January 26, 2023

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Zenith Bank’s Rapid Growth As Most Profitable Bank In Nigeria

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From NGN20 million (US$4 million) take of to now Nigeria’s largest and one of Africa’s largest financial institutions by tier-1 capital, with shareholders’ funds of NGN1.28 trillion (US$3.03 billion) and a total asset base of over NGN9.6 trillion (US$22.80 billion)

If there is any financial institution that has created various platforms that suited the financial needs of an average Nigerian, then that bank is Zenith Bank. This is a financial hub that has given millions of Nigerians opportunities to invest their moneys and be rest assured that they have massive advantages dealing with the bank. The leadership of the bank, ever since it’s foundation has been very careful in appointing those who will oversee and administer customer’s investments and finances. This is why credible and trust-worthy professional bankers and financial gurus are appointed as the bank’s Managing Directors/CEOs.

Over the years, Zenith Bank has recorded so many plus in various degrees of success as regards all the sectors of the Nigerian and international economies. With all these sterling performances and commendable contributions, Zenith Bank has carved a very huge and solid niche for itself in the global banking community viz-a-viz the bank being recognized and awarded severally both at home and in the Diaspora.
Founded by the indefatigable business tycoon and a czar in the boardroom, Mr. Jim Ovia a Commander of the Order of the Niger (CON), Zenith Bank commenced operation in July 1990 as a commercial bank. Ever since, the bank has been involved in developing the Nigerian economy by helping farmers, businessmen and women, industrialists, manufacturers and others financial supports and back-ups for the successful operation of their dealings and today, to the special glory of God and the prudency, hardwork, resilience and consistency of both the bank’s board, staff and shareholders, Zenith Bank has, from its humble beginnings of a single branch that started off on NGN20 million (US$4 million) is now Nigeria’s largest and one of Africa’s largest financial institutions by tier-1 capital, with shareholders’ funds of NGN1.28 trillion (US$3.03 billion) and a total asset base of over NGN9.6 trillion (US$22.80 billion). With more than 10,000 staff in its employment globally, the Bank presently operates from over 500 branches and business offices across all states of Nigeria, the Federal Capital Territory (FCT), Abuja, and its foreign subsidiaries in Ghana, Sierra Leone, Gambia and United Kingdom.

These admirable records surely are pointers that Zenith Bank is here to stay in the community of global banks. Zenith Bank has been so involved in the growth and development of an average Nigerian business entrepreneur not living out the established, bluechip companies. The enviable bank is one of those that have stood the test of time and remain very relevant in both the Nigerian and the international banking world. With dedicating, hardworking and exciting workforce, Zenith Bank will continue to outshine many of its contemporaries in the country and become a rallying point for bank directors and workers generally.

Zenith Bank has partnered with many successful business establishments, government agencies and parastatals, oil giants, conglomerates and others to ensure a global stable economy. Located strategically in virtually all the nooks and crannies of the country, Zenith Bank is closer to the people than any other banks. The array of its branches spread its tentacles to everywhere and no one would be left with an excuse of not getting connected with a Zenith Bank branch, anywhere in Nigeria and beyond.

In retrospect, the founder of Zenith Bank chose “Zenith” as the name of the Bank, a name he reckoned had not been used in the international and global market. In arriving at a decision, he was guided by his understanding of the core elements of successful branding, including simplicity, broad-based appeal, and uniqueness. Leveraging on his experience over the years, he was able to write the application for a banking license, including a detailed feasibility study of the proposed Zenith Bank. He put so much into delivering a high-quality application for a commercial banking license because of his strong view that whatever emanates from the company represents the company and the values of the founder. The licence for Zenith Bank to commence operation was issued on April 22, 1990.
With Mr. Ovia as pioneer Managing Director/CEO, Zenith Bank commenced business in a duplex at Ajose Adeogun Street, Victoria Island, Lagos, sharing the facility with another tenant who occupied the other side of the building. As time passed, the tenant moved elsewhere, allowing Zenith Bank to utilise the entire space. The new team learnt quickly, following Mr. Ovia’s example of discipline, commitment and getting results under great pressure. The management team drew up a strategic plan to open up branches within a short time in each state capital, with a mandate for each branch to be established and open for business within three to six months.

When Zenith Bank first opened its doors in 1990, there were no automated teller machines (ATMs) in Nigeria, no debit or credit cards, and no digital networks. In 1995, the need to integrate digital technologies in the business led Mr. Jim Ovia to establish Cyberspace, a network and ICT-service company. Initially, he set up a VSAT (very small aperture terminal) satellite, but the military government of the day pulled it down because they were under the impression it could be used to spy on the country. This setback did not deter him from his digital banking ambitions though as he went ahead to use existing phone lines to network the Bank. After a couple of meetings with the Nigerian Telecommunications Limited (NITEL), Zenith Bank was allowed to install VSAT dishes on the top of its buildings, using them to connect branches. Consequently, Zenith Bank became the first bank to network its branches in Nigeria, a game-changer for the Bank and the industry. In 1997, Cyberspace acquired a new spectrum frequency from the Nigerian Communications Commission (NCC) which enabled it to transmit data within Nigeria wirelessly. With Zenith Bank now networked, the Bank was able to ensure that staff members have a connected personal computer or a handheld device. The bank began digitalizing many of its processes, making it easier for customers to transact in real-time.

