Zenith Bank Plc has leapfrogged Dangote Cement and MTN Nigeria to become the most profitable company in Nigeria as the lender’s strategies in the past five years yielded fruit.
Zenith Bank posted a net income of N208.84 Billion as at December 2019, this is followed by MTN Nigeria (N202.11 billion); Dangote Cement (N200.52 billion), and Guaranty Trust Bank (N196.84 billion), according to data compiled by Money Central.
Dangote Cement was on the no.1 spot in 2018 when it posted net income of N390.25 billion, while MTN Nigeria was listed on the bourse last year.
Over the past 5 years, lenders have been the major drivers of NSE-30 profit even amid slow economic growth as they took advantage of some central bank’s policies to add impetus to earnings. Also, an excellent risk management and capital buffers helped them overcome the headwinds.
On the other hand, earnings of cement makers have been growing sluggishly due to tepid construction activities as government cut down capital expenditure spending.
A weak consumer purchasing power following the devaluation of the currency and high unemployment have continued to be a drag on growth on fast moving consumer goods industry.
Zenith Bank’s net income is 12.64 percent of the N1.64 trillion combined profit of the 30 largest and most liquid companies on the bourse and 23.87 percent of N878.15 billion cumulative profit of the largest banks by market capitalization.
Zenith Bank has the most attractive valuation among Nigeria’s bellwether firms as evidenced in price to earnings (P/E) ratio of 2.50 times, which compares to GTBank, (3.50 times ); Dangote Cement, (11.9 times); Nestle Nigeria, (17.90 times), Seplat, (5.70 times¬), and MTN Nigeria (11.53 times).
The lender is the highest dividend stock in Africa’s largest economy, giving shareholders more income on every Naira invested than any other company.
For instance, it has a dividend yield of 16.77 percent, which compares with GTbank, (11.43 percent); Dangote Cement, (11.35 percent); Nestle, (6.40 percent); and MTN Nigeria (4.23 percent).