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By Uche Usim
In an era marked by digital innovation and financial transformation, Zenith Bank’s commitment to leading the charge in banking excellence remains unflinching. The bank’s journey from a visionary startup in 1990 to Nigeria’s most profitable and capitalised banking institution is nothing short of remarkable.
The financial giant has charted a course towards sustainable growth, combining innovation, strategic vision and a strong pledge to responsible banking.
As a major player in Nigeria’s financial landscape, the bank has embraced a holistic approach to growth that integrates environmental, social and governance (ESG) principles with its core business objectives.
At the heart of Zenith Bank’s strategy is a focus on buoying economic inclusion, supporting small and medium-sized enterprises (SMEs) and driving technological innovation to enhance customer experiences. The bank’s proactive investments in renewable energy, sports, digital transformation and impactful community initiatives exemplify its dedication to creating long-term value for its stakeholders while addressing global sustainability challenges.
With a clear vision and a strong leadership team, Zenith Bank is not only securing its position as an industry trailblazer but also setting a standard for financial institutions across Africa.
The bank’s enduring commitment to sustainability highlights its mission to empower communities, catalyze economic progress, and shape a resilient future for generations to come.
Legacy of visionary leadership
Zenith Bank’s story begins with the foresight of its Chairman, Dr. Jim Ovia, whose exceptional vision shaped the bank from its inception. Known as the “Nostradamus” of the Nigerian banking sector, Dr. Ovia’s foresight positioned Zenith Bank as a frontrunner in capital adequacy, shareholder value, and long-term sustainability. His relentless pursuit of excellence created a solid foundation that has allowed the bank to weather economic storms, consistently outperforming competitors and ensuring its place as a leader in the Nigerian financial ecosystem.
Under Dr. Ovia’s guidance, Zenith Bank embarked on a series of highly successful capital raises. The 2004 IPO, which saw an overwhelming 524 percent oversubscription, marked the beginning of a journey that would include more successful public offers, a $1 billion Eurobond issuance, and ultimately, the establishment of Zenith Bank as Nigeria’s largest by shareholders’ funds. As the bank’s journey progressed, it maintained its core identity, its red logo, its commitment to excellent corporate governance, and its focus on delivering premium value to all stakeholders.
Strong financial footing
Zenith Bank’s continued success is driven by a combination of strong financial performance and an unwavering commitment to its stakeholders.
As of December 31, 2023, the bank’s Tier-1 capital stood at N1.9 trillion, the highest in the Nigerian banking sector, while its shareholders’ funds reached N2.3 trillion. The bank’s market capitalization of N1.3 trillion also made it the largest in the country. On November 1, Zenith Bank Plc unveiled its unaudited results for the third quarter ended September 30, 2024, posting a notable 118 percent increase in revenue, from N1.33 trillion in Q3 2023 to N2.9 trillion in Q3 2024. The stellar performance highlighted Zenith Bank’s resilience and market leadership amid a challenging economic climate.
The bank’s topline growth fueled a robust 99 percent year-on-year (YoY) increase in profit before tax, which rose from N505 billion in Q3 2023 to N1.0 trillion in Q3 2024. Profit after tax also climbed by 91 percent, reaching N827 billion. Zenith Bank’s results, presented to the Nigerian Exchange (NGX), reflect applaudable progress across both interest and non-interest income streams. Interest income surged by 190 percent to N1.95 trillion, capitalising on a high-yield environment, while non-interest income grew 41 percent to N856 billion, driven by strong gains in fees and commissions, a testament to the Bank’s retail growth and digital expansion. Earnings per share (EPS) nearly doubled to N26.34, highlighting Zenith’s commitment to value creation for shareholders.
The bank’s balance sheet expanded significantly, with total assets growing by 49 percent to N30.4 trillion, buoyed by a 42 percent increase in customer deposits to N21.6 trillion. This broad-based deposit growth across corporate and retail segments reflects deepening customer loyalty. Gross loans rose by 46 percent to N10.3 trillion, underpinning the bank’s dedication to supporting vital economic sectors.
