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Zenith Bank’s half-year profit more than doubles to N350bn

Zenith Bank names UNILAG branch building after Ibidapo-Obe

Zenith Bank Plc has reported a 169 percent growth in profit before tax to N350.4 billion in the first half of 2023 from N130 billion in the same period of 2022.

The country’s biggest lender by market value saw its after-tax profit jump 162 percent to N291.7 billion from N111.4 billion.

Zenith Bank reported 139 percent growth in gross earnings to N967.3 billion from N404.8 billion, driven by both interest income and non-interest income.

Interest income grew 72 percent to N415.4 billion from N241.7 billion, while non-interest income grew 246 percent to N515.7 billion from N149 billion.

The growth in interest income can be attributed to the impact of both the growth and repricing of risk assets, Zenith Bank said in a statement on Monday.

It said the liberalisation of the foreign exchange market during the period spurred the growth in non-interest income as revaluations gains improved significantly.

Read also: Juliet Ehimuan joins Zenith Bank’s board of directors

In terms of efficiency, the cost-to-income ratio improved to 38.5 percent from 58 percent in the current period on the back of an enhanced income line.

The lender said the FX liberalisation coupled with the heightened risk environment resulted in cost of risk growing to 8.8 percent from 1.4 percent.

Cost of funding also grew to 2.6 percent in H1 2023 from 1.4 percent in the same period of 2022 because of the spike in interest rates between both periods as interest expense grew to N153.6 billion from N57 billion.

Total assets grew by 31 percent from N12.3 trillion to N16.0 trillion in December 2022, mainly driven by growth in customers’ deposits and the devaluation of the local currency, the lender said.

Customers’ deposits grew by 30 percent from N9.0 trillion in December 2022 to N11.6 trillion in June 2023.

Loans and advances also grew by 32 percent from N4.12 trillion in December 2022 to N5.38 trillion in June 2023 partly due to the revaluation of the foreign currency-denominated loans as well as growth in local currency loans.

Read also: Zenith Bank honoured at World Finance Banking Awards 2023

Non-performing loans ratio improved from 4.3 percent to 3.9 percent in December 2022 despite the deterioration of the macros and heightened risk environment because of the currency mix of risk assets.

Capital adequacy ratio improved from 19.8 percent to 22.0 percent, while liquidity ratio reduced from 75 percent to 61 percent in the current period.

Zenith Bank said: “Both prudential ratios are still well above regulatory thresholds. The reorganisation into a holding company structure has advanced, as the group adds new verticals to its businesses and expands into new frontiers.

“As the year progresses, the group said it will continue to remain dynamic in anticipating and responding to the changes in the fiscal and monetary environments in order to sustain growth across all its business segments and markets.”