Zenith Bank Plc Gains N78 Billion From Gross Earnings in Q1 2024

In its latest report, Zenith Bank announced that it generated gross earnings of N781 billion in Q1 2024, an 189% increase from the corresponding year, which recorded N270 billion in Q1 2023.

According to the Zenith Bank Plc unaudited statement filed with the Nigerian Exchange (NGX) on Friday, May 3, 2024, the bank's profit before tax (PBT) rose to N320 billion in Q1 2024, a 270% increase from the N87 billion it earned in Q1 2023. This growth in the top line also improved the bottom line.

Zenith Bank Plc's profit after tax (PAT) also grew by 291% from the N66 billion reported in Q1 2023 to settle at N258 billion in Q1 2024.

Also, interest and non-interest income contributed significantly to the growth in gross earnings. Interest income grew by 155% from the N192 billion reported in the quarter ended March 2023 to N489 billion in the period to March 31, 2024.

Zenith also noted that interest income growth was due to reduced risk assets, owing to the increase in the central bank's Monetary Policy Rate (MPR), which currently stands at 24.75%. The growth in net interest income is primarily due to the increase in fees and commissions and trading grains.

In Q1 2024, the group recorded an impairment charge of N56 billion, up from the corresponding period, which settled at N8 billion in Q1 2023.  The substantial increase in risk assets can be attributed to the revaluation of the bank's dollar loans, which required further impairment on the bank's loans denominated in foreign currencies.

Due to the high interest rate environment, the cost of funds increased by 48%, from 2.7% in Q1 2023 to 4% in Q1 2024. At the same time, interest expense increased by 157 percent, from N71 billion in Q1 2023 to N182 billion in the period ending in March 2024.

Net interest margin (NIM) increased by 20% from 6.9 percent in the three months ended in March 2023 to 8.3 percent in the current period ending March 31, 2024, despite the year-over-year (YoY) increase in interest expense.

It was also reported that Return on Average Equity (ROAE) and Return on Average Assets (ROAA) increased year-on-year (YoY) by 114% and 119%, respectively, due to improved profitability.

Gross loans increased by 30%, from N7.1 trillion in December 2023 to N9.2 trillion in March 2024. Customer deposits also grew by 11% from N15.2 trillion in December 2023 to N16.8 trillion in March 2024, sustaining continued customer confidence in the Zenith brand.

Total assets rose by 19% to N24 trillion within the same period. The group has consistently maintained prudential ratios above the minimum regulatory requirement. According to the report, at the end of Q1 2024, Capital Adequacy Ratio (CAR) and Liquidity Ratio stood at 20% and 67%, respectively, demonstrating the group's ability to maintain a strong and liquid balance sheet.

In keeping with the CBN's recapitalization directive, it is moving forward with the planned capital raise to support future growth and hopes to meet the new minimum capital requirements.

The organisation planned to transition to its new technology architecture and into a holding company; it remains poised to maximise value for all stakeholders.