Zenith Bank Plc and Guaranty Trust Bank (GTBank) Plc are two of the top five banks operating in the Nigerian banking space right now. Both of them have huge balance sheet with hefty assets base, liabilities, loans and advances to customers, and deposits. Both banks are also big money makers in terms of revenue. For example, for the 2016 financial year, GTBank grossed N412.0 billion, had a pre-tax profit of N165.1 billion, and deployed assets worth N3.12 trillion. On the other hand, Zenith Bank grossed N507.9 billion, had a pre-tax profit of N156.7 billion, and deployed assets worth N4.73 trillion. Our analysis shows that Zenith is the bigger of the two banks. Despite Zenith being the bigger bank, GTBank outperformed its peer in terms of profitability for the 2016 financial year. It took the lead in six of the eight profitability ratios examined, while Zenith Bank only managed to lead in two.Growth rates

For the 2016 financial year, Zenith Bank was able to grow its gross earnings significantly, especially in the light of Nigeria’s economic recession and the losses most other companies made. Turnover growth rate was 17.4 per cent and is quite commendable. Even then, such result was not as good as that which GTBank recorded. GTBank’s turnover growth rate for the period under review was a higher 36.5 per cent. This 36.5 per cent profit growth rate in 2016 was not only better than that of the preceding year, but was also much better than the 17.4 per cent which Zenith Bank recorded.


For the 2016 year, GTBank was the winner in terms of return on assets (ROA) and return on equity (ROE). ROA for the year was 5.3 per cent, up from 4.8 per cent in the prior year. This means that of every N100 worth of assets deployed by GTBank, N5.30 accrued to it as pre-tax profit while Zenith Bank was able to record a lower N3.30 pre-tax profit from every N100 worth of assets employed.

As regards ROE, GTBank’s ROE was 26.2 per cent, not just higher than the 24.0 per cent recorded in the erstwhile year but also much better than the 18.4 per cent Zenith Bank recorded for the same period under review.

Pre-tax profit margin

For the 2016 financial year, pre-tax profit margin (which measures a company’s ability to squeeze as much profit as possible from turnover) for GTBank was 40.1 per cent, higher than Zenith Bank’s own which stood at 30.9 per cent. This means that for every N100 income earned by GTBank in 2016, an extremely high N40.10 accrued to it as profit while a lower N30.90 (even though still high) pre-tax profit accrued to Zenith Bank for every N100 income earned.

Net interest margin

Net interest margin is one of the true measures of a bank’s effectiveness, as it measures effectiveness in its core banking operations. For the year, GTBank led the two banks, recording a net interest margin of 74.4 per cent, as compared to Zenith Bank’s lower 62.5 per cent result.

Classified loans

Proportion of classified loans was one of the ratios in which Zenith Bank led the two banks in 2016. For the year, the portion of its entire loan stock that became classified as non-performing stood at 3.0 per cent. This result was better and lower than GTBank’s result for 2016. For GTBank, proportion of classified loans for 2016 was 3.29 per cent, up from 3.21 per cent in 2015.

Capital adequacy

This was the second ratio in which Zenith Bank came out tops, ahead of GTBank for their 2016 financial years. Zenith Bank recorded a capital adequacy of 23 per cent, better than GTBank’s 19.8 percent result. What this means is that Zenith Bank is better equipped than GTBank in the banks’ primary business of giving out loans. It is however worthy of note that both banks’ results were higher than the 16 per cent rate mandated for Systemically Important Banks.

Third year averages

In terms of averages, GTBank also generally performed better than Zenith Bank did, coming out on top in five of the ratios, and tying up an equal position with Zenith Bank in one.

Final word

It is imperative to note that while GTBank generally did better than Zenith Bank in most of the ratios, Zenith Bank of itself performed exceptionally. It improved its processes during the course of the year and posted a substantial profit while most Nigerian companies posted losses.