zenithbankLSEZenith Bank Plc, a quoted company on the Nigerian Stock Exchange, NSE has stated its readiness to deepen the retail space of the banking industry, using its high technology and innovative products. The bank over the years has used technology as one of its major advantages, to service its customers and deliver impressive returns to shareholders in the process.

It has equally established itself as a leader in corporate and investment banking, with the KPMG’s ‘Nigeria Banking Industry Customer Satisfaction Survey of 2014’ confirming the bank’s position as the most customer focused bank in the country in both the retail and corporate segments.

Meanwhile, with the e bank’s entry into the retail space, more customers will now be able to access efficient service delivery that hitherto have been available to only high net worth customers and corporate.

Retail space:

The bank’s offering in the retail space include the Aspire account targeting the youth; the eaZySave classic and eaZySave Premium accounts both of which have zero account opening balances; as well as the Zenith Premium Gold and Zenith Premium Platinum, both of which are COT free and interest bearing. The KPMG survey, which confirmed Zenith Bank’s status as the most customer focused bank, focused on the perceived quality of customer service delivery by banks from the customer’s perspective across the retail, corporate/commercial and small & medium sized enterprises (SME) segments.

And for 2013 and 2014, Zenith Bank led as the preferred by customers. For the second consecutive year in the retail segment, Zenith Bank emerged as the most customer-focused bank closely followed by Diamond Bank who moved to second (from last year’s fourth place) with GTBank in third place. Aside being the most customer focused bank, Zenith Bank’s performance on all parameters has been recognized by other bodies.

A survey conducted by PricewaterhouseCoopers (PWC) to determine the most respected companies and chief executives in Nigeria, Zenith Bank emerged first among the banks. In arriving at the conclusion, PWC said a respected company is defined by these enviable parameters: A good corporate citizen, which is socially responsible with high ethical standards; a trusted company, which promotes good values with a unique and excellent leadership style, coupled with strong management principles and structure plus a smooth succession plan as well as a very resourceful company with excellent business culture.

Others are: a visionary and revolutionary company with strong focus, innovative with popular brands of high quality; engaging in human capital development and high capacity building and an indigenous company with high local content. Good corporate governance practice, high shareholder interest and value, harmonious industrial relations, friendly and good working environment, global and internationally recognised (Multinational) and size of company/largest in Africa/industry leader were other parameters used in arriving at their inference.

Going forward:

Run by a stable board and management, Zenith Bank has created a professional environment where individuals are encouraged and can aspire to achieve their potential. Currently under the management of Peter Amangbo, Zenith Bank has a pool of talents at both the middle and top management level, which has enabled it to remain competitive through the series of banking reforms in the country.

The bank, Nigeria’s biggest by Tier-1 capital sees technology as an enabler and as a generator of new opportunities. “We are forward-thinking, benchmarking trends in technology to shape our future coupled with our practical delivery on a highly automated platform that makes us unique,” Amangbo recently said.

“As the country’s information technology (IT) infrastructure improves, our leading edge in IT keeps us well positioned in the global banking community to sustain our offering of exceptional E-banking services. This is complemented by our risk management system that creates a blend that not only grows our customers’ businesses but also strengthens them. Our credit management system stresses rational procedures and transparency,” he was quoted as saying.

Five year financial results:

The bank has been posting impressive financial results over the years, rewarding shareholders with equally impressive dividends.   For instance, five year performance from 2009 to 2013 showed steady growth in profit and returns on investments. For instance, revenue grew from N277 billion in 2009 to N244 billion in 2010, N307 billion in 2012 and N351 billion in 2013. Profit before tax rose from N35 billion, to N50 billion in 2010, N61 billion in 2011, N101 billion in 2012 and N111 billion in 2013.

Shareholders have been benefitting from the growth witnessed in the profitability over the years. Shareholders got a dividend of N11 billion in 2009, N26 billion in2010, N29 billion in 2011, N50 billion in 2012 and N54 billion in 2013.

2014 Financial results

Zenith Bank grew gross earnings by 14.76 per cent to N403.3billion, up from N351 billion. Interest Income grew by 15.9 per cent from N272 billion to N313.4 billion, while non-interest income rose by 39.1 per cent to N90.1billion. Profit Before tax (PBT) increased by 12.8 per cent from N106 billion to N119.8 billion while Profit After Tax (PAT) for the year rose by 8.6 per cent N91.5 billion to N99.5 billion.

The board has proposed a dividend of N1.75 per share. Return on average equity stood at 18.7 per cent, while return on average asset stood at 2.9 per cent. Loan to deposit was 68.2 per cent up from 55 per cent in 2013. Cost to income ratio was 55.2 per cent, as against 55.7 per cent in 2013. Net margin was 24.7 per cent compared with 27.1 per cent.

Analysts’ comments

Assessing the full results, analysts at FBN Capital Limited, said the bank met its full year PBT target of N120 billion, implying an 8.3 per cent growth. According to them, the fourth quarter (Q4) PBT 2014 PBT worked out as N33.0 billion, up 19.7 per cent. “Q4 2014 PAT growth was less impressive at 6.5 per cent because tax more than doubled   and other comprehensive income fell 78 per cent. While funding income grew by a modest 3.9 per cent to N63 billion, non-interest income more than doubled to N29.7 billion,” they said.

The analysts added that the picture was similar for the most part down to the PBT line: double-digit q/q growth on the revenue lines more than offset cost/loan loss expense increases. “Again, non-interest income was the standout performer: it grew by 96 per cent q/q. Notwithstanding, PAT fell by 9.1 per cent q/q because the impact of a marked reduction in other comprehensive income proved significant.

Relative to our forecasts, PBT was ahead by 26 per cent and PAT by 15 per cent. The difference in magnitude between the two percentage figures was down to the tax rate (13.9 per cent) coming in well ahead of our 4.5 percent forecast,” they said.

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