Zenith Bank Plc, on Friday reported an impressive triple-digit growth in its unaudited results for the first quarter ended March 31, 2024, despite the challenging operating environment and tightening monetary policy stance.
According tthe unaudited statement of account submitted to the Nigerian Exchange (NGX), Gross Earnings rose by 189% from ₦270bn reported in Q1 2023 to ₦781bn, significantly helped by interest and non-interest income growth.
Interest income grew by 155% from the ₦192bn reported in the quarter ended March 2023 to ₦489bn in the period to March 31, 2024. This was due to the repricing of risk assets, owing to the increase in the central bank’s Monetary Policy Rate (MPR), which currently stands at 24.75%. The growth in net interest income is primarily due to the increase in fees and commissions as well as trading gains.
The Group reported an impairment charge of ₦5bn for Q1 2024, up from ₦8bn recorded in Q1 2023, attributable to significant growth in risk assets, primarily driven by the revaluation of its USD loans, which necessitated additional impairment on the bank’s foreign currency-denominated loans.
The cost of funds grew by 48% from 2.7% in Q1 2023 to 4% in Q1 2024 due to the high-interest rate environment, while interest expense increased by 157% from ₦71bn reported in Q1 2023 to ₦182bn in the period to March 2024.
Notwithstanding the year-on-year (YoY) increase in interest expense, net interest margin (NIM) grew by 20% from 6.9% in the 3 months ended March 2023 to 8.3% in the current period ending 31 March 2024. Return on Average Equity (ROAE) and Return on Average Assets (ROAA) increased year-on-year (YoY) by 114% and 119%, respectively, due to improved profitability.
The growth in revenue was enhanced the rise in bottom line, as profit before tax (PBT) rose to ₦320bn in Q1 2024, representing an increase of 270% from the ₦87 billion reported in Q1 2023.
Profit after tax (PAT) equally grew significantly by 291% from the ₦66bn reported in Q1 2023 to ₦258bn in the current period.
Gross loans, which are largely funded by customer deposits, grew by 30% from ₦7.1tr in December 2023 to ₦9.2tr in March 2024, while customer deposits also grew by 11% from ₦15.2tr in December 2023 to ₦16.8tr in March 2024, underpinning continued customer confidence in the Zenith brand. Total assets increased by 19% to ₦24tr within the same period.
The Group has consistently maintained all prudential ratios well above the minimum regulatory requirement. At the end of Q1 2024, Capital Adequacy Ratio (CAR) and Liquidity Ratio stood at 20% and 67%, respectively, demonstrating the Group’s ability to maintain a strong and liquid balance sheet.
The Group is making progress on the planned capital raise to support future growth and is very optimistic about meeting the new minimum capital requirements in line with the CBN’s recapitalisation directive. As the Group accelerates migration to its new technology architecture and also transitions into a holding company, it remains poised to maximise value for all stakeholders.
