Zenith Bank strengthens loan asset quality, grows assets value to GHS 8.8bn
Zenith Bank Ghana for the year ended 2021 improved on its loan asset quality by reducing its non-performing loans (NPL).
Zenith Bank for the year under review reduced its NPL from 6.15% in 2020 to 4.4% in 2021.
The reduction in the bank’s NPL is indicative of the use of effective loan recovery strategies or methods being used by the bank.
Additionally, it shows less default rates by businesses and households that have acquired loan facilities from the bank.
Zenith Bank’s Capital Adequacy Ratio for the review period also increased slightly from 43.17% in 2020 to 45.09% in 2021.
The capital adequacy ratio (CAR) is a measurement of a bank’s available capital expressed as a percentage of a bank’s risk-weighted assets and liabilities.
Capital Adequacy Ratios mandate that a certain amount of the deposits be kept aside whenever a loan is being made. These deposits are kept aside as provisions to cover up the losses in case the loan goes bad.
Total assets value of the bank within the review year also witnessed an appreciable increase of some GHS 800m, as assets value grew from GHS 8.03bn in the previous year to GHS 8.86bn in 2021.
Accounting for the increase in Zenith Bank’s assets value was its cash and bank balances and pledged trading assets of GHS 1.71bn and GHS 485m in 2021 respectively.
In 2020, the bank’s cash and bank balances and pledged trading assets stood at GHS 1.48bn and GHS 263m respectively.
Liabilities of Zenith bank increased from GHS 6.57bn in 2020 to GHS 7.31bn in 2021, driven mainly by deposits from its customers which amounted to some GHS 6.39bn.
A perusal of the bank’s 2021 Financial Statement by norvanreports however, revealed that the bank’s net profit declined to GHS 220m in 2021 from GHS 338m in 2020.
Accounting for the decline in the bank’s net profit was a decline in its operating income from GHS 732m in 2020 to GHS 637m in 2021.
Read details of Financial Statement below:
2021 Summarised Financial Statement 1 Pager Final Signed by Fuaad Dodoo on Scribd
