Customer deposit increased by N5.3trn from N4.2trn
Zenith Bank Plc on Tuesday released its audited results for the year ended 31 December 2020 on the Nigerian Stock Exchange (NSE) website.
Below are 10 major highlights of the report:
- Gross earnings increased by 5 percent to N695.4 billion from N662.2billion.
- The interest and similar income of the bank had increased by 1 percent to N420.81 billion compared to N415.56 billion which is made in the comparable period of 2019.
- Profit Before Tax increased by 5 percent to N255.86bn from N243.29bn in the comparable period of 2019 while the Profit After Tax increased to N230.56bn from N208.84bn when compared to 2019. The increase arose from a combination of growth in the top-line and a significant reduction in interest expense.
- Interest expense reduced from N148.5 billion in 2019 to N121.1 billion in 2020, significantly increasing our net interest income from NGN267.0 billion in 2019 to NGN299.7 billion in 2020.
- Retail deposits grew by N612.7 billion from N1.11 trillion to N1.72 trillion year-on-year (YoY). Savings balances significantly grew by 88% Year-on-Year and closed at NGN1.16 trillion. This retail drive, coupled with the low-interest yield environment helped reduce our cost of funding from 3.0% to 2.1% and also reduced our interest expense.
- The low-interest environment also affected the net interest margin, which declined from 8.2% to 7.9% in the current year due to the re-pricing of interest-bearing assets. Operating costs grew by 10% YoY but are still tracking well below inflation which at the end of the year stood at 15.75%.
- Although returns on equity and assets also reduced from 23.8% to 22.4% and from 3.4% to 3.1% respectively, the Group still delivered improved Earnings per Share (EPS) which grew 10% from NGN6.65 to NGN7.34 in the current year.
- The Group also increased corporate customer deposits, which alongside the growth in retail deposits delivered total deposit growth of 25%, to close at N5.34 trillion, driving growth in market share.
- Total assets also increased significantly by 34% from N6.35 trillion to N8.48 trillion. Despite the COVID-19 pandemic and its associated challenges, the Group managed to create new viable risk assets as gross loans grew by 19% from N2.46 trillion to N2.92 trillion.
- This was achieved while maintaining a stable and low overall NPL ratio of 4.29% (2019: 4.3%) across the entire portfolio and an increase in the cost of risk from 1.1% to 1.5%, reflecting the elevated risk environment in 2020. The Group recorded impressive liquidity and capital adequacy ratios of 66.2% and 23.0% and remained above regulatory thresholds of 30% and 15% respectively.