How Adaora Umeoji is Shaping Zenith Bank’s Future

Donatus Eleko

Adaora Umeoji, the Group Managing Director/Chief Executive Officer of Zenith Bank Plc, has once again demonstrated her exceptional leadership skills, propelling the bank to new heights of financial performance in the financial institution’s recently released half-year 2024 results.

Under Umeoji’s strategic guidance, Zenith Bank has consistently outperformed its peers and solidified its position as a leading financial institution in Nigeria and across Africa.

Indeed, the visionary approach to banking of Umeoji, who has been with Zenith Bank for 26 years, has been instrumental in driving Zenith Bank’s impressive growth.  Her focus on innovation, customer satisfaction, and sustainable development has resulted in a series of significant achievements.

Umeoji is an alumnus of the prestigious Harvard Business School where she attended the Advanced Management Program (AMP) and an alumnus of Columbia Business School with a Certificate in the Global Banking Program. She holds a Bachelor’s Degree in Sociology from the University of Jos, a Bachelor’s Degree in Accounting and a First-Class honors in Law from Baze University, Abuja. She holds a Master of Laws from the University of Salford, United Kingdom, a Master in Business Administration (MBA) from the University of Calabar, and also has a doctorate in business administration from Apollos University, USA. She holds a Certificate in Economics for Business from the prestigious MIT Sloan School of Management, USA, and has attended various management programmes in renowned Universities around the world including the strategic thinking and Management programme at Wharton Business School, USA. She also attended the executive program in Strategic Management, and has a Certificate in Leading Global Business all from Harvard Business School, USA.

She has impacted many lives through her philanthropic and humanitarian activities through her NGOs; Pink Breathe Cancer Foundation and the Adorable Foundation that educates, caters for Cancer patients and indigent children education especially the Girl-Child. Her contribution to humanity was recognized by the Sun Newspaper which recently bestowed on her the Humanitarian Service Icon Award for 2023.

Maintaining Impressive Financial Performance

Under Umeoji’s leadership, Zenith Bank’s audited results for the half-year ended 30 June 2024, showed that the bank recorded an impressive triple-digit growth of 117 per cent in gross earnings from N967.3 billion reported in the half-year (H1) of 2023 to N2.1 trillion in H1 2024.

This superior performance was achieved even as the Nigerian banking industry navigates a challenging macro environment.

According to the bank’s audited half-year financial results presented to the Nigerian Exchange (NGX) recently, the triple-digit growth in the top line also drove growth in the bottom line as the Group recorded a 108 per cent year-on-year (YoY) increase in profit before tax, from N350 billion in H1 2023 to N727 billion in H1 2024.

Profit after tax also grew by 98 per cent from N292 billion to N578 billion in the same period. This led to growth in earnings per share (EPS) by 98 per cent from N9.29 in H1 2023 to N18.41 in the period under review. The growth in gross earnings was driven by an acceleration in both interest income and non-interest income. Propelled by the growth of and by the effective pricing of risk assets, Zenith Bank’s interest income surpassed the N1 trillion mark, a half-year record, growing by 177 per cent from N415.4 billion in H1 2023 to N1.1 trillion in H1 2024, while non-interest income grew by 74 per cent from N515.7 billion to N899.3 billion.

The Group continued to strive for operational efficiency, resulting in only a marginal increase in cost-to-income ratio year-on-year (YoY) from 38.5 per cent to 39.4 per cent. The heightened risk environment fuelled a growth in impairment levels, thus mildly elevating the bank’s cost of risk from 8.8 per cent to 9.7 per cent. Its cost of funds grew year-on-year from 2.6 per cent to 4.4 per cent given the high-interest rate environment. This also resulted in growth in interest expense from N153.6 billion in H1 2023 to N434.4 billion in H1 2024.

Despite this, net interest margin grew by 49 per cent from 5.9 per cent in H1 2023 to 8.8 per cent in H1 2024, underscoring the efficient repricing of interest-earning assets and interest-accruing liabilities.

Furthermore, Zenith Bank under the leadership of Umeoji, recorded growth in total assets of 35 per cent from N20.4 trillion in December 2023 to N27.6 trillion in June 2024, while customer deposits grew by 29 per cent from N15.2 trillion in December 2023 to N19.6 trillion in June 2024. Gross loans also grew by 44 per cent from N7.1 trillion in December 2023 to N10.2 trillion in June 2024 aided by loan disbursements to customers and the translation effect of foreign currency-denominated loans.

The Group’s consistent stringent risk acceptance criteria helped ensure that the non-performing loan ratio continued to show only modest growth, increasing from 4.4 per cent in December 2023 to 4.5 per cent in June 2024 despite the challenging macroeconomic environment. The capital adequacy ratio improved from 21.7 per cent in December 2023 to 23 per cent in June 2024, the loan-to-deposit ratio grew by 11 per cent from 46.5 per cent to 51.7 per cent, while liquidity ratio reduced from 71 per cent to 59 per cent in the current period. All of the bank’s prudential ratios were still well above regulatory thresholds.

In maximising value to its shareholders, the Group declared an interim dividend of N1.00 per share. This represented the highest half-year dividend pay-out in its history, and also the highest interim dividend in the Nigerian banking sector till date.

Today, the bank is globally celebrated as a relentlessly forward-thinking institution, consistently setting the benchmark for digital banking across the Nigerian and African banking sectors, according to a report by International Banker.

Built upon the three principles of people, technology and service, the optimisation of experience and satisfaction across its vast customer base inspires Zenith Bank’s digitalisation strategy, which delivers innovative solutions that are consistently ahead of the local competition.

