Zenith Bank’s Gross Earnings Rise By 6% To N166.8 Billion In Q1 2020
Zenith Bank Plc, Nigeria’s leading financial institution, has announced its unaudited results for the first quarter ended 31st March 2020, with gross earnings rising by 6% to N166.8 billion, from N158.1 billion in March 2019. This is in spite of a very challenging domestic operating macroeconomic environment and global headwinds.
According to the unaudited statement of account which was presented to the Nigerian Stock Exchange (NSE) on Wednesday 29th, April 2020, the Group’s 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. Non-interest income growth was driven by a 98% surge in trading income from N7.8 billion in March 2019 to N15.5bn in the quarter.
Profit before tax also improved by 3% from N57.3 billion in Q1 2019 to N58.8 billion in Q1 2020. Increased profits benefited from the twin effects of continuing top-line growth and focused cost-of-funds optimisation. Cost of funds declined significantly from 3.0% in March 2019 to 2.6% in the quarter, translating to a 10% decrease in interest expense dropping from N36.3 billion in Q1 2019 to N32.8 billion in Q1 2020. Despite this drop, the current low yield environment necessitated the repricing of interest-bearing assets which in turn resulted in a 13% compression in net interest margin, decreasing from 8.9% in March 2019 to 7.7% in the current period.
The 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 Bank’s 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 customer acquisition strategy has been underpinned by the versatility of its electronic platforms and digital channels which continue to resonate with customers.
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. While seeking opportunities in select sectors, risk management and prudence took precedence as cost of risk moved marginally from 0.4% to 0.6%. Over the years, conservatism has put the Bank in a firm position from a balance sheet, capital adequacy and liquidity standpoint, allowing for prudential ratios to exceed the relevant regulatory thresholds as at end-March 2020.
As a result of the challenges presented by the novel Coronavirus (COVID-19) pandemic, the Bank has activated its business continuity plan, deploying its broad spectrum of enhanced digital channels and platform to handle increased volumes of customers’ transactions during this period. While the duration and extent of the pandemic on the economy are yet unknown, the Bank is adapting and evolving to take advantage of the opportunities a post-COVID world will present.
Zenith Bank has continued to maintain the leadership position in the Nigerian financial industry, achieving the feat as the first Nigerian Bank to cross the N200 billion profitability mark with a profit after tax of N208.8 billion in its audited financial results for the 2019 financial year. In recognition of its track record of excellent performance, 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.