Adaora Umeoji Unveils New Pathways For Zenith Bank, Highlights Strengths At Investors’ Forum
CHIGOZIE AMADI
Dr. Adaora Umeoji, the new Group Managing Director and Chief Executive Officer of Zenith Bank Plc, has unveiled new pathways for the group, while highlighting its core strength to a gathering of capital market operators and investors during the week in Lagos, as she prepares to undertake her first major task.
The gathering brought together key market participants to discuss the group’s growth trajectory, strategic objectives, and market performance over the years. It also provided an opportunity to inform stakeholders about its strong risk management culture, regulatory compliance, capital adequacy, and low levels of non-performing loans.
Addressing the gathering, Umeoji specifically outlined future plans, including driving financial inclusion, expanding corporate and retail banking through advanced technology, and establishing a fintech subsidiary, ZenPay, to enhance profitability. She added that the bank plans to expand into France and the Francophone African region.
While hinting them of an impending recapitalisation drive, the GMD assured that the bank’s strengths (across all indicators) will put it in good stead to deliver. She equally expressed confidence in the ability of Zenith Bank to deliver superior value to investors and navigate the recapitalisation process successfully, backed by its high-quality board, strong management, and a robust corporate culture.
In her words: “Zenith Bank is planning to raise capital from the market. Currently, Zenith Bank has the least capital to raise among its peers, aiming for N230 billion, with N270.7 billion already secured. We have the capacity, network, balance sheet, human capital, and track record to achieve this. Our advanced technology will ensure seamless processes and integration.”
Umeoji emphasised the bank’s tier-1 capital of N1.8 trillion, shareholders’ funds of N2.3 trillion, market capitalisation of N1.3 trillion, and a profit after tax of N796 billion as of the year ended December 2023.
Also speaking at the event, Chief Financial Officer/General Manager, Dr. Mukhtar Adam, noted that the bank’s Compound Annual Growth Rate (CAGR) in revenue has exceeded 27 percent over the past five years, noting that “this growth continues year-on-year.
“Despite Nigeria’s recession during this period, we worked hard to maintain growth. Over the past five years, our profit before tax has grown by about 28 percent,”he stresse
Executive Director, Dr. Henry Oroh, on his part, took the gathering through the bank’s digital transformation and future direction, focusing on financing small and medium enterprises and trade.
That is why, he said, “we are investing in technology to build world-class solutions that enhance customer experience and market penetration. We are also addressing cyber-security issues by building a network of tech products with zero vulnerabilities, including firewalls and other protections.”
Zenith Bank recently won the Best Commercial Bank, Nigeria, at the World Finance Banking Awards 2024, retaining the title for the fourth consecutive year. The bank also received the Best Corporate Governance, Nigeria, award for the third year running. These accolades, published in the Summer 2024 issue of World Finance Magazine, recognise the bank’s financial performance, customer service, sustainability initiatives, and corporate governance practices.
Commenting on the honours, Dr. Umeoji said they “reflect our commitment to excellence, adherence to global best practices, and dedication to delivering superior value through innovative products and services. Our consecutive awards demonstrate the commitment of our staff, the loyalty of our customers, and the support of our shareholders. We remain committed to setting industry benchmarks and driving excellence across all operations.”
She also dedicated the awards to Founder and Chairman, Dr. Jim Ovia, for his leadership, and expressed gratitude to the board, staff, and customers. World Finance provides comprehensive coverage and analysis of the financial industry, international business, and the global economy.
In its audited results for the year ended December 31, 2023, Zenith Bank achieved 125 percent growth in gross earnings, from N945.6 billion in 2022 to N2.132 trillion in 2023. This growth resulted in a 180 percent year-on-year increase in profit before tax (PBT), from N284.7 billion in 2022 to N796 billion in 2023, and a 202 percent increase in profit after tax (PAT), from N223.9 billion to N676.9 billion.
The increase in gross earnings, the management explained, was driven by growth in Interest income which rose by 112 percent, from N540 billion in 2022 to N1.1 trillion in 2023, while non-interest income grew by 141 percent, from N381 billion to N918.9 billion. The growth in interest income was due to the expansion of risk assets and their effective repricing, as well as higher yields on interest-bearing instruments. Non-interest income growth was driven by significant trading gains and foreign currency revaluation gains.
Zenith Bank’s cost of funds rose from 1.9 percent in 2022 to three percent in 2023 due to a high interest rate environment, while interest expenses increased by 135 percent, from N173.5 billion in 2022 to N408.5 billion in 2023. Despite a 32 percent increase in operating expenses in 2023, the Group’s cost-to-income ratio improved significantly from 54.4 percent in 2022 to 36.1 percent in 2023, helped by the 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, driven by higher gross earnings. Return on Average Assets (ROAA) also grew by 95 percent, from 2.1 percent to 4.1 percent.
