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Zenith Bank Plc (ZENITHBANK) has released its unaudited 9M-24 financial statements, reporting a 90.6% year-on-year (Y/Y) increase in earnings per share (EPS) to NGN26.34.
Key Highlights
1. Interest income grew 190.2% Y/Y to NGN1.95 trillion, driven by elevated interest rates.
2. Funded income expanded 190.2% Y/Y, driven by loans and advances to customers (+162.7% Y/Y).
3. Non-funded income rose 41.0% Y/Y, driven by investment securities and net fees.
4. Operating income increased 104.2% Y/Y to NGN1.66 trillion.
5. Profit before tax grew 98.6% Y/Y to NGN1.00 trillion.
6. Profit after tax increased 90.5% Y/Y to NGN827.28 billion.
Outlook
According to analysts, ZENITHBANK’s strong performance is expected to continue, driven by improved earning assets, higher yields in the fixed-income market, and stronger e-banking income.
Interest income advanced significantly by 190.2% y/y to NGN1.95 trillion, mirroring the elevated interest rate in the debt market. Parsing through the contributory lines, the bank generated higher income from loans and advances to customers (+162.7% y/y to NGN1.07 trillion), investment securities (+239.2% y/y to NGN734.32 billion), and loans and advances to banks (+204.2% y/y to NGN139.27 billion) in the review period.
Similarly, the elevated interest rate environment pushed the bank’s funding costs higher as interest expense increased by 160.6% y/y to NGN666.44 billion. For clarity, ZENITHBANK incurred higher costs on customer deposits (+148.3% y/y to NGN464.87 billion) despite the improvement in the bank’s CASA mix in 9M-24 (83.2%| FY-23: 78.6%). Likewise, borrowing costs (+194.9% y/y to NGN199.41 billion) came in higher in the period under review, following the accretion in the bank’s interest-bearing borrowings (+51.8% YTD to NGN2.54 trillion). Accordingly, the bank’s net Interest income (ex-LLE) settled higher by 291.2% y/y at NGN802.91 billion after accounting for higher loan impairment charges (+127.5% y/y).
Further in, the bank reported a 41.0% y/y increase in non-interest income to NGN856.01 billion, as the higher gains from investment securities (+438.8% y/y to NGN686.34 billion) and net fees and commission income (+119.6% y/y to NGN174.26 billion) outstripped the FX revaluation loss (NGN1.71 billion) recorded in the period. Thus, the bank’s operating income edged higher by 104.2% y/y to NGN1.66 trillion.
Operating expenses increased by 113.5% y/y to NGN656.07 billion, following the higher costs incurred on personnel expenses (+70.4% y/y to NGN150.67 billion) and regulatory fees – AMCON levy (+60.7% y/y to NGN92.20 billion) and deposit insurance premium (+106.8% y/y to NGN42.37 billion) – in 9M-24. Given that OPEX grew faster than operating income, the bank’s operational efficiency waned as the cost-to-income ratio (ex-LLE) settled at 39.5% (9M-23: 37.8%).
Eventually, ZENITHBANK’s profit before tax expanded by 98.6% y/y to NGN1.00 trillion. Similarly, PAT grew by 90.5% y/y to NGN827.28 billion after accounting for income tax expenses (NGN175.57 billion).
