Zenith bucks market trend, grows profit by 22% in 2016

Okey Onyenweaku

Pushing against a harsh recessionary climate, Zenith Bank Plc has characteristically managed to pull off an impressive 22 per cent growth in its profit after tax for the year ended December 31st, 2016.
According to year end 2016 results released to the Nigerian Stock Exchange(NSE) over the weekend, the bank achieved significant growth in both its top and bottom line earnings.
Details of the result show that the bank achieved a revenue growth by 17 percent rising to N507,997 billion in 2016 from N432,535 billion in the corresponding period of 2015.
Its profit after tax grew to N129,652 billion in 2016 from N105,663 billion the previous year.
The bank equally grew its end of year total assets by a solid 18% on a year-on-year basis, indicating an impressive growth of its basic operations.
Its operating expenses rose by 5% from N89, 928billion in 2015 to N94,365billion in 2016, while it achieved a 12.2% growth in its fees & commission income from N60.904billion to N68.444billion.
During the year Zenith expanded its loans book by 15% to N2.289trillion in 2016 from N1,989trillion in 2015.
The feat was a testimony to the clever balancing act in its sectorial lending portfolio and its firm hands on management of a variety of complexed risk assets that had the potential of hurting the integrity of its balance sheet. The deposit money institution, hitherto known for aggressive retail lending activity and strong retail market-based deposit mobilization, has been able keep its head above bloody waters in the face of major problems in the retail sector of the economy that has resulted from a season of worsening foreign exchange rates and an increased squeeze in liquidity resulting from the federal governments implementation of a Single Treasury Account (STA) policy which has sucked over N3billion from the financial system.

Since Zenith Bank Plc, Nigeria’s second largest deposit bank, emerged on the banking landscape as a major player, it has not wavered. It has advertised one of the largest bank balance sheet consistently for two decades.
Analysts have fingered strong points about the bank. They note that It is the only bank in the financial industry that has continued to grow organically despite the induced mergers and acquisitions by an industry-wide and Central Bank of Nigeria-sponsored Consolidation programme in 2005. This means that the bank has continued to maintain a consistent and undiluted corporate culture since its founding. With a vision to play in the big league, Zenith Bank’s management had decided to grow up its capital when most of its contemporaries lacked the capacity. The bank had gone public before the 2005 banking consolidation policy of the CBN which was visionary and put it ahead of competition.
From that vantage point, the bank has maintained not only a steady growth, but also a leadership position in the industry over the years.
Among the few top performers, what distinguishes Zenith Bank is not just the mega size balance sheets but the high degree of innovation and quality of ideas which forms the bedrock of operations.
Zenith bank recognized very early the critical role technology would play in the industry and exploited it.
The bank’s service delivery has won numerous international endorsements and awards, including Best Bank in Corporate Governance in Nigeria by Global Banking and Finance (2015), Best Customer Service Bank in Nigeria by Global Banking and Finance (2014) and the Most Customer-Focused Bank in Nigeria by KPMG (2014).
Only recently, Zenith was one of the first Nigerian financial institutions certified by the British Standards Institution (BSI) on three key ISO (International Standards Organisation) standards namely; ISO 22301 (Business Continuity Management), 27001 (Information Security Management) and 20000 (IT Service Management). Zenith is the first Nigerian institution to win the three standards at ago.
By this feat, the bank already reputed for its culture of service delivery, joins other global brands with the highly-rated ISO certification.

The Board of Directors proposed a final dividend of N1.77 kobo per share which in addition to the N0.25kobo per share paid as interim dividend amounts to N2.02 kobo per share (31 Dec 2015: N1.80 kobo per share) from the retained earnings account as at 31 Dec 2016. This will be presented to the shareholders for approval at the next Annual General Meeting.