Banking sector assets will rise to new heights by this year end based on report by Coronation Asset Management Limited indicating that the total assets of the Nigeria’s five Tier-1 lenders will rise from N37.49 trillion in 2020 to N43.93 trillion in 2021 and N48.31 trillion in 2022. The report projects that Zenith Bank Plc will lead its peers with total assets of N10.11 trillion and N11.21 trillion in 2021 and 2022 respectively.
Zenith Bank’s third quarter 2021 assets stood at N8.8 trillion, with other indicators showing positive outlook for the bank. The bank is leveraging technology including the inauguration of ZIVA (Zenith Intelligent Virtual Assistant) to drive profitability and asset size.
Deposit Money Banks (DMBs) are investing massively in technology that makes their services seamless and meets the needs of their customers. The competition among top tier banks centres on which lender provides the best services to customers and controls larger portion of the market share.
That means that market leaders must do more to stay ahead of their peers.
Findings showed that a bank’s commitment to these goals and seamlessly achieving them determine how the market perceives such brand and the patronage they get.
Zenith Bank has continued to distinguish itself in the Nigerian financial services industry through superior service offerings, unique customer experience and sound financial indices. The bank has remained a clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions.
Hence, many bank customers were excited when Zenith Bank Plc introduced an Artificial Intelligence (AI) powered Chatbot on WhatsApp named ZIVA (Zenith Intelligent Virtual Assistant), which enables customers to perform financial transactions and enjoy real-time customer service from their mobile phones.
The technology allows customers to enroll by simply adding the bank’s verified WhatsApp mobile number on their mobile devices, agree to the legal terms of use and then initiate a conversation. It also provides the convenience for the bank’s customers to interact and transact on a 24 hours basis on the encrypted WhatsApp platform.
With this capability to respond to chats/queries anchored on the existing WhatsApp platform, customers will be able to open new accounts, receive instant transaction notifications, check their balances on the go, transfer funds and top up airtime. They will also be able to confirm cheques, pay bills, apply for loans, block their accounts, and request mini statements, amongst other banking services.
Commenting on the banking solution, the Group Managing Director/Chief Executive of Zenith Bank Plc, Ebenezer Onyeagwu said: “The launch of ZIVA is driven by the need for additional secured channels of communication with our customers as we deepen our retail penetration”.
Speaking further on the WhatsApp chatbot, Onyeagwu noted that “since the behavioural pattern of the modern customer dictates that they want to engage with brands over the channel of their choice, it was really important for us as a leading financial services institution and a pioneer of several technological innovations in the financial services industry to implement this solution in order to continue to create value for our teeming customers who incidentally were already using WhatsApp as a primary channel of communication”.
Central Bank of Nigeria (CBN) Governor, Godwin Emefiele always empasises the gains of deploying technology to improve banking services and Zenith Bank’s introduction of ZIVA aligns with that goal.
Profitability, asset size soar
Zenith Bank’s innovativeness has also led to superior performance by the lender. The bank announced a Profit Before Tax (PBT) of N180 billion for the nine months ended September 30, 2021, reflecting a one per cent growth over the N177 billion recorded in the same period in the previous year amidst. This performance came despite a challenging macro-economic environment exacerbated by the Coronavirus (COVID-19) pandemic.
According to the group’s un-audited nine months financial results presented to the Nigerian Exchange (NGX), gross earnings increased by two per cent from N509 billion to N519 billion, largely due to growth in current account maintenance fees as well as fees from electronic products during the period.
Despite continuing economic uncertainties, the group grew its net earnings through a reduction in the cost of funds while keeping the cost of risk flat.
This strengthened Earnings Per Share (EPS) by one percent to N5.11. The group achieved a nine per cent growth in interest income from loans and advances on the back of an increase in gross loans of nine per cent year to date and enhanced efficiency, resulting in a 21 per cent drop in interest expense to N74 billion from N94 billion.
This culminated in growth in net interest income of four per cent, from N225 billion recorded at the end of third quarter (Q3) 2020 to N235 billion in the current period.
Total assets also increased by three percent to N8.8 trillion in the current period, while total deposits grew by 13 per cent to close at N6 trillion from N5.3 trillion as at December 31, 2020, with a substantial contribution from retail deposits.
As a result of the focused drive to increase retail deposits in the past three years, there was a decrease in The Group’s cost of funds by 35 percent to 1.4 percent from 2.2 percent year-on-year.
The Group continues to make significant progress in its retail banking drive, as evidenced by remarkable growth in transaction volumes and value across its digital platforms and strong growth in customer acquisition.
