Zenith bank Plc on Monday announced half year ended June 30, 2023 with total assets crossing the N16trillion mark which is an increase of 31 per cent from N12.3trillion reported in 2022 full financial year.
The group’s customers’ deposits grew by 30 per cent from N9 trillion in 2022 to N11.6 trillion in June 2023, while loans and advances also grew by 32 per cent from N4.12 trillion in 2022 to N5.38 trillion in June 2023.
Thee growth in loans and advances was partly due to the revaluation of foreign currency-denominated loans as well as growth in local currency loans.
The group’s profit was up by 162per cent from N111.4 billion in H1 2022 to N291.7 billion in H1 2023. The growth in gross earnings was driven by an acceleration in both interest income and non-interest income.
The management declared N0.50 per share interim dividend in H1 2023 as against N0.30 per share declared in H1 2022.
The results on the Nigerian Exchange Limited (NGX) disclosed that the group achieved a year on year (YoY) growth in gross earnings of 139 per cent from N404.8 billion reported in H1 2022 to N967.3 billion in H1 2023.
According to the bank, ‘’the triple-digit growth in the top line also drove growth in our bottom line as the Group recorded a 169per cent YoY increase in profit before tax, from N130 billion in H1 2022 to N350.4 billion in H1 2023.’’
Interest income grew by 72per cent from N241.7 billion in H1 2022 to N415.4 billion in H1 2023 while non-interest income grew by 246 per cent from N149 billion to N515.7 billion.
The bank in a statement said, ‘’The growth in interest income is attributed to the impact of both the growth and the effective pricing of our risk assets. The unification of the foreign exchange rates during the period spurred the growth in non-interest income as revaluations gains improved significantly.
‘’In terms of efficiency, our cost-to-income ratio improved from 58 per cent to 38.5 per cent in the current period on the back of enhanced income. Impairment levels increased significantly in recognition of the heightened risk environment resulting in the cost of risk growing from 1.4 per cent to 8.8 per cent.
‘’Cost of funding also grew YoY from 1.4 per cent in H1 2022 to 2.6 per cent in H1 2023 due to the spike in interest rates, with interest expense growing from N57 billion in H1 2022 to N153.6 billion in H1 2023. This affected our net interest margin (NIM) which reduced from 7.1 per cent to 5.9per cent over the same period.’’
The non-performing loans ratio improved from 4.3 per cent to 3.9per cent in December 2022 despite the deterioration of the macroeconomic variables and heightened risk environment, because of the currency mix of our risk assets book. The Capital adequacy ratio improved from 19.8 per cent to 22 per cent while our liquidity ratio reduced from 75 per cent to 61 per cent in the current period. Both prudential ratios are still well above regulatory thresholds.
The bank added that, ‘’The reorganisation into a holding company structure is still in progress as the Group adds new verticals to its businesses and expands into new frontiers.
‘’As the year progresses the Group will continue to remain dynamic in anticipating and adapting to the changes in the fiscal and monetary environments in all our markets to sustain growth across all business segments.’’