Established in May 1990, Nigeria’s Zenith Bank has enjoyed remarkable growth throughout its 32-year history, such that today it is the country’s biggest bank by Tier 1 capital. Headquartered in Lagos, the bank currently has more than 500 branches and business offices in prime commercial centres throughout Nigeria.
Zenith also has subsidiaries in Ghana, Sierra Leone, The Gambia, the United Kingdom, and the United Arab Emirates, in addition to a representative office in China. It also plans to continue its expansion into more African countries, as well as to make further inroads into European and Asian markets.
The bank has a firm goal of becoming the best retail bank in Nigeria, and if the last few years are anything to go by, it will achieve its lofty ambitions. Its focus on delivering the highest customer-satisfaction standards, invariably through the deployment of state-of-the-art technologies, means that its products and services are at the forefront of effective and innovative customer solutions in the region.
Committed to promoting the sustainable development of vulnerable and underbanked communities, Zenith is delivering real, quantifiable change to people throughout Nigeria and beyond.
International Banker recently sat down with Zenith’s Group Managing Director and CEO, Mr. Ebenezer Onyeagwu, to discuss the bank’s recent achievements and how it has persevered in the face of a crippling global pandemic and the crucial role technology is playing in delivering optimal solutions to its customers.
Mr. Onyeagwu, welcome…
According to Zenith Bank’s 2021 Annual Report, last year was characterised largely by stellar growth, with total assets, customer deposits and gross loans and advances experiencing surges of 11 per cent, 21 per cent and 20 per cent, respectively, while profit before tax grew by 10 per cent. What are the main factors behind this impressive performance?
The growth in the topline arose from growth in both interest income and non-interest income, which is a result of the combined effects of an improvement in interest income on loans and advances—as risk assets continue to grow, and pricing gradually improves—and an improvement in non-interest income—as the bank continues to deploy its retail strategy, thereby acquiring more customers and expanding its electronic banking income from the increased volume of transactions across all its channels.
I presume the business sector makes up a sizeable chunk of those transaction volumes. What are some key challenges Nigeria’s small businesses face in banking and finance? And how does Zenith Bank’s SME/Commercial Banking unit strive to address those problems?
SMEs (small and medium-sized enterprises) in Nigeria face a lot of challenges, including a low level of business patronage, keeping proper books of accounts, general lack of business knowledge to improve their businesses and take advantage of digital solutions, liquidity challenges, lack of data to analyse transactions and difficulty in accessing finance.
As a bank, our SME-GMB (grow my business) offers several value propositions to the SME customers that bank with us. Through our partnership with Google, we expose SMEs to the digital world through free Google listings, and we help them improve their management capabilities with our quarterly capacity-building training. Our various e-business products also help them with digital knowledge for their growth, expansion and reduction in the cost of collections. To help alleviate one of the major pain points of SMEs, which is a lack of finance for working capital and growth, we also provide support by offering single-digit loans to specific segments of our SME base and women-owned (Z-Woman) enterprises.
Yes, digital banking is becoming more important to customers by the day. The Zenith Mobile App sounds like it has been a success story for the bank in customer satisfaction. What are the key ways this app is different or superior to similar mobile apps offered by your local banking peers?
The new Zenith Bank Mobile App boasts an all-new user interface, more engaging than its predecessor. The mobile-banking app enables on-the-go banking, making transacting more seamless and easier for customers.
With the all-new and upgraded Zenith Bank Mobile App, customers can manage their finances, as they have been equipped with finance tracking and analysis tools, an all-round lifestyle-management module, an AI (artificial intelligence)-powered chatbot that provides users with the ability to initiate and complete transactions via voice or chat conversations, and a whole lot more.
Can you briefly explain the purpose of Zenith Bank’s 24-hour Customer Experience Centre? And what role, if any, does this centre play in gauging customer feedback on the bank’s various products and services?
ZenithDirect is a 24/7, interactive customer-experience hub that not only focuses on addressing customer enquiries and complaints but drives positive interactions and constructive feedback. Our engagements are carried out via various electronic touchpoints, including interactive voice calls, e-mails, LiveChat, WhatsApp and social media.
Our digital platforms afford us a unique opportunity for immediate and direct feedback about our products and services from customers, including pointers on how they prefer to be served. This helps us analyse, map and identify customer trends and sentiments, which are considered and incorporated into product development upgrades and process improvements.
Yes, I imagine customer feedback must be important to the bank, especially given the proliferation of fintech (financial technology) solutions and start-ups that seem to underpin much of the intensifying competition within Nigeria’s retail-banking space. How is Zenith choosing to deal with such competition?
No doubt, the retail-banking space has witnessed the influx of several players, thus increasing the choices open to customers. As a bank, we continue leveraging our brand to reinforce customer loyalty. We offer personalised offerings to various segments of our customer base, from free banking to customers over 60 years to specialised and tailor-made offerings to our prestigious customers to free digital training in partnership with renowned and world-class organisations to the youth segment of our customers. All these have created stickiness and continued brand loyalty from existing and new customers.
Do you prefer to seek collaborative opportunities with fintech firms over competing with them?
As a Tier 1 bank, we have what it takes to collaborate or compete in the retail space. However, our posture has always been to collaborate because fintechs still need a bank with a strong base to help them compete and lend support as swiftly as possible, making Zenith Bank a natural partner.
Can you briefly explain Unstructured Supplementary Service Data (USSD) banking, which seems to be a powerhouse solution for Zenith Bank? And why has this proven so popular amongst your customers?
