By our reporter| Zenith Bank Plc has reported a profit-after-tax (PAT) of N103.8 billion for the half-year ended June 30.
The result represent an increase of 16.8 per cent compared with N88.9 billion recorded in the corresponding period of 2019.
According to its audited statement of account presented to the Nigerian Stock Exchange (NSE) on Thursday, the gross earnings grew from N332 billion in 2019 to N346 billion in 2020.
The growth was driven by six per cent increase in non-interest income from N110 billion in H1 2019 to N116 billion in H1 2020, however, impairment charges jumped by 74 per cent, from N13.4 billion to N23.9 billion in 2020, while Profit Before Tax increased to N114 billion in H1 2020 from N112 billion in H1 2019.
The Group recorded growth in total deposits by 15 per cent from N4.3 trillion in December 2019 to N4.9 trillion at the close of H1 2020. This growth in total deposits was driven by a 41 per cent increase in retail deposits from N1.1 trillion to close at N1.6 trillion.
The bank’s non-performing loans ratio improved to 4.7 per cent from five per cent in the prior quarter, although this may be adduced to the significant year-to-date (YTD) expansion in loans to customers, as well as regulatory forbearance for distressed restructures.
“Similarly, the bank’s capital adequacy (20 per cent) and liquidity (43.8 per cent) ratios remained strong after expanding quarter on quarter and signifies that the bank has ample headroom for growth over the medium-term. Also, we note that the bank’s current loans-to-deposits ratio (66.1 per cent) is now above the minimum LDR of 65 per cent,” the analysts said.
According to them, the bank’s macro-prudential ratios remain strong, as all ratios settled within statutory limits.
“The bank’s non-performing loans ratio improved to 4.7 per cent from 5.0 per cent in the prior quarter, although this may be adduced to the significant YTD expansion in loans to customers, as well as regulatory forebearance for distressed restructures. Similarly, the bank’s capital adequacy (20 per cent) and liquidity (43.8 per cent) ratios remained strong after expanding quarter on quarter and signifies that the bank has ample headroom for growth over the medium-term. Also, we note that the bank’s current loans-to-deposits ratio (66.1%) is now above the minimum LDR of 65 per cent,” they added.
They noted that the bank’s performance was well above their expectation, as the much reduced tax expense supported a stronger expansion in profitability.
The bank has also recommended an interim dividend of 30 kobo per share to the shareholders.
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