In Q1 2023, Zenith Bank’s gross earnings increased by 41% – The impressive performance of Zenith Bank was maintained in the first quarter of 2023, as its gross earnings increased by 41 percent to N270.0 billion from N191.5 billion in the same period of the previous year.
According to the company’s unaudited financial statements for the period ending March 31, 2023, the double-digit growth was driven by significant increases in both interest income and non-interest income.
Analysis of the results revealed that interest income increased by 52% to N191.6 billion from N126.4 billion in the first quarter of 2022, while non-interest income increased by 27% from N57.2 billion to N72.8 billion.
The impact of risk asset repricing is responsible for the increase in interest income, while loan recoveries and foreign currency revaluation gains were predominantly responsible for the increase in non-interest income.
In the lender’s financial information submitted to the Nigerian Exchange (NGX) Limited on April 28, 2023, the cost of risk decreased from 0.8% to 0.7% during the same period as a result of a larger loan book. However, the cost of funding doubled from 1.3% in Q1 2022 to 2.7% in Q1 2023 due to a significant increase in interest rates between the two periods, as interest expense increased from N25.8 billion in Q1 2022 to N70.8 billion in Q1 2023, impacting the net interest margin (NIM), which decreased from 7.3% to 6.9% over the same period, with the cost-to-income ratio rising to 53.4% from 55.6% in the same period of 2022.
Profit Before Tax (PBT) increased by 27 percent to N86.6 billion in Q1 2023 from N68 billion in Q1 2022, while Profit After Tax (PAT) increased by 13 percent to N66.0 billion from N58.8 billion.
As for the balance sheet, Zenith Bank increased its total assets by 9%, from N12.29 trillion in December 2022 to N13.36 trillion in March 2023, primarily due to growth in customer deposits and other funding sources, such as borrowings, with customer deposits increasing by 2% year-to-date to N91.4 trillion in Q1 2023, up from N8.98 trillion in FY 2022.
Loans and advances also increased by 1%, from N4.12 trillion in December 2022 to N4.15 trillion in March 2023, as customers continued to adjust to the full impact of higher interest rates on risk assets.
Both the capital adequacy and liquidity ratios remained robust at 19.5% and 72%, respectively, comfortably exceeding regulatory thresholds.
As it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers, Zenith Bank has stated that it will maintain its focus on sustainable growth across all business segments.
Zenith Bank’s consistent record of outstanding performance has earned the brand numerous accolades, including Tier-1 Capital’s recognition of the bank as the number one bank in Nigeria for the thirteenth consecutive year in The Banker Magazine’s 2022 Top 1000 World Banks Ranking. The bank has also been named Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards for 2020 and 2022, as well as Best Bank in Nigeria for three consecutive years, from 2020 to 2022, in the Global Finance World’s Best Banks Awards.