Zenith Bank’s unaudited results for the first quarter ending 31st March 2023, showed an exceptional double-digit growth of 41 per cent in gross earnings, increasing from ₦191.5 billion in Q1 2022 to ₦270 billion in Q1 2023.
The report submitted to the Nigerian Exchange (NGX) indicated that the significant double-digit growth in the top line boosted the bottom line, with the Group experiencing an impressive 27 per cent year-on-year (YoY) increase in profit before tax (PBT), rising from ₦68 billion in Q1 2022 to ₦86.6 billion in Q1 2023.
Profit after tax (PAT) also grew by 13 per cent from ₦58.2 billion to ₦66 billion during the same period.
The bank explained that the growth in the top line was propelled by substantial increases in both interest income and non-interest income.
Interest income surged by 52 per cent from ₦126.4 billion in Q1 2022 to ₦191.6 billion in Q1 2023, while non-interest income expanded by 27 per cent from ₦57.2 billion to ₦72.8 billion.
It attributed the growth in interest income to the impact of risk asset re-pricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
Regarding efficiency, the cost-to-income ratio improved from 55 per cent to 53.4 per cent in the current period, supported by a bolstered income line.
The cost of risk also moderated from 0.8 per cent to 0.7 per cent during the same period due to an enlarged loan book.
However, the cost of funding doubled YoY from 1.3 per cent in Q1 2022 to 2.7 per cent in Q1 2023, owing to a considerable spike in interest rates between both periods as interest expense grew from ₦25.8 billion in Q1 2022 to ₦70.8 billion in Q1 2023.
Total assets expanded by 9 per cent from ₦12.29 trillion in December 2022 to ₦13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings.
Customer deposits, according to the financial statement, increased by 2 per cent from ₦8.98 trillion in December 2022 to ₦9.14 trillion in March 2023.
Loans and advances also experienced marginal growth of 1 per cent from ₦4.12 trillion in December 2022 to ₦4.15 trillion in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets.
Both the capital adequacy and liquidity ratios remained robust at 19.5 per cent and 72 per cent, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.
“In 2023, the Group will maintain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers,” the bank stated.