For the last year’s final quarter, management’s outlook remains positive, buoyed by a declining inflationary trend, expected increase in foreign exchange inflows, and improving oil production.
The Group remains focused on increasing its retail market share, consolidating its leadership position in the corporate segment and maintaining a robust balance sheet.
The bank’s commitment to world-class service standards has led to several product innovations, including the “Zenith Timeless Account”, which allows Nigerians aged 60 years and above bank for free, the “Zenith Save4me”, a high-interest target savings account and the deployment of contactless payments and QR on ATM points, amongst others.
Zenith Bank places a premium on its core business strategy anchored on People, Technology and Service, to create value for its numerous clientele. With a team of dedicated professionals, the bank leverages its robust Information and Communication Technology (ICT) infrastructure to provide cutting-edge solutions and products through its network of branches and electronic/digital channels.
Support for sustainable economic growth
Onyeagwu recently called for increased collaboration of Nigerians in the diaspora for the nation to achieve its economic growth targets.
He spoke at the last edition of the Nigeria Diaspora Investment Summit organised by the Nigerians in Diaspora Commission (NIDCOM) themed ‘Partnership and Linkages for Post Covid Economic Growth’.
Onyeagwu said the summit’s theme was apt as it emphasised Nigeria’s need for robust growth following the unprecedented impact of the COVID-19 pandemic, which triggered a severe macroeconomic shock.
He said there was a need for partnership and collaboration of Nigerians in the diaspora to achieve Nigeria’s economic growth targets, particularly during these challenging times.
According to him, the diaspora community plays a critical role in their home country’s economic growth and development.
He identified the healthcare sector as one area where diaspora investment and intervention are urgently required.
“By leveraging the expertise of our diaspora healthcare professionals in some of the emerging world-class health facilities in Nigeria, such as Evercare Hospital, Ibom Specialist Hospital and Base University Hospital, we can begin to curb the loss of foreign exchange to medical tourism,” he said.
He, therefore, called on the various associations and groups of Nigerians in the diaspora to pull resources together and identify viable investment opportunities in the homeland.
He noted that Nigeria has enormous potential to attract significant diaspora inflow, most of which comes in through informal channels.
He further said the remittance inflows and investments, which are counter-cyclical, help in ameliorating foreign exchange challenges as the funds form a significant buffer for the country’s foreign reserves.
Onyeagwu urged that narrative should shift from diaspora remittance to diaspora direct investment as advocated by Abike Dabiri-Erewa, chairman of NiDCOM and Emeka Offor, acting executive secretary/chief executive officer, Nigeria Investment Promotion Commission (NIPC).
The GMD also commended the federal government and the CBN for leading with policies that created an enabling environment for investment in Nigeria such as the ‘Naira 4 Dollar Scheme’.
He said the policy contributed to boosting diaspora remittances by providing incentives for recipients of international money transfers, which encouraged the senders and recipients to channel inflows through the official market, knowing that they will not be shortchanged.
Recognitions for excellent performance
In recognition of its track record of excellent performance and commitment to best-in-class service, Zenith Bank was voted as Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, and Best in Corporate Governance ‘Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom.
Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, and Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine.
The bank was also recognised as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Retail Bank of the year at the 2020 BusinessDay Banks and Other Financial Institutions (BOFI) Awards, and Best Company in Promotion of Good Health and Well-Being as well as Best Company in Promotion of Gender Equality and Women Empowerment at the Sustainability, Enterprise and Responsibility (SERAS) Awards 2020.
Speaking on the various awards won by the bank, Onyeagwu said it was a demonstration of the bank’s resilience and doggedness as an institution given the very challenging macroeconomic environment brought about by the Covid-19, which had a significant deleterious impact on businesses globally.
“It is also an affirmation of our commitment to delighting and creating value for our customers through a broad range of superior product offerings, best-in-class service and top-of-the-range technology,” he added.
Onyeagwu also thanked the lenders’ numerous customers for their loyalty over the years. He added: “First is to say that Zenith Bank has grown organically, we are disciplined, we are focused and we look for where to extract value.
“However, we would not do a deal or a corporate action just for the sake of doing it. If we find a deal that fits into our profile, of course we would do a deal. It has to be something that fits into our profile.
“Until we find such, we would continue to grow organically. We are already in Ghana, we are in Sierra Leone, Gambia, UK and by no means that is not to say that we cannot expand beyond this location. It depends on what we see as events continue to unfold.”
Clearly, Zenith Bank under the leadership of Onyeagwu has been increasing in brand strength and this has translated to better returns to shareholders, improved customer services and enhanced value to shareholders.
