Zenith Bank Plc closed the 2023 financial year with triple-digit growth of 125 per cent in gross earnings from N945.6 billion reported in 2022 to N2.132 trillion.
The bank disclosed this in its audited financial results for the 2023 financial year presented to the Nigerian Exchange (NGX).
The growth in gross earnings resulted in a year-on-year increase of 180 per cent in profit before tax (PBT) from N284.7 billion in 2022 to N796 billion in 2023.
Profit after tax also recorded growth of 202 per cent from N223.9 billion to N676.9 billion in the period ended December 31, 2023.
The bank attributed the increase in gross earnings primarily to growth in interest and non-interest incomes.
While interest income increased by 112 per cent from N540 billion in 2022 to N1.1 trillion in 2023, non-interest income grew by 141 from N381 billion to N918.9 billion in the same period.
It said the increase in interest income was driven by the growth in the size of risk assets and their effective repricing, alongside the rise in the yield of other interest-bearing instruments over the year while the growth in non-interest income was attributed to significant trading gains and an increase in gains from the revaluation of foreign currencies.
The bank also reported that the cost of funds grew from 1.9 per cent in 2022 to 3.0 per cent in 2023 due to the high interest rate environment while interest expense increased by 135 per cent from N173.5 billion in 2022 to N408.5 billion during the period in review.
Notwithstanding the 32 per cent growth in operating expenses in 2023, the bank’s cost-to-income ratio improved significantly from 54.4 per cent in 2022 to 36.1 per cent in 2023 due to improved top-line performance.
Return on average equity increased by 118 per cent from 16.8 per cent in 2022 to 36.6 per cent in 2023, underpinned by improved gross earnings.
Total assets increased by 66 per cent from N12.3 trillion in 2022 to N20.4 trillion in 2023, largely due to growth in total deposits and the revaluation of foreign currency deposits.
Gross loans grew by 71 per cent from N4.1 trillion in 2022 to N7.1 trillion in 2023 due to the revaluation of foreign currency loans and the growth in local currency risk assets.
The loan growth, according to the financial statement, did not significantly impact the non-performing loans ratio, which increased marginally from 4.3 per cent to 4.4 per cent despite the heightened risk environment and challenging operating environment.
As a demonstration of its commitment to shareholders, the bank announced a proposed final dividend payout of N3.50 per share, bringing the total dividend to N4.00 per share.
Going forward, the bank said: “In 2024, the Group will complete the transition to a holding company structure, which is anticipated to position it advantageously for exploring emerging opportunities in the Fintech space while bolstering its digital and retail banking initiatives.
“Furthermore, the Group is undertaking urgent necessary actions to meet the new minimum N500 billion equity capital requirement to maintain its international authorisation within the timeframe stipulated by the Central Bank of Nigeria (CBN).
“This will strengthen its presence in key markets to continue positioning for sustainable growth and value addition for stakeholders.”
