Zenith Bank reports 37.2% increase in profit to N177.9bn

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Zenith Bank

Zenith Bank Plc has announced 37.2 per cent increase in profit after tax for the financial year ended December 31, 2017.

The financial institution in its report to the Nigerian Stock Exchange (NSE) on Monday reported N177.9 billion in 2017 against N 129.65 billion reported in 2016.

Given increased profit, the management declared a final N2.45 dividend for every share of 50k, bringing the total dividend for the financial year to N2.70kobo.

Profit before tax also grew by 29.8 per cent to N203.46 billion from N156.7 billion reported in 2016.

The bank maintained stronger growth in profit & loss figures in the financial year driven by gross earnings that gained 46.7 per cent to N745.2 billion in 2017 from N507.99 billion in 2016.

Total assets gained 18 per cent to N5.6 trillion from N4.74 trillion, driven by 15.2 per cent growth in customers’ deposits and 16.6 per cent increase in shareholder’s funds that closed 2017 at N821.7 billion compared with N704.5 billion reported in 2016.

The management of the Zenith Bank in a statement stated that, “Zenith Bank’s performance in 2017 financial year end shows the Group’s leadership in the Nigerian financial services industry.

“In 2017, the Group generated a record gross earnings of N745 billion representing a 46.7per cent increase compared to the prior year. This growth in gross earnings was driven by a 23.4 per cent and 119.2per cent increase in interest income and non-interest income respectively.

“The growth in interest income was largely due to income from investments in government securities. For the year, the Group recorded a N147.1 billion increase in non-interest income, driven by record processing volume of transactions coupled with the growth in the size of our trading book. The Group’s income diversification strategies have begun to yield gains evidenced with a 31.7per cent increase in fees and commission income over the prior year.

The statement added that, “The Group’s Profit Before Tax (PBT) for 2017 was N203.5 billion, a 29.8per cent increase from N156.7 billion in the prior year. The Group achieved net interest margin (NIMs) of nine per cent (adjusted) for 2017 compared to 7.7per cent (adjusted) for 2016, reflecting significant improvements in the Group’s efficiency. Also, the Group was able to keep its cost-to-income ratio flat at 52.7per cent for the second year running.

“For the 2017 the Group’s cost of funds increased from 4.2per cent in 2016 to 5.2per cent in 2017 due to the high yielding environment. Critically, cost of risk was 4.3per cent for 2017, reflecting the Group’s conservative disposition in credit risk management. The return on average assets (RoAA) and average equity (RoAE) were 3.4per cent and 23.3per cent respectively.

“The Group maintained its healthy balance sheet as its loan to deposit ratio, liquidity ratio and capital adequacy ratio were 60per cent, 69per cent and 27per cent respectively and were all better than the regulatory requirements.

“Despite the challenging competitive operating environment, management’s outlook continues to be positive. Furthermore, the Group is strategically positioned to explore opportunities to grow its customer base and risk assets in strategic sectors.”

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