Zenith Bank PLC, a leading financial institution in Nigeria, Thursday, made public its half- year audited result for 2020.
The results which were made available to the Nigerian Stock Exchange showed that the bank recorded strong earnings growth over the corresponding period of the prior year as its profit-before-tax closed 2.2 per cent higher year-on-year, while profit-after-tax closed 16.8 per cent higher year-on-year, on account of a 54.8 per cent decline in income taxable expense.
Following the sound performance, the board has proposed an interim dividend of 30 kobo per share which equates to a yield of 1.7% based on the closing price of N17.20 as of the 3rd of September 2020.
Interest income grew by 1.1% year-,on-year to N216.95 billion, supported primarily by the income from loans and advances to customers which was up 11.6% year-on-year to N128.37 billion.
The other contributory line recorded a decline. Investment securities was down 18.1% . The decline from investment securities was not unexpected because yields across assets had gone down significantly from the prior year.
Also, interest expense declined by 17.4% year-on- year to N59.55 billion, reflecting lower interest cost on borrowings over the corresponding period of the prior year.
This was inspite of the increased cost on deposits from customers which inched 13.3% higher to N42.54 billion). Consequent to the decline in interest expense, net interest income settled higher by 10.5% year- on-year at N157.41 billion.
Despite the challenges, experienced the bank’s non-interest income was strong in the period under review, settling 6.2 per cent, higher at N116.49 billion year-on-year. The strong growth recorded was supported by expansions in forex revaluation gains of 239.6 per cent year-on-year to N22.02 billion as well as gains on investment securities of 30.4 per cent year-on-year to N58.83 billion. This expansion in non-interest income alongside led to an expansion in operating income of 4.8 per cent to N249.97 billion.
Also, the bank’s macro-prudential ratios remain strong, as all ratios settled within statutory limits as its non-performing loans ratio improved to 4.7 per cent from 5.0 per cent in the prior quarter. Similarly, the bank’s capital adequacy of 20.0 per cent and liquidity 43.8 per cent ratios remained strong. However, the bank’s current loans-to-deposits ratio of 66.1 per cent is now above the minimum LDR of 65.0 per cent as prescribed by the Central Bank of Nigeria (CBN).