Zenith Bank Plc has released its audited financial results for the half-year ending June 30, 2024, showcasing a remarkable 117% increase in gross earnings, surging from ₦967.3 billion in H1 2023 to an impressive ₦2.1 trillion in H1 2024.
This outstanding performance comes amid a challenging macroeconomic environment that has tested the resilience of the banking sector in Nigeria.
The bank’s audited half-year results, presented to the Nigerian Exchange (NGX) on August 30, 2024, reveal that the significant growth in gross earnings also propelled a 108% Year-on-Year (YoY) increase in profit before tax, which rose from ₦350 billion in H1 2023 to ₦727 billion in H1 2024.
Similarly, profit after tax jumped by 98%, growing from ₦292 billion to ₦578 billion within the same period, leading to a 98% rise in earnings per share (EPS) from ₦9.29 to ₦18.41.
Zenith Bank attributed the growth in gross earnings to a strong performance in both interest and non-interest income.
Interest income, driven by the growth and strategic pricing of risk assets, crossed the ₦1 trillion mark for the first time in a half-year period, soaring by 177% from ₦415.4 billion in H1 2023 to ₦1.1 trillion in H1 2024. Non-interest income also saw significant growth, increasing by 74% from ₦515.7 billion to ₦899.3 billion.
Operational efficiency remained a priority for the bank, with the cost-to-income ratio seeing only a slight increase from 38.5% to 39.4% YoY.
However, the heightened risk environment led to a rise in impairment levels, pushing the cost of risk up from 8.8% to 9.7%.
The cost of funds also increased YoY from 2.6% to 4.4%, reflecting the high-interest rate environment, which in turn caused interest expenses to climb from ₦153.6 billion in H1 2023 to ₦434.4 billion in H1 2024.
Despite these challenges, Zenith Bank achieved a 49% increase in net interest margin, which grew from 5.9% in H1 2023 to 8.8% in H1 2024, highlighting the bank’s efficient repricing of interest-earning assets and liabilities.
The bank’s total assets expanded by 35%, rising from ₦20.4 trillion in December 2023 to ₦27.6 trillion in June 2024.
Customer deposits also saw a 29% increase, growing from ₦15.2 trillion in December 2023 to ₦19.6 trillion in June 2024.
Additionally, gross loans surged by 44%, from ₦7.1 trillion to ₦10.2 trillion, driven by increased loan disbursements and the impact of foreign currency-denominated loans.
Zenith Bank’s stringent risk management policies ensured that the non-performing loan ratio remained relatively stable, increasing only slightly from 4.4% in December 2023 to 4.5% in June 2024, despite the challenging economic conditions.
The bank’s capital adequacy ratio improved from 21.7% in December 2023 to 23% in June 2024, while the loan-to-deposit ratio rose by 11%, from 46.5% to 51.7%.
However, the liquidity ratio decreased from 71% to 59% during the period, though all prudential ratios remained well above regulatory thresholds.
In a bid to maximize shareholder value, Zenith Bank declared an interim dividend of ₦1.00 per share, marking the highest half-year dividend payout in the bank’s history and the highest interim dividend in the Nigerian banking sector to date.
The management highlighted the bank’s strong brand equity and exceptional service quality as key factors positioning it to capitalize on new business opportunities across strategic sectors of the economy.
The bank is also expanding its geographic footprint, having received regulatory approval to establish a branch in Paris, France, which will enhance its international product offerings.
Zenith Bank is committed to further strengthening its digital banking capabilities and is accelerating the completion of its technology infrastructure upgrade.
With a proven track record in successful capital raises, the bank is well-positioned to meet the new minimum capital requirements set by the Central Bank of Nigeria (CBN) for commercial banks with international authorization, ahead of the deadline.
The management expressed confidence that Zenith Bank is on course for a record-breaking year in financial performance, with a continued focus on delivering maximum value to shareholders while maintaining strong corporate governance practices.
