Takeaways from Zenith Bank’s full-year 2019 result
The Interest income of the tier-1 bank declined 5.6percent year-on-year to N491.27 billion, on the back of a weaker income from loans to customers which was down -14.7percent year-on-year to N232.95 billion.
However, in the light of the new minimum LDR limit of 65percent, there was a surge in interest income from loans and advances quarter-to-quarter of 29.1percent, reflecting the significant expansion in loans and advances which was up 26.5percent year-on-year and up 12.9percent quarter-to-quarter to N2.31 trillion.
The bank recorded a strong growth in the non-interest income which settled 29percent higher year-on-year at N232.12 billion, buoyed by expansions in fees and commissions income which grew 22.4percent year-on-year to N100.11 billion and gains on investment securities up 46.9percent year-on-year to N117.80 billion.
The brilliant performance in the non-interest income helped reduce the impact of a decline in net interest income at 9.7percent year-on-year to N267.03 billion, and led to an expansion in operating income of 3.9percent year-on-year to N353.12 billion.
In full-year 2019, profitability was stronger, with profit-before-tax settling 5.0percent higher year-on-year, while profit-after-tax settled 8.0percent, on account of a 10.0percent drop-in income tax expense.
Operating expenses grew marginally by 2.8percent year-on-year to N231.83 billion, with the biggest increase recorded in personnel expenses which grew 13.6percent year-on-year to N77.86 billion. The personnel expenses constituted 33percent of operating expenses