USSD (Unstructured Supplementary Service Data) banking is a convenient, fast and secure way for the bank’s customers to access their bank accounts and perform banking transactions without needing internet connectivity. It makes use of “short codes” (also called “feature codes”) to present an on-screen menu for customers to make their desired selections to complete transactions. This service is available to individual account-holders and merchants who desire to get onboarded as billers to receive payments from their customers. The channel also serves a wide range of sectors across the industry beyond individual usages, such as schools, hotels, restaurants, churches and many other key sectors.
The bank’s *966# USSD code (called “EazyBanking”) provides customers with an exhaustive list of transactional and self-service enquiries. Adoption of USSD banking has continued to grow over the years, with the bank’s current retail drive also playing a major part in the increasing uptake of the channel, especially by the unbanked population and those without access to smart mobile devices, who can, as a result, leverage the capabilities of USSD banking.
You mentioned the unbanked population. How important is financial inclusion across Nigeria to Zenith Bank? The bank has onboarded “super agents” and deployed agency-banking services across the 36 states of the federation to ensure it has a touchpoint in every location in the country, with 75,827 agents onboarded by the end of 2021. How significantly have such agency services thus far helped to boost financial inclusion?
Our agents are strategic partners in our retail banking efforts. We cannot set up physical bank branches in every location in the hinterland due to the size of the country and the infrastructural challenges in those locations. Consequently, we depend on our agents to reach the unbanked in those terrains. As we continue to grow our agent network, we adequately reward them. Apart from the income aspect and the cash-in, cash-out transactions carried out at the agent locations, the agents have contributed in no small way to the number of accounts we open. Agents also provide touchpoints in spreading information about our various products to new and existing customers.
How seriously does the bank consider its impact on the environment through its physical presence and lending activities? And what is the strongest way the bank promotes environmentally responsible business and lending practices?
Zenith Bank is strongly committed to environmental, social and governance (ESG) values and subscribes to the principle of the Triple Bottom Line: People, Planet and Profit. As a leading financial institution that services various sectors of the economy, we consider environmental and social (E&S) risk management critical to the bank’s sustainability strategy. Our Environmental and Social Management System (ESMS) provides a clear framework to address the potential negative impacts associated with the bank’s investments. We take measures to mitigate and minimise the risks identified during the E&S risk due-diligence process in line with our commitments as signatories to various global and local sustainability frameworks, such as the United Nations’ Sustainable Development Goals (SDGs), Principles for Responsible Banking and Nigerian Sustainable Banking Principles.
We are also implementing measures to track and measure our carbon emissions using a certified tool built on the internationally recognised GHG (Greenhouse Gas) Protocol. We are working on several practical measures that we believe will reduce total emissions from our operations. For instance, we significantly increased the number of branches, business offices and automated teller machines (ATMs) powered by alternative energy sources, such as solar systems.
You mentioned the bank’s sustainability strategy. Glancing at the myriad of corporate social responsibility (CSR) initiatives, it seems clear that Zenith Bank contributes significantly to the sustainable development of local communities across Nigeria. What do you consider to be some of the bank’s most impactful contributions?
Our sustainability strategy is guided by the Sustainable Development Goals (SDGs) of the United Nations. We are committed to many of those goals, especially those related to health, education, poverty elimination, zero hunger, decent work and economic growth, and responsible consumption and production. CSR initiatives and donations are major components of our strategy to create value for local communities.
In 2016, Zenith Bank invested over NGN1.2 billion in purchasing ten mobile cancer diagnostic and treatment centres (MCC). The health intervention initiative is in partnership with a non-profit organisation—the Committee Encouraging Corporate Philanthropy (CECP). The MCC, nicknamed PinkCruise, is a clinic on wheels with state-of-the-art facilities for screening, follow-up and treatment of cancer. Some medical activities on the PinkCruise include mammography, endoscopy, colonoscopy, colposcopy, cryotherapy, laboratory, vaccination and surgeries for pre-cancer and early-stage cancer. This intervention continues to impact many people across the nation.
In response to the COVID-19 pandemic, our health initiatives in 2020 focused mainly on supporting government efforts to curb the effects of the COVID-19 pandemic. Zenith Bank donated NGN1 billion to the Coalition Against COVID-19 (CACOVID). The bank also donated NGN100 million to the Lagos State Government Emergency Relief Fund to care for the Abule Ado gas explosion victims.
As for yourself, Mr. Onyeagwu, you have been the bank’s group managing director and chief executive officer for around three years. What would you say has been your greatest accomplishment as a banking leader during this time? And what is the single most important lesson the coronavirus taught you as a banking leader?
One of our major achievements during this period has been keeping the bank along the path of sustained growth and sustaining the superior performance for which the institution is renowned, despite a very challenging macroeconomic environment exacerbated by the coronavirus (COVID-19) pandemic. Indeed, these performances would not have been possible without the contributions of our founder and chairman, Jim Ovia, CON, whose pioneering role in building the structures and laying the foundation has ensured an enduring and very successful institution.
The onset of the COVID-19 pandemic, which massively disrupted the global business and financial landscape, has taught us that if we are to continue to succeed and remain relevant as a business, we should be nimble, ever-ready to respond to the variegations in the market.
According to the 2021 Annual Report, the group’s strategic objective is to become the market leader in the retail market. How far off do you believe Zenith is currently from achieving this objective? And what is the single most significant measure or strategy the bank needs to adopt going forward to achieve that objective?
We are strongly on course in this strategic objective—to become a leading retail bank in Nigeria. Our retail customer numbers have grown and continue to grow. We added about seven million new retail customers in 2021 and another six million new customers in the first half of 2022. We also hope to issue the highest number of cards in the industry in 2022. All of this is impacting our electronics income, which has continued on an upward trajectory. With additional customer-loyalty programmes and initiatives being worked on, we will continue to grow our revenue base.
We wish you all the best in your journey towards achieving this goal. Mr. Onyeagwu, thank you for your time today.