Economy
Zenith Bank Grows Gross Earnings by 41% in Q1 2023
By Aduragbemi Omiyale
Zenith Bank maintained its impressive performance in the first quarter of 2023 as its gross earnings improved by 41 per cent to N270.0 billion from the N191.5 billion achieved in the same period of last year.
Details of its unaudited financial statements for the period which ended March 31, 2023, showed that the significant double-digit growth was driven by substantial increases in both interest income and non-interest income.
Analysis of the results indicated that the interest income surged by 52 per cent to N191.6 billion from N126.4 billion in Q1 2022, while non-interest income expanded by 27 per cent from N57.2 billion to N72.8 billion.
The growth in interest income can be attributed to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
In the financial details of the lender submitted to the Nigerian Exchange (NGX) Limited on Friday, April 28, 2023, revealed that the cost of risk moderated from 0.8 per cent to 0.7 per cent during the same period due to an enlarged loan book. However, the cost of funding doubled from 1.3 per cent in Q1 2022 to 2.7 per cent in Q1 2023 due to a considerable spike in interest rates between both periods as interest expense grew from N25.8 billion in Q1 2022 to N70.8 billion in Q1 2023, impacting the net interest margin (NIM), which reduced from 7.3 per cent to 6.9 per cent over the same period, with the cost-to-income ratio improving to 53.4 per cent from 55 per cent in the same period of 2022.
The bottom line of Zenith Bank Q1 2023 results showed an impressive 27 per cent increase in Profit Before Tax (PBT) to N86.6 billion from N68.0 billion in Q1 2022, as the Profit After Tax (PAT) grew by 13 per cent to N66.0 billion from N58.2 billion.
As for the balance sheet, Zenith Bank expanded its total assets by 9 per cent from N12.29 trillion in December 2022 to N13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings, with customer deposits growing by 2 per cent on a year-to-date basis to N91.4 trillion in Q1 2023 from N8.98 trillion in FY 2022.
Loans and advances also experienced marginal growth of 1 per cent from N4.12 trillion in December 2022 to N4.15 trillion in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets.
Both the capital adequacy and liquidity ratios remained robust at 19.5 per cent and 72 per cent, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.
Zenith Bank said this year, it would maintain its focus on sustainable growth across all business segments as it restructures into a holding company, introduces new verticals to its businesses, and expands into new frontiers.
Zenith Bank’s consistent record of outstanding performance has garnered numerous accolades for the brand, including being acknowledged as the Number One Bank in Nigeria by Tier-1 Capital for the 13th consecutive year in the 2022 Top 1000 World Banks Ranking published by The Banker Magazine. The bank has also received the Bank of the Year (Nigeria) title in The Banker’s Bank of the Year Awards 2020 and 2022, as well as the Best Bank in Nigeria award for three consecutive years, from 2020 to 2022, in the Global Finance World’s Best Banks Awards.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited ended Friday’s trading session lower with a marginal decline of 0.01 per cent as a result of continued market volatility.
Customs Street was down during the last trading session of the week despite bargain-hunting activities in the banking and industrial goods sectors, which closed higher by 0.51 per cent and 0.01 per cent, respectively.
Business Post reports that profit-taking in the other sectors contributed to the downfall of the local bourse yesterday, with the insurance index weakening by 3.21 per cent.
Further, the energy counter went down by 0.50 per cent, and the consumer goods space depreciated by 0.24 per cent, while the commodity industry closed flat.
At the close of business, the All-Share Index (ASI) shrank by 13.37 points to 105,511.89 points from 105,525.26 points and the market capitalisation declined by N8 billion to settle at N66.147 trillion versus Thursday’s closing value of N66.155 trillion.
A total of 348.3 million shares worth N8.1 billion exchanged hands in 11,444 deals on Friday compared with the 397.1 million shares valued at N8.7 billion traded in 13,667 deals a day earlier, implying a drop in the trading volume, value, and number of deals by 12.29 per cent, 6.90 per cent, and 16.27 per cent, respectively.
The activity log was led by UBA with the sale of 26.3 million stocks for N972.3 million, United Capital traded 25.6 million shares valued at N391.5 million, FCMB exchanged 24.2 million equities worth N211.2 million, Zenith Bank transacted 22.9 million shares valued at N1.1 billion, and Fidelity Bank traded 22.6 million stocks worth N441.7 million.
