Zenith Bank on Thursday presented its audited result for the half-year ended June 30, 2020, in which it consolidated industry leadership across the major measurement indices, especially top and bottom-line. Highlights of the result however included the lean growth in interest and similar income, N12.541bn or 17.39% drop in interest expense, and N10.188bn or 74.18% rise in impairment loss on financial and non-financial instruments, from N13.735bn in 2019 to N23.923bn. The impact of this was however mitigated by the N12.497bn or 54.82% drop in income interest expense from N22.795bn in the first half of 2019, to N10.298bn in the corresponding period of 2020.
The directors have, consequently, offered a dividend of 30 kobo for the period, from Earnings per share which grew from N2.83 in 2019 to N3.30. The interim dividend is slated for payment electronically to the bank account of shareholders on September, while qualification date is September 16.
According to the score-card, Gross Earnings for the period stood at N346.088bn, of which N296.983bn or 85.81% was derived from its Nigeria corporate retail and pension custodian services business; followed by the N41.328bn from outside Nigeria (Africa); and N12.283bn from Europe.
A further breakdown of the figure showed that interest and similar income accounted for N216.954bn, up from N214.601bn, of which N177.756bn was earned from its Nigerian corporate retail and pension custodian services business. Interest income from outside Nigeria (Africa) stood at N30.162bn; while Europe fetched N9.932bn. Interest and similar expense dropped to N59.545bn, as against the previous N72.086n, with Nigeria responsible for N49.286bn; followed by N9.012bn from Africa, and N2.152bn from Europe. This resulted in net interest income of N157.409bn, up from N142.515bn; even as the Nigerian operations was responsible for the N20.165bn impairment loss on financial assets; while net interest income after impairment loss on financial and non-financial instruments, therefore, stood at N133.486bn, up from N128.78bn.
Net income on fees and commission dropped by N22.312bn or 39.97% to N33.503bn from N55.815bn, but the impact was mitigated by the N15.337bn or 174% growth in other operating income from N8.814bn in the 2019 half-year to N24.151bn. A total of N21.33bn came from the Nigerian business and N6.421bn was derived from the African operations. Further review of the numbers showed that the jump came from the foreign currency revaluation gain, which soared from N6.484bn to N22.021bn; while the bank recovered N1.007bn from loans previously written off, compared to nil in the corresponding period of last year.
Specifically, fee and commission income for the period was driven by the N9.063bn account maintenance fee; credit related fees at N9.063bn, dropped from previous N12.684bn; while the drop in fees on electronic products was more significant, from N27.076bn to N8.937bn; among others.
Trading gains also substantially reduced the impact of the drop in net fee income, climbing N13.731bn or 30.44% up from N45.101bn to N58.832bn, helped by the N58.797bn from Nigeria. Even this gain could have been more, but for the N13.572bn derivatives loss, a slight improvement over the N13.827bn loss of prior half-year. Of the total trading gains, treasury bills trading income contributed N65.097bn, up from N55.253bn; while bonds trading income stood at N5.278bn, up from N1.737bn.
Depreciation of property and equipment rose to N12.471bn in the period under review, from N9.971bn in the prior half-year; amortization of intangible assets inched from N1.514bn to N1.778bn; just as operating expenses grew from N76.803bn to N82.731bn. Profit before tax stood at N114.124bn from N111.677bn, just as profit after tax increased by N4.944bn to N103.826bn, from N88.882bn. Tax expense was driven by the African operations which accounted for N5.261bn, followed by Nigeria’s N4.32bn; while Europe contributed N717m; following which Zenith Bank recorded N93.642bn from its Nigerian operation; N10.995bn from Africa, and N3.189bn from Europe.
Helped by the other comprehensive income for the year of N21.757bn, up from the previous N6.006bn loss, total comprehensive income for the year jumped to N125.583bn from N82.876bn.
