Zenith Bank Grows Earnings to N270 Billion in Three Months Amid Naira Scarcity
- Zenith Bank’s profit has increased by 41% to N270 billion in the first three months of this year
- According to its unaudited reports, the bank’s customer deposit surged by 2% in the period under review
- Despite headwinds caused by naira scarcity, the bank said its assets grew from N12.9 trillion to N13.36 trillion
One of Nigeria’s leading financial institutions, Zenith Bank, has seen its gross earnings jump by 41% to N270 billion in the first quarter of 2023.
The bank’s unaudited report, which it sent to the Nigerian Stock Exchange, shows that it recorded a 27% year-on-year increase in profit before tax to N86.6 billion in the first quarter of 2023 from N68 billion in the same period last year.
Profit after tax also increased by 13% from N58.2 billion to N66 billion during the periods under review.
Source: UGC
Bank's customer deposits increases in three months
The bank said interest and non-interest income propelled its growth in the review period.
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According to the bank, interest income grew by 52% to N191.6 billion in the first quarter from N126.4 billion in the first quarter of 2022.
Also, non-interest income spiked by 27% to N72.8 billion from N57.2 billion in the period under review.
It said the growth in interest income could be attributed to the impact of its risk asset repricing. In contrast, non-interest revenue increased primarily from loan recoveries and foreign currency gains.
Per BusinessDay reporting, the cost of income-to-ratio improved from 53.4% to 55% in the period under review, supported by the income line.
The bank’s cost of income also moderated from 0.8 to 0.7% during the period under review to a more significant loan book.
Its cost of funding doubled year-on-year from 1.3% in the first quarter of last year to 2.7% in the first quarter of 2023.
Zenith Bank said:
“This is owing to a considerable spike in interest rates between both periods as interest expense grew from N25.8 billion in Q1 2022 to N70.8 billion in Q1 2023,” Zenith Bank said in a note.
“This impacted the net interest margin, which reduced from 7.3% to 6.9% over the same period.”
Zenith Bank’s total assets spiked by 9% from N12.29 trillion in 2022 to N13.36 trillion in March this year, primarily due to growth in customer deposits and other funding sources, such as borrowings.
The bank’s customer deposits increased by 2% from N8.98 trillion in December 2022 to N9.14 trillion in March 2023.
The bank’s loans and advances saw marginal growth of 1% from N4.12 trillion in December 2022 to N4.15 trillion in March 2023 as customers adjusted to the full impact of higher rates on risk assets.
Zenith grows profit despite naira scarcity challenges
Zenith Bank’s capital adequacy and liquidity ratios stayed at 19.5% and 72%, respectively, with prudential ratios exceeding thresholds.
The bank said it would focus on sustainable growth across all business segments as it becomes a holding company, introduce new verticals to its businesses, and develop into new areas and markets.
Notably, the bank recorded growth when most banks battled cash scarcity due to the naira redesign policy of the Central Bank of Nigeria.
Zenith Bank was one of the banks hit mainly by acute scarcity, leading to serious customer complaints and dissatisfaction.
MTN revenue rises to N568bn in 3 months, as Fidelity Bank doubles profit, BUA Foods profits soars
Legit.ng earlier reported that three Nigerian companies, MTN Nigeria, Fidelity Bank, and BUA Foods, saw record financial performance growth in the first quarter of 2023.
The mobile telecommunication network, MTN Nigeria, saw a 20.6% increase in its total revenue, which increased to N568.136 billion for the first three months of 2023.
The revenue is higher than the N470.984 billion the company recorded in the same period in 2022.
Source: Legit.ng
