The board of Zenith Bank Plc, on Saturday, August 31, 2024bn, presented its audited financials for the half-year ended June 30, 2024, becoming the first of the interim dividend paying banks to do so.
Top and bottom-lines grew significantly, just as the directors offered to double interim dividend payable from 50 kobo per share in the same period of last year to N1.00.
Further highlights of the result showed that gross earnings grew by 117.25%, faster than the 98.13% in the profit after tax, after impairment charge on financial and non-financial instruments rose from N207.925bn to N415.294; just as other operating expenses ballooned to N333.229bn from N148.003bn, with the bank paying a levy of N92.201bn to the Asset Management Corporation of Nigeria (AMCON) in the half-year period, from N57.383bn; followed by the N51.667bn cost of fuel and maintenance, from N16.553bn. Personnel expenses jumped to N115.9bn from N56.25bn. The effects of these were however mitigated by the huge N652.547bn or 633.39% growth in trading gains within the period.
Gross earnings closed at N2.101tr, up by N1.134tr from the previous N967.261bn, of which all of N1.877tr was derived from the group’s Nigerian corporate, retail and pension custodian services, representing 89.34% of total; followed by N123.969bn from its African businesses, while Europe pooled N117.287bn. The bulk of total revenue was the interest and similar income of N1.149tr, up by N734.011bn or 176.69% from the previous N415.425bn. A further breakdown of the amount showed that interest and similar income from customer loans and advances soared to N610.36bn, compared to the previous N253.948bn; interest o treasury bills contributed N261.311bn from just N70.781bn; government and other bonds yielded N193.768bn, compared to the previous N60.413bn; ahead of the N70.76bn from placement with banks and discount houses, among others.
Interest and similar expense climbed up from N153.564bn to N434.363bn, representing an increase of N280.799bn or 182.85%, boosted by the N172.97bn expense on borrowed funds, which rose from N32.695bn; ahead of the N112.632bn paid on time deposits, up from N64.053bn; while saving account mobilization cost N85.59bn from N32.351bn; and current accounts, N61.759bn from N23.886bn. Net interest income stood at N715.073bn from N261.861bn.
Impairment charge was mainly driven by the N352.107bn provision on impaired financial and non-financial instruments, up from N204.841bn; following which Net Interest Income after impairment loss on financial and non-financial instruments was N299.779bn from N53.936bn.
Net income on fees and commission rose from N43.923bn in the first half of 2023 to N109.616bn in the corresponding period of this year; with fees on electronic products contributing N41.23bn, as against N22.27bn in the first half of last year; followed by N32.786bn account maintenance fee, which rose from N21.021bn; while foreign withdrawal charges added N30.847bn, up from N12.32bn.
Trading grew from N103.025bn to N784.572bn, helped by gain on other trading books of N871.643bn, included the sum of N123bn gains on derivatives, from N65.2bn in the prior half-year, compared to the previous N77.957bn; as loss on treasury bills at face value stood at N81.819bn, compared to the previous N22.266bn gain.
Other operating income contributed a net of N5.855bn, up from N368.745bn, as the group recorded a foreign currency revaluation (being gain in the foreign currency denominated assets and liabilities) loss of N2.649bn, compared to the previous N355.589bn gain; loan recovery rose to N11.19bn from N9.795bn; as dividend income from equity instruments amounted to N6.64bn from N3.066bn.
Other operating loss for the period was N5.855bn, compared to the previous income of N368.745bn.
Armotisation of intangible assets was N2.371bn, compared with the previous N1.665bn; which when considered along with personnel and operating expenses, left profit before tax at N727.03bn from N350.36bn. Income tax expense almost tripled from N58.629bn to N149.033bn at the end of June 2024; resulting in profit after tax of N577.997bn, up from N291.731bn, which translated to earnings per share for the period of N18.41 each, from N9.29 per share in the corresponding period of last year.
The dividend is scheduled for payment electronically on September 20 to shareholders whose names appear on the register of members at the time it closes seven days earlier.
There was also a significant growth in balance sheet for the period, with total assets at N27.575tr in the half-year, from N20.368tr at the end of December 2023, buoyed by customer loans and advances at N9.293tr, up from N6.556tr; with the most significant growth recorded in the assets due from other banks of N4.03tr from just N1.834tr in the comparable period.
Total liabilities rose from N18.045tr to N24.381tr, the most significant being the customer deposits of N19.633tr, up from N15.167tr as of December 31, 2023.
