Zenith Bank Posts N346bn H1’20 Gross Earnings

Zenith Bank Plc has announced its unaudited results for the half year ended June 30, 2020, with gross earnings rising by 4.37 per cent from N331.586 billion in March 2019 to N346.088 billion. From the unaudited statement of account which was presented to the Nigerian Stock Exchange(NSE) yesterday, thebank reported profitaftertaxof N103.826billionfromN88.882 billion, accounting for 16.82 per cent growth.
Profit before tax stood at N114.124 billion from N111.677 billion in 2019, representing a growth of 2.19 per cent. Interest income grew by 1.1 per cent y/y to NGN216.95 billion, supportedprimarily by the income from loans and advances to customers (+11.6 per cent y/y to NGN128.37 billion) as risk asset creation has been strong in the year so far (+13.8 per cent YTD to NGN2.62 trillion).
The other contributory line recorded a decline – investment securities (-18.1 per cent y/y). The decline in income from investment securities was expected, as yields across assets have pared significantly from the prior year. Also, interest expense declined by 17.4 per cent y/y to NGN59.55 billion, reflecting lower interest cost on borrowings over the corresponding period of the prior year (-50.7 per cent to NGN17.00 billion) and despite the increased cost on deposits from customers (+13.3 per cent to NGN42.54 billion). Continuing the trend during the year, non-interest income (NII) was strong, settling 6.2 per cent higher y/y at NGN116.49 billion. The strong growth recorded was supported by expansions in FX revaluation gains (+239.6% y/y to NGN22.02 billion), and gains on investment securities (+30.4% y/y to NGN58.83 billion).
This expansion in NII, alongside the growth in net interest income, led to an expansion in operating income of 4.8 per cent y/y to NGN249.97 billion. According analysts at Cordros Capital, operating expenses growth was moderate, as the bank continued to focus on cost management in the face of moderate gross earnings growth. Opex grew by 7.1 per cent y/y to NGN135.85 billion, with the most pressure exerted by other operating expenses (+16.6 per cent y/y to NGN21.22 billion) such as I.T, and maintenance costs.