Business
Zenith Bank: Onyeagwu to take a bow after minting cash for shareholders
…grows capital gains by 93 percent
In the banking industry, only a few individuals make a significant impact and leave a lasting legacy. One such luminary is Ebenezer Onyeagwu, the esteemed Group Managing Director of Zenith Bank. He is known for his exceptional leadership skills and unwavering commitment to excellence.
In his years in the saddle, Onyeagwu has demonstrated deep engagement with innovation and progress. He has redefined the banking landscape in Nigeria and beyond. During his tenure as the leader of Zenith Bank, the institution has evolved beyond just a financial entity. It is now a force to be reckoned with; known for its innovation, agility, and inclusivity.
The visionary leadership of Onyeagwu has been the driving force behind Zenith Bank’s consistent growth in all measurement indicators. With strategic foresight and unyielding determination, he has skillfully navigated the bank through turbulent waters, turning challenges into opportunities and obstacles into stepping stones. His relentless pursuit of excellence has pushed Zenith Bank to new heights, consolidating its position as a pioneer in the ever-evolving landscape of modern banking.
After its founder, Jim Ovia, Zenith Bank CEO Onyeagwu has made the most significant contribution to the group.
Many people are impressed by the remarkable achievement of Ebenezer Onyeagwu, the Group Managing Director of Zenith Bank, and his team, who were able to increase the bank’s total assets by almost 186% to N18.160 trillion in just three years. Onyeagwu took over as GMD of Zenith Bank in 2019, and by the end of 2022, his team had achieved this impressive growth.
Despite macroeconomic challenges, the bank’s total assets grew from N6.346 trillion in 2019 to N18.160 trillion in 2022.
During the same period, Zenith Bank’s Gross Earnings increased by 80.5 percent, rising from N243.2 billion in 2019 to N439.2 billion in 2022. Furthermore, the bank’s more recent nine-month performance was equally exceptional, with both interest income and non-interest income contributing to its achievement of three-digit growth in the top-line measurement indicators of Zenith Bank Plc for the third quarter that ended in September 2023.
The Q3 results indicate that the financial group’s profit before tax increased by 149%, from N202.5bn in Q3 2022 to N505bn in Q3 2023.
The company’s profit after tax saw a significant growth of 149 percent from N174.3bn to N434.2bn during the same period. Despite the challenging macroeconomic environment, the company’s interest income equally grew by 72 percent to N670.9bn from N390.8bn in Q3 2022, while non-interest income grew by 186 percent from N212bn to N607.2bn.
Details show that the increase in interest income was due to the growth in risk assets and effective pricing. The non-interest income growth was driven by the revaluation gain from the unification of exchange rates during the year. The cost-to-income ratio also reduced from 55.8 percent in Q3 2022 to 37.8 percent in the current period.
Despite the challenging economic environment, Zenith Bank managed to increase its total assets by 48 percent in the first nine months of 2023. This growth saw the bank’s total assets rise from N12.3tn as of December 2022 to N18.2tn. However, the risk costs also increased during this period, from 1.3 percent in Q3 2022 to 5.5 percent in Q3 2023. This increase was due to the conservative approach taken by the bank towards the heightened risk environment, which led to deliberate incremental provisions and the creation of a counter-cyclical buffer. Despite this increase, the cost of risk in Q3 2023 was an improvement from Q2 2023, where it peaked at 8.8 percent, and this time, due to the bank’s even more prudent management of risk assets in a highly combustible business landscape.
At the same time, customer deposits at Zenith Bank experienced a growth of 49% from N8.98tn in December 2022 to N13.38tn in September 2023. This growth in deposits was witnessed in both the corporate and retail segments. The savings portfolio across all currencies grew from N2.7tn in December 2022 to N4.6tn in September 2023.
Gross loans at the bank also increased by 48% from N4.1tn in December 2022 to N6.1tn in September 2023. This can be attributed to the revaluation of foreign currency-denominated loans and the growth in local currency loans to strategic and thriving sectors of the economy.
Zenith Bank’s non-performing loan ratio improved to 3.8% in the period ending 30 September 2023. This is a significant improvement from the prudential limits of 5.0%. The bank’s net interest margin closed at 5.6% as of September 2023, declining from 6.2% in the previous year due to low yield in government securities.
Under the leadership of Onyeagwu, it has become almost predictable in the Nigerian financial sector that Zenith Bank would perform strongly regardless of the challenges it faces. This is due to its consistency in achieving high-quality performance over the years. The bank has remained the most profitable financial institution in Nigeria, as shown by its performance indices in recent years, and has once again achieved its goals.
Business Hallmark has also learned that the Group is focused on advancing its digital banking strategy, which is anchored on a strong technology base. The Group intends to build on the gains achieved in previous years across all business segments. The expectation is that, combined with the Group’s industry leadership, this will drive improved performance and deliver enhanced returns to stakeholders.
