Zenith Bank Plc has announced a 41 percent growth in it’s gross earnings to the tune of N270 billion in Q1 2023 from N191.5 billion in Q1 2022.
The unaudited statement of account submitted to the Nigerian Exchange Group indicated that Zenith Bank recorded a 27 percent year-on-year increase in profit before tax to N86.6 billion in Q1 2023 from N68 billion in Q1 2022.
Profit after tax also increased by 13 percent from N58.2 billion to N66 billion during the compared periods.
According to the bank, the growth in the topline was propelled by an increase in both interest income and non-interest income.
Zenith Bank’s interest income surged by 52 percent to N191.6 billion in Q1 2023 from N126.4 billion in Q1 2022.
Similarly, non-interest income increased by 27 percent to N72.8 billion from N57.2 billion in the reviewed period.
Zenith Bank said the growth in interest income can be attributed to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
Regarding efficiency, the cost-to-income ratio improved from 55 percent to 53.4 percent in the current period, supported by a bolstered income line.
The cost of risk also moderated from 0.8 percent to 0.7 percent during the same period due to an enlarged loan book.
However, the cost of funding doubled year on year from 1.3 percent in Q1 2022 to 2.7 percent in Q1 2023.
“This is owing to a considerable spike in interest rates between both periods as interest expense grew from N25.8 billion in Q1 2022 to N70.8 billion in Q1 2023,” Zenith Bank said in a note.
“This impacted the net interest margin which reduced from 7.3 percent to 6.9 percent over the same period.”
The bank’s total assets grew 9 percent from N12.29 trillion in December 2022 to N13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings.
Read also: Fidelity Bank records stellar performance in FY 2022
Customer deposits increased by 2 percent from N8.98 trillion in December 2022 to N9.14 trillion in March 2023.
Loans and advances also experienced marginal growth of 1 percent from N4.12 trillion in December 2022 to N4.15 trillion in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets.
Both the capital adequacy and liquidity ratios remained at 19.5 percent and 72 percent, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.
In 2023, the group said it will maintain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers.