Zenith Bank’s capital adequacy ratio strengthened to 21.9 percent, well above regulatory benchmarks, with return on average equity (ROAE) up to 37.8 percent and return on average assets (ROAA) at 4.3 percent, maximising asset performance.
The cost of funds rose to 4.3 percent, in line with higher market rates, while the cost of risk remained steady at 7.3 percent, showing the bank’s commitment to proactive risk provisioning.
Strategic investments in technology and capacity building resulted in a cost-to-income ratio of 39.5 percent, signaling Zenith’s forward-looking growth initiatives.
Zenith’s asset quality remains a hallmark of its stability, with a non-performing loan (NPL) ratio of 4.5 percent and a coverage ratio of 198.4 percent, reinforcing disciplined risk management.
In line with the Central Bank of Nigeria’s recapitalisation directive, Zenith launched a capital raise on August 1, 2024, through a successful Rights Issue and Public Offer, reflecting strong investor confidence.
The capital infusion will support Zenith’s expansion into new sectors, enhance lending to the real sector, and fuel its broader African and global ambitions.
Spread
Further solidifying its international presence, Zenith received regulatory approval in September 2024 for a new branch in Paris, France, expanding its footprint in global markets.
With a fortified capital base, Zenith Bank stands strong to navigate evolving economic landscapes, maintaining sustainability as a core business tenet. The bank remains dedicated to enhancing stakeholder value through sound governance and a strong compliance culture, cementing its leadership in Nigeria’s financial sector and setting a foundation for sustained, long-term growth.
Despite a rising cost of funds at 4.3 percent, the bank maintained disciplined risk management with a cost of risk at 7.3 percent. Strategic investments raised its cost-to-income ratio to 39.5 percent, reflecting Zenith’s commitment to technology and capacity-building initiatives.
Zenith Bank’s asset quality remains robust, with a non-performing loan (NPL) ratio of 4.5 percent and a coverage ratio of 198.4 percent, accentuating its disciplined risk management.
Dividend payout
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What sets Zenith Bank apart is its ability to reward shareholders while ensuring sustainable growth.
It is the highest dividend paying bank in the last five years.
The bank has paid consistent dividends, with a dividend payout ratio of 25 percent of organic profits, excluding foreign exchange revaluation gains. This solid performance has allowed Zenith to expand its network, with 447 branches and 2,100 ATMs across Nigeria and beyond. Moreover, the bank’s growth has been largely driven by its ability to engage with underserved communities, leveraging agent banking to promote financial inclusion.
Commitment to technological advancement
A major part of Zenith Bank’s growth strategy is its ongoing investment in technology. The bank has overhauled its IT infrastructure, making it one of the most technologically advanced banks in the region. As part of its digital transformation, Zenith Bank launched ZenPay, a fintech subsidiary that aims to revolutionize financial services across Africa. ZenPay has also partnered with the African Continental Free Trade Area (AfCFTA) to develop a digital trade platform that promises to unlock new opportunities for Pan-African trade.
Furthermore, Zenith Bank’s digital offerings have proven instrumental in its ongoing recapitalisation exercise. This seamless integration of technology into the capital raise process is a testament to Zenith Bank’s commitment to providing ease of access to investors while embracing the future of banking.
Sustainable growth
Zenith Bank’s growth trajectory is underpinned by a robust expansion strategy. With operations in several countries, including the UK, UAE, China, and most recently, France, the bank continues to expand its geographical footprint. Zenith Bank’s strategic expansion into Francophone Africa, with planned subsidiaries in Côte d’Ivoire and Cameroon, is poised to enhance its business across the continent.
In addition to geographical growth, Zenith Bank’s commitment to sustainability is clear. The bank has reduced its carbon footprint by adopting alternative energy sources such as solar power for its ATMs and branches. Zenith Bank has also prioritized environmental, social, and governance (ESG) practices in its operations, promoting sustainability in its credit processes and encouraging customers to adopt eco-friendly practices.
