Foremost financial institution, Zenith Bank Plc doubled up in the first half to set another record performance, with gross earnings rising to a new high of N2.1 trillion within the six-month period.
Key extracts of the audited report and accounts of Zenith Bank for the half-year ended June 30, 2024 released at the Nigerian Exchange (NGX) at the weekend showed that gross earnings rose by 117 per cent, leapfrogging pre and post tax profits by 108 per cent and 98 per cent respectively.
The half-year results came as existing shareholders and new investors continue to show strong appetite for Zenith Bank’s shares.
Zenith Bank is offering a rights issue of 5.233 billion ordinary shares of 50 kobo each at N36 per share. The shares were pre-allotted to existing shareholders on the basis of one new ordinary share for every six existing ordinary shares held as at the close of business on Wednesday, July 24, 2024.
The bank is also simultaneously offering 2.767 billion ordinary shares of 50 kobo each in a public offer to the general investing public at N36.50 per share. Minimum subscription is 250 shares, meaning that with N9, 125, one can be a co-owner of Nigeria’s leading bank. Application list for the offers, which opened on August 01, 2024, is scheduled to close on September 09, 2024.
With earnings per share increasing significantly from N9.29 recorded in first half 2023 to N18.41 in first half 2024, the board of the bank has declared an interim dividend of N31.4 billion for the six-month period. Shareholders will receive interim dividend per share of N1, a new record for the bank and the entire banking industry.
Gross earnings rose by 117 per cent from N967.3 billion in first half 2023 to N2.1 trillion in first half 2024. The triple-digit growth in the top line also drove growth in the bottom line as the group recorded 108 per cent increase in profit before tax from N350 billion in first half 2023 to N727 billion in first half 2024. Profit after tax also grew by 98 per cent from N292 billion to N578 billion.
Further analysis showed that top-line growth was driven by appreciable increases in both interest income and non-interest incomes. With increased risk assets and effective pricing, interest income attained a new record, crossing the N1 trillion mark from N415.4 billion in first half 2023 to N1.1 trillion in first half 2024, an increase of 177 per cent. Non-interest income also rose by 74 per cent from N515.7 billion to N899.3 billion.
The balance sheet of the bank also expanded significantly as total assets grew by 35 per cent from N20.4 trillion in December 2023 to N27.6 trillion in June 2024. Customer deposits grew by 29 per cent from N15.2 trillion in December 2023 to N19.6 trillion in June 2024. Gross loans improved by 44 per cent from N7.1 trillion in December 2023 to N10.2 trillion in June 2024, driven by loans disbursements to customers and the translation effect of foreign currency denominated loans.
Underlying ratios showed that the group continued to strive for operational efficiency, resulting in only a marginal increase in cost-to-income ratio from 38.5 per cent to 39.4 per cent. The heightened risk environment has fuelled a growth in impairment levels, thus mildly elevating the cost of risk from 8.8 per cent to 9.7 per cent. Cost of funds grew from 2.6 per cent to 4.4 per cent given the high-interest rate environment. This also resulted in growth in interest expense from N153.6 billion in first half 2023 to N434.4 billion in first half 2024.
Despite this, net interest margin grew by 49 per cent from 5.9 per cent in first half 2023 to 8.8 per cent in first half 2024, underscoring the efficient repricing of interest earning assets and interest accruing liabilities.
The group’s consistent stringent risk acceptance criteria helped ensure that the non-performing loan ratio continued to show only modest growth, increasing from 4.4 per cent in December 2023 to 4.5 per cent in June 2024. Capital adequacy ratio improved from 21.7 per cent in December 2023 to 23 per cent in June 2024. Loan-to-deposit ratio grew by 11 per cent from 46.5 per cent to 51.7 per cent. Liquidity ratio reduced from 71 per cent to 59 per cent in the current period. All prudential ratios are still well above regulatory thresholds.
Zenith Bank noted that its strong brand equity and excellent service quality have positioned it to mine new business opportunities in strategic sectors of the economy, in existing geographies where it has a presence, and in new geographies it is exploring.
“In furtherance of its expansion plans, the Group has received regulatory approval for the establishment of a third-country branch in Paris, France, which, when fully operational, will enhance its product offerings in international markets.
“The Group will continue to invest in enhancing its digital banking capabilities and is expediting the completion of its technology infrastructure upgrade. Its track-record of successful capital raises puts it on a solid footing to meet the new minimum capital requirements for commercial banks with international authorisation, well ahead of the deadline set by the CBN.
“The Group remains undoubtedly on track for a record year in its financial performance and will continue to deliver maximum value to its shareholders, while ensuring a strong corporate governance culture,” Zenith Bank stated.
Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards including being recognised as the Number One Bank in Nigeria by Tier-1 Capital for the15th consecutive year in the 2024 Top 1000 World Banks Ranking, published by The Banker Magazine. The bank was also awarded the Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards for 2020 and 2022; and Most Sustainable Bank, Nigeria in the International Banker 2024 Banking Awards.
Further recognitions include Best Bank in Nigeria for three consecutive years from 2020 to 2022 and in 2024 in the Global Finance World’s Best Banks Awards, and Best Commercial Bank, Nigeria for four consecutive years from 2021 to 2024 in the World Finance Banking Awards. Additionally, Zenith Bank has been acknowledged as the Best Corporate Governance Bank, Nigeria, in the World Finance Corporate Governance Awards for three consecutive years from 2022 to 2024, and ‘Best in Corporate Governance’ Financial Services’ Africa for four consecutive years from 2020 to 2023 by the Ethical Boardroom.
The bank’s commitment to excellence saw it being named the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands for 2020 and 2021, and Retail Bank of the Year for three consecutive years from 2020 to 2022 at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards.
The bank also received the accolades of Most Sustainable Bank, Nigeria, in the International Banker 2023 Banking Awards, Best Commercial Bank, Nigeria and Best Innovation in Retail Banking, Nigeria, in the International Banker 2022 Banking Awards. Zenith Bank was named Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Bank of the Year 2021 by Champion Newspaper, Bank of the Year 2022 by New Telegraph Newspaper, and Most Responsible Organisation in Africa 2021 by SERAS Awards.
Credit: thenationonlineng.net
