Zenith Bank’s profit after tax rises by 5% in Q1 2021

Zenith Bank’s profit after tax rises by 5% in Q1 2021 – Zenith Bank Plc’s Profit After Tax (PAT) went up by 5% to N53.1 billion in the first quarter of this year despite the economic challenges caused by the COVID-19 pandemic, the bank’s unaudited results for the quarter have shown.

The bank’s PAT for the corresponding period last year was N50.5 billion.

The unaudited statement of account was presented to the Nigerian Stock Exchange (NSE) yesterday.

The statement also shows that the Group’s Profit Before Tax (PBT) grew by 4%, from N58.8 billion to N61.0 billion in the same period.

The profitability was driven by the optimization of the cost of funds and improvement in non-interest income. The Bank’s cost of funds reduced significantly from 2.6% in March 2020 to 1.1% in March 2021.

This was also reflected in interest expense which dropped by 45% from N32.8 billion to N18.0 billion over the same period. Non-interest income increased by 10% from N46.6 billion to N51.2 billion, driven by growth in credit-related fees and fees on electronic products.

Read also: GTBank profit after tax rise by 8.3 percent for Q1 2019

Non-interest income was boosted by the increase in fees and commission income, which resulted from the increased volume of transactions across all the bank’s channels.

Cost of risk dropped from 0.6% in March 2020 to 0.5% in March 2021, which affirms the bank’s prudent risk management, even as gross loans increased by 2% from N2.92 trillion to N2.98 trillion in Q1 2021.

The bank’s customer acquisition strategy and the effectiveness of its electronic platforms and digital channels enabled it to deliver a N54 billion increment in the savings account balance, which is solely retail.

Customer deposits grew by 6% from N5.34 trillion in December 2020 to N5.68 trillion in March 2021. Transactions on electronic channels also grew astoundingly as new customers continue to be attracted to the Bank’s various user-friendly digital platforms.

The bank expects that the ongoing economic recovery and improvements in the yield environment will translate into improved numbers for the Group.

This is expected to be supported by local and international COVID-19 vaccination campaigns, rising commodity prices, and global economic growth of up to 6%, as estimated by the International Monetary Fund (IMF).