Zenith Bank Plc, Nigeria’s biggest bank by market capitalisation, has reported a double-digit growth in its gross earnings for the half-year ended June 30, 2022.
The bank’s gross earnings rose by 17 percent to N405 billion in half-year 2022 from N346 billion reported in half-year 2021.
Its profit before tax grew 11 percent year-on-year from N117 billion to N130 billion.
According to the bank’s financial results, this growth was underpinned by a 19 percent year-on-year growth in interest income from N204 billion to N242 billion and an 18 percent year-on-year growth in non-interest income from N127 billion to N149 billion.
“The growth in interest income was driven by the modest increase in the loan book and improved interest margins. The increase in non-interest income attests to the group’s success in its income diversification strategy,” it said in a statement on Tuesday.
According to Coronation Research, net interest income was in line with our expectations. “However, profits were lower than our and the market’s expectations following higher-than-expected operating expenses and the surprising FX revaluation losses,” analysts at Coronation said in a note.
The group also recorded an 11 percent year-to-date increase in total customer deposits to close the period at N7.15 trillion.
Earnings per share also grew from N3.38 to N3.55 over the same six month period.
The retail strategy of the group continues to deliver outstanding results as retail deposits grew by 17 percent year to date from N1.82 trillion to N2.13 trillion.
Retail activities supported the growth recorded in fees on electronic products, which grew by 45 percent year on year from N17 billion to N25 billion.
Despite the elevated yield environment, the cost of funds increased only marginally from 1.3 percent in June 2021 to 1.4 percent in June 2022.
Read also: Zenith Education unveils career guidance initiative to build capacities of Nigerian students
The increase in the cost of funds was lower than the increase in yields on interest-generating assets, giving rise to an improved net interest margin of 7.1 percent from 6.4 percent in June 2021.
Total assets rose to N10.12 trillion at the end of June 2022 from N9.45 trillion at the end of December 2021.
Despite the headwinds imposed by the operating environment, the group grew its risk assets as gross loans grew by 5 percent year to date from N3.5 trillion to N3.7 trillion.
Prudential ratios such as liquidity and capital adequacy also remained stable and well-above regulatory thresholds at 60.5 percent and 21.0 percent respectively.
According to the bank, the group is focused on advancing its digital banking strategy anchored on a strong technology base, and intends to consolidate on the gains achieved in prior years across all business segments.
“Combined with the group’s industry leadership, we expect this to drive improved performance and deliver enhanced returns to stakeholders,” the bank said.
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