June 06, (THEWILL) – It is three years since Mr Ebenezer Onyeagwu was appointed Managing Director/Chief Executive Officer of Zenith Bank Plc. On that day, June 1, 2019, his name, Ebenezar, resonated philosophically and literally in the finance world. It was headline news among local and international media which acknowledge Zenith Bank as one that operates at the zenith of the industry.
Not bothering about where his religious leanings tweak to, it was obvious that heading Zenith Bank, Nigeria’s largest commercial bank by market size, requires a huge measure of divine help. It is, therefore, natural to perceive that he must have, in his closet, activated the original meaning of his name, Ebenezar, the Hebrew word for God is my Stone of Help – singing “God in my Ebenezer”.
In an industry where the dominant lexicon is Money, inserting punctuation marks where unnecessary could be a major error capable of shipwrecking the expert’s hope. So, it is a herculean task sitting on the driver’s seat of Zenith Bank’s corporate leadership – to keep the numbers growing. This is more important for a financial service institution listed on the prestigious Premium Board of the Nigerian Exchange (NGX). Onyeagwu knows he must be unyielding in his adherence to the culture of excellence with which Zenith Bank had carved out a niche for itself, to deliver. And he has, in the 1,095 days he has occupied the CEO’s seat at Zenith Bank.
Defying Headwinds
The place to start is the bank’s 2021 annual report – three years after Onyeagwu’s appointment.
Zenith Bank Plc defied a challenging macroeconomic environment that witnessed the worst recession in a quarter of a century and exacerbated by the Coronavirus (COVID-19) pandemic, to grow its assets 60 percent within five years. A review of the bank’s performance between 2017 and 2021, when it emerged from the economic uncertainties of 2016 recession and deepening effects of the COVID-19 pandemic, revealed a culture of resilience that confirms its market leadership.
This unusual posture resulted in a significant asset growth that hit almost a trillion Naira in 2021, supported by continued impressive performance in virtually all the key parameters in the lender’s balance sheet during the period. Analysts note that the performance did not reflect the general downturn in the economy when inflation, GDP growth and unemployment rates hit their worst points. This they attribute to the bank’s ability to carve out a niche for itself in the financial service industry.
A glean into the results showed that Zenith Bank’s Assets base rose 6.5 percent from N5.59 trillion in 2017 to N5.95 trillion in 2018. Evidently, this reflected the post-recession recovery environment that also impacted on the total Loans and Advances, which recorded a drop of 13.4 percent — from N2.10 trillion to N1.83 trillion in 2017 and 2018 respectively. Significantly, Gross Loans rose to N3.51 trillion within the five year period or 67.15 percent from N2.10 trillion in 2017.
Expanding credit in an economy that was described as surviving on a life support is a measure of a bank’s confidence to achieve organic growth that is devoid of “soft” incomes common with seasonal investments.
Zenith Bank’s reports showed a steady growth in Gross Loans to N2.30 trillion in 2019 from N1.82 trillion in 2018, a 26.38 percent. Apparently, in a bid to support the economy to wriggle out of COVID-19 pandemic, the bank grew its Gross Loans to N2.91 trillion in 2020 reflecting 26.5 percent rise from N2.30 trillion recorded in the preceding year. Gross Loans hit N3.51 trillion in 2021.
Net Interest Income which largely derives from banks’ core activity of lending rose steadily to N295.6 billion in 2018 from N258 billion; then N267 billion in 2019 and N299.7 billion in 2020 when COVID-19 pandemic ravaged the economy and created severe health challenges. The N320.8 billion Net Interest Income recorded in 2021 was a significant growth of 24.35 percent during the review period.
As a result of the focused drive to increase retail deposits in the past three years, the bank’s Customer Deposits jumped 51.8 percent between 2019 and 2021, hitting an all time high of N6.47 trillion in 2021 against N4.26 trillion in 2019.
Customer Deposit is a measure of depositors’ confidence in a bank. Zenith Bank used to be criticised for its elitist stance that excluded the less privileged. But all that has changed because the rich, the poor and the neither-rich-nor-poor now patronize the bank — which is a good testament to the organisation. Zenith Bank recorded Customer Deposit rise of 88.63 percent between 2017 and 2021.
Supporting the emergence of its strong asset base is the surge in Gross Earnings which hit N765.55 billion in 2021 against N696.45 billion in the preceding year, reflecting a 10 percent rise. Again, the pandemic year of 2020 did not witness a drop in Gross Earnings. Instead, it was a 5.17 percent rise against N662.25 billion in 2019. The figure for 2018 was N630.34 billion which is 5 percent lower than the 2019 record. Overall, the bank’s Gross Earnings rose 2.74 percent.
There is a steady rise in the bank’s profit during the five-year period. Profit before tax (PBT) rose to N280.37 in 2021 from N199.31 in 2017, a jump of 40.68 percent. Profit after tax (PAT) also reflected an upward trajectory hitting N244.6 billion in 2021 from N173.79 in 2017, a 40.8 percent improvement. As in the bank’s performance trend, PAT performance in 2020 was not decelerated by COVID-19. It rose to N230.56 billion from N208.84 billion in 2019 or 10.4 percent. Earnings Per Share increased steadily from 5.53 in 2017 to 7.78 in 2021, reflecting a 40.6 percent.
At the Conference Call held on March 3, 2022, to present the 2021 Financial Year Earnings (FYE), the Group Managing Director/CEO, Mr Ebenezer Onyeagwu, said that Zenith Bank beat market expectations with double-digit growth in Gross Earnings and impressive performance in other parameters. He added that the growth was achieved in the face of growing macroeconomic instability which saw the bank sustain strong earnings growth and improved liquidity.
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. Under Onyeagwu, 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.
Let the Ebenezer song continue, with ‘Congratulations’ on pitch descant.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
