Zenith. |
From the unaudited
statement of account submitted to the Nigerian Exchange (NGX) on Friday, 3rd May 2024, this impressive growth in the topline also enhanced
the bottom line, as profit before tax (PBT) rose to ₦320 billion in Q1 2024, representing an increase of
270% from the ₦87 billion
reported in Q1 2023. Profit after tax (PAT) equally grew significantly by 291%
from the ₦66 billion reported in Q1
2023 to ₦258 billion in the current period.
Interest and
non-interest income contributed significantly to
the growth in gross earnings. Interest income grew by 155% from the ₦192 billion reported in the quarter ended March 2023 to ₦489
billion in the period to 31 March 2024. The growth
in interest income is due to the repricing of 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 as well as trading grains.
The Group
reported an impairment charge of ₦56 billion for Q1 2024, up from ₦8 billion recorded in Q1 2023. This is attributable to significant
growth in risk assets, primarily driven by the revaluation of its USD loans, which necessitated
additional impairment on the bank’s foreign currency-denominated loans.
The cost of funds
grew by 48% from 2.7% in Q1 2023 to 4% in Q1 2024 due to the high-interest rate environment, while interest expense increased
by 157% from ₦71 billion reported in Q1 2023 to ₦182
billion in the period to March 2024. Notwithstanding the year-on-year (YoY) increase in interest expense, net interest
margin (NIM) grew by 20% from 6.9% in the 3 months ended
March 2023 to 8.3% in the current period ending 31 March 2024. 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, which
are largely funded by customer deposits, grew by 30% from ₦7.1 trillion in December 2023 to ₦9.2 trillion in March 2024.
Customer deposits also grew by 11% from ₦15.2
trillion in December 2023 to ₦16.8 trillion in March 2024, underpinning continued
customer confidence in the Zenith brand. Total assets increased by 19% to ₦24 trillion within the same period.
The Group has
consistently maintained all prudential ratios well above the minimum regulatory requirement. 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.
The Group is making progress on the planned capital raise to support future growth and is very optimistic about meeting the new minimum capital requirements in line with the CBN’s recapitalisation directive. As the Group accelerates migration to its new technology architecture and also transitions into a holding company, it remains poised to maximise value for all stakeholders.
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