Zenith Bank Group records 24% growth in earnings to N945bn in 2022
The Zenith Bank Group achieved a year-on-year (YoY) growth in gross earnings of 24% from NGN765.6 billion reported in the previous year to NGN945.5 billion in 2022. This was driven by a 26% YoY growth in interest income from NGN427.6 billion to NGN540.2 billion and a 23% YoY growth in non-interest income from NGN309 billion to NGN381 billion.
The debt restructuring programme in Ghana resulted in a very significant impairment expense for our Ghana subsidiary. Consequently, impairments grew by 106% from NGN59.9 billion to NGN123.4 billion, which also resulted in an increase in the cost of risk from 1.9% in 2021 to 3.2% in the current year. Interest expense increased by 63% YoY from NGN106.8 billion to NGN173.5 billion. This affected the cost of funds which grew from 1.5% in 2021 to 1.9% in 2022 because of interest rate hikes globally. The above notwithstanding, the group profit before tax recorded a 2% YoY growth from N280.4 billion in 2021 to N284.7 billion in 2022.
Customer deposits increased by 39%, growing from NGN6.47 trillion in the previous year to NGN8.98 trillion in 2022. The growth in customer deposits cuts across all products and deposit segments (corporate and retail), consolidating our market leadership and the confidence customers have in us.
The continued elevated yield environment positively impacted on our net-interest-margin (NIM), which grew from 6.7% to 7.3% due to an effective repricing of our interest-bearing assets. Operating expenses grew by 17% YoY, but cost growth was controlled and remains below the inflation rate. The Group’s profit after tax (PAT) decreased by 8% from NGN244.6 billion to NGN223.9 billion because of the increase in the Group’s effective tax rate from 12.7% in 2021 to 21.3% in 2022. This increase is because of the effective implementation of the Finance Act. This significant increase is a one-off and is not expected to recur in subsequent years. This affected return on equity which reduced from 20.4% to 16.8%. Return on assets decreased from 2.7% to 2.1% due to the significant growth in the balance sheet.
Total assets increased by 30%, growing from NGN9.45 trillion in 2021 to NGN12.29 trillion mainly as a result of the rapid growth in customer deposits. With the steady and continued recovery in economic activities, the Group prudently grew its gross loans by 18%, from NGN3.5 trillion in 2021 to NGN4.1 trillion in 2022, leading to a marginal increase in the non-performing loan (NPL) ratio from 4.2% to 4.3% YoY. The capital adequacy ratio decreased from 21% to 19.8% while the liquidity ratio improved from 71.6% to 75%. Both prudential ratios are well above regulatory thresholds.
In 2023, the Group intends to expand its frontiers as it also reorganises into a holding company structure adding new verticals to its businesses and growing in all its markets, both locally and internationally.
