By Uzoma Akobundu
Shareholders of Zenith Bank Plc at the company’s annual general meeting (AGM) held on Monday March 18, 2019 approved for the board to pay final dividend.
Almost immediately, many shareholders started receiving alert of payment, some while the AGM was in still session, and no sooner was the directive given to the board by the shareholders to pay.
In demonstration of its commitment to its shareholders, the bank had announced a proposed final dividend pay-out of N2.50 per share, bringing the total dividend to N2.80 per share, representing a yield of 11.2 per cent.
The shareholders received and adopted the company’s financial statement for the year ended December 31, 2018 together with the reports of the directors, auditors and audit committee thereon.
In a clear show of its resilience and strong market share, Zenith Bank has announced an impressive result for the year ended December 31, 2018 with profit before tax (PBT) rising to N232 billion for the 12 months ended December 31, 2018, this represents an increase of 16.6 percent over the N199 billion recorded for the same period in 2017.
According to the bank’s audited financial results for the 2018 financial year presented to shareholders, its profit after tax (PAT) witnessed an impressive growth of 11 per cent year-on-year to N193 billion from N174 billion.
This record profit before tax (PBT) was achieved through the Group’s optimisation of its cost of funds, cost-to-income ratio and cost of risk, ensuring that earnings per share strengthened by 11% to ₦6.15.
“The bank remains a clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions for all,” said Jim Ovia, chairman Zenith Bank Plc.
Ovia noted that the bank remains committed to delivering superior returns to “our much-valued shareholders by ensuring that a good chunk of our profit is set aside for you”.
“Zenith Bank Plc as a forward looking brand and a contending force in the Nigerian financial services industry has remained one of the biggest Corporate Social Responsibility contributors”, he added.
Despite the challenging macro-environment, the Group mitigated the knock-on effects through growth of its net interest income and operating income by 15 per cent and 8 per cent respectively as it was able to ensure improved cost efficiencies across the business. This focus on cost efficiencies is yielding tangible benefits as the Group recorded its lowest ever cost-to-income ratio at 49.3 per cent from 52.8 per cent in 2017.
Chairman, Zenith Bank Plc., Mr. Jim Ovia, CON (Centre), flanked from left by the Deputy Managing Director, Ms. Adaora Umeoji; the Managing Director/CEO, Mr. Peter Amangbo; the Company Secretary, Mr. Mike Otu; and the Deputy Managing Director, Mr. Ebenezer Onyeagwu at the bank’s 28th Annual General Meeting held in Lagos, yesterday.
The bank’s balance sheet remains shockproof as loan to deposit ratio, liquidity ratio and capital adequacy ratio were 44.2 per cent, 72.0 per cent and 25.0per cent respectively and all above the regulatory threshold.
Our risk-centric approach also ensured that cost of risk reduced significantly by 79 percent from 4.3 per cent in the prior year to 0.9 percent in 2018. This was reflected through the drop-off in impairment charges by 81 per cent (₦80 billion) compared to 2017, re-affirming the Group’s enhanced asset quality.
In the same breadth, coverage ratio increased by 34.2 per cent from 143.4 per cent to 192.4 per cent over the same period, reflecting a prudent disposition to credit risk management. Cost of funds also moved in the positive direction, declining by 41 per cent from 5.2 per cent in 2017 to 3.1 per cent for the year, supported by a 33 per cent decrease in interest expense (₦72 billion) over the same period, demonstrating a robust treasury and liquidity management.
The Group’s efforts to deepen its roots in the retail segment have started yielding benefits. This has resulted in a remarkable increase in the volume of transactions across various electronic platforms as well as significant customer acquisitions. This growth in transactions on its digital channels continues to support its retail push as fees from e-products increased by 44 per cent over 2017 with retail deposit balances also growing by 25 per cent.
Consistent with this superlative performance and in recognition of its track record of excellent performance, the bank was recently ranked as the Most Valuable Banking Brand in Nigeria in 2018 by The Banker Magazine. In similar fashion, Zenith Bank was recognized as the Best Corporate Governance Bank in Nigeria by The World Finance for the sixth time just as Ethical Boardroom, a Europe based Boardroom watchdog reaffirmed this recognition by naming the bank as the Best Bank in Corporate Governance in 2018.
Recognition has also come the way of the bank as it was recently named as the Best Institution in Sustainability Reporting in Africa 2018 (SERAS Awards) and the Bank of the Year 2018 (BusinessDay).