In 2004, the Central Bank of Nigeria (CBN) declared that banks had to be recapitalised with a minimum of NGN25 billion or be liquidated. Out of ninety banks in existence at the time, only twenty-five were able to raise the funds. While some banks merged or acquired others, Zenith Bank was one of only two banks that had no need to acquire or merge with any other financial institution. When the Bank announced an initial public offering (IPO), the public mood was extremely confident, and the demand for the Zenith Bank stock was so great that the IPO was over-subscribed. The Bank was able to raise NGN48 billion, although it could only keep just a third of that sum in accordance with the Stock Exchange rules. Following the highly successful IPO, the Bank became a public limited company on June 17, 2004, and was listed on the Nigerian Stock Exchange (NSE) on October 21, 2004.

In March 2007, Zenith Bank was licensed by the Financial Services Authority (FSA) of the United Kingdom to establish Zenith Bank (UK) Limited as the United Kingdom subsidiary of Zenith Bank Plc. The Bank has witnessed significant expansion in Africa and established the following subsidiaries: Zenith Bank (Ghana) Limited, Zenith Bank (Sierra Leone) Limited and Zenith Bank (Gambia) Limited. The Bank also has presence in the People’s Republic of China and the United Arab Emirates. In 2013, the Bank listed $850 million worth of its shares at $6.80 each on the London Stock Exchange (LSE).

Zenith Bank has continued to distinguish itself in the Nigerian financial services industry through superior service quality, unique customer experience and sound financial indices. With a team of dedicated and well-trained professionals, the Bank leverages its robust Information and Communication Technology (ICT) infrastructure to provide a broad range of products and services. In addition, the Bank is a leader in lending to key segments of the Nigerian economy, facilitating job creation and economic growth. Zenith Bank’s impressive growth pattern and performances over the years have earned the Bank excellent ratings, recognitions and endorsements from local and international agencies and institutions. Some of the notable ones include Bank of the Year (Nigeria) 2005, 2013, and 2020 (The Banker Magazine), Best Commercial Bank 2015 (International Finance Magazine), Biggest Bank in Nigeria by tier-1 capital 2013, 2014, 2015, 2019, 2020, and 2021 (The Banker Magazine) and Best Corporate Governance ‘Financial Services’ Africa 2018, 2020, 2021 (Ethical Boardroom). Zenith Bank Plc announced its unaudited results for the first quarter (Q1) ended 31st March 2022, with an impeccable growth of 22 per cent in gross earnings, from N157.3 billion reported in Q1 2021 to N191.5 billion in Q1 2022.
From the unaudited statement of account presented to the Nigerian Exchange Limited (NGX) recently, the strong double-digit growth in the top-line culminated in an increase in the bottom line, as the Group recorded an 11 per cent year-on-year (YoY) increase in profit before tax, growing from N61.02 billion in Q1 2021 to N67.99 billion in Q1 2022.
Its profit after tax also grew by 10 per cent, from N53.06 billion to N58.19 billion over the same period. The growth in the topline arose from both interest income and non-interest income.
Interest income grew by 25 per cent, from N101.12 billion in Q1 2021 to N126.38 billion in Q1 2022, while non-interest income grew by 12 per cent, from N51.20 billion to N57.23 billion.
The growth in interest income and non-interest income arose from the combined effects of an improvement in interest income on loans and advances (as risk assets continue to grow and pricing is gradually improving) and an improvement in non-interest income as the bank continued to deploy its retail strategy, thereby acquiring more customers and expanding its electronic banking income from the increased volume of transactions across all its channels. Its total assets grew by nine per cent, from N9.45 trillion to N10.32 trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 12 per cent, from N6.47 trillion in December 2021, to N7.25 trillion in March 2022. Savings account balance, which is solely retail grew by over N68 billion and was a validation of the robust customer acquisition strategy and versatile electronic platforms and digital channels.
Loans and advances also grew by six per cent, from N3.5 trillion in December 2021, to N3.7 trillion in March 2022, boosting the Group’s interest income and displaying the Group’s appetite for high-yielding risk assets creation.
This development also helped to boost the net interest margin (NIM), as it improved from six per cent in March 2021, to 7.3 per cent in the current period, while the capital adequacy ratio improved slightly from 21.1 per cent to 22.1 per cent.
“Going into the remainder of 2022, the Group would continue to focus on sustainable growth across all its business segments and deploy technology platforms and digital assets intuitively to serve its various customers’ needs to deliver enhanced returns to its stakeholders,” the bank stated.
Zenith Bank’s track record of excellent performance has earned the brand numerous awards, including being voted as Best Bank in Nigeria in the Global Finance World’s Best Banks Awards, for three consecutive years from 2020 to 2022, Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, and Best in Corporate Governance’ Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine and the 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.

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