ZENITH Bank Plc paid N15.428 billion in penalties to the Central Bank of Nigeria (CBN) for 10 different violations in the 2024 financial year, including foreign exchange, cybersecurity and anti-money laundering infractions, according to the Tier-1 bank’s 2024 financial statement.
Economy Post found that the bank paid a N14.647 billion for infractions from the CBN foreign exchange examination, including a N103.250 million due to what the bank called “anti-money laundering reviews.”
Zenith Bank also paid a N250 million as penalty for “extant regulation violation” as well as N322 million for “checks on customers onboarding documentation.” The Tier-1 lender likewise paid a N4 million as penalty for cyber security breaches and another N4 million as penalty for violations related to risk assessment examination.
The bank further paid a N20 million for non-compliance with CBN directives as well as N61 million as penalty for anti-money laundering findings. It also paid a N14 million for non-compliance with CBN’s directive on reconciliation of customer charges. The lender equally paid a N2 million in penalties for the late resolution of customer’s complaints.
High level of litigations
Similarly, the bank also faces a number of court cases, with litigants claiming N1.30 trillion by the end of 2023 as against N1 trillion in the corresponding period of 2023.
“The Group is presently involved in several litigation suits in the ordinary course of business. The total amount claimed in the cases against the Group is estimated at N1.30 trillion (31 December 2023: N1 trillion).
“The actions are being contested and the Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on the Group and are not aware of any other pending or threatened claims and
litigations.”
Zenith Bank continues lending to managers at 4%
Also, Zenith Bank has continued to lend to its key management personnel at 4 percent interest rate despite the monetary policy rate – which is the bechmark interest rate- staying at 27.5 percent. Its loans to the managers stood at N3.850 billion at the beginning of 2024 but ended the year at N578 million. The bank earned an interest of N23 million from the loans.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria retained the country’s benchmark interest rate at 27.50 percent at the apex bank’s 299th meeting in Abuja in February 2025. “The Committee was unanimous in its decision to hold all parameters and thus decided as follows: 1. Retain the MPR at 27.50 per cent. 2. Retain the asymmetric corridor around the MPR at +500/-100 basis points,” CBN Governor, Mr Yemi Cardoso, said after the meeting.
This means that banks should not lend at any rate that is less than 27.50 percent. Doing so means that a bank is lending below the market rate. But Zenith Bank lends to its management staff at 4 percent – far less than the market rate.
Zenith Bank Plc had lent N3.517 billion to its management staff at four percent interest rate during the second-quarter 2023 financial statement. Zenith Bank granted most of the loans to its management staff to acquire land and build houses, while some were given to them as personal loans.
“Loans to key management personnel include mortgage loans and other personal loans. The loans are repayable from various repayment cycles, ranging from monthly to annually over the tenor and have an average interest rate of 4%,” Zenith Bank admitted in its second-quarter financial statements.
This was also the case in the third quarter 2024 financial statement.
High interest rates and MSMEs
Zenith Bank’s loans to customers hover between 20 percent and 35 percent. As at 2022, interest rate for the bank’s SME Sub-KD /Sub-Dealer Scheme was 19 percent per annum. But this has increased to over 20 percent.
While small businesses complain that they cannot have access to funds owing to high interest rates, Zenith Bank’s advertised rate for micro, small and medium enterprises (MSMEs) loan stood at 29 percent per annum in 2024. Tenor of the loan was 12 months. There was also a management fee of 0.5 percent to one percent to be paid before a small business owner can access the loan.
Chief Executive Officer of Lagos-based Jasen Fashions, Ms Jane Idemudia, said the situation only reflected the state of Nigeria’s financial system.
“It is a laughable situation that a bank pays more attention to its senior staff than those without which it cannot be in business. As an entrepreneur, we hardly have access to cheap loans. Even when government intervention loans are available, you cannot access them unless you know someone in a bank. So, this situation is just a reflection of what the country’s banking system has become,” she said.
An Abuja-based operator of food business, Ms Vivian Emodi, said she was not surprised. According to the 34-year-old entrepreneur, she went to a bank seeking some funds in 2021 but could not get due to a high interest rate.
“I went to a bank to get some loan in 2021, but I was told I could only get it at N23 percent. I could not even get any of the CBN loans,” she said.
