Shareholders Approve Zenith Bank’s N94.19bn Dividend Payout

Shareholders of Zenith Bank at its Annual General Meeting in Lagos on Tuesday unanimously approved the proposed by the directors of a final dividend of N2.70 per share, bringing the total dividend payment for the 2020 financial year to N94.19bn, or N3.00 each.    

This followed a review of the bank’s audited financial results with gross earnings for the period rising by 5% from N662.3bn in the previous year to N696.5bn, with non-interest income growing by 8% from N232.1bn in 2019 to N251.7bn in 2020 and a 1% increase in interest income from N415.6bn in 2019 to N420.8bn in 2020.

Timothy Adesiyan, a shareholder

Profit before tax increased by 5%, growing from N243.3bn in 2019 to N255.9bn owing to a combination of growth in topline and a significant reduction in interest expense from N148.5bn in 2019 to N121.1bn. This significantly increased net interest income from N267bn in 2019 to N299.7bn. Net profit, therefore, rose by 10% year-on-year from N208.8bn in 2019 to N230.7bn, despite the challenging macroeconomic environment exacerbated by the COVID 19 pandemic in the period under review. This translated to a 10% improvement in Earnings per Share (EPS) from N6.65 to N7.34 each.

The Group’s increased retail activities translated to a corresponding increase in retail deposits and loans grew by N612.7bn from N1.11tr to N1.72tr year-on-year (YoY), while savings account balances significantly grew by 88% YoY to N1.16tr.

This retail drive, coupled with the low-interest yield environment, helped reduce the cost of funding from 3.0% to 2.1%, as well interest expense. 

The low-interest environment, the bank said in a statement, “also affected the net interest margin, which declined from 8.2% to 7.9% in the current year due to the re-pricing of interest-bearing assets. Operating costs grew by 10% YoY but are still tracking well below inflation which at the end of the year stood at 15.75%. Although returns on equity and assets also reduced from 23.8% to 22.4% and from 3.4% to 3.1%, respectively,.

“The group also increased corporate customer deposits, which alongside the growth in retail deposits, delivered total deposit growth of 25%, to close at N5.34tr, driving growth in market share. Total assets also increased significantly by 34%, from N6.35tr to N8.48tr, besides creating new viable risk assets despite the COVID-19 pandemic and its associated challenges.

This, the statement added, is seen in the 19% growth in gross loans from N2.46tr to N2.92tr, which it said was achieved while maintaining a stable and low overall NPL ratio of 4.29%, an improvement over the 4.3% achieved in previous year, staying well below the 5% regulatory benchmark.

Liquidity and capital adequacy ratios during the period stood at 66.2% and 23.0% respectively, also remaining above the3 regulatory thresholds of 30% and 15%, respectively. 

A testament to this superlative performance and in recognition of its track record of excellent performance, the statement said the bank was voted “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 Best Corporate Governance ‘Financial Services’ Africa 2020 by the Ethical Boardroom. Also, the bank emerged as the Most Valuable Banking Brand in Nigeria, for the fourth consecutive year, in the Banker Magazine “Top 500 Banking Brands 2021” and Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking published by The Banker Magazine. Similarly, the bank was recognised as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Retail Bank of the year at the 2020 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 2020.”

Picture caption: Jim Ovia, Zenith Bank Plc chairman.

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