• Thursday, February 29, 2024
businessday logo


Zenith Bank half year profit rises 24.80 percent on loans


Zenith Bank Plc, Nigeria’s second-largest lender by market value, reported a 24.80 percent gain in half year profit on increased lending.

The results validate the Nigeria lender’s focus strategy and market penetration and its unrelenting push for increased earnings, loan and deposit growth and improved operating efficiency to boost top and bottom line.

Pre-tax income climbed to N72.20 billion in June 2015, from N57.85 billion a year earlier, the Lagos- based firm said on its website.

Net income increased by 12.09 billion to N53.18 billion in June 2015 as against N47.44 billion in June 2014.

Loans and advances jumped by 9.28 percent to N1.90 trillion in the period under review compared to N1.73 billion last year.

Zenith Bank has been developing a solid risk management strategy while improving on the quality of loan portfolio as its 1.44 percent Nonperforming loans (NPL) ratio is the lowest in the industry.

Lender’s in Africa largest economy are at risk of losing money owed to them by oil and gas companies and some telecommunication  firms as defaults increase.

Analysts say Zenith Bank stellar performance means the lender has overcome the macroeconomic headwinds stoked by Central Bank of Nigeria’s stringent monetary policies.

The Abuja Based Bank increased the interest rate to 13 percent from the 12 percent previously held. It also imposed restrictions on foreign exchange trading a policy banks say is hurting profits and causing liquidity squeeze.

Zenith Bank is aggressive about lending while creating risk assets as loan as to deposit ratio moved to 73.07 percent in 2015 from 68.38 percent the previous year.

Deposits from customers increased by 2.57 percent to N2.60 trillion.

The Bank has issued a $500 million Eurobond Notes from its $1 billion Global Medium Term Note Programme. About 200 percent over subscription was recorded for the bond issuance.

Zenith’s operating costs rose by 14.51 percent to N80.62 billion in June 2015 from N70.40 billion  ast year due to an increase in a funding levy by the state-owned Asset Management Corp. of Nigeria, which was set up in 2010 to buy lenders’ bad debts.

The bank’s total assets increased by 3.46 percent to N3.88 trillion in June 2015 compared with N3.75 trillion the previous year.

Earnings Per share EPS increased to 161k in 2015 against 151k the preceding year.

Zenith Bank has been listed on the London Stock Exchange since March 2013 on non capital GDR listing for greater accessibility by international investors.

The bank share price closed at N16.10 on the floor of the exchange while market capitalization was N500.16 billion.