Zenith Bank grows H1 profit by 3% to N117bn

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Zenith Bank Plc has announced its audited results for the half-year (HI) ended 30 June 2021, recording positive growth across key financial metrics despite a challenging macroeconomic environment exacerbated by the COVID 19 pandemic.

According to the bank’s audited half-year financial results presented to the Nigerian Exchange (NGX), the group recorded a growth in profit before tax of three per cent, from the N114 billion reported in H1 2020, to N117 billion in H1 2021.

The group also recorded a nine per cent growth in non-interest income from N116 billion in June 2020, to N127 billion in June 2021.

Overall, the significant reduction in interest expense by 26 per cent and growth in non-interest income by nine per cent culminated in improved profitability.

The group’s retail journey continued to deliver positive results as retail deposits grew by N38.2 billion from N1.72 trillion to N1.76 trillion year-to-date (YTD).

Also, the financial institution’s savings balances grew marginally by two per cent YTD to close at N1.18 trillion, from N1.16 trillion as at December 2020.

The drive for increased retail deposits and a low-interest yield environment helped reduce the cost of funding from 2.2 per cent to 1.3 per cent in the current period. Furthermore, the results showed that operating expenses grew by 10 per cent year-on-year, but growth remained below the inflation rate, while the Group improved its Earnings per Share (EPS), which grew two per cent from N3.30 to N3.38 for the half-year ended June 2021.

The group also increased total customer deposits by eight per cent to close the period at N5.77 trillion, demonstrating growth in its market share, just as total assets grew marginally to N8.52 trillion as at June 30, 2021, from the N8.48 trillion recorded as at December 31, 2020.

Despite the COVID-19 pandemic induced challenges and the challenging operating environment, the Group grew its risk assets as gross loans were up three per cent year-to-date, from N2.92 trillion to N2.99 trillion.

This was conservatively achieved at a low non-performing loans (NPLs) ratio of 4.51 per cent (FYE 2020: 4.29%) and a reduced cost of risk of 1.3 per cent (June 2020: 1.8%).

It prudential ratios such as liquidity and capital adequacy also remained above regulatory thresholds at 69.9 per cent and 22 per cent respectively.

Despite the continued prevalence of the COVID-19 pandemic, there is cautious optimism that the global economy will continue to recover as vaccination programmes are intensified.

On the domestic economy, Nigeria’s gross domestic product (GDP) grew by 5.01 per cent in the second quarter of 2021, and the inflation rate, which peaked in March 2021 at 18.17 per cent is gradually trending down and currently at 17.38 per cent as at July 2021.

The bank said in a statement that it had been well-positioned to maximise the opportunities that the recovering fundamentals present while leveraging technology to expand its retail footprints to deliver improved returns to all its stakeholders.

“Zenith Bank has grown enormously in 30 years to become Nigeria’s largest and one of Africa’s largest financial institutions by tier-1 capital, with shareholders’ funds of NGN1.1 trillion ($2.64 billion) as at 31st December 2020.

“The bank continues to distinguish itself in the Nigerian financial services industry through superior service offerings, unique customer experience and sound financial indices.

“Zenith Bank is the clear leader in the digital space with several firsts in the deployment of innovative products, solutions and an assortment of alternative channels that ensure convenience, speed and safety of transactions,” it stated.

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