In the first quarter ending March 2023 (Q1’23), Zenith Bank Plc reported a 41% rise in its gross earnings from N191.5 in a similar period in 2022 (Q1’22) to N270 billion, Entrepreneurng report.
Profit Before Tax (PBT), increased by 27 percent to N86.6 billion in Q1’23 from N68 billion in Q1’22 as a result of the double-digit growth in earnings. During the same period, Profit After Tax (PAT) increased by 13% from 58.2 billion to 66 billion.
According to the bank, “Significant gains in both interest revenue and non-interest income drove the expansion in gross earnings. While non-interest income increased by 27% from 57.2 billion to 72.8 billion, interest income increased by 52% from 126.4 billion in Q1’22 to 191.6 billion in Q1’23.
The influence of risk asset repricing can be used to explain the increase in interest income, whereas loan recoveries and gains from foreign currency revaluation were principally responsible for the rise in non-interest revenue.
Due to a stronger income line, the cost-to-income ratio improved in terms of efficiency from 55% to 53.4% over the current period. Due to an expanded loan book, the cost of risk also decreased from 0.8% to 0.7% during the same time frame.
However, because of a significant increase in interest rates between the two periods and an increase in interest expense from $25.8 billion in the first quarter of 2022 to $70.8 billion in the first quarter of 2023, the cost of funding doubled YoY from 1.3% to 2.7%. This affected the net interest margin (NIM), which decreased during the same period from 7.3% to 6.9%.
Total assets increased by 9%, from 12.29 trillion in December 2022 to 13.36 trillion in March 2023. The expansion in customer deposits and other funding sources, like borrowings, were principally responsible. From 8.98 trillion in December 2022 to 9.14 trillion in March 2023, customer deposits climbed by 2%.
As customers continued to adjust to the full effects of higher rates on risk assets, loans, and advances also saw marginal growth of 1%, rising from 4.12 trillion in December 2022 to 4.15 trillion in March 2023. At 19.5% and 72%, respectively, the capital adequacy and liquidity ratios both remained strong, and both prudential ratios comfortably exceeded regulatory thresholds.
In response to the stellar Q1’23 performance, the bank gave the assurance that “In 2023, the Group will retain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its companies, and expands into new territories.
As a result of Zenith Bank’s consistently excellent performance, the company has received various honors, including recognition as Nigeria’s top bank for the 13th year running by Tier-1 Capital in The Banker Magazine’s 2022 Top 1000 World Banks Ranking.
Additionally, The Banker’s Bank of the Year Awards in 2020 and 2022 gave the bank the title of Bank of the Year (Nigeria), and the Global Finance World’s Best Banks Awards gave the bank three consecutive years from 2020 to 2022 of receiving the Best Bank in Nigeria honor.
