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.
