Zenith Bank beats tier-one peers to post highest profit in H1

Zenith Bank, Nigeria’s second-biggest lender by asset, outperformed its tier-one counterparts to record the highest half-year profit in 2021 as net income on fees and commission surged.

The bank’s half-year profit grew by 2.29 percent to N106.12 billion in the six months to June 2021 from N103.83 billion reported in the corresponding period of 2020. The half-year profit is the highest the lender has reported in nine years.

Zenith Bank’s profit in the review period was 22.06 percent higher than Access Bank’s, the biggest lender in Africa’s largest economy. With a half-year profit of N86.94 billion Access Bank occurred the second spot as GTB and UBA reported N79 billion and N61 billion, respectively.

FBN Holdings completed the big five lender’s list with N38 billion, the half-year profit reported by the lender was its highest in six years.

Breakdown of Zenith Bank’s financial result showed that the lender grew its profit despite a N13.02 billion slump in interest and similar income to N203.93 billion in June 2021 from N216.95 billion the previous year.

The lender’s profit was largely supported by the 42.26 percent jump in net income on fees and commission to N47.66 billion in the first six months of June from N33.50 billion recorded in the preceding year.

The majority of the income was obtained from account maintenance and income from electronic products. Zenith Bank attracted N14.48 billion from account maintenance fees, N5.05 billion more than the N9.43 billion it reported in June 2020. Its fees on electronic products was up by N1.89 billion to N8.94 billion in June 2021 from N7.05 billion in the same period of 2020.

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Further breakdown of the bank’s half-year financials showed it reported stronger gross earnings to N345.6 billion in the six months to June from N346.1 billion recorded in 2020, the peak of the pandemic when Nigerian lenders tightened credit criteria to enable them to prevent an increase in non-performing loans. A bank’s gross earnings is used to measure how efficient it is as it determines how well it uses its resources to produce a profit.

In the review period, Zenith Bank’s pre-tax profit was up 2.6 percent to N117.1 billion. Its earnings per share rose 2.4 percent to N3.38 in the six months to June from N3.30 reported in the corresponding period of 2020.

Meanwhile, the tier 1 lender has said it will pay shareholders an interim dividend of N0.30 per share totalling N9.4 billion for the period under review.

The company is expected to pay an interim dividend of 30 kobo per share on all the outstanding 31,396,493,786 ordinary shares of the company.

“An interim dividend of 30 kobo for every share of N50k subject to appropriate withholding tax will be paid to shareholders whose names appear in the register of members as at the close of business on the 10th day of September 2021,” the bank’s Company Secretary, Michael Otu, said in a statement.

Zenith Bank engages in the provision of banking and other financial services to corporate and individual customers.

The bank’s segments include Corporate, Retail Banking and Pension Custodial services-Nigeria, which provides a range of banking and pension custodial services to a range of corporations, financial institutions, investment funds, governments and individuals, and Outside Nigeria Banking-Africa and Europe, which provide a range of banking services to a group of corporations, financial institutions, investment funds, governments and individuals outside Nigeria.

The segments cover banking operations in other parts of Africa (Ghana, Sierra Leone and The Gambia) and Europe (the United Kingdom). The Bank’s operations are primarily organized based on its geographic areas, which are Nigeria, the Rest of Africa and Europe. Its subsidiaries include Zenith Bank (Ghana) Limited and Zenith Bank (Sierra Leone) Limited.

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