Banking
Stock Analysis: Zenith Bank Sets for Impressive FY-2017 Performance Amid Credit Loss Pressure
Zenith Bank recorded a 44.57 percent growth in interest income in H1-17. On our 12.98 percent estimated assets yield, we believe the run rate will be sustained for the rest of the year, equating to 36.38 percent y/y growth in interest income to N524.46 billion.
The bank’s portfolio of investment securities, treasury bills, and quality loan books will be catalysts of the growth in assets yield. We also forecast NIR to surge by 51.16 percent to N186.60 billion, buoyed by strong trading income, revaluation gains, and marginal write-back of previous provisions.
Overall, we forecast a 39.97 percent growth in gross earnings to N711.06 billion in 2017F.
That said, PBT and PAT growth will be muted, owing to the impact of the elevated cost of refinancing maturing FCY obligations, higher impairment provisioning on transportation (specifically the aviation sector), communication and general commerce exposure, and a surge in total operating expenses (opex).
In a bid to meet maturing FCY obligations during the year, Zenith Bank issued the second tranche of its $1 billion Global Medium-Term Note Programme established in 2014. The programme was completed in May and the bank successfully raised $500 million (at a coupon rate of 7.375 percent, a 113bps premium over the first tranche).
The bank’s balance sheet as at H1-17 ending reveals that FCY borrowings worth $593.80 million (KEXIM $16.44 million, ABSA Bank $151 million, JP Morgan $75.05 million, Standard Bank $273.83 million, First Rand Bank $6.52 million, Citi Global Markets $51.96 million, and BACA $18 million) are due for maturity between May and October 2017.
We believe both the Eurobond and the newly secured borrowings during the year (SMBCE $49.75 million and AFC $181.9 million) came at higher cost relative to the maturing loans (mostly concessional borrowings) having estimated weighted average rate of 5.15 percent.
Accordingly, and given the continued tight domestic interest rate environment, we expect cost of funds to expand 125 bps y/y to 5.40 percent in 2017F – translating to interest expense of N235.88 billion.
However, we expect the stronger expansion in asset yields will offset the growth in funding cost, thus, we forecast an uptick in net-interest margin by 25 bps to 7.65 percent.
In H1-17, Zenith Bank made a 30 percent provision on its exposure to 9 Mobile (formerly Etisalat Nigeria) which resulted in a surge in credit loss provision (COR rose to 3.6 percent, from 1.3 percent in Q1-17 and H1-16) to N42.40 billion. Though we acknowledge the fact that a haircut is eminent on the syndicated exposure to 9Mobile, it is our understanding that most of the provisions booked in H1-17 by Zenith Bank was on its bilateral loan to the telco and not entirely on its share as a part of the syndicate.
Despite the bank restructuring 11.8 percent of its gross loan in H1-17(with oil & gas exposure representing 10.1 percent of the restructured exposure) as well as declassified some power exposure (down to 1.0 percent from 43.0 percent in FY-16), NPL still rose to 4.3 percent (N99.19 billion) from 3.0 percent (N71.37 billion) in FY-16, as the bank classified 37.6 percent (vs. 1.5 percent in FY-16) and 27.4 percent (vs. 18.5 percent in FY-16) of its transportation and general commerce exposure as NPL.
Overall, for 2017F, we estimate Zenith Bank’s NPL to increase to 4.50 percent, from 3.00 percent in FY-16 and 4.30 percent in H1-17, and cost of risks to rise to 2.68 percent, translating to a credit loss provision of N77.13 billion in 2017F.
We estimate opex to rise 29.63 percent y/y to N226.24 billion in 2017F (driven largely by higher regulatory levies on operating expenses) – translating to a 415 bps y/y expansion in CIR to 56.84 percent and growth in operational leverage to 4.5x (from 4.0x in FY-16).
Accordingly, we expect the impact of the increase in opex to limit the trickling down effect of the rise in gross earnings – we estimate PBT and PAT to rise 9.61 percent and 8.28 percent to N171.81 billion and N140.38 billion, respectively.
While acknowledging the impressive performance across income lines in H1-17, which resulted in an upward revision in earnings for the year, we believe the revaluation-bloated growth in NIR will taper in 2018, and factoring in the impact of the adoption of IFRS 9 from 2018 (with management guiding to a 20 percent impact on credit loss provision and 1 percent drop in CAR), we now expect PAT to grow lower than previously estimated over 2018F-2019F.
