- Jim Ovia makes N16.22bn, accounts for 95.7% of total directors’ earnings
BY BAMIDELE FAMOOFO
As Zenith Bank, one of Africa’s largest lenders, presents its performance scorecard for the financial period ended December 31, 2022, shareholders are upbeat on juicy return on investment as dividend yield stands at 11.6 per cent.
Directors of the bank who invested in its shares and Jim Ovia, Chairman of Zenith Bank are the biggest beneficiaries of the dividend largesse, which will be doled out at the Annual General Meeting which is around the corner.
According to a corporate actions announcement signed by the Company’s Secretary/General Counsel, Michael Osilama Otu, the AGM of the bank will be held at the Civic centre, Ozumba Mbadiwe Street, Victoria Island, Lagos State on Tuesday, May 2, 2023 at 9.00am
A peep into the bank’s shareholding structure and analysis of dividend which members of the board of the bank, who are shareholders are entitled to showed that 13 out of 17 directors who own shares in the bank, will go home with about N16.95 billion as dividend from their 5.30 billion shares (direct and indirect) holdings as at December 31, 2022.
The board of directors of Zenith Bank has announced a final dividend of N2.90 per share, which excludes the 30k/share interim dividend paid to shareholders before the close of the financial year.
A breakdown of directors’ shareholding structure puts the direct shareholdings of the 13 director-shareholders at over 3.77 billion ordinary shares while indirect holdings stood at about 1.53 billion ordinary shares as at December 31, 2022.
Meanwhile, the bulk of the dividend to be earned by the directors of the bank will go to Jim Ovia, Chairman, Zenith Bank, who also owns the bulk of the shareholding of the bank.
A check on the shareholdings of directors by The Point showed that Ovia accounts for about 96 per cent of the holdings with about 5.07 billion ordinary shares (direct and indirect). Hence, Ovia is expected to cart away about N16.22 billion from his investment in the bank in the review financial year.
Ovia’s direct holdings in the bank stood at about 3.55 billion shares representing 11.29 per cent of total shareholdings of the bank in the review period.
The other 12 directors/shareholders of the bank including Ebenezer Onyeagwu, Group Managing Director, Zenith Bank will share about N723.93 million dividends. They collectively own about 226.23 million of the bank’s shares as at December 31, 2022.
In all, the collective shareholders of Zenith Bank which stand at 645,562 persons with total holdings of 31,396,493,787 ordinary shares are expected to collectively take home N100.47 billion from their investment in the bank in the review period.
A financial performance review of the bank showed that the group’s interest income grew by 26.3 per cent y/y to N540.17 billion, occasioned by the expansion in risky assets (+19.6% YTD to N4.23 trillion) and an effective re-pricing of its interest-earning assets during the period.
Consequently, the group generated higher income from loans and advances to customers (+26.8% y/y), loans and advances to banks (+81.3% y/y), and investment securities (22.4% y/y) in 2022FY.
Likewise, interest expense inched higher by 62.5 per cent y/y to N173.54 billion, reflecting higher costs on deposits from customers (+103.4% y/y to NGN122.71 billion) and borrowings (+13.2% y/y to N48.75 billion).
According to a press release which accompanied the financial result, management said, “We attribute the higher costs on customers’ deposits to the steep growth in deposits (+38.7% y/y to N8.98 trillion) coupled with the moderation in the group’s low-cost deposits (CASA 2022FY: 84.6% vs 2021FY: 93.0%) during the period.
“Following the impressive interest income growth, net interest income expanded by 14.3 percent y/y to N366.63 billion. However, after accounting for credit impairment charges (+105.7% y/y to N123.25 billion), net interest income (ex-LLE) settled 6.7 percent lower year-on-year.”
Management also cited that the significant growth in impairment charges was due to the higher impairment expense for its Ghana subsidiary following the debt restructuring programme in Ghana. Notably, impairment charges for its Ghana subsidiary grew to N56.18 billion in 2022FY from N1.95 billion in 2021FY.
Overall, profit-before-tax settled marginally higher by 1.5 per cent y/y to N284.65 billion (2021FY: N280.37 billion). However, the 69.6 per cent increase in income tax expenses put further pressure on profit after tax (-8.4% y/y to N223.91 billion).
