Shareholders of Zenith Bank Plc, on Tuesday, approved proposed final dividend of N2.70 per share, bringing total dividend for the 2020 financial year to N3 per share, amounting to N94.19 billion.
According to the audited financial results, profit before tax rose by five per cent to N255.9 billion from N243.3 billion reported in 2019, in spite of a challenging macro-economic environment exacerbated by the COVID 19 pandemic.
Chairman of the Bank, Mr Jim Ovia, in a statement explained that : “The increase arose from a mixture of growth in the topline and a significant reduction in interest expense from N148.5 billion in 2019 to N121.1 billion in 2020. significantly increasing the net interest income from N267.0 billion in 2019 to N299.7 billion in 2020.
“The group recorded a growth in gross earnings of five per cent from N662.3 billion in the previous year to N696.5 billion.
“The group recorded eight per cent growth in non-interest income from N232.1 billion in 2019 to N251.7 billion in 2020 and one per cent increase in interest income from N415.6 billion in 2019 to N420.8 billion in 2020.
“The group’s increased retail activities translated to a corresponding increase in retail deposits and loans.
“Thus, retail deposits grew by N612.7 billion from N1.11 trillion to N1.72 trillion year-on-year (YoY), while savings balances significantly grew by 88 per cent YoY and closed at NGN1.16 trillion,” he said.
The chairman also said that retail drive, coupled with the low-interest yield environment, reduced the cost of funding from 3.0 per cent to 2.1per cent and reduced interest expense.
He, however, said that the low-interest environment also affected the net interest margin, which declined to 7.9 per cent from 8.2 per cent in the current year due to the re-pricing of interest-bearing assets.
“Operating costs grew by 10 per cent YoY but are still tracking well below inflation which at the end of the year stood at 15.75 per cent.
“Although returns on equity and assets also reduced from 23.8 per cent to 22.4 per cent and from 3.4 per cent to 3.1 per cent, respectively.
“The group still delivered improved Earnings per Share, which grew 10 per cent from N6.65 to N7.34 in the current year.
“The group equally increased corporate customer deposits, which alongside the growth in retail deposits, delivered total deposit growth of 25 per cent, to close at N5.34 trillion, driving growth in market share,” he said.
The chairman noted that total assets also increased significantly by 34 per cent to N8.48 trillion, from N6.35 trillion.
“In spite the COVID-19 pandemic and its associated challenges, the group managed to create new viable risk assets as gross loans grew by 19 per cent, from N2.46 trillion to N2.92 trillion.”