Zenith Bank Plc, on Monday presented its long awaited audited financials for the half-year ended June 30, 2023, with three digit growth in both gross earnings and net profit, despite the 727.66% jump in loan loss provision, helped by a significant N131.272 foreign exchange revaluation gain, compared to the previous N28.818bn loss in the corresponding period of last year.
The directors have recommended an interim dividend of 50 kobo per 50 kobo share, 40% better than the 30 kobo paid in the similar period of last year, from an Earnings Per Share of N9.29 each, which soared from just N3.55 per share. Qualification date for the dividend is September 22, while payment will be paid electronically to shareholders whose names appear in the register; followed by payment to the bank’s Global Depository Receipt holders after that date.
Gross earnings for the period under review rose by N562.498bn or 138.96% from N404.763bn to N967.261bn, lifted by interest and similar income which improved from N241.726bn to N415.425bn, boosted by income from Nigerian corporate, retail and pensions custodian services of N352.417bn; followed by N36.74bn from Europe and N31.228bn from across Africa. Further breakdown showed that interest and similar income was boosted primarily by the N253.948bn income from customer loans and advances which grew to N253.948bn, from N163.414bn; followed by the N70.781bn from treasury bills income, up from N21.655bn; and N60.413bn from government and other bonds, compared to the previous N51.047bn.
Interest and similar expense grew to N153.564bn, up from N56.983bn; buoyed by the N64.695bn spent on time deposits from N17.126bn; and borrowed funds attracted N32.695bn in expenses from N19.305bn; ahead of the N32.351bn paid as interest on savings accounts, up from N9.851bn; while payment on current accounts rose from N8.816bn to N23.886bn.
Net interest income therefore stood at N261.861bn against the previous N184.743bn. Impairment charge on financial and non-financial instruments stood at N207.925bn from N25.122bn; driven by the financial instruments impairment that rose from N27.269bn to N204.841bn. Net interest income after impairment loss on financial and non-financial instruments dropped from N159.621bn to N53.936bn.
Net income on fees and commission stood at N43.923bn from N64.447bn, the lion’s share of which was the N22.27bn from fees on electronic products, which fell from N24.635bn; N21.021bn compared to N19.771bn; even as the biggest growth came from the N12.32bn in foreign withdrawal charges that soared from N5.855bn; among others. Trading gains grew from N85.192bn to N103.025bn, lifted by the N77.957bn gains on other trading books from N3.134bn; and gains on treasury bills fell from N80.735bn to N22.266bn.
Other operating income soared from N655m to N368.745bn on foreign currency revaluation gains of N355.589bn, representing “net gain on the revaluation of foreign currency-denominated assets and liabilities held in the non-trading books.” In the same period of last year, FX revaluation loss stood at N6.245bn. The group also recorded N9.795bn recovery of loans previously written-off, which is recognised on a cash basis only; up from N3.876bn.
Depreciation of property and equipment was flat at N13.351bn from N13.417bn; amortization of intangible assets was also flat at N1.665bn from N1.669bn; personnel expenses jumped up to N56.25bn from N38.906bn; while operating expenses increased from N124.608bn to N148.003bn, the biggest contributor was the N57.383bn levy paid to the Asset Management Corporation of Nigeria (AMCON) from N44.01bn; followed by the N16.553bn fuel and maintenance expenses. These raised profit before tax to N350.36bn from N130.005bn.
Income tax expense equally soared from N18.592bn to N58.629bn; leaving profit after tax for the period at N291.731bn from N111.413bn. Fair value movements in equity instruments rose to N69.75bn from N5.957bn; while foreign currency translation differences for foreign exchange operations stood at N131.272bn, compared to the previous loss of N28.818bn, which brought other comprehensive income for the period net of taxation to N202.361bn, from a N30.84bn loss; resulting in total comprehensive income for the period of N494.092bn, up from N80.573bn
On the balance sheet, total assets amounted to N16.031tr from the previous N12.285tr reported as of December 31, 2022; helped by the N5.051tr loans and advances which rose from N4.013tr.
Total liabilities stood at N14.249tr from N10.906tr, of which customer deposits accounted for N11.626tr from N8.975tr.