Zenith Bank has once again surpassed expectations, reporting a record-breaking profit after tax (PAT) of N1.033 trillion for the 2024 financial year, a significant increase of 52.59% from the N677.98 billion posted in 2023.
This exceptional performance was driven by a combination of strong interest income, impressive trading gains, and growing revenue from non-interest sources such as electronic banking fees and account maintenance charges.
The bank’s gross earnings reached an all-time high of N3.971 trillion, an increase of 86.28% compared to N2.39 trillion in the previous year. Interest income was a major contributor, rising to N2.721 trillion, while trading gains surged to N1.1 trillion, reflecting the bank’s strategic positioning in Nigeria’s high-interest-rate environment. As a result of these earnings, Zenith Bank proposed a final dividend of N4.00 per share, bringing the total dividend payout for the 2024 financial year to N5.00 per share, up from N4.00 per share in 2023.
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How Zenith Bank Achieved Record Profitability
Zenith Bank’s remarkable financial performance in 2024 was largely fueled by the high-interest-rate environment in Nigeria, which significantly boosted earnings from loans and government securities. The Central Bank of Nigeria’s tight monetary policy, aimed at curbing inflation, created a favorable climate for banks to generate substantial interest income.
Interest income from loans and advances to customers rose sharply by 126% year-on-year to N1.52 trillion, reflecting increased lending activity. The bank also earned N579.92 billion from investments in treasury bills, representing a 224% increase compared to 2023. Overall, net interest income surged by 134.85% to N1.729 trillion, highlighting the bank’s ability to optimize its interest-earning assets.
However, the rising cost of funds was also evident, as interest expenses increased by 142.96% to N992.47 billion, underlining the impact of tighter monetary conditions. Despite this, the bank’s net interest income after impairment charges still grew by a remarkable 227.68%, reaching N1.070 trillion.
Trading and Non-Interest Revenue Hits New Highs
Beyond interest income, Zenith Bank recorded a substantial increase in non-interest revenue, largely driven by trading activities and digital banking fees. The bank’s trading business generated a record-breaking N1.1 trillion in earnings, nearly doubling from N566.9 billion in 2023.
Fee and commission income also saw significant growth, rising to N206.87 billion, an 89.25% increase from the previous year. Gross earnings from commissions and fees amounted to N356.3 billion, up from N177.5 billion in 2023. This growth was primarily fueled by revenues from electronic banking transactions, account maintenance fees, and foreign withdrawal charges. Specifically, the bank earned approximately N80 billion from electronic-related fees, N73 billion from account maintenance charges, and N79 billion from foreign withdrawal transactions.
However, the bank faced rising operating costs due to Nigeria’s inflationary environment. The cost-to-income ratio increased to 30% in 2024, compared to 27% in the previous year. The bank’s personnel expenses grew by 64.5%, while general operating expenses doubled, rising by 100% year-on-year.
Zenith’s Expanding Balance Sheet and Asset Growth
Zenith Bank’s total assets grew significantly, reaching N29.96 trillion, an increase of 47.08% from N20.37 trillion in 2023. This further cements the bank’s position as one of Nigeria’s largest financial institutions, ranking alongside Access Holdings and the United Bank for Africa (UBA).
Customer deposits surged to N21.959 trillion, indicating a 44.78% increase from the previous year. This growth in deposits underscores the bank’s strong brand reputation and its ability to attract customer funds despite economic headwinds. The bank also expanded its lending portfolio, with total loans and advances to customers increasing by 51.99% to N9.965 trillion.
Shareholders’ equity also experienced substantial growth, rising by 73.42% to N4.029 trillion. This included retained earnings of N2.016 trillion, which grew by 70.89% year-on-year, and share capital and share premium, which increased by 127.02% to N614.648 billion.
Capital Raising and Compliance with CBN’s Recapitalization Policy
Following the Central Bank of Nigeria’s directive for banks to increase their minimum capital base, Zenith Bank initiated a capital-raising exercise to meet the new requirements. The bank successfully completed an N343 billion hybrid offer through a combination of rights and public offers. This capital raise was significantly oversubscribed, receiving 160% more demand than initially expected. As a result, Zenith Bank’s share capital increased to N614.648 billion.
However, it is important to note that under current regulatory guidelines, retained earnings and profits cannot be counted as part of a bank’s share capital for recapitalization purposes. This means that while Zenith Bank’s profitability remains strong, it may need to explore additional capital-raising initiatives if required by the CBN’s policies.