Zenith Bank Plc is deploying digital banking tools to grow more businesses, simplify service processes, make its payment channels more efficient and resolving customers’ complaints.
These moves has led to improved profitability and N97.33 billion final dividend for shareholders in the financial year ended December 31, 2021. The bank’s development of products to serve the retail segment of the market will continue to drive its operations and sustain growth trajectory.
Many financial institutions with wide network expansion are leveraging technology to drive their operations. Technology is not only making banking interesting and seamless, it is reducing the cost to serve for lenders that invest on it.
Effective use of technology has also led to improved profitability, better asset quality and improved returns on investment for shareholders.
The 2021 full year results of Zenith Bank Plc fully showed a good example of what a seamless technology does to a bank’s profitability and returns for shareholders.
During the Zenith Bank’s 31st Annual General Meeting (AGM) held last week in Lagos, the shareholders unanimously approved N97.33 billion final dividend for the financial year ended December 31, 2021.
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The also approved the proposed final dividend, and were excited at the final dividend payment of N2.80 per share. This brought the total dividend for the 2021 financial year to N3.10 per share with a total value of N97.33 billion.
The results in perspective
In spite of a challenging macroeconomic environment aggravated by the COVID-19 pandemic, the Zenith Bank Group achieved year-on-year (YoY) growth in gross earnings of 10 per cent from N696.5 billion reported in the previous year to N765.6 billion.
This was on the back of a 23 per cent YoY growth in non-interest income from N251.7 billion to N309 billion and a two per cent YoY growth in interest income from N420.8 billion to N427.6 billion.
Profit before tax also grew by 10 per cent, from N255.9 billion to N280.4 billion in the current year.
The increase was due to growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12 per cent from N121.1 billion in 2020 to N106.8 billion in the current year. This further led to a seven per cent increase in net interest income of N320.8 billion in 2021 from N299.7 billion in 2020.
Customer deposits increased by 21 per cent, growing from N5.34 trillion in the previous year to N6.47 trillion in the current year.
The growth in customer deposits came from both corporate and retail customers. Retail deposits grew by N146 billion from N1.72 trillion in 2020 to N1.87 trillion in 2021. The Group’s continuous drive for retail deposits combined with the strategic rebalancing of its funding base helped to reduce the cost of funding from 2.1 per cent to 1.5 per cent in the current year.
Although operating expenses grew by 13 per cent YoY, growth remains below the inflation rate, and the Group improved its Earnings per Share (EPS) which grew by six per cent from N7.34 to N7.78.
Total assets increased by 11 per cent, growing from N8.48 trillion in 2020 to N9.45 trillion in 2021, mainly driven by growth in customer deposits.
With the steady recovery in economic activities, the Group prudently grew its gross loans by 20 per cent, from N2.9 trillion in 2020 to N3.5 trillion in 2021, with moderated NPL ratio from 4.29 per cent to 4.19 per cent YoY.
The Group recorded impressive liquidity and capital adequacy ratios of 71.6 per cent and 21 per cent, which remained above regulatory thresholds of 30 per cent and 15 per cent, respectively.
Views from stakeholders
Speaking at the AGM, Founder and Chairman of Zenith Bank Plc, Jim Ovia, thanked the shareholders for their unflinching loyalty, which has enabled the bank to rise to the pinnacle of the nation’s financial services industry. He assured them of the bank’s commitment to consistently deliver superior value to shareholders.
The Group Managing Director/Chief Executive, Zenith Bank Plc, Ebenezer Onyeagwu, said: “If you look at the bank’s history over the years, Zenith Bank has always grown, and even within the pandemic, we have maintained a reasonable positive growth trajectory.”
He said the bank is deploying digital capability to grow more businesses, simplify service processes, make its processes more efficient, and deal with customers’ complaints.
“Apart from developing new products, we are discovering new business verticals, especially within the retail segment, which have significant revenue,” he stated.
He added that: “meeting the expectation of shareholders means we have to work harder. The team is dodged, hardworking, resilient, and above all, we have a very supportive board that comes with superior guidance”.
Commenting on the dividend payout, the Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN), Sunny Nwosu, expressed the delight of shareholders over the consistent payment of dividends by Zenith Bank.
He noted that the bank’s shares remain the toast of investors as it has never failed to pay dividends to shareholders.
Also speaking on behalf of shareholders, President of the Association of the Rights of Nigerian Shareholders (AARNS), Faruk Umar, said: “The bank is doing very well. All the ratios and indices have gone up. More importantly, while we were in the meeting, I got my alert of the credit of my dividend.
This is very commendable. The leadership of the bank has been very effective; we thank Jim Ovia for the leadership he has been giving, he has increased the dividend in spite of the economic hardship in the country, and I believe the GMD is doing very well. I commend the management and staff of the bank, including the board, and I am very confident that this year would also be very good for the bank.”
Umar also commended the Group Managing Director for the numerous awards the bank received in 2021, especially the sustainability awards.
Eazybanking: Digital payment on the go
For instance, Eazybanking by Zenith bank is a convenient, fast, secure, and affordable way to access one’s bank account 24 hours a day, seven days a week through the mobile phone without internet connectivity. It is a session- oriented service unlike SMS which is a store and forward based service. This service is available to all individual account holders (except ZECA and Premium account holders) with any phone that runs on the GSM platform.
The lender explained that Eazybanking is different from other technologies as it provides an interactive browsing experience, its available on all GSM handsets, it has an in built USSD encryption and “no store just forward” facility for performing secure transactions and ensures faster service, as network latency is low.
In terms of security, Eazybanking is very safe as it has various levels of authorisation that ensures that one’s banking transactions and information remains private. Verification using Debit card (MasterCard, Visa and Verve) PAN and PIN to authorize transaction and BVN. The service can only be accessed from the number registered with the bank for transactions notification (Alertz).
The product is available to all Zenith bank individual customers. Target customers are low income earners with non- feature phones who should have a Zenith Bank account, GSM phone and alertz number. The customer is expected to simply dial *966*00# with one’s Alert Z number.
Artificial Intelligence powered Chatbot
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-hour 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, 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, he 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”.
The World Bank President David Malpass and Central Bank of Nigeria (CBN) Governor, Godwin Emefiele always empasise the gains of deploying technology to improve banking services and Zenith Bank’s introduction of ZIVA aligns with that goal.
Aside reducing cost to serve for banks, digital banking makes banking easy and seamless.
Reward for good work
In recognition of its track record of excellent performance, Zenith Bank was voted as Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Best Bank in Nigeria in the Global Finance World’s Best Banks Awards 2020 and 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, 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, Number One Bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” Ranking by The Banker Magazine and the Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.
Zenith Bank was also honoured as Bank of the Decade (People’s Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for “Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women Empowerment”, and the coveted “Most Responsible Organisation in Africa.
