Despite the persistent challenging macroeconomic and headwinds, Zenith Bank Plc has announced its audited results for the year 2022, with an impressive double-digit growth of 24 per cent in gross earnings, from N765.6 billion reported in the previous year to N945.5 billion in 2022.
The audited financial results which were presented to the Nigerian Exchange (NGX) revealed that the double-digit growth in gross earnings was driven by a 26 per cent year-on-year (YoY) growth in interest income from N427.6 billion to N540.2 billion and a 23 per cent year-on-year (YoY) growth in non-interest income from N309 billion to N381 billion.
Also, due to the significant growth in all the income lines, profit before tax grew by two per cent from N280.4 billion to N284.7 billion in the current year.
It also showed that impairments grew by 107 per cent from N59.9 billion to N124.2 billion, while interest expense grew 63 per cent year-on-year from N106.8 billion to N173.5 billion, respectively. The bank explained that 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), was due to the impact of Ghana’s sovereign debt restructuring programme.
Due to hikes in interest rates globally, the growth in interest expense increased the cost of funds from 1.5 per cent in 2021, to 1.9 per cent in 2022, while customer deposits increased by 39 per cent, growing from N6.47 trillion in the previous year to N8.98 trillion in the current year.
The growth in customer deposits came from 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), which grew from 6.7 per cent to 7.2 per cent due to an effective repricing of interest-bearing assets.
Its operating expenses also grew by 17 per cent year-on-year, but growth remains below the inflation rate. Its total assets increased by 30 per cent, growing from N9.45 trillion in 2021 to N12.29 trillion, mainly driven by growth in customer deposits.
With the steady and continued recovery in economic activities, the Group prudently grew its gross loans by 20 per cent, from N3.5 trillion in 2021 to N4.1 trillion in 2022, which increased its non-performing loan (NPL) ratio modestly from 4.2 per cent to 4.3 per cent year-on-year.
The capital adequacy ratio decreased from 21 per cent to 19 per cent, while the liquidity ratio improved from 71.2 per cent to 75 per cent. Both prudential ratios are well above regulatory thresholds.
The bank stated “In 2023, the Group 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.”