Zenith Bank Plc has shown remarkable growth in its balance sheet, expanding by N2.6 trillion during the second quarter (Q2) of 2023.
The bank’s balance sheet now stands at N16 trillion for the first half of the year, representing a substantial increase from N12.3 trillion in 2022 and N13.4 trillion in Q1 2023.
During Q2, the bank also successfully reduced bad loans by over N200 billion, which accounted for 79.4 percent of net interest earnings for the first half of the year.
Zenith bank achieves remarkable asset growth
This impressive asset expansion indicates a 29 percent increase in the bank’s balance sheet in just six months, reflecting the creation of additional assets totaling N3.6 trillion during this period.
This expansion puts Zenith Bank in a strong position in the Nigerian banking industry, emphasizing its focus on growing its balance sheet.
In addition to its asset growth, the bank’s half-year audited financial report for June 2023 demonstrates rapid earnings growth. Gross earnings for the group surged by 139 percent to N967.3 billion for the first half of the year, nearly five times the 29 percent increase in assets.
This figure is also ahead of the closing gross income of N945.6 billion for the entire previous year.
Profits also saw significant growth, with after-tax profit increasing by 162 percent to N291.6 billion over the same period, surpassing the full-year figure of N223.9 billion recorded in 2022.
The bank’s aggressive growth strategy, initiated in the previous year, has been a key driver of its impressive financial performance.
This strategy led to asset expansion of 30 percent in 2022, resulting in the creation of over N2.8 trillion in new assets.
Derivative assets played a significant role in the balance sheet expansion, increasing from less than N50 billion in the same period the previous year to N632.2 billion for the first half of 2023.
Lending to other banks also rose by 47 percent to N1.9 trillion, loans and advances grew by 25.9 percent to over N5 trillion, and the investment securities portfolio expanded by 17 percent to over N2 trillion.
Foreign exchange (FX) gains played a crucial role in Zenith Bank’s earnings growth, with an FX windfall of N355.6 billion, a significant improvement from an FX loss of N6.2 billion during the same period the previous year.
This inflow helped offset the substantial credit losses of over N200 billion incurred in Q2, compared to just N7.73 billion in Q1.
Loan loss charges for the first half of the year amounted to N207.9 billion, surpassing the full-year figure of N123.3 billion recorded in 2022.
Despite these challenges, the bank’s strong FX gains and moderated operating expenses contributed to an overall positive financial performance.
The directors of Zenith Bank have announced an interim cash dividend of 50 kobo per share to shareholders, with the company register scheduled to close on September 25, 2023, and payments to be made on September 29, 2023.