Leading Tier-1 deposit money bank (DMB), Zenith Bank Plc granted expansive facilities in loans and advances totaling N11.3 trillion in the past five years: 2016-2020, data from its annual reports has revealed. The DMB which belongs to the prestigious Premium Board league of the NGX Exchange (formerly Nigerian Stock Exchange) also accelerated the facilities to support businesses and boost the economy at the peak of the COVID-19 crisis.
The Central Bank of Nigeria (CBN) continues to compel banks to boost their credit to the real sector of the economy. It has maintained a strong policy stance of 65 percent loan deposit ratio (LDR) to ensure compliance by DMBs. Focus is more on the real sector – to create jobs, boost productivity and support Nigerian government efforts to diversify the economy. Many DMBs have come under the CBN’s hammer for defaulting in the stipulated loan deposit ratio, as the apex bank debits their CRR account hugely at a time.
Analysis of the Zenith Bank’s financial statements during the review period showed that the bank’s loans and advances dropped from N2.28 trillion in 2016 to N2.10 trillion in 2017, a dip of 8.2 percent. The figure further declined by 58.1 percent to N1.82 trillion in response to the ripple effects of the 2016/2017 recession. The bank embarked on an accelerated move that led to recording N2.3 trillion loans and advances in 2019, a rise of 26.4 percent, before hitting N2.77 trillion in 2020, a 20.5 percent jump, at the peak of the COVID-19 crisis.
Disaggregation of the 2020 performance shows accelerated trend in loans and advances during the COVID-19 crisis, apparently to support businesses and mitigate the pangs of the recession. The loans and advances rose from N2.62 trillion in H1 ’20 to N2.71 trillion in Q3 ’20. These also compared favourably with corresponding periods of 2019 which recorded N2.30 trillion and N2.04 trillion respectively.
Net Interest Income jumped from N157.40 billion at H1 ’20 to N255.17 billion in Q3 ’20. Preceding year’s figures were N214.62 billion and N142.51 billion respectively.
As evidence of prudent management of the facilities, the bank’s Profit After Tax (PAT) grew exponentially during the 5-year period. The N124.25 billion achieved in 2016 rose to N173.79 billion in 2017, before hitting N193.42 billion in 2018. The PAT rose to N208.84 billion in 2019 to peak at N230.56 billion in 2020 – the highest during the review period.
The performance of the bank in 2020, a year of devastating COVID-19 pandemic was equally impressive. PAT at H1 ’20 was N103.82 billion compared to N88.88 billion in the corresponding period of 2019; then jumped to N159.31 billion in Q3 ’20 as against N150.72 billion in the corresponding year.
The increase in loans and advances recorded corresponding trends in Net Interest Income which rose from 240.17 billion in 2016 to N243.66 billion in 2017, to climb to N295.59 billion in 2018. The figure dropped to N267.03 billion in 2019 to hit N299.68 billion in 2020, the highest during the five-year period.
The total asset growth during the period was a boost to the bank’s leadership position in the industry. From total assets of N4.73 trillion in 2016, the bank recorded N5.59 trillion and N5.95 trillion total assets in 2017 and 2018 respectively. In 2019 and 2020, total assets of the bank rose to N6.34 trillion and N8.48 trillion respectively. Disaggregated figures for 2020 showed that the total assets rose from N7.58 trillion in H1 ’20 to N7.79 trillion in Q3 ’20. Figures for 2019 corresponding period were N6.34 trillion and N5.97 trillion respectively.
Zenith Bank also has subsidiaries in: Ghana, Zenith Bank (Ghana) Limited; Sierra Leone, Zenith Bank (Sierra Leone) Limited; Gambia, Zenith Bank (Gambia) Limited. The bank also has a representative office in The People’s Republic of China. The Bank plans to take the Zenith to other African countries as well as the European and Asian markets.
Zenith Bank Plc emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2021. For the fourth consecutive year, Zenith Bank has been ranked as the number one banking brand in Nigeria with a brand value of $275 million, moving up two places from 392 in 2020 to 390 in the 2021 global ranking of banks. Notably, Zenith Bank is the only Nigerian bank among the first 400 banks in the global ranking.
The ranking was published in the February 2021 edition of The Banker Magazine of the Financial Times Group in conjunction with London-based Brand Finance. According to the publication, brand value is the licensing rate that a third-party would need to pay to use the bank’s brand.