Zenith Bank Plc, on Thursday showed that it remains Nigeria’s most profitable financial institution yet, judging by its net profit of N58.198bn, which rose by N5.138bn or 9.68% from the previous N53.03bn; slower than the N34.214bn or 21.75% growth in gross earnings during the period.
Profit growth during the period was hampered by the twin effects of the growth in impairment charge from N3.855bn to N6.759bn (resulting mainly from the loan loss provision of N6.381bn, compared to the previous N3.54bn); and ‘other loss’ of N8.854bn, compared to the previous income of N9.935bn; among others. The negative impact of these was, however, mitigated by the similarly significant growth in trading income from N12.575bn to N32.598bn.
According to the result posted on the NGX portal, gross earnings rose to N191.523bn from N157.309bn; driven by the N126.384bn interest and similar income which increased from the previous N101.176bn; while interest expense rose to N25.845bn from N18.008bn; leaving net interest income at N100.539bn from N83.168bn.
A further breakdown of the earnings by geographical location showed that Nigeria remained Zenith Bank’s biggest market, contributing N168.752bn, up from N134.667bn to gross earnings in the similar period of last year; followed by N23.712bn, which rose from N18.347bn earned from its African subsidiaries; while Europe added N7.316bn, up from N4.311bn in the prior Q1.
Net interest income after impairment charge improved from N79.313bn to N93.78bn; even as fee and commission income grew from N33.623bn to N41.395bn, which was driven mainly by fee on electronic products from N11.133bn to N14.784bn; while fee and commission expense jumped from N4.932bn to N7.909bn. Net fee and commission income improved from N28.691bn to N33.486bn. Trading income was boosted significantly by the N33.003bn earned from treasury bills trading, up from N14.542bn; as bond trading income stood at N352m, from the previous N4.828 loss. Other loss resulted from the N10.475bn foreign currency revaluation loss, up from the previous N6.904bn gain. Depreciation of property and equipment inched from N5.946bn to N6.37bn. Personnel expenses rose from N18.554bn to N21.539bn; and operating expenses from N44.249bn to N54.283bn.
Profit before tax, therefore, stood at N67.991bn from N61.022bn; while income tax expense, grew from N7.962bn to N9.793bn; resulting in profit after tax of N58.198bn, compared to the previous N53.06bn; translating to earnings per share of N1.85, from N1.69 each. The lion’s share of the net profit, amounting to N47.995bn was recorded in Nigeria, which also contributed N5.745bn to tax expense, ahead of the N3.948bn and N2.18bn respectively from the African operations; ahead of the N1.117bn and N37m from Europe.
According to the balance sheet, total assets for the period rose to N10.324tr from N8.682tr; lifted by the N3.552tr in total loans and advances, compared to the N3.355tr at the end of December 2021. Total liabilities for the period rose from N7.59tr to N8.993tr; buoyed by customer deposits which grew from N6.472tr in December 2021 to N7.253tr; leaving total shareholders’ fund of N1.33tr, compared to N1.279tr in 2021 year-end.