Hence, we revise our target price on the stock downward to N27.18 (Previous: N30.63), translating to 13.26 percent upside from current price of 24.00 (as at 21/08/2017).
Zenith Bank is currently trading at 2017F P/BVPS of 1.0x (above peer average of 0.9x and below the 5-year average of 1.1x) and P/E of 5.6x (above peer average of 5.2x and below the 5-year average of 5.9x). HOLD.
Banking
Stanbic IBTC Reinforces Role in Driving Businesses, Key Sectors in Nigeria
By Adedapo Adesanya
Top financial services provider in Nigeria, Stanbic IBTC, has reiterated its commitment to empowering businesses, strengthening key sectors and positioning Nigeria as a competitive player in the global economy.
This came on the back of the 2026 edition of the Nigeria Business Summit from Wednesday, April 1 to Thursday, April 2, 2026, at the Landmark Event Centre, Victoria Island, Lagos. The two-day summit brought together industry leaders, policymakers, entrepreneurs and stakeholders across multiple sectors to explore sustainable business practices, foster economic growth and unlock global trade opportunities.
With the theme, Nigeria Means Business: Powering Sectors, Growing Sustainable SMEs & Unlocking Global Trade, the summit addressed critical issues across key sectors, including agribusiness, renewable energy, trade and Africa–China banking, as well as ICT and telecommunications. Additional sessions covered areas such as family business sustainability, artificial intelligence, employee value banking, insurance, pension and wealth management.
The event featured a keynote address by the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, who emphasised the urgent need for Nigeria to reposition itself as a leading export-driven economy to achieve sustained growth.
“Our true potential lies in becoming a leading export economy,” Edun stated. “Increased participation in regional and global trade will be critical to diversifying foreign exchange earnings and driving inclusive growth.”
He noted that while Nigeria’s GDP growth has improved to approximately 4 per cent, it remains below the level required to significantly reduce poverty. According to him, the country’s economic strategy is now shifting from stabilisation to growth acceleration, with trade expansion playing a central role.
Mr Edun highlighted ongoing reforms, including improved foreign reserves, rising non-oil revenues and renewed investor confidence, as indicators of a more resilient economy. However, he stressed that enhancing trade competitiveness would require continued investment in infrastructure, logistics and policy coordination.
He also highlighted the importance of small and medium-sized enterprises (SMEs), which account for over 90 per cent of businesses, noting that inclusive growth will depend on stronger collaboration between the public and private sectors.
Participants engaged in a rich line-up of activities, including expert presentations, panel discussions and high-level networking opportunities. Highlights of the summit included the Africa Trade Barometer presentation, client testimonial showcases and insightful discussions on the state of the African economy and intra-African trade opportunities.
Breakout sessions on agribusiness, ICT and healthcare, Africa-China banking and trade, as well as renewable energy, provided attendees with deeper, practical insights into some of the most critical sectors driving Nigeria’s economic future.
Speaking at the event, Mr Chuma Nwokocha, chief executive of Stanbic IBTC Holdings, represented by the organisation’s Chief Finance and Value Management Officer, Mr Kunle Adedeji, emphasised the importance of collaboration and innovation in driving sustainable growth.
“This summit has reinforced the importance of creating platforms where ideas can flourish, and businesses can grow sustainably. By working together, we can unlock new opportunities and drive economic advancement across Nigeria and the African continent,” he said.
The summit also spotlighted practical strategies for integrating sustainability into business operations, encouraging organisations to adopt environmentally conscious practices while maintaining profitability and competitiveness.
Mr Remy Osuagwu, Executive Director, Business & Commercial Banking, expressed satisfaction at the level of interest from participants, a critical element for a successful summit.
“From our conversations on energy and healthcare to the deep dives into trade, Africa-China relations, and agribusiness, Day 1 has offered perspectives that were both insightful and practical. I believe we’re all leaving with a stronger understanding of the opportunities emerging across our industries,” he said.
He acknowledged the level of engagement, questions, contributions and willingness of participants to share experiences, describing this as the real power of the Nigeria Business Summit, and a solid foundation for tomorrow.
The Chief Executive of Stanbic IBTC Bank, Mr Wole Adeniyi, who was represented by Mrs Bunmi Dayo-Olagunju, Deputy Chief Executive of Stanbic IBTC Bank, opened Day Two of the Nigeria Business Summit by highlighting the focus of the summit’s SME Day.
