Zenith Bank ranks high in asset quality, cost savings

Zenith Bank didn’t disappoint its shareholders with the release of its Half year results as shareholders will be getting 25 kobo per share as interim dividend at a time when most companies listed on the Nigerian Stock Exchange are posting loses.

However, the crash in oil price as well as the dwindling value of the naira against the dollar has solitary effects on the bank’s operation with a slight decline in its gross earnings of N192 billion as against the N213.5 billion it reported in the second half of 2015.

According to the report, income from interest charged on loans and advances improved marginally from N160 billion in June 2015 to N165.6 billion in June 2016 which is to be expected in a period of economic recession. Interest and similar expenses stood at N49.6 billion as at June 2016 a decline from the N59.2 billion expenses incurred on interest as at June 2015.

Net Interest Income has a positive result of N116 billion over and above the N100.8 billion the bank earned in June 2015. This however, declined to N104 billion after provisions were made for impairment losses on financial assets. The Profit Before tax stood at N56 billion lower than the N67.7 billion achieved in June 2015.

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Zenith Bank’s Profit After Tax thus stood at N40billion while other comprehensive income from the group stood at N44.1 billion. It thus made a profit before making provision for non-performing loans, depreciations and others of N56.964billion during the operating period. As required by law it made Provisions of N11.655billion against nonperforming loans and the sum of N38.89billion was the total cost of running the bank during the period, while personnel cost amounted to N31.745 billion.

On removing the provisions made and the cost of running the day to day affairs of the bank including staff salaries and allowances, the bank made a profit before tax during the period of N56.016 billion. The decline in the profit before provisions is as a result of the marginal growth in loans and advances and the decline in non-interest income. The latter stood out more as the magnitude of the declines show, due to low trading income, and to a lesser extent, fees and commission.

The bank’s total loans and Advances as at June 2016 had a record of N2.114 trillion as against the N1.849 trillion on its books as at end of December 2015. Zenith total Assets grew from N3.75trillion in December 2015 to N3.952 trillion in June 2016. Its shareholders fund recorded a figure of N542 billion as against the figure of N546 billion in June 2017.