The bank can proudly boast of having deployed several firsts in cutting-edge offerings that continuously satisfy evolving customer preferences and are thus pioneering the digital-banking revolution transpiring across the country—and, indeed, the continent—at present.

These innovations include the deployment of the first offsite automated teller machine (establishing an ATM in a location outside the bank’s premises in 2003), real-time online banking across its entire branch network, transaction notifications via SMS (Short Message Service) and email, an online payment gateway and QR (quick-response) code payment system.

Some of its internet banking solutions include the *966# Banking, which is a convenient, fast, and secure way for its customers to access their bank account and perform banking transactions via non-smartphone without internet connectivity. This service is available to all individual account holders with any feature phones that run on the GSM platform.

 Commitment to Nigeria’s Economic Diversification

Zenith Bank has remained committed to its drive to support the diversification of the Nigerian economy by helping to unlock significant economic benefits for the nation, with its annual international trade seminar.

At this year’s forum with the theme, “Nigerian Non-Oil Export Industry: Awakening the Giant,” Umeoji in her welcome address, highlighted the importance of non-oil export as a catalyst for job creation. According to her, “Our theme ‘Awakening the Giant,’ speaks directly to the untapped potential within the non-oil segment of the economy and how to optimise them. This involves an increase in the number and volume of exportable non-oil items and value addition to exportable items into finished products. Increasing the number and volume of exportable non-oil products implies more business for you, our esteemed exporters, and increased foreign exchange earnings for our country.

“In addition, this sector will drive employment generation for Nigerian youths who constitute 60 percent of the estimated 233 million population, and Zenith Bank is committed to being at the forefront of these efforts.”

Zenith Bank launched the Non-Oil Export Seminar in 2015 as an initiative to deepen the discourse on promoting the non-oil export business in Nigeria, and remains committed to promoting the non-oil export sector in Nigeria by identifying emerging opportunities that help stimulate non-oil exports and developing robust financial products as well as incentives for operators in the sector.

Sustainability Banking and CSR

Zenith Bank has demonstrated a strong commitment to corporate social responsibility, investing in initiatives that benefit communities and the environment. The Zenith Group has also made a lot of commitments towards achieving the Sustainable Development Goals (SDGs). Owing to this, the bank has won several laurels in the area of sustainability banking and corporate social responsibility (CSR). Zenith Bank’s vision is to build a lasting corporate structure that would outlive current and future generations through sustainable business practices and efficient deployment of resources.  As a responsible corporate citizen, giving back to the communities where they carry out business is an integral part of their overall strategy. The aim is to ‘give back’ in a structured and sustainable manner that ensures the greatest possible impact on the beneficiaries. Its social initiatives are geared towards eradicating extreme poverty, encouraging skills development and capacity building, employment creation, and supporting government’s efforts at achieving inclusive growth and development. To achieve this, the Group periodically carries out need-gap analysis in target communities to be able to accurately determine areas where its support is most needed, thereby delivering CSR projects that are relevant and impactful.

Some of its key focus areas include healthcare, education, infrastructure, sports and youth empowerment. Also, some of Zenith Bank’s major intervention projects include building, equipping and donation of Iga Idunganran Healthcare Centre in Lagos Island; donation of 10 Mobile Cancer Centres (in conjunction with the Committee Encouraging Corporate Philanthropy); support for Private Sector Health Alliance of Nigeria; support for States’ Security Trust Funds; title sponsorship of the National Women Basketball League (in conjunction with the Nigeria Basketball Federation); sponsorship of Nigeria’s representation at the annual Microsoft Office World Championship in collaboration with ReadManna Ventures; sponsorship of the Delta Principals’ Cup, and sponsorship of the Nigeria Football Federation (NFF).

Future Outlook

No doubt, the Group’s strong brand equity and excellent service quality position it to mine new business opportunities in strategic sectors of the economy, in existing geographies where it has a presence, and in new geographies it is exploring.

In furtherance of its expansion plans, the Group has received regulatory approval for the establishment of a third-country branch in Paris, France, which, when fully operational, will enhance its product offerings in international markets.

The Zenith Bank Group will continue to invest in enhancing its digital banking capabilities and is expediting the completion of its technology infrastructure upgrade. Its track-record of successful capital raises puts it on a solid footing to meet the new minimum capital requirements for commercial banks with international authorisation, well ahead of the deadline set by the CBN.

The Group remains undoubtedly on track for a record year in its financial performance and will continue to deliver maximum value to its shareholders, while ensuring a strong corporate governance culture.

Also, in 2024, it is expected to unveil its holding company (HoldCo) structure which is expected to see the financial institution serve its customers better.

The HoldCo structure presents Zenith Bank an opportunity to unlock value for shareholders in terms of opportunity in other sectors beyond banking. The first part is Fintech, which it has already received the approval and the licence from the Central Bank of Nigeria (CBN). It would position Zenith Bank to also think of opportunities beyond Africa.

This, the Founder and Chairman of Zenith Bank, Mr. Jim Ovia, strongly believes, ”is anticipated to position it advantageously for exploring emerging opportunities in the Fintech space while bolstering its digital and retail banking initiatives.”

As Zenith Bank continues to thrive under Umeoji’s leadership, it is clear that her strategic vision and exceptional management skills are key drivers of the bank’s success. Her ability to navigate complex challenges and seize opportunities has positioned Zenith Bank as a leading force in the Nigerian financial landscape.