Half-year profit for Zenith Bank more than doubles to N350bn – In the first half of 2023, Zenith Bank Plc’s profit before taxes increased by 169 percent to N350.4 billion from N130 billion in the same period of 2022.
The country’s largest lender by market capitalization saw its after-tax profit increase 162%, from N111.4 billion to N291.7 billion.
Gross earnings increased by 139 percent to N967.3 billion from N404.8 billion, propelled by both interest income and non-interest income.
Non-interest income increased by 246 percent to N515.7 billion from N149 million. Interest income increased by 72 percent to N415.4 billion from N241.7 billion.
The development in interest income can be attributed to both the growth and repricing of risk assets, according to a statement released by Zenith Bank on Monday.
According to the report, the liberalisation of the foreign exchange market during the period stimulated the development of non-interest income as revaluation gains improved substantially.
In terms of efficacy, the cost-to-income ratio decreased to 38.5% from 58.5% in the current period as a result of an increase in revenue.
The lender reported that the FX liberalisation and heightened risk environment caused the cost of risk to increase to 8.8 percent from 1.4 percent.
Cost of funding increased to 2.6 percent in the first half of 2023, up from 1.4 percent in the same period of 2022, due to the rise in interest rates between the two periods, as interest expense increased from N57 billion to N153.6 billion.
The lender reported that total assets increased by 31 percent from N12.3 trillion to N16.0 trillion in December 2022, primarily due to an increase in customer deposits and the devaluation of the local currency.
From N9.0 trillion in December 2022 to N11.6 trillion in June 2023, customer deposits expanded by 30s-worth.
Loans and advances also increased by 32%, from N4.12 trillion in December 2022 to N5.38 trillion in June 2023, due in part to the revaluation of loans denominated in foreign currency and the growth of local currency loans.
The ratio of nonperforming loans decreased from 4.3% to 3.9% in December 2022, despite the deterioration of macros and the heightened risk environment, as a result of the currency composition of risk assets.
In the current period, the capital adequacy ratio increased from 19.8 percent to 22.0 percent, while the liquidity ratio decreased from 75 percent to 61 percent.
Both prudential ratios remain well above regulatory thresholds, according to Zenith Bank. As the group adds new verticals to its enterprises and expands into new frontiers, the reorganisation into a holding company structure has advanced.
“As the year progresses, the group said it will continue to remain dynamic in anticipating and responding to changes in the fiscal and monetary environments in order to sustain growth across all of its business segments and markets.”