Zenith Bank Plc grew its gross earnings by 41 per cent from N191.5bn in the first quarter of 2022 to N270bn in Q1 2023.
This was disclosed in its unaudited results for the first quarter ending 31st March 2023, which was released on Friday.
The unaudited statement indicated that the double-digit growth in the topline also boosted the bottom line, with the Group experiencing a 27 per cent year-on-year increase in profit before tax from N68bn in Q1 2022 to N86.6 bn in Q1 2023. Profit after tax also grew by 13 per cent from N58.2 bn to N66 bn during the same period.
The growth in gross earnings was propelled by substantial increases in both interest income and non-interest income. Interest income surged by 52 per cent from N126.4 bn in Q1 2022 to N191.6 bn in Q1 2023, while non-interest income expanded by 27 per cent from N57.2 bn to N72.8 bn.
The lender attributed the growth in interest income to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
Regarding efficiency, the cost-to-income ratio improved from 55 per cent to 53.4 per cent in the current period, supported by a bolstered income line. The cost of risk also moderated from 0.8 per cent to 0.7 per cent during the same period due to an enlarged loan book.
However, the cost of funding doubled YoY from 1.3 per cent in Q1 2022 to 2.7 per cent in Q1 2023, owing to a considerable spike in interest rates between both periods as interest expense grew from N25.8 bn in Q1 2022 to N70.8 bn in Q1 2023. This impacted the net interest margin, which reduced from 7.3 per cent to 6.9 per cent over the same period.
Total assets expanded by nine per cent from N12.29 tn in December 2022 to N13.36 tn in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings. Customer deposits increased by two per cent from N8.98 tn in December 2022 to N9.14 tn in March 2023.
Loans and advances also experienced marginal growth of one per cent from N4.12 tn in December 2022 to N4.15 tn in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets.
Both the capital adequacy and liquidity ratios remained robust at 19.5 per cent and 72 per cent, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.
The group added that it would maintain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers.