Zenith Bank Plc has released its 2024 FY results, reporting a record profit after tax of N1.03 trillion.
This represents a 52.5% increase over the N676.9 billion reported a year earlier.
The bank also reported a pre-tax profit of N1.32 trillion, which is also a record for the bank, and a 66.6% increase year on year.
A cursory analysis of the results also shows that the bank reported Gross Earnings of N3.9 trillion, with interest income and trading income contributing majorly to the top line.
As part of its earnings announcement, the bank proposed a final dividend of N4.00 per share, bringing its total dividend payout from 2024 profits to N5 per share, compared to N4 per share in 2023.Â
Key highlights (2024 v. 2023):
- Gross earnings: N3.971 trillion +86.28% YoY
- Interest Income: N2.721 trillion +137.74% YoY
- Interest Expense: N992.474 billion +142.96% YoY
- Net interest income; N1.729 trillion +134.85% YoYÂ
- Impairment charges: N658.805 billion +60.83% YoY
- Net interest income after impairment charges: N1.070 trillion +227.68% YoY
- Net fees and commission income: N206.867 billion +89.25% YoY
- Trading gains: N1.100 trillion +94.01% YoY
- Profit after tax: N1.033 trillion +52.59% YoY
- Basic EPS: N32.87 +32.87% YoY
- Cash and cash equivalents with banks: N5.888 trillion +38.44% YoY
- Loan and advances: N9.965 trillion +51.99% YoY
- Total Assets: N29.958 trillion +47.08% YoY
- Customers deposit: N21.959 trillion +44.78% YoY
- Share capital & share premium: N614.648 billion +127.02% YoY
- Retained earnings: N2.016 trillion, +70.89% YoY
- Shareholders’ fund: N4.029 trillion +73.42% YoY
How Zenith beat its profitability record
Income Analysis
Zenith Bank reported gross earnings of N3.9 trillion, up from N2.39 trillion recorded a year earlier. A key driver of this growth was interest income, which surged to N2.7 trillion, compared to N1.14 trillion in the previous year.
- Banks in Nigeria have significantly benefited from the high-interest-rate environment, as the Central Bank continues to tackle soaring inflation through elevated monetary policy rates.
- The Group’s net interest income stood at N1.73 trillion, driven by robust earnings from loans and advances, as well as significant investments in risk-free government securities such as treasury bills.
- Interest income from loans and advances to customers rose by 126% year-on-year to N1.52 trillion, while interest income from treasury bills grew by 224% to N579.92 billion.
- On the cost side, interest expenses increased by 142.96% year-on-year to N992.47 billion, reflecting the rising cost of funds amid tighter monetary conditions.
The Group also reported N206.8 billion in net fees and commission income, largely driven by its electronic banking business, account maintenance fees, and foreign withdrawal charges.
- Gross earnings from commissions and fees rose to N356.3 billion, up from N177.5 billion in the prior year.
- Specifically, the bank earned approximately N80 billion from electronic-related fees, N73 billion from account maintenance charges, and N79 billion from foreign withdrawal charges.
- However, Zenith Bank’s highest non-interest revenue came from its trading business, which delivered a record N1.1 trillion in earnings—almost double the N566.9 billion recorded a year earlier.
A bulk of Zenith Bank’s income was generated within Nigeria, accounting for N3.5 trillion out of the N3.97 trillion in net consolidated revenue. Income from its African and European operations totaled N510 billion, up from N281.1 billion in the previous year.
Nairametrics analysis also estimates the bank’s cost-to-income ratio spiked to about 30% in 2024, up from 27% a year earlier. This is due to a higher inflationary environment experienced in 2024. Cost increases were reported in its personal expenses and operating expenses, which were higher by 64.5% and 100%, respectively.
Balance Sheet Analysis
Zenith Bank Plc’s total assets stood at N29.96 trillion, cementing its position as one of Nigeria’s largest financial institutions, trailing only Access Holdings and UBA.
- A significant portion of Zenith Bank’s assets—N21.96 trillion—is made up of customer deposits, while its total shareholders’ funds stood at N4.03 trillion.
- This comprises N2.02 trillion in retained earnings, N20.54 billion in share capital, and N594.11 billion in share premium.
- It is important to note that, under current regulations, banks cannot include retained earnings or profits as part of share capital for recapitalization purposes.
- According to the notes in the annual report, and in response to the Central Bank of Nigeria’s (CBN) new minimum capital requirements, Zenith Bank conducted a capital raise through a combination of rights and public offers, generating N343 billion.
In a recent statement, the bank confirmed that it had completed the hybrid offer, which was oversubscribed by 160%. As a result, Zenith Bank’s share capital rose to N614.6 billion.
