Business
Zenith Bank showers shareholders with bumper dividends
By OBINNA EZUGWU
Investors of Zenith Bank Plc are already salivating and will soon be smiling to the banks following the institutions readiness to pay a final dividend of N2.50 per share for the year ended December 31, 2019. The information released on the website of the Nigerian stock Exchange (NSE) on Friday reveals that the bank is paying a total dividend of N2.80 per share having paid an interim dividend of 30 kobo earlier.
The bumper package which has been powered by the bank’s impressive performance which was made public over the weekend nudged the bank’s stock up by 6.14 per cent to close at N19.85 per share on Friday February 21, 2020. The tier one bank grew its gross earnings to N662.251billion in 2019. This represents 5 per cent over the figure of N630.3 billion that was achieved in 2018.
Whereas Zenith bank’s profit before tax (PBT) increased to N243.294billion in 2019 from N231.685billion in 2018, Profit after tax also rose to N208.843billion from N193.424billion in 2018. Investors are scrambling to have a slice of Zenith shares in order to reap from the dividend which analysts are speculating may be the highest in absolute figures in the banking industry.
The banking industry has been faced with stiffer regulation in which they are expected to maintain Loan to Deposit ratio (LDR) at 65 per cent, cash reserve ratio (CRR) from 22.5percent to 27.5 per cent among other stringent operating conditions. Almost every business entity in Nigeria has acknowledged the harsh effect of heightened and tensed security challenges.
In spite of this, Zenith Bank succeeded in moderating interest expenses, and operating expenses declined -6.59 per cent to N129.453 billion in its audited result for 2019, compared to N137.897billion billion in the same period last year. The commercial lender was able to give out 26.4 per cent more loans and advances to customers worth N2.305 trillion year-on-year as its total assets grew 6.5 per cent to N6.346 trillion.
Zenith Bank has continued to move against the head and tail winds. A combination of innovations, and personalized customer services have calibrated its rating as a top financial institution. Analysts believe that Zenith Bank is arguably the biggest bank in Nigeria and is seen as one of the lenders that has made the biggest impact in the banking industry.
Those conversant with the growth of the bank have rated it highly as the top tier 1 financial institution. This notwithstanding, some analysts perceive the bank as one of the best managed in the banking industry. Industry experts hinged this perception on the highly experienced and qualitative persons in the management cadre.
“Zenith bank is one of such banks. However, I make bold to say that my experiences with Zenith bank is unrivalled. Zenith bank customer services sparkles or used to sparkle. These days, I hear that the standard has fallen a notch or two. But it is still the industry leader”, said a customer who would not want to be mentioned in print.
Zenith Bank is still a high flying financial institution. Its response time to inquiries is swift and Mr. Ebenezer Onyeagwu, its managing director/CEO, has made it a point of duty to maintain good and qualitative service delivery in the bank. High net-worth and low income customers still hold their banks dearly.
Zenith Bank International is determined to carry on with its cardinal values of excellent customer service, highly professional and competent workforce as well as the optimal use of technology continues to be the driving forces behind the outstanding performance. With the economy in a tailspin Zenith Bank has a hard slog as it continues to keep its nose ahead of its competition in a keen race for profitability and survival.
In 2020, the Group remains strategically positioned to capture the opportunities in the corporate and retail segments, while efficiently managing costs and expanding further its retail franchise employing digital assets and innovation.
Consistent with this superlative performance and in recognition of its track record of excellent performance, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Most Valuable Banking Brand in Nigeria 2019 by The Banker.
The Bank was also recognized as Bank of the Year and Best Bank in Retail Banking at the 2019 BusinessDay’s Banks and Other Financial Institutions (BOFI) Awards, and was ranked as the Best Digital Bank in Nigeria 2019 by Agusto & Co. Most recently, the Bank emerged as the Bank of the Decade (People’s Choice) at the Thisday Awards 2020.
The shares of Nigeria’s tier-1 lender rallied in early trading on Friday February 21 as investors rush to take equity position in the bank which proposes N2.50kobo final dividend for the financial year ended December 31, 2019. As at 12.38pm, Zenith Bank followed the topmost gainer on the Bourse after its shares increased from N19.4 to N20, after adding 60kobo or 3.09percent.
Zenith Bank outstanding shares are 31,396,493,786 units. The proposed final dividend translates to N78.5billion final dividend payout. The register of the company will close on March 10, 2020 while the qualification date is on March 9, 2020.
The final dividend which in addition to the 30kobo per share paid as interim dividend amounts to N2.80 per share (2018: Interim dividend of N0.30 per share and final of N2.50 per share) from the retained earnings account as at December 31, 2019. This will be presented for ratification by the shareholders at the next Annual General Meeting.
Zenith Bank is one of the tier-1 banks which analysts expect their financial scorecards, if stronger than expected, will spur buy sentiment at the local bourse. The financial result released at the Nigerian Stock Exchange (NSE) showed gross earnings of Zenith Bank group increased by 5.1percent while profit before tax increased by 5percent.
Gross earnings increased to N662.251billion in 2019 from N630.344billion in 2018. Profit before tax (PBT) increased to N243.294billion in 2019 from N231.685billion in 2018. Profit after tax also rose to N208.843billion from N193.424billion in 2018. The principal activity of the bank is the provision of banking and other financial services to corporate and individual customers.
Such services include obtaining deposits from the public, granting of loans and advances, corporate finance and money market activities.
The Bank has six subsidiary companies namely, Zenith Bank (Ghana) Limited, Zenith Pensions Custodian Limited, Zenith Bank (UK) Limited, Zenith Bank (Sierra Leone) Limited, Zenith Bank (The Gambia) Limited and Zenith Nominees Limited. During the year, the Bank opened thirteen new branches and no branch was closed.
As at December 31, 2019 the Group had 430 branches, 178 cash centers; 2,093 ATM terminals; 50,427 POS terminals and 7,745,176 cards issued to its customers. (December 31, 2018: 417 branches, 256 cash centers, 1,891 ATM terminals, 34,006 POS terminals and 5,732,820 cards issued)
