Zenith Bank grows profit by 10 per cent to N231 billion despite COVID-19 shocks

23 Feb 2021


Zenith Bank said its total assets jumped by 34 per cent from N6.35 trillion in 2019 to N8.48 trillion last year.

Zenith Bank's Founder and Chairman Jim Ovia

Zenith Bank Plc, one of Nigeria’s largest banks, released its 2020 annual report for the period ended 31st December, 2020 on Tuesday, declaring 10.4 per cent rise in profit after tax (PAT) from N208.8 billion recorded in 2019 to N230.6 billion last year.

In a press statement released today, the bank attributed the increase in profit to a combination of top-line growth and a significant reduction in interest expense. According to the audited financial statements released on the Nigerian Stock Exchange (NSE), gross earnings increased by 5.2 per cent from N662.3 billion reported in 2019 to N696.5 billion in 2020.

The bank said despite a challenging macro-economic environment exacerbated by the COVID-19 pandemic, its non-interest income reached N251.7 billion in 2020, up 8 per cent from N232.1 billion recorded in 2019. Interest income increased by 1 per cent to N420.8 billion last year, compared to the previous period. According to the Zenith Bank statement, interest expense was down by 18.5 per cent from N148.5 billion in 2019 to N121.1 billion last year, while net interest income rose by 12.3 per cent to N299.7 billion in 2020, compared to the previous year.

Zenith Bank said its total assets jumped by 34 per cent from N6.35 trillion in 2019 to N8.48 trillion last year. As part of its improved performance, Zenith Bank grew its customer deposits across the corporate and retail space as deposits grew by 25 per cent to close at N5.34 trillion. Its net assets, defined as the total assets minus total liabilities, grew by 18.6 per cent to N1.12 trillion in the current review period.

According to the financial report, the bank created new risk assets as gross loans stood at N2.92 trillion, up 19 per cent from N2.46 trillion recorded in 2019. Zenith Bank said it maintained a stable and low non-performing loan (NPL) ratio of 4.29 per cent in 2020 compared with 4.30 per cent in the previous year. Prudential ratios such as liquidity and capital adequacy ratios remained above regulatory thresholds at 66.2 per cent and 23.0 per cent, respectively.  

"In 2021, the global economy looks set for a recovery with the rollout of vaccines, and growing confidence, driving an increase in economic activities across most economies. This has also driven an increase in crude oil prices, an improvement in interest rates and recovery from recession in Q4 2020 in the domestic economy," Zenith Bank said in its statement. "The Group is well-positioned to maximise the opportunities these recovering fundamentals represent while leveraging technology and expanding its retail footprints to deliver improved returns to all stakeholders."

The bank's returns on equity and assets declined from 23.8 per cent to 22.4 per cent and from 3.4 per cent to 3.1 per cent, respectively. Despite the decline, the Group still delivered improved earnings per share (EPS) of N7.34 in the current reporting year, up 10.4 per cent from the N6.65 EPS declared in 2019.

The bank also announced a proposed final dividend payout of N2.70 per share, bringing the total dividend to N3 per share. Following these announcements, Zenith Bank’s stock price on the NSE rose by 4.8 per cent on Tuesday to close at N26 per share.

The bank said its Annual General Meeting will hold on March 16 at the Civic Centre in Lagos, albeit in line with government guidelines on public gatherings to curb the spread of COVID-19.

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