Zenith Bank Plc started this year on a good footing with considerable growths in overall earnings and profitability, according to the latest earnings report of the bank.
Interim report and accounts of Zenith Bank for the first quarter ended March 31, 2015 indicated that while gross earnings grew by 14 per cent, pre and post tax profits rose by 15 per cent and 17 per cent respectively. Earnings per share thus improved to 88 kobo within the three months, in contrast with 75 kobo recorded in corresponding period of 2014.
Gross earnings rose to N113.32 billion by March 2015 compared with N94.32 billion by March 2014. Interest income for the period rose to N81 billion compared with N71 billion posted in the similar period of 2014 translating to 14 per cent increase. Similarly, non-interest income appreciated by 39.5 per cent N31.9 billion up from N22.9 billion in 2014.
Operating income rose to N72 billion as against N66 billion in the similar period of 2014 translating to 9 per cent growth while operating expenses of N39 billion was recorded amounting to 4.8 per cent increase from N37.6 billion reported in the corresponding period of 2014.Profit before tax also rose from N28.92 billion to N33.13 billion while profit after tax increased from N23.68 billion to N27.68 billion.
Total assets rose to N3.94 trillion in first quarter 2015 compared with N3.19 trillion recorded in comparable period of 2014. Gross loans and advances rose to N1.9 trillion, implying 9.9 per cent appreciation when compared with N1.7 trillion posted in the similar period of 2014. Similarly, customers’ deposit and total assets increased by 5.7 per cent and 4.9 per cent to N2.6 trillion and N3.9 trillion respectively during the period.
The latest earnings report is broadly in line with the performance of the bank in the previous financial year. The board of Zenith Bank has earmarked N54.94 billion as cash dividends to shareholders for the immediate past business year ended December 31, 2014. Shareholders will receive a dividend per share of N1.75, the same rate paid for the 2013 business year.
The audited report and accounts for the 2014 business year showed that Zenith Bank recorded gross earnings of N403.34 billion in 2014, 14.8 per cent above N351.47 billion. Profit before tax rose by 8.3 per cent from N110.6 billion in 2013 to N119.8 billion in 2014. After taxes, net profit rose by 4.3 per cent to N99.46 billion in 2014 compared with N95.32 billion in 2013. Earnings per share thus stood at N3.16 in 2014 as against N3.01 in 2013.
Zenith Bank continued to show impressive credit risk management and loan efficiency as the proportion of non-performing loans to gross loans and advances dropped from 3.0 per cent in 2013 to 1.8 per cent in 2104. Shareholders’ funds also increased by 8.5 per cent from N509.25 billion in 2013 to N552.64 billion in 2014.
Analysts at FBN Capital said the performance in the first quarter was positive, implying likely increase in their forecast on the bank. Analysts noted that the net profit growth was faster than profit before tax growth of 15 per cent because of a significant positive result of N1.1 billion on the other comprehensive income line.
Group managing director, Zenith Bank, Mr. Peter Amangbo, has assured stakeholders of a prosperous 2015 financial year.
“The year 2015 has high prospects of increased economic growth and development, following the successful conduct of general elections in the country. This scenario will present the group with ample opportunity to grow its clientele and business volume in Nigeria while consolidating on its gains from foreign subsidiaries,” Amangbo told Bloomberg.
Commenting on the financial, he stated that with the growth in gross earnings to N133 billion in the first quarter of 2015, the bank has demonstrated its leadership position within the Nigerian banking landscape noting that in spite of the headwinds faced by the Nigerian banking industry the bank grew its profit before tax by 14.6 per cent to N33 billion during the period.
According to him, the group’s focus on creation of well-priced high-quality assets is evident in the growth of loans and advances by 44.6 per cent with a moderate cost of risk of 0.5 per cent and non-performing loan ratio of 1.7 per cent.
“The growth in risk assets was effectively matched by a corresponding increase in competitively priced deposits with a view to maximizing net interest margin. With a loan-to-deposit ratio of 67.3 per cent, Basel II capital adequacy ratio of 18.82 per cent and liquidity ratio of 44.4 per cent, Zenith group is well positioned to explore business opportunities in strategic sectors of the economy,” Amangbo said.
Chief financial officer, Zenith Bank, Mr. Stanley Amuchie, noted that the results emanated from group’s continued effort in diversifying its revenue base. He stated that the effort yielded result as its non-interest revenue grew by 39.5 per cent over the prior period.
According to him, the group maintained a relatively high net-interest margin despite the increased cost of funds during the quarter, stressing that this was achieved through efficient pricing of its risk assets and continued mobilization of low-priced deposits.
“The group is committed to keeping its cost-to-income ratio under control, cost-to-income reduced from 56.5 per cent to 54.29 per cent between March 2014 and March 2015, while utilising its assets more effectively,” Amuchie said.
