The Board of Zenith Bank Plc has proposed a dividend of N3.20 per share despite a profit moderate decline in the lender’s bottom line in its audited financial results for the year ended December 31, 2022, filed to the Nigerian Exchange (NGX) on Tuesday.
The dividend proposal comprises a final dividend of N2.90 per share which in addition to the N0.30 per share as interim dividend amounts to N3.20 per share, 10kobo higher than the N3.10 per share dividend paid out in the previous year, 2021.
If the recommendation gets approval of shareholders at its forthcoming annual general meeting, the dividend sum will be paid to shareholders whose names appear in the company’s register of members as at the close of business on April 14, 2023, the bank stated in a corporate action filing to NGX.
The Tier-1 lenders audited financial statement showed a 24 percent growth in gross earnings, from N765.6 billion reported in the year 2021 to N945.5 billion in 2022.
However, the bottom line moderated slightly, from N 244.558 billion in 2021 to N 223.911 billion in 2022.
The double-digit growth in gross earnings is driven largely by a 26 per cent year-on-year (YoY) growth in interest income from N427.6 billion to N540.2 billion and a 23 percent year-on-year (YoY) growth in non-interest income from N309 billion to N381 billion.
However, profit before tax (PBT) edged up slightly by two percent to N284.7 billion, up from N280.4 billion in the previous year, 2021.
The result showed a sharp increase in impairments by 107 percent to N124.2 billion, up from N59.9 billion in 2021. Similarly, interest expense grew 63 per cent year-on-year from N106.8 billion to N173.5 billion, a red flag that the lender attributed to an increase in the cost of risk (from 1.9% in 2021 to 3.3% in 2022) due to the impact of Ghana’s sovereign debt restructuring programme.
According to the bank, the growth in interest expense increased the cost of funds from 1.5 percent in 2021, to 1.9 percent in 2022, due to hikes in interest rates globally.
To underscore its leading position in the industry, Zenith Bank’s customer deposits increased by 39 percent to N8.98 trillion in 2022, up from N6.47 trillion in the previous year.
Its operating expenses grew by 17 percent year-on-year, but growth remains below the inflation rate. Its total assets increased by 30 percent, growing from N9.45 trillion in 2021 to N12.29 trillion, mainly driven by growth in customer deposits.
The lender grew its gross loans by 20 percent, from N3.5 trillion in 2021 to N4.1 trillion in 2022, with the non-performing loan (NPL) ratio edging up slightly from 4.2 percent to 4.3 percent year-on-year.
Despite a decrease in the capital adequacy ratio from 21 percent to 19 percent, the bank’s liquidity ratio improved from 71.2 percent to 75 percent, both prudential ratios well above regulatory thresholds. Inside Business