Banking sector: Zenith Bank pays the highest income tax in five years

Zenith Bank building

OKEY ONYENWEAKU

Zenith Bank, the largest bank in terms of profits, paid income taxes to the tune of N159 billion over the past five years, from 2017 to 2021.

As a good corporate citizen of Nigeria, Zenith Bank has not only remained consistent in remitting its income tax to the government, but it has always been done in a timely manner.
Income tax refers to a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. ”By law, taxpayers must file a tax return each year to determine their tax obligations.

Income taxes are a source of revenue for governments. They are used to fund public services, pay government bonds and provide goods to citizens,” an expert explained.

Every bank that operates in Nigeria is legally required to file a tax return every year with the state and federal government agencies where they have branches. Although they pay the statutory rate of 30% of total profits as corporate income tax, banks are also expected to pay school tax, National Technology Development Agency tax information (NITDA) and levy from the Nigerian Police Trust Fund.

While the tax each bank pays depends on the size of its revenue, the federal government benefits from huge taxes each year from financial institutions.

The details show that Zenith Bank paid income tax of N25.528 billion in 2017, N38.261 billion in 2018, N34.451 billion in 2019, N25.296 billion in 2020 and N35.816 billion in 2021. Research also shows that with an aggregate income tax of N159 billion in those years, Zenith Bank pays the highest tax in the banking industry. Next is GTCO Plc whose income tax was N143.7 billion in the same five years.

Meanwhile, Zenith Bank’s unaudited results for the first quarter ended March 31, 2022 showed an impressive 22% growth in gross profit from N157.3 billion in the first quarter of 2021 to N191.5 billion. naira in the first quarter of 2022.

According to the unaudited statement of account presented to the Nigerian Stock Exchange (NGX) on Thursday 28th April 2022, the strong double-digit revenue growth resulted in an increase in net income, with the Group recording growth of 11% year over year. Annual (annual) increase in pre-tax profit from N61.02 billion in Q1 2021 to N67.99 billion in Q1 2022.

Profit after tax also increased by 10% from N53.06 billion to N58.19 billion over the same period. Revenue growth is driven by both interest and non-interest revenue.

Interest income increased by 25% from N101.12 billion in Q1 2021 to N126.38 billion in Q1 2022, while non-interest income increased by 12%, from 51.20 billion naira to 57.23 billion naira. Growth in interest income and non-interest income stems from the combined effects of improved interest income on loans and advances (as risky assets continue to grow and pricing improves gradually) and an improvement in non-interest income as the Bank continues to deploy its retail strategy, thus acquiring more customers and developing its e-money revenues thanks to the increase in the volume of transactions on all its canals.

Total assets grew by 9% from 9.45 trillion naira to 10.32 trillion naira in 2022, driven mainly by growth in customer deposits. Customer deposits increased by 12% from 6.47 trillion naira in December 2021 to 7.25 trillion naira in March 2022. The savings account balance, which is for individuals only, increased by more than 68 billion naira and confirms the strong customer acquisition strategy and versatile electronics. digital platforms and channels.

Loans and advances also increased by 6%, from N3.5 trillion in December 2021 to N3.7 trillion in March 2022, boosting the Group’s interest income and demonstrating the Group’s appetite for business creation. high yield risk assets. This development also contributed to boost the net interest margin (NIM), as it fell from 6.0% in March 2021 to 7.3% in the current period, while the capital adequacy ratio improved slightly from 21.1% to 22.1%.

Until the rest of 2022, the Group is committed to continuing to focus on sustainable growth in all its business segments and to intuitively deploy technological platforms and digital assets to meet the needs of its various customers. in order to offer better returns to its stakeholders.

Zenith Bank’s track record of excellent performance has earned the brand numerous awards, including being voted the Best Bank in Nigeria in the Global Finance World’s Best Banks Awards, for three consecutive years from 2020 to 2022, Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020, and Best in Corporate Governance’ Financial Services’ Africa 2020 and 2021 by the Ethical Boardroom. In addition, the Bank appeared as the Most Valuable Banking Brand in Nigeria in Banker Magazine’s Top 500 Banking Brands 2020 and 2021, the number one bank in Nigeria by Tier-1 Capital in the “2021 Top 1000 World Banks” ranking by The Banker Magazine and Retail Bank of the Year at the BusinessDay Banks and Other Financial Institutions Awards (BOFI) Awards 2020 and 2021.

Likewise, Zenith Bank was honored as Bank of the Decade (People’s Choice) at the 2020 ThisDay Awards and emerged winners in four categories at the 2021 SERAS (Sustainability, Enterprise, and Responsibility) Awards, winning the ” Best Company in Reporting and Transparency”, “Best Company in Infrastructure Development”, “Best Company in Gender Equality and Women’s Empowerment” and the coveted “Most Responsible Organization for Africa”.

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