Zenith Bank Surmounts Headwinds with Strong Q3 2022 Topline and Bottom Line Performance

Kayode Tokede

Zenith Bank Plc has announced its unaudited results for the third quarter ended September 30, 2022, recording a remarkable double-digit growth of 20 per cent in gross earnings, from the N518.7 billion reported in the third quarter (Q3) 2021 to N620.6 billion in Q3 2022.

The performance demonstrated the Group’s resilience against a challenging macroeconomic environment.
According to the unaudited account presented to the Nigerian Exchange Limited (NGX), the growth in the top-line was driven by interest and non-interest income growth. Precisely, its interest income grew by 27 per cent, from N308.8 billion to N390.8 billion, driven majorly by growth in risk assets and an improvement in pricing.

This also strengthened Zenith Bank’s earnings per share (EPS) by nine per cent to N5.55.
The double-digit growth in top-line also aided its bottom line, as the Group recorded a 13 per cent year-on-year (Y-o-Y) increase in profit before tax, growing from N179.8 billion in Q3 2021, to N202.5 billion in Q3 2022.
Profit after tax equally grew by nine per cent, from N160.6 billion to N174.3 billion in the same period.
Growth in non-interest income was enabled by the Group’s retail strategy, with continued substantial customer acquisition driving transactions, deposit growth and growth in electronic banking income.

Due to inflationary pressure and the rising cost of doing business, its operating costs grew by 17 per cent. However, this was below the growth in gross earnings (20%), thereby facilitating the double-digit growth in the bottom line.
The continuing elevated yield environment affected the cost of funding which increased from 1.4 per cent to 1.7 per cent in the current period. This affected the net interest margin (NIM), which dropped due to the immediate implementation of higher yields on interest-bearing liabilities.
However, the NIM was expected to see a correction in subsequent quarters as the assets side is repriced correspondingly.

Furthermore, Zenith Bank’s total assets grew by 20 per cent, from N9.45 trillion to N11.34 trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 24 per cent from N6.47 trillion in December 2021 to N8.04 trillion in September 2022, due to the market’s confidence in the brand.
Loans and advances also grew by 16 per cent from N3.5 trillion in December 2021 to N4.06 trillion in September 2022, boosting the Group’s interest income and displaying the Group’s appetite for high-yielding risk assets creation. As a result of this growth, Zenith Bank’s capital adequacy ratio reduced from 21 per cent to 19.1 per cent, while liquidity ratio reduced from 71.6 per cent to 68.9 per cent. Both prudential ratios remain very strong and are still well above regulatory thresholds.

“In the year’s final quarter, management is determined to sustain the strong performance trajectory while adapting to changes in the regulatory environment and focusing on creative initiatives to mitigate inflationary trends, foreign exchange pressures and the growing competitive environment,” the bank explained.
Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, including being recognised as Number One Bank in Nigeria by Tier-1 Capital, for the 13th consecutive year, in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine; Best Bank in Nigeria, for three consecutive years from 2020 to 2022, in the Global Finance World’s Best Banks Awards; Best Commercial Bank, Nigeria 2021 and 2022 in the World Finance Banking Awards; Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards 2022; Best in Corporate Governance’ Financial Services’ Africa, for three consecutive years from 2020 to 2022, by the Ethical Boardroom; Best Commercial Bank, Nigeria and Best Innovation In Retail Banking, Nigeria in the International Banker 2022 Banking Awards. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.

Similarly, Zenith Bank was honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.