Zenith Bank Plc has released its audited results for the year ending December 31, 2022. Gross earnings increased by an impressive 24% from the N765.6 billion reported the previous year to NGN945.5 billion in 2022, representing an impressive double-digit growth. This is true notwithstanding the macroeconomic headwinds and persistently difficult climate.
According to the audited financial results for the 2022 fiscal year, which were presented to the Nigerian Exchange (NGX), the growth in interest income of 26% year over year (YoY), from N427.6 billion to N540.2 billion, and the growth in non-interest income of 23% YoY, from N309 billion to N381 billion, were the main contributors to the double-digit growth in gross earnings. Profit before tax (PBT) increased by % over the same period, rising from N280.4 billion to N284.7 billion. All of the income categories had significant increases, which is what caused the increase.
While interest expense increased by 63% YoY from N106.8 billion to N173.5 billion, impairments increased by 107% from NGN59.9 billion to NGN124.2 billion.
The impact of Ghana’s sovereign debt restructuring program was the cause of the impairment growth, which also led to an increase in the cost of risk (from 1.9% in 2021 to 3.3% in the reviewed year). Due to an increase in interest rates around the world, the cost of funds went from 1.5% in 2021 to 1.9% in 2022 as a result of the increase in interest charges. From N6.47 trillion in the prior year to N8.98 trillion in the current year, customer deposits climbed by 39%. The bank’s market leadership was solidified and clients’ trust was demonstrated by the leap that came from all deposit groups (corporate and retail) and product lines.
The bank’s Net-Interest-Margin and effective re-pricing of interest-bearing assets were both favorably impacted by the ongoing improvement in the yield environment. Operational costs increased by 17% YoY, yet growth was still less than inflation. From N9.45 trillion in 2021 to N12.29 trillion in 2018, total assets climbed by 30%, mostly due to increases in customer deposits.
Because of the economy’s steady and ongoing recovery, the company responsibly expanded its gross loans by 20%, from N3.5 trillion in 2021 to N4.1 trillion in 2022, which slightly elevated the Non-Performing Loan (NPL) ratio from 4.2% to 4.3% YoY. While the liquidity ratio increased from 71.2 to 75.2%, the capital adequacy ratio dropped from 21% to 19%. Both prudential ratios are significantly higher than the required levels.
The group plans to broaden its horizons in 2023 as it restructures into a holding company structure, grows in all of its targeted markets—both domestically and abroad—and adds new verticals to its companies.
The bank has suggested a quarterly payout of N2.90 per share, increasing the total dividend to N3.20 per share, as a sign of its dedication to shareholders.