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Q1 2019: Zenith Bank sustains market dominance with improved profitability

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In the first quarter ended 31 March 2019, Zenith Bank Group recorded improved numbers across key metrics, driven by a solid performance in all business segments. This resulted in a Profit before Tax (PBT) of ₦57 billion, representing a 6% growth over the ₦54 billion achieved in the corresponding period in 2018. The Group’s on-going commitment to cost optimisation on the income statement and statement of financial position ensured earnings per share increased by 7% to ₦1.60 compared to Q1 2018.

The growth in net interest income and operating income by 23% and 1% respectively mitigated the decline in gross earnings. The effective management of cost-to-income ratio, cost of funds and cost of risk offset top-line declines to deliver an enhanced operating income in the period.

Our risk and asset quality continues to improve as cost of risk dropped significantly by 52% from 0.9% in the prior year to 0.4% for the period. This was achieved as impairment charges declined by 54% (₦2.5 billion year on year reduction). Our cost of funds also improved, declining by 25% from 4% in Q1 2018 to 3% at quarter-end. This was supported by a 22% decrease in interest expense of ₦10 billion over the same period, affirming the Group’s robust treasury and liquidity management. Our prudent cost management led to a 5% decline in our cost-to-income ratio by 5% from 53.3% in 2018 to 50.9% in the period with an absolute reduction in operating expenses by ₦2.3 billion year-on-year.

The Group’s retail franchise continues to increase as retail deposits grew by N80bn between December 2018 and March 2019 representing a 9% growth notwithstanding the fact that total customer deposits dropped marginally by 3%. The drop in customer deposits was as a result of rebalancing of the deposit mix as expensive purchased deposits were forgone in favour of cheaper and stickier retail deposits.

The volume and value of transactions across our electronic and digital platforms continue to grow as new customers are being acquired. Our balance sheet continues to strengthen as liquidity ratio is at 66.7%, loan to deposit ratio closed at 43%, and capital adequacy ratio ended the period at 25% respectively and remain above the relevant regulatory thresholds as at 31 March 2019.

Going into the rest of the year and with improving economic fundamentals, we are confident of delivering value to all our stakeholders on our commitments even as we create more opportunities for businesses by supporting them through selective risk asset creation. We shall continue our investments in the retail segment of the market as we consolidate our leadership position in the corporate segment while maintaining a strong balance sheet.

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BUSINESS

Senate investigates banks for not remitting taxes on deposits

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The Senate on Tuesday directed its Committees on Banking, Insurance and other Financial Institutions, to investigate alleged non-remittance of taxes on bank deposits and dividend payments.

The Witness learnt that the it also asked the committees to report back within four weeks.

This followed the adoption of a motion by Senator Uche Ekwunife (PDP, Anambra).

Ekwunife said: “It has been discovered that the Central Security & Clearing System, CSCS and banks in Nigeria do not remit withholding tax on bank deposits and dividends to state government as and when due.

“Most state governments are unable to pay salaries and meet their financial obligations as a result of poor and dwindling revenue.

“Billions of naira are being held by banks either in form of under remittance or non remittance of withholding revenue.”

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BUSINESS

CBN to banks: You must seek approval before sacking staff

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The Central Bank of Nigeria, CBN has said banks are no longer allowed to sack more than five staff without its approval.

This was part of the communiqué released by the Bankers Committee after its meeting on Friday.

The committee, in a circular signed by Director, Financial Markets Department, CBN, Angela Sere-Ejembi, emphasized that all banks should send a sample of Contract Letter issued to outsourced staff + SLA with the company being used to run outsourced staff.

Dabiri-Erewa, others charge Africans in Diaspora to remember their roots

It stated, “Banks should note and be guided by the CBN circular in respect of laying off staff that is more than five. This requires apex bank’s notification and approval going forward.”

The Bankers’ Committee had said the mass sacking in banks would be reduced in the shortest time possible.

The committee noted that while it was working on how to reduce the level of job losses in the sector, there would always be reasons people would have to be sacked from their workplaces.

It explained that while the decision to sack bank workers had elicited a lot of sentiments from both the public and private sectors of the economy, the banks understood the implications of having to relieve workers of their jobs in view of the current economic situation in the country.

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BUSINESS

Ecobank Nigeria to host Regional Trade Forum 2020

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Ecobank Nigeria to host Regional Trade Forum 2020

Ecobank Nigeria is set to host its 2020 Regional Trade Forum in Lagos.

The Witness gathered that the forum taking place in March, will be a two-day event, providing the opportunity for exporters and importers within the African region to exhibit their products in a marketplace scenario with panel discussions by highly experienced and diversified stakeholders and leaders of thought in the industry.

Ecobank Nigeria is a member of the pan African banking group with unparalleled Africa wide Network Advantage across 33 countries catering for businesses and providing world class trade services to its customers. The Ecobank Group network has over 30 years been enhancing the financial integration of the continent. The Group provides solutions to facilitate trade in the various trade corridors and groupings across Africa

Announcing the Trade Forum in Lagos, Sunday Abah, Head Trade Finance of Ecobank Nigeria said Ecobank is using the forum to unveil its comprehensive trade solutions to its existing and prospective customers alike by sharing the various payment methods available to facilitate cross border trade throughout its network across Africa. According to him, Ecobank recognizes the role of exporters and importers in driving economies through trade.

“By creating a networking forum for importers and exporters via the trade exhibition slated for the first day of the forum, the Bank extends support to stakeholders in export and import businesses.

“Ecobank’s trade products and solutions are designed around two broad areas: Trade finance which enables customers benefit from adequate and well mitigated credit facilitation in the area of Import finance, export finance, bill discounting, trade loans, distributor finance, structured trade and commodity finance amongst others; also we do Trade Services, which gives our customers the advantage of speedy turnaround time and error free processing of Import Letters of Credit, Import collections, Customs bonds, Export collections and regional trade services amongst others,” he noted.

Ecobank’s unique intra-Africa trade solutions enable settlements of trade transactions and mitigation of payment risk; provide regional solutions and enable exporters obtain payment guarantees without the need for a letter of credit and its related costs to the importer. Ecobank works closely with clients in reviewing key factors regarding transactions processing, settlements, financing, and risk mitigation as well as credit enhancement. The bank boasts of a unique and large Pan-African platform that positions it to support trade at all levels. Its technology platform is designed to help unlock the opportunities of the continent through standardization across 33 countries, while fueling regional integration, trade and investment across borders.

The Ecobank Africa Trade Forum is expected to attract hundreds of guests and participants. Leaders from across Ecobank Group will also be attending to share their market specific trade knowledge and information.

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