Support for innovation
In line with its corporate social responsibility blueprint, Zenith Bank has continued to invest in startups and thriving innovative ventures in an effort to bolster the economy.
Just recently, N77.5 million in prize money was won at the end of a keenly contested hackathon session at the Fourth Edition of the Zenith Tech Fair, themed “Future Forward 4.0: Embedded Finance, Cybersecurity & Growth Imperatives – The Impact of AI “, which held on Thursday, November 21, 2024, in Lagos.
The prize money was shared among ten finalists who emerged from the over 1,700 contestants that took part in the hackathon, with JumpnPass, a self-checkout technology solution reshaping the retail landscape in Africa emerging as the overall winner and taking home the grand prize of N25 million. This is in addition to a six-week mentorship and incubation program designed to help them grow and scale effectively, which will run from December 2024 to February 2025.
The first runner-up, CreditChek, a credit and verification service provider which leverages AI and open banking to streamline income and credit history verification for financial institutions, won N20 million and a mentorship programme, while the second runner-up, Salad Africa, a start-up which offers seamless integration of credit products for digital platforms and software companies won N15 million as well as a mentorship programme. Other finalists who took home N2.5million each include Regxta, CashAfrica, Middleman, Messenger, Pocketfood, Famasi Africa, Kitovu.
Earlier during the programme, the Group Managing Director/CEO of Zenith Bank Plc, Dr. Adaora Umeoji, in her welcome address expressed her appreciation to the Founder & Chairman, Dr Jim Ovia, for birthing the idea that led to the establishment of the Tech Fair initiative 5 years ago, she thanked him for his vision and foresight in utilizing technology to revolutionize the world of business and banking
“Zenith Bank remains dedicated to nurturing Nigeria’s startup ecosystem,” said the Group Managing Director/Chief Executive, Zenith Bank, Dr. Adaora Umeoji.
Umeoji has repeatedly highlighted the importance of non-oil export as a catalyst for job creation.
She said: “Our theme, ‘Awakening the Giant’, speaks directly to the untapped potential within the non-oil segment of the economy and how to optimise it. This involves an increase in the number and volume of exportable non-oil items and value addition to exportable items into finished products. Increasing the number and volume of exportable non-oil products implies more business for you, our esteemed exporters, and increased foreign exchange earnings for our country.
In addition, this sector will drive employment generation for Nigerian youths, who constitute 60 per cent of the estimated 233 million population, and Zenith Bank is committed to being at the forefront of these efforts.”
Sports development
Sports development is another area Zenith Bank plays in. This year, no fewer than 100 Primary Schools in Delta State have registered for the Zenith Bank/Delta Headmasters’ Football competition.
The competition has witnessed a remarkable surge of participating schools from 167 in the maiden edition to 615 schools in this edition.
The Chief Executive Officer of Hideaplus, organisers of the event Tony Pemu, also lauded Zenith Bank for its robust support.
The final of the Principals’ Cup took place on November 7 at the Stephen Keshi Stadium in Asaba.
Also benefiting from the bank’s support in sports development, the Nigeria Basketball Federation (NBBF) recently thanked Zenith Bank Plc for its continued sponsorship of the Zenith Bank/NBBF Women’s Premier Basketball League. This follows the successful conclusion of the 2024 season, marking the 17th consecutive edition of the league, held at the Indoor Hall of the National Stadium in Surulere, Lagos.
NBBF President, Engineer Ahmadu Musa Kida, said: “Words alone are not enough to describe how elated we are at the NBBF, and I want to express the sincere gratitude of Nigerians to Zenith Bank Plc for the immense support given to Nigerian basketball over the many years they have sponsored the league,” Kida said.
He emphasised that the partnership between the NBBF and Zenith Bank has been instrumental in improving the prospects of female basketball in the country. Players such as Murjanatu Musa, discovered through past editions of the league, have gone on to represent the D’Tigress, Nigeria’s national women’s team, on continental and global stages.
