Zenith Bank’s Q1 profit before tax rises by 3% to N58.7bn

Zenith Bank Plc posts N58.7 billion profit before tax in its unaudited results for the first quarter ended March 31 2020. The bank’s gross earnings rose by six per cent from N158.1 billion in March 2019 to N166.8 billion. According to the bank’s unaudited financial statement presented to the Nigerian Stock Exchange (NSE) on Wednesday, April 29, 2020, this top-line growth was driven by the 43 per cent expansion in non-interest income from N32.7 billion in the prior-year period to N46.6 billion in March 2020.

The bank’s profit before tax also rose three per cent from N57.3 billion in the prior-year period to N58.8 billion in March 2020. The increased profits benefited from the twin effects of continuing top-line growth and focused cost-of-funds optimisation. Cost of funds declined significantly from three per cent in March 2019 to 2.6 per cent in the quarter, translating to a 10 per cent decrease in interest expense dropping from N36.3 billion in March 2019 to N32.8 billion in the quarter. Despite this drop, the current low yield environment necessitated the repricing of interest-bearing assets which in turn resulted in a 13 per cent compression in net interest margin, decreasing from 8.9 per cent in March 2019 to 7.7 per cent in the current period. 

The Group also recorded a 6% increase in Gross Earnings from N158.1 billion in March 2019 to N166.8 billion for the period. This top-line growth was driven by the 43% expansion in non-interest income from N32.7 billion in the prior-year period to N46.6 billion in March 2020. Zenith Bank has continued to gain customer acceptance with customer deposits increasing by 5% from N4.26 trillion in December 2019 to N4.46 trillion in the current period. The customer deposit mix rebalancing remains on-track as the Group added N150 billion in savings account balances in Q1 2020, supported by its retail drive. The Bank’s total assets increased by 12% growing from N6.35 trillion in December 2019 to close at N7.13 trillion in the current period. In the quarter, gross loans grew by 11% from N2.46 trillion in December 2019 to N2.74 trillion within the period. 

Consistent with this performance and in recognition of its track record of excellent performances, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto and Co. The Bank was also recognised as Bank of the Year and Best in Retail Banking at the 2019 BusinessDay Banks and Other Financial Institutions (BOFI) Awards. Recently, the Bank emerged as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the Banker Magazine “Top 500 Banking Brands 2020”, Best Bank in Nigeria 2020 in the Global Finance World’s Best Banks Awards 2020, and Bank of the Decade (People’s Choice) at the ThisDay Awards 2020.