Investor sentiment remained bearish yesterday after the NGX finished with 19 price gainers and 29 price losers, showing a negative market breadth index.
Lasaco Assurance and AXA Mansard were the worst-performing equities with a decline of 10.00 per cent each to sell for N2.34, and N8.64 apiece, May and Baker decreased by 8.72 per cent to N7.85, Guinea Insurance crashed by 8.70 per cent to 63 Kobo, and FTN Cocoa lost 6.43 per cent to end at N1.60.
However, Learn Africa and Livestock Feeds closed as the best-performing stocks after they gained 10.00 per cent each to quote at N3.30, and N7.92, respectively, VFD Group soared by 9.83 per cent to N57.00, Union Dicon expanded by 9.43 per cent to N5.80, and NGX Group rose by 8.17 per cent to N32.45.
By Adedapo Adesanya
The duo of FrieslandCampina Wamco Nigeria Plc and Food Concepts Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.21 per cent on Friday, April 4.
FrieslandCampina Wamco Plc lost N1.86 to close at N36.80 per unit compared with Thursday’s closing value of N38.66 per unit, and Food Concepts Plc recorded a 1 Kobo decline to end at N1.17 per share versus the preceding session’s N1.18 per share.
This dragged down the NASD Unlisted Security Index (NSI) by 6.88 points at the close of business to 3,309.46 points from the previous day’s 3,316.34 points and the market capitalisation dropped N3.97 billion to settle at N1.911 trillion, in contrast to the N1.915 trillion it ended at the preceding session.
At the unlisted securities yesterday, the volume of trades increased by 247.9 per cent to 1.3 million units from the 372,568 units transacted in the previous trading day.
Equally, the value of transactions surged by 23.2 per cent to N1.3 million from N4.1 million, but the number of deals went down by 50 per cent to 20 deals from the 40 deals recorded on Thursday.
When the bourse ended for the session, Impresit Bakolori Plc remained the most active stock by volume on a year-to-date basis with a turnover of 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 71,2 million units worth N24.2 million, and Geo Fluids Plc with 44.2 million units sold for N89.4 million.
FrieslandCampina Wamco Nigeria Plc also remained as the most traded equity by value on a year-to-date basis with the sale of 13.8 million units valued at N534.7 million, followed by Impresit Bakolori Plc with 533.9 million units worth N520.9 million, and Afriland Properties Plc with 17.8 million units sold for N364.2 million.
By Adedapo Adesanya
The Naira extended its loss against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by 1.45 per cent or N22.49 on Friday, April 4.
Data from the Central Bank of Nigeria (CBN) showed that the local currency was exchanged to a Dollar at N1,573.23/$1 during the session compared with the N1,550.74/$1 it was transacted on Thursday.
Similarly, the domestic currency weakened against the Euro in the official market yesterday by N2.91 to settle at N1,725.29/€1, in contrast to the previous day’s N1,722.38/€1 but on the British Pound Sterling, it appreciated by N12.27 to sell for N2,031.02/£1 versus the preceding session’s N2,043.29/£1.
In the black market, the Nigerian currency lost N10 against the greenback on Friday to trade at N1,570/$1 compared with the N1,560/$1 it was transacted a day earlier.
The Naira’s negative outcome aligns with a wider slowdown in the global financial markets as retaliatory tariffs weaken outlook and raise possibility of a recession.
Already, Nigeria could face lower foreign exchange earnings from oil, which could be impacted heavily by tariffs.
As for the cryptocurrency market, it remained mixed after China announced retaliatory tariffs on all goods, responding to President Donald Trump’s Wednesday decision to boost the overall levy on Chinese goods to 54 per cent.
The concensus is that China’s response is not only negative for the US but it is also impacting the global outlook.
Binance Coin (BNB) shed 0.5 per cent to close at $594.69, Cardano (ADA) went down by 0.5 per cent to $0.6561, Litecoin (LTC) dropped 0.4 per cent to close at $84.09, Bitcoin (BTC) tumbled by 0.05 per cent to $83,444.13, Ethereum (ETH) declined by 0.04 per cent to $1,810.12, and the US Dollar Tether (USDT) moderated by 0.03 per cent to $0.9997.
On the flip side, Ripple (XRP) jumped by 3.1 per cent to $2.13, Solana (SOL) appreciated by 2.8 per cent to $120.63, and Dogecoin (DOGE) leapt by 2.4 per cent to $0.1690, while the US Dollar Coin (USDC) closed flat at $1.00.
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