“Today, we build on Day One’s momentum with conversations that are equally critical for the future – from the dynamics of family businesses to the growing influence of artificial intelligence; the evolution of insurance, and the emerging space of electric vehicle banking.”
She further added, “Our goal on Day Two is simple: to explore what’s next. To understand how these developments will shape our businesses and how we can position ourselves ahead of the curve.”
Banking
Applications Open for GTCO ‘Take on Squad’ Hackathon 3.0
By Dipo Olowookere
Tech enthusiasts interested in participating in the Take on Squad Hackathon, organised by Guaranty Trust Holding Company (GTCO) Plc, can now enter the contest via the official portal at https://squadco.com/hackathon.
The programme enters its third edition in 2026, and the theme for this year is Smart Systems: The Intelligent Economy, according to a statement issued by the organisers.
The hackathon brings together developers, designers and entrepreneurs across Nigeria in a collaborative environment to build practical solutions across key sectors, including financial services, healthcare, commerce and digital inclusion.
Participants are challenged to design and build intelligent, data-driven solutions that transform how communities engage with money.
It is part of the organisation’s commitment to fostering innovation, empowering talent, and supporting the development of technology-driven solutions that address real-world challenges across Africa.
“Today’s dynamic, digitally driven world demands continuous innovation, which is shaping how economies grow, how businesses scale, and how societies evolve.
“Through Take on Squad Hackathon, we are deliberately investing in the ideas and talent that will define the future.
“Our objective is not simply to encourage innovation, but to enable its translation into scalable solutions that deliver real and measurable impact.
“This reflects GTCO’s role as a financial services platform that connects capital, capability, and creativity to drive sustainable progress,” the Managing Director of HabariPay, Ms Eduofon Japhet, stated.
The social coding event remains a cornerstone of HabariPay’s mission to foster creativity and problem-solving among emerging tech talents. Competing teams will leverage Squad’s advanced APIs to create scalable digital tools that address everyday challenges faced by businesses and individuals.
Through initiatives such as this, GTCO continues to position itself at the intersection of finance, technology and enterprise, actively shaping the future of digital transformation in Africa.
Banking
Easter: Ecobank Assures Customers Uninterrupted Banking Services
By Dipo Olowookere
Banking services will not be interrupted throughout the Easter public holidays, from Friday, April 3, to Monday, April 6, 2026, for any reason, Ecobank Nigeria has assured its customers.
In a message over the weekend, the member of Africa’s leading pan-African banking group, Ecobank Transnational Incorporated, said customers would continue to enjoy quality service delivery during the period.
It noted that its secure and robust digital platforms would remain fully operational to support financial activities during the festive period.
All digital channels, including the Ecobank Mobile App, Ecobank Business App, USSD *326#, Ecobank Online, OmniPlus, Omnilite, EcobankPay, Ecobank Cards, ATMs, PoS terminals, and over 35,000 Ecobank Xpress Point agent locations nationwide, will remain accessible throughout the holiday, the financial institution further said, urging customers to conveniently conduct transactions at any time using this wide range of digital solutions.
Ecobank customers were encouraged to maximise the bank’s alternative channels for transfers, bill payments, airtime purchases, card services, and account management.
They were also advised to stay vigilant by shopping only on trusted websites; avoiding the sharing of PINs, passwords, and one-time passwords (OTPs); refraining from banking on public Wi-Fi networks; being cautious of urgent or emotionally charged messages; and regularly monitoring their account activity.
“Customers will continue to enjoy a full bouquet of services during the holiday, including local and international funds transfers, bill payments, airtime top-ups, merchant payments, balance enquiries, account statements, and cardless cash withdrawals via ATMs,” the Head of Products & Analytics, Consumer & Commercial Banking at Ecobank Nigeria, Mr Victor Yalokwu, stated.
“We understand that festive seasons come with increased financial activity, and our priority is to ensure our customers enjoy fast, reliable, and secure banking wherever they are.
“Our digital channels are designed to support uninterrupted transactions, and we have strengthened our systems to guarantee optimal performance throughout the Easter break,” he added.
Mr Yalokwu noted that, “Ecobank remains committed to providing innovative financial solutions and exceptional customer service. We wish all our customers and partners a peaceful and joyful Easter celebration.”
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