Zenith Bank CEO: 2020 was a difficult year, earnings reflect team’s resilience

Nigeria's Tier-one lender, Zenith Bank, recently reported a 10% rise in its full-year profit after tax for 2020, despite the challenging economic climate. The Group Managing Director and CEO, Ebenezer Onyeagwu, acknowledged that 2020 was a difficult year but emphasized that the earnings reflected the resilience and dedication of the Zenith Bank team. In a recent interview with CNBC Africa, Onyeagwu discussed the bank's financial performance and shared his outlook for 2021. The CEO credited the team's resilience, doggedness, and diligence for the positive results, highlighting how the bank swiftly implemented its Business Continuity Plan (BCP) and transitioned to remote working with minimal disruptions. He also commended the understanding and cooperation of Zenith Bank's customers during this challenging period. One of the key drivers of the bank's performance was its ability to efficiently price its assets in a low-yield environment, resulting in a growth in interest income. Despite inflationary pressures, Zenith Bank managed to keep its overhead expenses in check, with only a moderate 10% increase. Onyeagwu also discussed the bank's digital and retail banking initiatives, which contributed to new license acquisitions and enhanced foreign currency earnings. He highlighted the importance of the bank's talented team in achieving its financial targets. The CEO addressed concerns about the sustainability of the bank's non-interest income gains, particularly in light of FX revaluation gains. He expressed confidence in the bank's ability to sustain its performance, citing the dynamic capabilities and competencies of its treasury team. When asked about the impact of the pandemic on Zenith Bank's business, Onyeagwu attributed the bank's resilience to proactive measures taken by the Central Bank of Nigeria, such as forbearance policies. While certain areas, such as fees and commissions, experienced declines, overall sentiments are positive as Nigeria shows signs of economic recovery. Looking ahead to 2021, Onyeagwu highlighted the potential for growth in retail and SME loans, driven by advancements in the payment system that facilitate easier access to credit. He underscored the importance of digital technology and services, particularly in the ICT sector, as key growth areas for the bank. On the topic of oil prices, the CEO acknowledged the positive impact of rising oil prices on Nigeria's economy but emphasized the need for cautious optimism due to production constraints and market volatility. He emphasized the importance of diversifying the economy and hedging against future oil price fluctuations. Addressing the issue of insecurity in the country, Onyeagwu expressed confidence in the government's efforts to address the challenges and highlighted the importance of collaboration among state governments to improve security and create a conducive environment for businesses. Overall, Onyeagwu's insights underscored Zenith Bank's resilience, adaptability, and strategic focus in navigating the complex economic landscape of Nigeria.