Zenith Bank profit falls 8% as loan loss provisions surge

Zenith Bank Plc, Nigeria’s biggest lender by market value, posted an 8 percent drop in half-year profit as swelling impairment charges offset a jump in interest income, underlining the strain from Nigeria’s tougher credit environment.

Net income slid to N532.2 billion in the six months through June, from N578 billion a year earlier, the Lagos-based lender said in a filing. Profit before tax fell 14 percent to N625.6 billion, even as gross earnings climbed 20 percent to N2.52 trillion, buoyed by higher yields on loans and investment securities.

Loan-loss charges more than doubled to N760.8 billion from N415.3 billion, eroding gains from interest and trading income. Net interest income nearly doubled to N1.35 trillion, while fees and commissions rose 17 percent to N128.1 billion.

The board proposed an interim dividend of N1.25 per share, up from N1.00 a year earlier, payable from retained earnings. Basic earnings per share dropped to N12.95, from N18.41 in the same period of 2024.

Total assets stood at N30.99 trillion, little changed from year-end, while customer deposits rose to N23.48 trillion from N21.96 trillion in December.

Shareholders’ equity increased to N4.57 trillion from N4.03 trillion, reflecting retained earnings growth.

“Zenith Bank’s results highlight resilient interest income growth underpinned by elevated yields and growth in investment securities,” analysts at Cordros Research said.

“However, the combination of higher impairment charges and weaker trading gains capped profitability in the review period.”

The analysts see a lower interest rate environment stimulating credit growth, strengthening core performance and supporting profitability despite a moderation in non-core income.

Zenith, which operates subsidiaries in Ghana, the UK, Sierra Leone, and Gambia, is navigating Nigeria’s inflationary environment and tight monetary policy that has pressured borrowers.

The lender expanded its footprint slightly, opening one new branch in the period, bringing its network to 456 branches across its markets.