Zenith Bank Plc has released its unaudited results for the first quarter ending on March 31, 2024, showcasing a remarkable triple-digit growth of 189% in Gross Earnings.
The bank’s Gross Earnings surged from N270 billion in Q1 2023 to an impressive N781 billion in Q1 2024, despite the challenging operating environment and tightening monetary policy.
According to the unaudited financial statement submitted to the Nigerian Exchange (NGX) on May 3, 2024, this substantial growth in the top line also had a positive impact on the bottom line.
Profit before tax (PBT) rose to N320 billion in Q1 2024, marking a 270% increase from the N87 billion reported in Q1 2023. Similarly, Profit after tax (PAT) saw significant growth of 291%, rising from N66 billion in Q1 2023 to N258 billion in the current period.
The growth in Gross Earnings was largely driven by both interest and non-interest income. Interest income increased by 155%, climbing from N192 billion in Q1 2023 to N489 billion in Q1 2024.
This growth can be attributed to the repricing of risk assets in response to the Central Bank’s Monetary Policy Rate (MPR) hike, currently standing at 24.75%.
Additionally, the increase in fees, commissions, and trading gains contributed to the growth in net interest income.
The Group reported an impairment charge of N56 billion for Q1 2024, up from N8 billion in Q1 2023. This increase was primarily due to the revaluation of USD loans, leading to additional impairment on the bank’s foreign currency-denominated loans.
Despite the high-interest rate environment, the cost of funds increased by 48% from 2.7% in Q1 2023 to 4% in Q1 2024. Interest expense also rose by 157%, reaching N182 billion in Q1 2024 from N71 billion in Q1 2023.
However, the net interest margin (NIM) grew by 20% from 6.9% in Q1 2023 to 8.3% in Q1 2024. Return on Average Equity (ROAE) and Return on Average Assets (ROAA) also saw significant increases year-on-year, reflecting improved profitability.
Gross loans, primarily funded by customer deposits, grew by 30% from N7.1 trillion in December 2023 to N9.2 trillion in March 2024.
Customer deposits also increased by 11%, rising from N15.2 trillion in December 2023 to N16.8 trillion in March 2024, indicating continued customer trust in the Zenith brand. Total assets surged by 19% to N24 trillion within the same period.
Zenith Bank has consistently maintained prudential ratios well above the minimum regulatory requirements. As of Q1 2024, the Capital Adequacy Ratio (CAR) and Liquidity Ratio stood at 20% and 67%, respectively, showcasing the Group’s strong and liquid balance sheet.
The Group is progressing with its planned capital raise to support future growth and is confident about meeting the new minimum capital requirements as per the CBN’s recapitalization directive.
As the Group advances its migration to a new technology architecture and transitions into a holding company, it remains committed to maximizing value for all stakeholders
Comment here