Zenith Bank profit grows by N16bn in nine months

By Kayode Ogunwale

 

 

Zenith Bank Plc has reported surged of N16.987 billion represented 20.44 per cent in its profit after tax from N83.087 billion to N100.074 billion as a result of foreign exchange translation gains.

The lender in consolidated and separate interim financial statements for the nine months ended September 30, 2016 sent to the Nigerian Stock Exchange today in Lagos reported increase of N17.223 billion or 16.55 per cent in its profit before tax. Its profit before tax rose from N104.052 billion to N121.275 billion at the end of the review period.

The Tier I bank’s gross earnings upsurge by 12.91 per cent which was 43.499 billion in Naira terms, from N336.853 billion to N380.352 billion. The bank improved on its ratio of earnings retained as profit, as it retained 26.31 per cent of its gross earnings in nine months 2016 compared to 24.67 per cent it retained during the same period of 2015.

Earnings per share moved up from 264 kobo to 318 kobo, translated to 54 kobo or 20.45 per cent increase.

However, Zenith Bank third quarter results also show an improvement with profit before tax grew by 82 per cent.

Analysts at FBN Quest said, Zenith Bank’s Q3 2016 results came in strong with profit before tax of N58 billion grew 82 per cent year on year while profit after tax grew much faster, by 151 per cent year on year to N83 billion.

According to FBN Quest analysts, “The main driver behind the strong growth in PBT was non-interest income of N61 billion which increased by 125 per cent year on year. This performance compares with a 29 per cent year on year growth in net interest income. As a result, although both loan loss provisions and opex saw marked increases of 202 per cent year on year and 40 per cent year on year respectively, the strong revenue growth more than offset these trends, leading to the 82 per cent year on year PBT growth. Sequentially, the non-interest income line stood out again, with a 239 per cent quarter on quarter increase. Unlike Q2 when non-interest income disappointed because fx revaluation gains were largely absent, in Q3 the gains were very visible at N28 billion, slightly over 45 per cent of the total other-income result. The only other positive driver was a -35 per cent quarter on quarter decline in loan loss provisions. Both opex (+32 per cent quarter on quarter) and net interest income (-9 per cent quarter on quarter) weighed on the results.”