Zenith Bank Nine Months Profits Rise By 5% To N150.7Bn
Nigeria’s major financial institution, Zenith Bank plc has reported a five per cent increase in profit after tax to N150.7billion in third quarter (Q3) unaudited results for the period ended September 30, 2019.
The lender on the Nigerian Stock Exchange (NSE) on Wednesday said its profit after tax was N144.2billion in Q3 2019.
According to the financial statement, Zenith Bank’s profit before tax also grew by five per cent to N176.18billion in Q3 2019 from N167.3billion in Q3 2019.
The increase in profits was driven by 22 per cent increase in non-interest income to N156.76billion in Q3 2019 from N175.6billion reported in Q3 2018. Gross earnings also grew by four per cent to N491.3billion from N474.6billion in Q3 2019.
Balance sheet position revealed that Zenith Bank’s total assets remained flat at N5.9trillion despite nine per cent increase in gross loans and advances to N2.2 trillion as at September 30, 2019 from N2.02 trillion reported in full year ended December 31, 2018.
The bank in a statement said, it delivered topline growth with gross earnings rising by four per cent to N491.3 billion in Q3 2019 from N474.6 billion in the corresponding period last year.
According to the statement, “Despite a challenging macro-economic backdrop, the Group recorded a significant growth in Non-Interest Income, expanding by 22per cent from N128.7 billion in Q3 2018 to N156.8 billion for the current period. Our platforms and channels have been the enablers of this growth with fees from electronic products doubling to N35.3 billion from N17.6 billion in Q3 2018.
“Most importantly, topline growth continues to translate to net earnings as profit before tax grew by five per cent from N167.3 billion in Q3 2018 to a record N176.2 billion in Q3 2019.
“Our cost optimization strategies and aggressive retail banking drive are yielding the desired effects as cost-to-income ratio declined from 51.2per cent in Q3 2018 to 50.1per cent in Q3 2019 with Earnings Per Share (EPS) growing by five per cent from N4.58 in Q3 2018 to N4.80 in Q3 2019.
“Our retail and corporate banking franchises continued its momentum with customers’ deposits growing by seven per cent to N3.95 trillion from N3.69 trillion recorded as at December 2018, a reflection of increasing share of the industry’s deposits and customers’ confidence in the Zenith brand.
“These deposit acquisitions have directly contributed to our cost of funds improving from 3.3per cent in Q3 2018 to 2.95per cent as at Q3 2019.
“We have continued to deploy capital to creating viable risk assets with gross loans and advances growing by nine per cent from N2.02 trillion as at December 2018 to N2.2 trillion as at Q3 2019 across both the retail and corporate segments.
“Our focus remains the search for bankable lending opportunities to ensure the attainment of the minimum regulatory loan-to-deposit ratio (LDR) of 65per cent by December 31, 2019 without compromising our prudence.
“Our robust risk management framework has ensured that non-performing loans (NPL) ratio declined from 4.98per cent in December 2018 to 4.95per cent in the current period. Our commitment to maintaining a shock-proof balance sheet remains with liquidity and capital adequacy ratios at 63.8per cent and 23.8per cent respectively, both above regulatory thresholds.
“In this final quarter of the year, we will sustain our competitiveness and share of market in the corporate segment and build upon our digital foundations to reinforce our retail banking initiatives.”