Despite Headwinds, Zenith Bank Nets N160.59bn Third-Quarter Profit
Zenith Bank Plc, at the weekend, released its unaudited results for the nine months ended September 30, 2021, with Gross Earnings rising by 2% from N509bn recorded in the same period in 2020 to N519bn, amidst the persistent challenging macroeconomic environment which was exacerbated by the Coronavirus (COVID-19) pandemic.
According to the group’s unaudited nine months financial results presented to the Nigerian Exchange (NGX), the growth in gross earnings was largely due to an increase in current account maintenance fees and fees from electronic products during the period. Profit Before Tax also rose to N180bn, reflecting a 1% growth over the NGN177bn recorded in the same period in the previous year.
Despite continuing economic uncertainties, the group was able to grow its net earnings through a reduction in its cost of funds while keeping the cost of risk flat. This strengthened Earnings Per Share (EPS) by 1% to NGN5.11. The Group achieved a 9% growth in interest income from loans and advances on the back of an increase in gross loans of 9% year to date and enhanced efficiency, culminating in a 21% drop in interest expense to NGN74 billion from NGN94 billion.This resulted in the growth in net interest income of 4%, from NGN225 billion recorded at the end of Q3 2020 to NGN235 billion in the current period.
Total assets also increased by 3% to N8.8tr in the current period, while total deposits grew by 13% to close at N6.0tr from NGN5.3 trillion as of 31 December 2020, with a substantial contribution from retail deposits.
As a result of the focused drive to increase retail deposits in the past three years, there was a decrease in The Group’s cost of funds by 35% to 1.4% from 2.2% year-on-year. The Group continues to make significant progress in its retail banking drive, as evidenced by remarkable growth in transaction volumes and value across its digital platforms and strong growth in customer acquisition.
For the final quarter of the year, management’s outlook remains positive, buoyed by a declining inflationary trend, expected increase in foreign exchange inflows, and improving oil production. The Group remains focused on increasing its retail market share, consolidating its leadership position in the corporate segment, and maintaining a robust balance sheet.