Tier-1 bank, Zenith Bank recorded a 6.7 percent surge in after-tax profits in its Q1 2019 financial results to N50 billion, from N47 billion in 2018.
Highlights of the results show that the bank’s gross earnings hit N158 billion in 2019, as interest income grew 4.9 percent to N122.48 billion.
Profit before tax also jumped 6.1 percent to N57.2 billion, from N54 billion in 2018.
The bank’s net assets also grew by 6.2 percent to N780.89bn.
Analysis of the report also shows a drop in impairment charges and operating expenses by 54 percent and 15 percent, respectively, while net fee and commission expense rose by 14.35 percent.
The bank’s cost of funds also improved, declining by 25 percent from 4 percent in Q1 2018 to 3 percent at quarter-end, supported by a 22 percent decrease in the bank’s interest expense of N10 billion over the same period.
“Our prudent cost management led to a 5 percent decline in our cost-to-income ratio by 5 percent from 53.3percent in 2018 to 50.9percent in the period with an absolute reduction in operating expenses by N2.3 billion year-on-year,” the bank said.
The bank’s earnings per share increased marginally by 6.65 percent to N1.60 from N1.50. Return on average equity increased 4 percent to 25.2 percent, while return on average assets also increased by 4 percent to 3.4 percent.
The Group’s retail franchise continued to increase as retail deposits grew by N80 billion between December 2018 and March 2019, equivalent to a 9 percent growth, notwithstanding the fact that total customer deposits dropped marginally by 3 percent.
According to the bank, the drop in customer deposits was as a result of the rebalancing of the deposit mix as expensive deposits were forgone in favour of cheaper and stickier retail deposits.
The bank’s volume and value of transactions across its electronic and digital platforms surged as new customers are being acquired.
“Our balance sheet continues to strengthen as liquidity ratio is at 66.7 percent, loan to deposit ratio closed at 43 percent, and capital adequacy ratio ended the period at 25 percent respectively and remain above the relevant regulatory thresholds as at 31 March 2019,” the bank noted in a statement.
The bank recently announced the appointment of Ebenezer Onyeagwu as its group managing director/CEO.
Prior to his appointment, Onyeagwu was the deputy managing director of the bank since October 28, 2016, and has close to 30 years’ cognate banking experience of which 17 years has been with Zenith Bank.
Shares of Zenith Bank closed trading at N20.90 on the floor of the Nigerian Stock Exchange on Wednesday.
OLUFIKAYO OWOEYE
