TheCable

Zenith Bank printed a 5 per cent increase in gross earnings in the financial year ended December 31, 2020, to end the period at N696.5 billion from N662.3 billion reported in the previous year.

Figures from the bank’s 2020 result, show that profit before tax also increased by 5 per cent from N243.3 billion to N255.9 billion in the current year. The increase came from a combination of growth in the top-line and a significant reduction in interest expense.

The bank declared a final dividend of N2.70 for every share of 50k, bringing the total dividend for the financial year at N3.00, amounting to N94.18 billion from N87.91 billion in 2019. This is, however, subject to approval by shareholders at the bank’s annual general meeting on March 16.

Riding on the back of income from loans and advances to customers which surged 7.7 per cent to N250.81 billion, the bank saw a 1.3 per cent increase in interest income to end full-year 2020 at N420.81 billion from N232.94 in same period 2019.

Interest expense reduced by 18.4 per cent to N121.1 billion in 2020, significantly increasing the bank’s net interest income from N267.0 billion in 2019 to N299.7 billion in 2020.

The bank’s increased in retail activities translated to an increase in retail deposits and loans. Retail deposits grew by N612.7 billion from N1.11 trillion to N1.72 trillion year-on-year.

Savings balances significantly grew by 88 per cent to closed at N1.16 trillion. This retail drive, coupled with the low-interest yield environment helped reduced the bank’s cost of funding from 3percent to 2.1 percent and also reduced its interest expense.

The low-interest environment during the period also affected net interest margin, which declined from 8.2 per cent to 7.9 per cent in the current year due to the re-pricing of interest-bearing assets.

Operating expenses (Opex) growth was moderate, as the bank focused on cost management in the face of moderate gross earnings growth. Opex grew by 10.4 per cent year-on-year to N256.03 billion, with the most pressure exerted by other operating expenses up 16.9 per cent to N102.76 billion such as IT and maintenance costs.

Shares of Zenith Bank on Tuesday, traded at N26.00 on the Nigerian Stock Exchange,  gaining 4.84 per cent – the highest gain year to date. The share has gained 4.84 per cent this year.