Zenith Bank: Surmounting Headwinds

banking - November 15, 2021

In order to maintain its leadership position amidst the tough banking environment, Zenith Bank Plc has remained dynamic and innovative, writes Dike Onwuamaeze

As a testament to its resilience and market leadership, Zenith Bank Plc recently announced its unaudited results for the nine months period ended September 30, 2021, with a profit before tax (PBT) of N180 billion.

This represented a one per cent growth over the N177 billion recorded in the same period the previous year, amidst a challenging macroeconomic environment exacerbated by the Coronavirus (COVID-19) pandemic.

According to the group’s unaudited nine months financial results presented to the Nigerian Exchange Limited (NGX), its gross earnings increased by two per cent from N509 billion to N519 billion, largely due to growth in current account maintenance fees as well as fees from electronic products during the period.

Despite continuing economic uncertainties, the Group, according to a statement, grew its net earnings through reduction in its cost of funds while keeping the cost of risk flat.

This strengthened its earnings per share (EPS) by one per cent to N5.11. The Group achieved a nine per cent growth in interest income from loans and advances on the back of an increase in gross loans of nine per cent year-to-date and enhanced efficiency, resulting in a 21 per cent drop in interest expense to N74 billion from N94 billion.

This culminated in growth in net interest income of four per cent, from the N225 billion recorded at the end of the third quarter of 2020, to N235 billion in the current period. Also, its total assets increased by three per cent to N8.8 trillion in the current period, while total deposits grew by 13 per cent to close at N6 trillion, from N5.3 trillion as at December 31, 2020, with a substantial contribution from retail deposits.

As a result of the bank’s focused drive to increase retail deposits in the past three years, there was a decrease in the Group’s cost of funds by 35 per cent to 1.4 per cent, from 2.2 per cent year-on-year.

The Group continues to make significant progress in its retail banking drive, as evidenced by remarkable growth in transaction volumes and value across its digital platforms and strong growth in customer acquisition.

According to the statement, in the year’s final quarter, management’s outlook remained positive, buoyed by a declining inflationary trend, expected increase in foreign exchange inflows, and improving oil production.

“The Group remains focused on increasing its retail market share, consolidating its leadership position in the corporate segment and maintaining a robust balance sheet,” it stated.

In recognition of its track record of excellent performance, Zenith Bank was voted as Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, and Best in Corporate Governance ‘Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine. In 2020, Zenith Bank was honoured as Bank of the Decade (People’s Choice) at the THISDAY Awards 2020, Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards, and Best Company in Promotion of Good Health and Well-Being as well as Best Company in Promotion of Gender Equality and Women Empowerment at the Sustainability, Enterprise, and Responsibility (SERAS) Awards.

Clearly, for over three decades, Zenith Bank has distinguished itself in the Nigerian financial services industry through superior service offerings, unique customer experience, and sound economic indices.

The bank remains a clear leader in the digital space with several firsts in deploying innovative products, solutions, and an assortment of alternative channels that ensure convenience, speed, and safety of transactions.

That is why despite the challenging macroeconomic environment brought about by the pandemic, which had a significant deleterious impact on businesses globally, Onyeagwu who is Chief Executive Officer of the bank has demonstrated that he has a midas touch considering the strong financial performance it continues to churn out.

Indeed, Zenith Bank’s track record under Onyeagwu has remained impressive such that those who doubted his competence when he was appointed are now having a rethink as his performance at the helm of affairs for more than two years now has shown that he is a square peg in a square hole.

This has continued to reflect in the performance of the bank which has maintained its leadership position.

Also, in the area of corporate governance which is a vital ingredient in ensuring the sustainability of any institution, Zenith Bank under Onyeagwu has maintained a positive rating as can be seen from the recent assessment by the NGX hence the financial institution’s listing on the Premium Board of the Exchange.

The bank places a premium on its core business strategy anchored on people, technology and service, to create value for its numerous clientele.

With a team of dedicated professionals, the bank leverages its robust Information and Communication Technology (ICT) infrastructure to provide cutting-edge solutions and products through its network of branches and electronic/digital channels.

Zenith Bank under Onyeagwu’s watch has remained committed to sustaining the legacy of its visionary Founder and Chairman, Mr. Jim Ovia, whose pioneering and foundational role in building the structures and laying the foundation ensured an enduring and very successful institution.

As a testament to the aforementioned and in recognition of its track record of excellent performance, Zenith Bank had been ranked the number one bank in Nigeria by tier-1 capital in the 2021 Top 1000 World Banks’ Ranking published by The Banker Magazine, a publication of the Financial Times Group of the United Kingdom.

The chief executive officer has continued to assure investors and stakeholders that the commercial bank will continue to accelerate its retail and digital banking initiatives in order to sustain its positive performance.

“We are also up scaling our investment in terms of what we have, to contend with the ever-increasing risks we see in the environment. That in a nutshell explains the rise in our digital banking initiative,” he added.

Since it commenced business in May 1990, Zenith Bank Plc has built a respectable brand that is recognised globally.

Zenith Bank which set out with the vision of becoming the leading Nigerian, technology-driven, global financial institution that provides distinctive range of financial services has lived up to the expectations of its founder, Mr. Jim Ovia.

The bank blazes the trail in digital banking in Nigeria; scoring several firsts in the deployment of Information and Communication Technology (ICT) infrastructure to create innovative products that meet the needs of its teeming customers. The bank is verifiably a leader in the deployment of various channels of banking technology, and the Zenith brand has become synonymous with the deployment of state-of-the-art technologies in banking.

Driven by a culture of excellence and strict adherence to global best practices, the bank has combined vision, skillful banking expertise, and cutting-edge technology to create products and services that anticipate and meet customers’ expectations; enable businesses to thrive and grow wealth for customers.

In the same vein, Zenith Bank has clearly distinguished itself in the banking industry through superior service quality, unique customer experience, and sound financial indices.

These have become part of its corporate culture to the extent that the bank is easily associated with the following attributes: Best-in-class customer experience, creativity, excellent financial performance, good asset quality, stable management, dedicated and highly skilled work-force, cutting-edge Information and Communication Technology, efficient and effective distribution channels.

The strategic objective of Zenith Bank also includes a continuous improvement of its capacity to meet customers’ increasing and dynamic financial needs as well as sustain high quality growth through investments that impact the quality of service to its existing and potential customers, constant upgrade of its ICT infrastructure, unwavering investment in training and re-training of its people and regular reinforcing of its customer services delivery charter with regards to continually changing customer needs.

Additionally, Zenith Bank places high premium on the pivotal role of exceptional service delivery in its drive to consistently exceed stakeholders’ expectations. The bank has in place a well-articulated strategy to not only meet and surpass customer expectations, but also ensure that plans are fine-tuned to address the changing taste and sophistication of the customer.

Its underlying philosophy is to remain at all times, a customer-centric institution with a clear understanding of its market and environment.

Also, the bank remains committed to promoting good corporate governance and best practices in the conduct of its business. This is because it believes that good corporate governance engenders public trust and ultimately ensures that the company meets the expectation of all stakeholders.

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