How Zenith Bank distributed N10.99trn loans across sectors of Nigerian economy

IN a demonstration of its commitment to supporting the growth and development of the Nigerian economy, Zenith Bank has disbursed a staggering N10.99 trillion in loans across various sectors, providing a vital lifeline to businesses, entrepreneurs, and individuals. 

Contained in its 2024 Financial Year report, this significant loan disbursement, which cuts across key sectors such as agriculture, manufacturing, oil and gas, and construction, among others, underscores the bank’s role as a leading financial institution and a key driver of economic expansion in Nigeria. Records reveal that from the gross loan disbursement of N10.99 trillion the oil and gas sector received the largest share, with N4.11 trillion, followed by the manufacturing sector with N2.65 trillion. The general commerce sector received N1.1 trillion, while the government sector got N1.02 trillion.

The finance and insurance sector received N440.2 billion, and the communication sector received N379.3 billion. Other sectors that benefited from the loan disbursement include consumer credit (N336.5 billion), agriculture (N335.7 billion), transportation (N229.7 billion), power (N217.1 billion), and real estate and construction (N150.7 billion). The education sector received the smallest share, with N31.8 billion.

The loan disbursement demonstrates Zenith Bank’s commitment to supporting the growth and development of the Nigerian economy. The corporate result of the financial institution came out strong amid sharp hikes in Nigeria’s monetary policy rate last year, which beefed up the benchmark borrowing rate by as much as 8.75 percent, in turn allowing banks to charge much more for loans.

Interest income for Zenith Bank accelerated more than twofold to N2.7 trillion, alone accounting for 68.5 percent of its revenue for the year. Gross earnings climbed to N4 trillion from N2.1 trillion. Net interest income, a gauge of the difference between the interest earned by a bank and what it pays to savers, advanced by 134.8 percent.

The lender provisioned N658.8 billion to cover loans whose chances of repayment have been hampered by repeated defaults. It underscores the impact of debt service burden on borrowers, whose income was considerably strained by elevated inflation in the country during the year.

Strengthening profit, trading gains jumped 94 percent to N1.1 trillion, while fees & other commissions rose to N206.9 billion from N109.3 billion a year ago. Zenith Bank announced months ago that it raised N162.1 billion through public offering and N188.4 billion by way of rights issue as it looks to shore up its shareholder fund.

That has put it on track to scale its core capital to at least N500 billion before March 2026 as required by the Central Bank of Nigeria of lenders holding international licenses. Apart from its base in Nigeria, Zenith Bank operates in Ghana, Sierra Leone, the UK as well as the Gambia. The group highlighted the impact of hyperinflation on its Ghanaian operations in the financial report, noting that it led to a decrease of N30 billion in its pre-tax profit for the year. Its bid to restructure into a holding company like a good number of its peers is in the works.

The model will allow it to branch out from its core banking business into other sectors within financial services, hoping the move will help unlock more value and widen its revenue sources. Operating expenses for the period under review surged to N586.6 billion from N291.7 billion, driven by the spending on fuel and maintenance, which more than doubled. Profit before tax was up by 66.7 percent, while post-tax profit grew to N1 trillion from N676.9 billion. Total assets climbed to N30 trillion from N20.4 trillion. The bank has announced a final dividend of N4 per share, taking its total for the year to N5 (compared to N4 for 2023) and its potential payout to N205.3 billion.

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