Zenith Bank Plc, Nigeria’s biggest lender by market capitalisation, has reported a 20 percent growth in gross earnings to N620.6 billion for the nine months ended September 30, 2022, compared to the same period last year.
The bank announced its unaudited results for the third quarter on Thursday, saying in a statement that the performance demonstrated the group’s resilience against a challenging macroeconomic environment.
It said the growth in the topline was driven by interest and non-interest income growth. Interest income grew by 27 percent from N308.8 billion to N390.8 billion, driven majorly by growth in risk assets and an improvement in pricing. It said this also strengthened earnings per share by 9 percent to N5.55.
The group also recorded a 13 percent year-on-year increase in profit before tax, growing from N179.8 billion in Q3 2021 to N202.5 billion in Q3 2022.
Profit after tax equally grew by 9 percent from N160.6 billion to N174.3 billion in the same period.
Zenith Bank said growth in non-interest income was enabled by the group’s retail strategy, with continued substantial customer acquisition driving transactions, deposit growth, and growth in electronic banking income.
It said due to inflationary pressure and the rising cost of doing business, operating costs grew by 17 percent. However, this was below the growth in gross earnings (20 percent), thereby facilitating the double-digit growth in the bottom line.
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The lender said: “The continuing elevated yield environment affected the cost of funding, which increased from 1.4 percent to 1.7 percent in the current period. This affected the net interest margin which dropped due to the immediate implementation of higher yields on interest-bearing liabilities.
“However, the net interest margin is expected to see a correction in subsequent quarters as the assets side is repriced correspondingly.”
Total assets grew by 20 percent from N9.45 trillion to N11.34 trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 24 percent from N6.47 trillion in December 2021 to N8.04 trillion in September 2022 due to the market’s confidence in the brand.
Loans and advances also grew by 16 percent from N3.5 trillion in December 2021 to N4.06 trillion in September 2022, boosting the group’s interest income and displaying the group’s appetite for high-yielding risk asset creation.
The lender said as a result of this growth, the capital adequacy ratio reduced from 21 percent to 19.1 percent, while the liquidity ratio reduced from 71.6 percent to 68.9 percent. Both prudential ratios remain very strong and are still well above regulatory thresholds, it said.
It said: “In the year’s final quarter, management is determined to sustain the strong performance trajectory while adapting to changes in the regulatory environment and focusing on creative initiatives to mitigate inflationary trends, foreign exchange pressures, and the growing competitive environment.
“Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, including being recognised as number one bank in Nigeria by Tier-1 Capital, for the 13th consecutive year, in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine; Best Bank in Nigeria, for three consecutive years from 2020 to 2022, in the Global Finance World’s Best Banks Awards.”
