Zenith Bank Reaps the Fruits of Hard work

Zenith Bank Plc is the number five stock on the Nigerian Stock Exchange (NSE), in terms market capitalisation. As at last Monday, the market capitalisation of Zenith Bank stood at N686 billion. The other stocks that are ahead of Zenith Bank are: Dangote Cement Plc, which occupied number one with N3.408 trillion. Nigerian Breweries Plc closed second with N1.218 trillion, while Nestle Nigeria Plc and Guaranty Trust Bank (GTBank) Plc  have N888 billion and N786 billion to occupy the third and fourth position respectively.
Also, among the banking stocks, Zenith is the second highest priced closing at N21.85 per share behind GTBank, which stood at N26.70 per share. However, the corporate profile of Zenith Bank witnessed a major boost recently as The Banker magazine, a publication of the Financial Times of London, named the bank as the “Bank of the Year Nigeria 2013.”
This award, according to capital market operators and financial analysts, reflects the bank’s  impressive financial performance over the years.  Market analysts explained that the hard work that the board, management and entire staff members of the Zenith Bank have put in place have started to yield fruits.
Corporate Profile
Zenith Bank Plc is one of the leading financial services institution with headquarters in Nigeria and subsidiaries in the United Kingdom, Ghana, Sierra Leone, Gambia, and South Africa (Representative Office).The bank was incorporated as Zenith International Bank Limited on May 30, 1990, as a private limited liability company and was licensed to carry on the business of banking in June 1990. The name of the bank was changed to Zenith Bank Plc on May  20, 2004, to reflect its status as a public limited liability company. The bank's shares were listed on the NSE October 20, 2004, following a highly successful Initial Public Offering (IPO).The bank is currently owned by Nigerian individuals and institutions numbering over 1,000,000 shareholders.
The bank has been growing its customers' businesses and wealth in the last 20 years and this has positioned Zenith Bank as the financial institution of choice. The bank’s business is built on its core principle of working in its customers' best interest.
Vision/Strategic Objectives
The overall vision of the bank has been "to build the Zenith brand into a reputable international financial institution recognised for innovation, superior performance while creating premium value for all stakeholders."
The strategic objective of Zenith Bank includes the continuous improvement of its capacity to meet the customer's increasing and dynamic banking needs as well as sustain high quality growth in a volatile business environment through: continuous investment in branch network expansion and thus bringing quality banking services closer to our teeming existing and potential customers; continuous investment and deployment of up to date and state-of-the-art technology; continuous employment of the best people available and motivating them; continuous investment in training and re-training of our personnel; maintaining and reinforcing our core customer service delivery charter.
Financial Performance
The bank has been posting impressive financial results over the years, rewarding shareholders with equally impressive dividends.  For instance, the bank paid a dividend of N1.60 per share for the 2012 financial year. And given the results for the third quarter ended September 2013, shareholders should expect a higher dividend at the end of this year.
Gross earnings rose from N229.161 billion to N255.299 billion. A breakdown of the gross earnings showed that corporate and commercial business fetched the bank the highest percentage of 42.2 per cent. Retail banking followed, accounting for 25.28 per cent, while institutional and public sector accounted for 15.8 per cent and 12.05 per cent in that order.
Net interest income rose by 16 per cent from N119.7 billion in 2012 to N138.979 billion.  Profit before tax stood at N83.037 billion, up from N75.22 billion in the corresponding period of 2012. Profit after tax grew from N64.1 billion to N69.7 billion, while earnings per share rose to 220 kobo, compared with 202 kobo in 2012.
Customers’ deposits, which indicate the level of patronage enjoyed by the bank, stood at N2.852 trillion, up from N1.929 trillion. Corporate and commercial customers deposited accounted for 42.65 per cent of the deposits, followed by retail customers with 30.7 per cent. Public accounted for 17.3 per cent.
A further analysis of the results showed shareholders’ funds of N482.5 billion compared with N462.9 billion in 2012. In terms of some key ratios, net interest margin improved from 8.9 per cent to 9.5 per cent. Cost of funds stood at 3.36 per cent in 2013, as against 3.83 per cent in 2012. Return on average assets reduced to 3.4 per cent, compared with 3.5 per the in 2012 while return on average equity decreased from 20.9 per cent to 19.67 per cent. Liquidity ratio improved from 60.4 per cent to 63.1 per cent. Non-performing loans ratio fell from 3.2 per cent to 3.1 per cent.
Commenting on the results, Managing Director/Chief Executive Officer of Zenith Bank, Mr. Godwin Emefiele, said: “Our results for nine months ended September 30, 2013 remained strong as we sustained our drive for another impressive performance this year. Driven essentially by of our people, technology and excellent customer services the group recorded an 11.41 per cent and 10.39 per cent  improvements in gross earnings and PBT to N255 billion and N83 billion respectively.
“We sustained improvements in our net interest margin (NIM) year-on-year as well as quarter-on-quarter as we responded effectively through reallocation of resources and optimal pricing of assets and liabilities to counter the effects of the new CRR regime and increased savings deposit cost on our operations. The cost of funding our operations improved both year-on-year as well as quarter-on-quarter. Our cost-to income ratio remained stable despite increased AMCON charge and new COT tariff as we continue to push for other non-interest income through deployment of e-banking products and services.”
According to him, the bank’s balance sheet remains strong with total assets growing and in excess of N2.85 trillion as at September 30, 2013.
“Liquidity and capital adequacy remained at very comfortable levels of 63 per cent and 28 per cent respectively giving us enough latitude to explore new business horizons while being able to withstand any systemic shocks. Our loan books continued to grow as we take advantage of emerging business opportunities, whilst ensuring that our cost of risk and NPL remained below industry averages. Given the current macro-economic indices, we are very confident that we would sustain this strong performance and growth trend into the fourth quarter of the year,” Emefiele added.
Bank of the Year Award
Apparently impressed with the performance of the bank in all ramifications, The Banker magazine gave an award of Bank of the Year to Zenith Bank.
Nominees for the award were judged by their ability to deliver shareholder returns and gain strategic advantage in terms of market visibility and positioning. The award also indicates the level of trust and confidence on the brand and is a testament to the strong management, sound business model and prudent risk approach of Zenith Bank Plc.
The Banker said Zenith Bank was selected based on the overall performance of the institution and the opinion of leading financial analysts from the world’s financial markets.
Receiving the award, Emefiele dedicated it to his bank’s customers while commending management and staff members for working excellently to build Zenith into a respectable global brand.
“The bank’s competitive advantage as a financial powerhouse for value creation in Nigeria and the several achievements and successes of the brand are a result of a strategic combination of people talent, proprietary knowledge, strong brand equity, leadership, integrity, and relationship management,” he said.
Before the new award, Zenith Bank was again named Nigeria’s largest financial institution by The Banker. In its 2013 rating of the world’s Top 1000 banks, the magazine listed the bank as Africa’s sixth largest by Tier 1 capital, having grown its Tier I capital to $2.969 billion within 12 months.
The bank also ranked the best customer-focused in both the retail and corporate banking categories by KPMG in its 2013 Banking Industry Customer Satisfaction Survey (BICSS).
The award, according to analysts, is an eloquent attestation of Zenith Bank’s best-in-class customer-centric service delivery.
Zenith Bank Nigeria was ranked the best Customer-focused bank in both the retail and corporate banking categories on the basis of a Customer Satisfaction Index (CSI), which took into account key factors like convenience, product/service offering, transaction methods and systems, pricing and customer care.

Leave a Reply