Shares of Zenith Bank rallied 4.84 percent, Tuesday, its biggest daily gain in more than three months, after the tier 1 lender shrugged off the pandemic to deliver impressive performance in the 2020 financial year.
Despite the pandemic that disrupted economic activities, the profit of Zenith Bank hit N230.6 billion in 2020, up by 10 percent from the N208.8 billion in 2020.
The increase in profit of the firm was driven by sustained momentum in revenue, and an ability to contain cost.
Gross earnings increased by 5.0 percent to N696 billion from N662 billion in the previous period of 2019.
Interest income of Zenith rose slightly in the period by 1.26 percent to N420.8 billion in 2020 from N415.6 billion, thanks to gains from loans to customers, government and other bonds and commercial papers as well as promissory notes.
Meanwhile, the firm was able to reduce the interest expense on funds and lease, time deposits, savings and current account, all of which fell to N121.1 billion from N148.5 billion in 2019.
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Although net income on fees and commission was down by 26 percent from N100.1 billion to N79.3 billion in 2020, the lender was able to make up for the fall with trading gains including income from trading bonds and treasury bills, which increased to N121.7 billion from N117.8 billion.
Other operating income rose to N50.7 billion from N14.2 billion in 2019.
However, depreciation of property and equipment, personnel expenses and operating expenses all rose slightly to N25.1 billion, N79.3 billion and N148.1 billion in 2020 from N21.4 billion, N77.9 billion and N129.4 billion in 2019, respectively; bringing the firm’s profit before tax to N230.6 billion from N208.8 billion in 2019.
The share price of the firm climbed 4.84 percent to N26 at the close of trading, Tuesday, its biggest daily advancement since November 12 last year, according to Businessday data.
The firm is proposing a final dividend of N2.70k for every share of 50k, thus, bringing the total dividend for the financial year ended December 31st, 2020 to N3.00k.
According to Zenith in a memo, the proposed dividend is subject to appropriate withholding tax, and approval will be paid to shareholders whose names appear in the Register of Members as at the close of business on the 8th day of March 2021.
