29th March, 2023
Zenith Bank Plc has posted a profit before tax of N284.7bn in 2022 despite the persistent challenging macroeconomic environment and headwinds.
According to the audited financial results for the 2022 financial year presented to the Nigerian Exchange (NGX) on Wednesday, profit before tax of the bank grew by 2% from N280.4 billion to N284.7 billion in the current year.
The increase in profit before tax, the bank said, was due to the significant growth in all the income lines.
The bank also said it achieved an impressive double-digit growth of 24% in gross earnings from NGN765.6 billion reported in the previous year to NGN945.5 billion in 2022.
The double-digit growth in gross earnings was driven by a 26% year-on-year (YoY) growth in interest income from N427.6 billion to N540.2 billion and a 23% year-on-year (YoY) growth in non-interest income from NGN309 billion to NGN381 billion.
Impairments grew by 107% from NGN59.9 billion to NGN124.2 billion, while interest expense grew 63% YoY from N106.8 billion to N173.5 billion, respectively. The impairment growth, which also resulted in an increase in the cost of risk (from 1.9% in 2021 to 3.3% in the current year), was due to the impact of Ghana’s sovereign debt restructuring programme.
The growth in interest expense increased the cost of funds from 1.5% in 2021 to 1.9% in 2022 due to hikes in interest rates globally.
Customer deposits in Zenith Bank increased by 39%, growing from NGN6.47 trillion in the previous year to NGN8.98 trillion in the current year. The growth in customer deposits came from all products and deposit segments (corporate and retail), thus consolidating the bank’s market leadership and indicating customers’ trust.
The continued elevated yield environment positively impacted the bank’s Net-Interest-Margin (NIM), which grew from 6.7% to 7.2% due to an effective repricing of interest-bearing assets. Operating expenses grew by 17% YoY, but growth remains below the inflation rate.
Total assets increased by 30%, growing from NGN9.45 trillion in 2021 to NGN12.29 trillion, mainly driven by growth in customer deposits. With the steady and continued recovery in economic activities, the Group prudently grew its gross loans by 20%, from NGN3.5 trillion in 2021 to NGN4.1 trillion in 2022, which increased the Non-Performing Loan (NPL) ratio modestly from 4.2% to 4.3% YoY.
The capital adequacy ratio decreased from 21% to 19%, while the liquidity ratio improved from 71.2% to 75%. Both prudential ratios are well above regulatory thresholds.
In 2023, the Group intends to expand its frontiers as it also reorganises into a holding company structure, adding new verticals to its businesses and growing in all its chosen markets, both locally and internationally.
As a testament to its commitment to shareholders, the bank has announced a proposed final dividend payout of N2.90 per share, bringing the total dividend to N3.20 per share.