Zenith Bank recorded double-digit growth in interest income to N540.2 billion in 2022 driven mainly by loans and advances to customers, BusinessDay analysis shows.
According to the available data gleaned from the Nigerian Exchange Group(NGX), the tier-1 bank saw a 26.3 percent increase in interest income in the full year of 2022 from N427.6 billion recorded in a similar period of 2021.
Further analysis revealed that the double-digit growth in interest income was largely attributable to loans and advances to customers which stood at N370.4 billion in 2022, indicating a 26.8 percent increase from N292.2 billion in 2021.
Zenith Bank’s interest expense climbed 62.5 percent to N173.5 billion in 2022 from N106.8 billion in 2021, on the back of time deposits.
Despite interest expense growing faster than interest income, Zenith Bank reported a 14 percent increase in net interest income to N366.6 billion in 2022 from N320.8 billion in 2021.
Zenith Bank reported a 23.5 percent increase in gross earnings to N945.6 billion in 2022 from N765.6 billion in 2021 which was on the back of a 26 percent growth in interest income and a 23 percent growth in non-interest income.
Net income on fee and commission income amounted to N132.8 billion, a 27.7 per cent increase from N104 billion which was driven mainly by growth in foreign withdrawal charges(70.3%), account maintenance fees (32.4%), and fees on electronic products (22.1%).
Zenith Bank’s profit after tax dipped 8 percent to N223.9 billion in the full year of 2022 from N244.6 billion in the full year of 2021.
CSL Research said in its report that Ghana Impairments depressed the bank’s profit. “Impairment charge grew significantly, up 105.7 percent year on year to N123.3 billion for full year 2022 from N59.9 billion for full year 2021, bringing full year 2022 Cost of Risk (COR) to 3.2 percent compared with 1.9 percent for full year of 2021.
“The group exchanged N123.6 billion of its existing Government of Ghana bonds for new bonds with maturities from 2027 to 2038 under the Ghana Domestic Debt Exchange Programme,” analysts at CSL Research said.
CSL Research said in a note that the effect of the exchange on impairment of the existing bonds on December 31, 2022, was recognised in the consolidated financial statements and it appears the hit was taken at once and not spread over 4 years, hence the jump in impairments.
“Impairment charge on financial and non-financial assets of N58.7 billion was taken for Zenith Bank Ghana and the subsidiary reported a loss of N21.0 billion. Beyond Ghana, with an NPL ratio of 4.3 percent and coverage ratio of 115.9 percent (up from 114.4% in FY 2021), we do not see any near-term risk to the bank’s asset quality ratios,” analysts at CSL Research said.
Zenith Bank has announced a proposed final dividend payout of N2.90 per share, bringing the total dividend to N3.20 per share.
Basic earnings per share stood at N7.14 per share in 2022 from N7.78 per share in 2021