Zenith Bank, which is known for its financial stability, has been able to maintain its growth trajectory under the leadership of its current GMD, Ebenezer Onyeagwu. Despite the economic dislocations experienced by many firms and countries, Zenith Bank has remained significant not only in Africa but also in the world. Shareholders believe that Onyeagwu has left an indelible mark on every aspect of the institution, and his strong pillars of achievement will propel the organization to even greater heights. Many believe that Zenith Bank is being envied today because of Onyeagwu’s Midas touch.
An activist shareholder, Mr. Boniface Okezie recently told BH that the tenure of Onyeagwu as the CEO of the bank is unparalleled due to his outstanding achievements in all performance indicators. Okezie highlighted that during Onyeagwu’s tenure, the bank increased dividends to shareholders, grew its balance sheet, improved its services, and increased its profits.
Okezie also reckons the fact that Onyeagwu pays close attention to details and is prompt in responding to customers, even making calls to resolve issues in the bank’s branches despite his busy schedule.
Similarly, Alhaji Mukhtar Mukhtar, the Chairman of the Trusted Shareholders Association of Nigeria (TSAN), commended Onyeagwu for delivering impressive dividends, which attracted investors. Mukhtar added that “Apart from holding the bank together, we have also enjoyed significant capital appreciation.” Those who invested in the bank’s stock in 2019 at the price of N22.70 gained 93.8 percent on April 3, 2024, when the price reached N44.00 per share.
Several analysts have pointed out some significant strengths of Zenith Bank. They have observed that the bank has been able to maintain organic growth despite the mergers and acquisitions that occurred in the financial industry due to the Consolidation program that was sponsored by the Central Bank of Nigeria in 2005. This has allowed the bank to uphold a consistent and undiluted corporate culture since its inception. Zenith Bank’s management had always nursed a vision to expand and compete with the big players in the industry. Therefore, they decided to increase their capital when many of their contemporaries could not do so. The bank had gone public even before the 2005 banking consolidation policy of the CBN, which was a visionary move and put them ahead of their competition.
Mr. David Adonri, the Vice Chairman of Highcap Securities Limited, believes that the current GMD of Zenith Bank, Onyeagwu, is one of the best in the banking industry. This is due to his achievements in the last three years.
“Zenith Bank has seen a lot of success under the leadership of its current CEO, who has done an excellent job building and managing the bank. The key indicators of the bank’s performance have been positive during his tenure, meeting the expectations of both depositors and investors.
The CEO, Onyeagwu, is widely recognized as one of the best in the industry, and Zenith Bank has maintained a leadership position in the industry thanks to its steady growth and innovative ideas. While many other top banks have also performed well, Zenith Bank stands out for its focus on quality and innovation,” Adonri underscored.
It is being insinuated that Zenith Bank, a prominent bank in Nigeria, has paid the highest dividends in the banking industry. This is despite that other banks have also paid dividends. In fact, Zenith Bank’s greatest rival, GT Bank, has not paid higher dividends than Zenith Bank.
An analysis of Zenith Bank’s dividend yield from 2011 to 2022 shows that it has consistently paid high dividends. In 2011, the dividend yield was 6.83 percent of its share price. This increased to 8.1 percent in 2013, 9.51 percent in 2014, 14.23 percent in 2015, 12.20 percent in 2016, 7.88 percent in 2017, 11.93 percent in 2018, 16.72 percent in 2019, 15.4 percent in 2020, 12.5 percent in 2021, and 13.3 percent in 2022.
Due to this consistent high performance, shareholders have been praising the bank’s CEO, Onyeagwu, and saying that he has turned the bank into a money-minting machine.
Zenith Bank has been consistently recognized for its excellent performance and has received numerous awards over the years. The bank was recently named the Number One Bank in Nigeria by Tier-1 Capital in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine, marking the 13th consecutive year it has received this award. It was also named the Best Bank in Nigeria for three consecutive years (2020-2022) in the Global Finance World’s Best Banks Awards, Best Commercial Bank in Nigeria 2021 and 2022 in the World Finance Banking Awards, Best Corporate Governance Bank in Nigeria in the World Finance Corporate Governance Awards 2022, and Best in Corporate Governance ‘Financial Services’ Africa for three consecutive years (2020-2022) by the Ethical Boardroom. Additionally, Zenith Bank was awarded Best Commercial Bank in Nigeria and Best Innovation in Retail Banking in Nigeria in the International Banker 2022 Banking Awards. The Banker Magazine also recognized Zenith Bank as the Most Valuable Banking Brand in Nigeria in its Top 500 Banking Brands 2020 and 2021 rankings. Zenith Bank was named Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and Retail Bank of the Year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021. The bank was also named Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged as the winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, receiving awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organization in Africa”.
Analysts believe that Onyeagwu’s exemplary performance has left no doubt about the direction of the lender in the coming years. However, what truly sets him apart is his integrity, humility, and unwavering dedication to service. He has inspired those around him to strive for greatness and uphold the highest standards of ethical conduct and professionalism. Onyeagwu will retire in June and hand over the leadership to Adaora Umeoji as the new MD/CEO. But no one can forget in a hurry that in addition to taking steps to put Zenith Bank on the high pedestal for recapitalization, he has laid a strong foundation that will enable the Group to expand further, leaving Zenith in a solid position.
