Zenith Bank Plc has announced a remarkable 125 per cent growth in its gross earnings in its 2023 operations, from N945.6 billion reported in 2022 to N2.13 trillion.
According to the audited financial results for the 2023 financial year presented to the Nigerian Exchange (NGX), the impressive triple-digit growth in gross earnings resulted in 180 per cent growth in profit before tax (PBT), from N284.7 billion in 2022 to N796 billion.
Profit after tax (PAT) also recorded triple-digit growth of 202 per cent, from N223.9 billion to N676.9 billion.
The increase in gross earnings, the bank said, was primarily due to growth in interest and non-interest income.
Interest income increased by 112 per cent from N540 billion in 2022 to N1.1 trillion in 2023 while non-interest income grew by 141 per cent from N381 billion to N918.9 billion in the same period.
The increase in interest income is attributed to the growth in the size of risk assets and their effective re-pricing, alongside the rise in the yield of other interest-bearing instruments over the year.
Growth in non-interest income was driven by significant trading gains and an increase in gains from the revaluation of foreign currencies.
The cost of funds grew from 1.9 per cent in 2022 to three 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 in 2023.
Notwithstanding the 32 per cent growth in operating expenses in 2023, the Group’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 (ROAE) increased by 118 per cent from 16.8 per cent in 2022 to 36.6 per cent in 2023, underpinned by improved gross earnings, as the Group sought to deliver better shareholder returns. Return on average assets (ROAA) also grew by 95 per cent from 2.1 per cent to 4.1 per cent in the same period.
The bank has continued to deepen its market leadership in key corporate and retail deposit segments as customer deposits increased by 69 per cent from N9 trillion to N15.2 trillion in 2023.
Its retail drive continues to yield dividends as retail deposits now constitute 46 per cent of total deposits (compared to 44 per cent in 2022) and grew by 77 per cent from NGN3.97 trillion in 2022 to NGN7.04 trillion in 2023, also reinforcing increased customer confidence in the Zenith brand.
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.
As a result of the disciplined and diligent approach to risk assets creation and management, the loan growth did not significantly impact the non-performing loans (NPL) ratio, which increased marginally from 4.3 per cent to 4.4 per cent despite the heightened risk environment and challenging operating environment, an attestation to the group’s resilience despite headwinds and a challenging macroeconomic environment.
Also, the prudential ratios remain within regulatory thresholds, with the capital adequacy ratio (CAR) and liquidity ratio at 21.7 per cent and 71 per cent respectively, at the close of 2023.
