Zenith Bank records 41% rise in Gross Earnings to N270bn in Q1’23

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Zenith Bank records 41% rise in Gross Earnings to N270bn in Q1’23

Zenith Bank Plc recorded a 41 per cent increase in its gross earnings to N270 billion in the first quarter ending March 2023 (Q1’23) from N191.5 in the corresponding period in 2022 (Q1’22).

The double digit growth in earnings triggered a 27 percent increase in Profit Before Tax (PBT), to N86.6 billion in Q1’23 from N68 billion in Q1’22. Profit After Tax (PAT) also grew by 13% from ₦58.2 billion to ₦66 billion during the same period.

The bank stated that, “The growth in the gross earnings was propelled by substantial increases in both interest income and non-interest income. Interest income rose by 52% from ₦126.4 billion in Q1’22 to ₦191.6 billion in Q1’23, while non-interest income expanded by 27% from ₦57.2 billion to ₦72.8 billion.

“The growth in interest income can be attributed to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.

“Regarding efficiency, the cost-to-income ratio improved from 55% to 53.4% in the current period, supported by a bolstered income line. The cost of risk also moderated from 0.8% to 0.7% during the same period due to an enlarged loan book.

“However, the cost of funding doubled YoY from 1.3% in Q1 2022 to 2.7% in Q1 2023, owing to a considerable spike in interest rates between both periods as interest expense grew from ₦25.8 billion in Q1 2022 to ₦70.8 billion in Q1 2023. This impacted the net interest margin (NIM), which reduced from 7.3% to 6.9% over the same period.

“Total assets expanded by 9% from ₦12.29 trillion in December 2022 to ₦13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings. Customer deposits increased by 2% from ₦8.98 trillion in December 2022 to ₦9.14 trillion in March 2023.

“Loans and advances also experienced marginal growth of 1% from ₦4.12 trillion in December 2022 to ₦4.15 trillion in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets. Both the capital adequacy and liquidity ratios remained robust at 19.5% and 72%, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.”

Following the impressive performance in Q1’23, the bank assured that, “In 2023, the Group will maintain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers.

“Zenith Bank’s consistent record of outstanding performance has garnered numerous accolades for the brand, including being acknowledged as the Number One Bank in Nigeria by Tier-1 Capital for the 13th consecutive year in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine.

“The bank has also received the Bank of the Year (Nigeria) title in The Banker’s Bank of the Year Awards 2020 and 2022, as well as the Best Bank in Nigeria award for three consecutive years, from 2020 to 2022, in the Global Finance World’s Best Banks Awards.”