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Zenith Bank Eyes N240bn Year-end PBT, Deeper Retail Market Penetration

Buoyed by its N111.7bn profit before tax for the half-year ended June 30, 2019, from N107.3bn, helped by the 23.9% year-on-year growth in non-interest income, the management of Zenith Bank Plc, last week expressed enthusiasm that it could grow the figure even faster in the second half of the year.
Speaking during a conference call for investors, the bank expects that it could achieve a gross profit of N128.3bn between July and December, which would bring it to N240bn. This is based on the management’s hope for “an improved ROAE and ROAA in H2 2019 as AMCON expense of N28.65bn for 2019 FY was fully taken in H1 2019.
To achieve this, the management assured investors that the bank would compete aggressively for market share while focusing on high-quality assets and top-end relationships while adopting cost reduction strategies.
The bank is also developing a strong platform to provide service, thereby making it an integrated financial solutions provider to its diverse customer base; while deepening retail market penetration. This it plans to achieve by leveraging on its retail platforms, while continuing to create innovative solutions to grow market share, at a time its deposit base is dominated by current accounts, with increasing domiciliary and savings account balance.
Contribution of the retail segment to the bank’s gross revenues and PBT increased respectively from 6.6% and 8.8% to 11.0% and 16.9% YoY, as the Group continues on its retail expansion drive.
The management also plans to take advantage of liquidity in Naira and foreign currencies to optimize yields in the FX and money markets
According to the financials presented to the Nigerian Stock Exchange (NSE), gross earnings rose from N322.201bn to N331.586bn; with a strong focus on risk management, with Non-Performing Loans ratio at 5.3% and a coverage ratio of 145.5%.
“The group plans to continue to implement robust risk management.”
Net Interest Margin for the half-year dropped year-on-year by 14.8%, from 10.1% in H1 2018 to 8.6% in H1 2019, due to a “decline in the yield environment for money market instruments and drop in the average interest rate on loans and advances to customers.

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