According to its H1’19 audited financial report released to the investing public on Monday 19th August 2019, Zenith bank plc, one of Nigeria’s foremost and biggest banks by asset size, grew its Gross Earnings and PAT for the period (H1’19) by 2.9% and 8.7% respectively to ₦331.58 billion and ₦81.74 billion compared to the corresponding period of 2018.
The increase in the bank’s Gross Earnings was jointly driven by a 3.5% decrease in Interest Expense (to ₦72.08bn), 22.5% increase in Net gains on Financial Instrument (to ₦45.01bn), and a 33.6% increase in Fees & Commission Income from online and other related services (to ₦55.82bn).
On the low side, however, the bank recorded a 6.2% reduction in Interest and Similar Income to print at ₦214.60 billion as against ₦228.67 billion in the corresponding period of 2018. This was mainly driven by a 21.44% decline in Interest Income from Loans and
Advances to Customers as the figure settled at ₦115.04 billion in H1’19 as against ₦146.43 billion in H1’18.
Furthermore, despite the 3.24% increase in Deposit size to ₦3.81 trillion in H1’19 as against ₦3.69 trillion in H1’18, the bank’s loan provision to customers fell by 1.17% relative to H1’18 to settle at ₦1.80 trillion. This development thus brings the bank’s Loans-to-Deposit ratio (LDR) to 47.3% in H1’19 as against 49.4% in H1’18.
Hence, given the new CBN directive of a minimum LDR of 60% by the end of September 2019, the bank may have to improve its credit creation significantly to avoid regulatory sanctions.
Conclusively, though the bank’s half-year EPS increased by 8.8% to settle at ₦2.83 (vs ₦2.60 in H1’18), its management has proposed to pay an interim dividend of 30k per share, same as in the preceding year.
