Zenith Bank’s profits soar by 370% in Q2 2024, boosted by forex gains

Zenith Bank has reported an impressive surge in its financial performance for the second quarter of 2024, with pre-tax profits reaching N406 billion.

This marks a staggering 370% increase compared to the N86.8 billion reported during the same period in 2023.

The sharp rise in profits is largely attributed to significant gains in foreign exchange (forex) transactions, which have notably boosted the bank’s bottom line.

Zenith Bank’s trading books recorded forex-related gains of N871.6 billion in the first half of 2024, a dramatic increase from the N77.9 billion recorded in the same period last year.

These gains were a major factor in propelling the bank’s half-year pre-tax profits to an unprecedented N727 billion.

With this momentum, Zenith Bank is on track to potentially become the first commercial bank in Nigeria to achieve N1 trillion in profits by the end of the year.

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Despite the strong performance, Zenith Bank faced significant challenges, particularly in loan impairments. The bank reported an impairment loss of N359.3 billion in the second quarter alone, bringing the total impairments for the year to N415.2 billion.

For context, the bank’s impairment charges for the whole of 2023 were N409.6 billion, and just N123.2 billion in 2022. This sharp increase in impairments reflects the bank’s cautious approach in a challenging economic environment.

Segment Revenue and Dividend Zenith Bank’s operations within Nigeria contributed N645.3 billion to group profits, while its international operations added N81.7 billion.

The bank has declared an interim dividend of N1 per share, signaling confidence in its continued strong performance despite the economic headwinds.

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Zenith Bank’s remarkable profit growth, driven by substantial forex gains and robust operating income, highlights its strategic positioning and resilience in the face of economic challenges.

However, the significant increase in loan impairments underscores the ongoing risks in the banking sector, particularly in managing credit quality amid a volatile economic landscape.