10th December, 2012
Zenith Bank posts impressive performance in its just released third quarter report
For Zenith Bank plc it is a roller coaster. This is evident in its Q32012 unaudited result for the period ended 30 September which the bank released to the Council of the Nigerian Stock Exchange, NSE in October this year. All key performance indices points to very good health.
For instance, the bank grew its after tax profit by 51 percent during the comparative nine month period. From N48.77bn recorded in the corresponding period in 2011, it moved up to N48.77bn in 2012. Similarly, profit before tax increased to N75.22bn as against N67.44bn recorded in 2011. Expectedly, gross earnings showed a remarkable improvement from N172.36bn in 2011 to N217.20bn in the review period of 2012.
The bank’s cash and balance with the Central Bank increased to N288bn, representing 60 per cent QoQ. The bank’s deposits grew by 4 percent QoQ and 11 per cent YoY.
Mr. Godwin Emefiele, Group Managing Director/Chief Executive Officer of the bank said in a statement that given the available micro-economic indices they are confident that the bank will be able to sustain this strong performance and growth trend into the fourth quarter of the year.
On the flip side, the cost of risk rose to 0.6 per cent from 0.4percent in the second quarter of 2012. According to Renaissance Capital, the impairment charge of N4bn was key drag on earnings. The same charge was N1.8bn in the second quarter.
The Zenith Bank management attributed the higher charges to a prudential decision. The overall result shows that Zenith Bank was efficient in cost management in Q32012. By this result, shareholders are expected to smile to their banks in terms of dividend payments. By 3 December, Zenith Bank share price was N17.20 just behind GTBank plc in the financial services sector (banking) which traded for N19.00 per share.
The Emefiele-led management at Zenith Bank has proved that it is result oriented. Since the management took over two years ago, it has been able to sustain the industry leading role. Mr. Jim Ovia, immediate past group managing director and founder of the bank resided with the financial institution.
In the 2011 financial year, the bank earned N215.62bn compared with N169.37bn it recorded in 2010. Though the 2011 gross earnings fell below that of 2009 which stood at N254.15bn. earnings per share has grown steadily since 2009 when it was 73kobo to 106kobo in 2010 and 118kobo in 2011. The bank’s EPS was 345kobo in 2008 and 189kobo in 2007.
Deposits have grown from N1.11tn in 2009 to N1.44tn in 2010 and N1.576tn in 2011. The bank’s asset growth also has a good story to tell. By the end of 2011 financial year, assets moved up to N2.15tn from N1.57tn in 2009. The bank has a lot to do in the area of loan loss expense. This expense which hit N38.15bn in 2009 dropped significantly to N2.82bn in 2010. By 2011 loan loss expense rose to N22.62bn, about 1,000 per cent increase.
Zenith Bank plc was founded in 1990 with its headquarters located in Lagos. The bank together with its subsidiaries, provides various banking and other financial services to the corporate and individual customers in Nigeria the rest of Africa and Europe. T he company operates through four segments – Corporate and Retail Banking; Investment Management and Securities Trading; General, Health and Life insurance among others.
Under the new specialized banking system, Zenith Bank opted for internationals banking license, this suggests that it has to divest from its non-banking services as provided by the Central Bank of Nigeria. Many Nigerians expected Zenith to adopt the Holding Company HoldCo, structures to enable it retain its subsidiaries.
Zenith Bank operates from about 330 branches and 125 cash offices. Formerly known as Zenith International Bank Limited, it changed name to Zenith Bank plc in May 2004. The bank has been doing well in its Corporate Social Responsibility, CSR, and has won many local and international awards.
Emefiele became the Group Managing Director/CEO in August 2010. Prior to this appointment he was the Deputy Managing Director of the bank for nine years and has been on the bank’s management team since inception.
With over 20 years experience in banking he holds a B.Sc and MBA in Finance both from the University of Nigeria, Nsukka. He was formerly a lecturer in Finance and Insurance at the University of Nigeria and University of Port-Harcourt respectively. He is an alumnus of Executive Education at Stanford University, Harvard University and Wharton Graduate School of Business where he took courses in Negotiation, Leading Change and Strategy.
He is director, member of Executive Committee, member of Board, Credit Committee, member of Staff Matters, Finance and General Purpose Committee and member of Board, Risk Management Committee at Zenith Bank.
—Clement Oriloye