Zenith bank reports 139% surge in H1’23 gross earnings

Zenith bank reports 139% surge in H1'23 gross earnings
Zenith bank reports 139% surge in H1'23 gross earnings

ZENITH Bank Plc has reported a remarkable triple-digit surge of 139 percent in its gross earnings, reaching N967.3 billion for the audited half-year 2023 (H1’23).

This substantial increase is compared to the N404.8 billion recorded in the corresponding period of 2022 (H1’22).

Despite navigating a challenging macroeconomic environment and persistent headwinds, the bank’s audited half-year financial results, which concluded on June 30, 2023, demonstrate its resilience and strong market share.

The triple-digit growth in the top line also had a positive impact on the bottom line, with the Group reporting a 169 percent Year on Year (YoY) increase in profit before tax, surging to N350.4 billion in H1’23 from N130 billion in H1’22.

Profit after tax also experienced triple-digit growth, rising by 162 percent to N291.7 billion in H1’23 from N111.4 billion in H1’22.

Interest and Non-Interest Income Growth

The growth in gross earnings was attributed to both interest income and non-interest income.

Interest income witnessed a 72 percent increase, growing from N241.7 billion in H1 2022 to N415.4 billion in H1 2023.

Meanwhile, non-interest income surged by an impressive 246 percent to N515.7 billion from N149 billion.

The growth in interest income is credited to the impact of both the growth and repricing of risk assets, while the liberalization of the foreign exchange market significantly boosted non-interest income through improved revaluation gains.

In terms of efficiency, the cost-to-income ratio improved to 38.5 percent from 58 percent due to an enhanced income line.

However, the cost of risk increased to 8.8 percent from 1.4 percent, driven by the liberalization of the foreign exchange market and heightened risk environment.

The cost of funding also grew year-on-year to 2.6 percent in H1’23 from 1.4 percent in H1’22, primarily due to the rise in interest rates.

The bank’s total assets expanded by 31 percent to N16.0 trillion in December 2022 from N12.3 trillion, driven primarily by growth in customers’ deposits and the devaluation of the local currency.

Customers’ deposits increased by 30 percent to N11.6 trillion in June 2023 from N9.0 trillion in December 2022.

Loans and advances also grew by 32 percent to N5.38 trillion in June 2023 from N4.12 trillion in December 2022, partly due to the revaluation of foreign currency-denominated loans and growth in local currency loans.

Despite the challenging macros and heightened risk environment, the non-performing loans ratio improved to 3.9 percent from 4.3 percent in December 2022, primarily due to the currency mix of risk assets.

The capital adequacy ratio increased to 22.0 percent from 19.8 percent, while the liquidity ratio decreased to 61 percent from 75 percent in the current period. Both prudential ratios remain well above regulatory thresholds.

The bank’s ongoing reorganization into a holding company structure continues to progress, with the Group expanding into new verticals and markets.

As the year unfolds, the Group remains dynamic in anticipating and responding to changes in the fiscal and monetary environments to sustain growth across all its business segments and markets.