Zenith Bank Plc continued its strong financial performance with the announcement of a profit before tax of N11.08 billion for the nine months ended March 31, 2006. This represents a 42 percent increase in profit over the same period in the last financial year.

The operating result for the nine months released on the floor of the Nigerian Stock Exchange in Lagos on Tuesday was greeted with great enthusiasm by market operators and investors. There was an impressive growth of 44 percent in gross earnings to N42billion, which is indication of the bank’s growing market share and dominance of its franchise in the industry.

The bank continued its strive to increasing shareholder value by squeezing out more profit out of revenue at a rate of N26 per N100 of revenue generated, inspite of the rising inflation rate and difficult economic terrain.

The results also showed that the bank recoded an impressive growth of 44 per cent in gross earnings, which jumped from N29.31 per cent for the same period in 2004 to N42.12 billion.

The result shows that Zenith Bank has surpassed the forecast gross earnings and profit before tax by 43 per cent and 40 per cent respectively for the nine months ending March 31, 2006.

Zenith Bank recently concluded a public offer aimed at raising N50.7 billion from the capital market. The offer which is said to be fully subscribed is expected to raise the capital base of the bank to about N100billion. It will also put the bank in good stead to manage the nation’s foreign reserve.

Analysts agree that Zenith Bank stock holds a hidden value with some arguing that given the bank’s price earning ratio it ought to be selling for more than N21 per share. PE ratio, obtained by dividing the Market Price by the Earning per Share, is one of the true measures of hot stocks.

They believe that given the trend of performance, the bank is on course to improve on the results in the remaining period of the financial year.

Already, investors who bought into Zenith Bank when it had its Initial Public Offering (IPO) in July, 2004 have enjoyed a capital appreciation of over N6.10 for every share purchased in just 14 months. This is in addition to a dividend of N4.2 billion or 70kobo per share paid out in August 2005. Going by its forecast the bank is billed to pay a dividend of 85 kobo per share or N5.1b in the current year.

The operating results of the bank in the last five years indicate an impressive performance on all parameters. Total assets plus contingents grew by 669% from N48.12 billion to N370 billion. Gross earnings increased from N7.07 billion to N34.91 billion, representing a 394% growth. Profit before tax also grew by 392% from N.86 to N9.16 billion while shareholders funds increased from N4.8 billion to N37.8 billion.

The bank’s impressive growth pattern and performance over the years have earned it excellent ratings from local and international agencies. Fitch Ratings has for five consecutive years rated Zenith Bank AA- (long term) and F1+ (short term) and indicated that the ratings given “reflect its strong domestic franchise, good asset quality and sound earnings record”. Agusto and Co., Nigeria’s foremost rating agency, has for the sixth consecutive year rated Zenith Bank Triple Aaa saying “… the bank is a financial institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due”.

These two ratings and endorsements are the highest and most consistent ratings ever given to any Nigerian bank. The bank has maintained one of the best assets qualities in the banking industry as evident in the low ratio of non-performing loans to total loans of 1.7% as at 30 June, 2005 compared to the industry average of about 18%




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