Zenith Bank’s profit after tax grows by 2% to N106bn in H1 2021
Zenith Bank Plc has announced its audited results for the half-year ended 30 June 2021, with Profit After Tax (PAT) rising by 2% to N106 billion from the N104 billion reported in the same period in 2020 despite a challenging macroeconomic environment aggravated by the COVID 19 pandemic.
According to the bank’s audited half-year financial results presented to the Nigerian Exchange (NGX), the Group recorded a growth in profit before tax of 3% from NGN114 billion reported in H1 2020 toNGN117 billion in H1 2021.
The Group also recorded a 9% growth in non-interest income from NGN116 billion in June 2020 to NGN127 billion in June 2021. Overall, the significant reduction in interest expense by 26% and growth in non-interest income by 9% culminated in improved profitability.
The Group’s retail journey continues to deliver positive results as retail deposits grew by NGN38.2 billion from NGN1.72 trillion to NGN1.76 trillion year-to-date (YTD). Savings balances grew marginally by 2% YTD to close at NGN1.18 trillion from NGN1.16 trillion as at December 2020.
The drive for increased retail deposits and a low-interest yield environment helped reduce the cost of funding from 2.2% to 1.3% in the current period. Operating expenses grew by 10% YoY, but growth remains below the inflation rate, while the Group improved its Earnings per Share (EPS) which grew 2% from NGN3.30 to NGN3.38 for the half-year ended June 2021.
The Group also increased total customer deposits by 8% to close the period at NGN5.77 trillion, demonstrating growth in the market share. Total assets grew marginally to NGN8.52 trillion as at 30 June 2021 from NGN8.48 trillion recorded as at 31 December 2020. Despite the COVID-19 pandemic induced challenges and the challenging operating environment, the Group grew its risk assets as gross loans were up by 3% YTD, from NGN2.92 trillion to NGN2.99 trillion.
This was conservatively achieved at a low Non-Performance Loans (NPL) ratio of 4.51% (FYE 2020: 4.29%) and a reduced cost of risk of 1.3% (June 2020: 1.8%). Prudential ratios such as liquidity and capital adequacy also remained above regulatory thresholds at 69.9% and 22.0%, respectively.
Despite the continued prevalence of the COVID-19 pandemic, there is cautious optimism that the global economy will continue to recover as vaccination programmes are intensified.
On the domestic economy, Nigeria’s Gross Domestic Product (GDP) grew by 5.01% in the second quarter of 2021, and the inflation rate, which peaked in March 2021 at 18.17%, is gradually trending down (currently at 17.38% as at July 2021). The Group is well-positioned to maximise the opportunities that these recovering fundamentals present while leveraging technology to expand its retail footprints to deliver improved returns to all its stakeholders.
