One of the leading commercials banks in Sierra Leone, Zenith Bank Sierra Leone has increased its profit margin in 2020 from Le22.1 billion in 2019 to Le28.12 billion in 2020, a growth of Le6.01 billion and 27% year on year.
The Annual General Meeting took place on Friday 21st May, 2021 at the bank’s conference Room, at Rawdon Street Freetown.
The Chairperson, Board of Directors, Mrs. Boi-Jenneh Jalloh, in her statement, said the world was heavily disrupted in 2020 by COVID-19 Pandemic, while the global economy consequently contracted by 3.50% in 2020 according to IMF world economic outlook in the January 2021 publication, which is less severe than the initial projected contraction of 4.40% in the October 2020 edition.
She said improvement was as a result of the continued fiscal and monetary policy support measures and the easing of the COVID-19 restriction by different countries.
“In 2021, the global economy is predicted to significantly recover to a positive growth of 5.50% and the projected growth is premised upon improved economic activities, resulting from the anticipated additional fiscal support measures from some advanced economies in order to deal with health and economic challenges brought by the pandemic and the expected effective rollout of the COVID-19 vaccination program.”
Mrs Boi-Jenneh Jalloh noted that the banking system remains stable, resilient, adequately capitalized, liquid and profitable despite the challenges of the pandemic.
“We have seen improvement in capital adequacy ratio, liquid asset to deposit ratio and the non-performing loan ratio in the banking industry. Moreover, the non-performing loan ratio improved significantly from 18.50% in September 2020 to 12.70% in December 2020. This was as a result of Government payment of outstanding arrears to contractors who in turn paid their debt to the bank, she said.”
Mrs. Jalloh told shareholders that despite the challenging operational environment, Zenith Bank continues to thrive and has recorded an outstanding performance and growth in 2020.
The Chairperson of the bank said the international and local economies are constantly monitored and it is expected that things will improve as the world gets over the COVID-19 pandemic and other challenges.
The Managing Director/CEO Chijioke W. Ejilemele averred that the figure presented by the Auditors were very encouraging depicting the growth of the bank.
The Managing Director took his time to explain to shareholders including board of directors the successes and challenges the bank went through during the year ended 31st December 2020.
Mr. Ejilemele said interest income grew by Le0.83 Billion or 1%, while interest expenses decreased by a much higher figure of Le2.45Billion or 22%, resulting in the interest income growth of Le3.2Billion or 5%, while net fees and commission income grew by Le4.46Billion or 34% and net trading income decreased by Le2.6Billion or 23%.
“This significant growth in profitability was as a result of growth in deposits, investments, loans and advances in the year which increased net yields despite the tough operating environment.”
On the financial indicators, the astute Managing Director said the bank’s liquidity ratio for the year ended December 31st 2020 was 158.74% against the Bank of Sierra Leone statutory requirement of 36.32%.
This he said shows the bank is highly liquid and maintains healthy prudential operations.
“Loan to deposit ratio stood at 11.15% in 2020 as compared to December 31, 2019 value of 11.52%. This shows that the bank has a large window of opportunities to grow its loan portfolio significantly. Capital adequacy ratio requirement by the Bank of Sierra Leone was 15% and the bank achieved a ratio of 100.19%. This shows the bank is very robust and can take on larger ticket transactions.”
He said the overall performance for 2020 puts the bank in a vantage position to take up the numerous business opportunities available in the country for the much expected growth and position amongst the other commercial banks in the country.
Zenith Bank (Sierra Leone) Limited has continued to provide exceptional services from seven locations in most of the key business centers in the country with complementary cash offices and centers. These services have endeared numerous customers to the bank. The bank will strengthen this by making more investments in the required human resources, best materials and technology.
Mr. Ejilemele said 2020 was a challenging year with a major adverse challenge in the general economy of Sierra Leone after the country recorded its first coronavirus case on 31st March 2020 resulting in the instant economic activities melt down.
Despite this challenging time the bank’s performance was encouraging. The various challenges faced by the bank when COVID-19 pandemic struck did not deter the bank from growing the total asset from Le614.24Billion in 2019 to Le703.29Billion in 2020.
The Managing Director/CEO averred that a significant growth of over Le89.056Billion and 14.50%, was recorded due to growth in investment in securities to about Le404Billion over the 2019 figure of Le329.29Billion.
He said the bank’s quality risk assets also grew from Le52.86Billion in 2019 to Le59.37Billion in 2020.
The 13th Annual General Meeting of the bank witnessed the re-appointment of directors and the reading of the audit report that was satisfactory. The report was adopted and accepted while the 2021 AGM accepted to retain the services of Baker Tily-Sierra Leone as the bank’s auditors.