Zenith Bank Nets N224.05bn Profit In 2022, As Earnings Jump 24% To N945.5bn

Zenith Bank Plc, on Tuesday became the first first-tier bank to present its audited financials for the year ended December 31, 2022, reporting a double-digit growth of 24% in gross earnings from N765.6bn in the previous year to N945.5bn, despite what its management called the persistent challenging macroeconomic environment and headwinds in the operating environment.
According to the results presented to the Nigerian Exchange (NGX), the double-digit growth in gross earnings was driven by a 26% year-on-year (YoY) growth in interest income from N427.6bn to N540.2bn, and a 23% YoY growth in non-interest income from N309bn to N381bn. Profit before tax also grew by 2% to N284.7bn from N280.4bn due to the significant growth in all the income lines.
Impairments ballooned by 107% from N59.9bn to N124.2bn, while interest expense grew 63% YoY from N106.8bn to N173.5bn, 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), in what the management said 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 however increased by 39%, growing from N6.47tr in the previous year to N8.98tr in the current year, boosted by 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), as it grew from 6.7% to 7.2% due to an effective repricing of interest-bearing assets. Operating expenses grew by 17% YoY, but growth remained below the inflation rate, just as Total Assets increased by 30% from N9.45tr in 2021 to N12.29tr, mainly driven by growth in customer deposits.
The Group grew its gross loans by 20%, from N3.5tr in 2021 to N4.1tr in 2022, following which Non-Performing Loan (NPL) ratio increased modestly from 4.2% to 4.3% YoY, as 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, according to a statement, the Group said it 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.