Zenith Bank Sustained rise in Non Interest Income Drives Earnings Growth

Must Read

UCH Chief Medical Director tests positive for Coronavirus

Prof Jesse A. Otegbayo, the chief medical doctor, University College Hospital, Ibadan UCH has tested positive for coronavirus. This...

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is...

Top 10 Most Expensive Universities In Nigeria

For many Nigerians, high-quality higher education is a luxury. There are many private universities who are known not only...
Zenith Bank Sustained rise in Non Interest Income Drives Earnings GrowthZenith Bank Sustained rise in Non Interest Income Drives Earnings Growth

Zenith Bank published its Full year 2019 audited financials for the period ended 31st December 2019, recording a 5.06% y/y increase in Gross Earnings from N630.34Billion in FY 2018 to N662.25Billion in FY 2019, largely driven by the rise in Non-Interest Income by 28.98% from N179.96Billion to N232.12Billion in FY 2019.

Interest Income declined by 5.57% from N440.05Billion to N415.56Billion in FY 2019 as a result of a 14.72% reduction in interest from loans and advances granted, coupled with a decline in interest on treasury bills paper by 19.32% as they plunged to N232.94 Billion and N81.10 Billion respectively.

The drop in interest income from Treasury bills paper is associated with the lower yields on government securities in the period, although, the bank’s investment in Treasury paper dropped marginally by 1%. Furthermore, the advancement in the bank’s loan book couldn’t result in a rise in interest on loans and advances as the bank aimed more on increasing its asset quality and meeting its required LDR. On the back of Interest expense which advanced by 2.82% from N144.45Billion to N148.53Billion mainly driven by the rise in interest paid on savings and time deposits.

Read:  Procter and Gamble launches black hair care line designed by African-American researchers

The expansion in Non-interest income by 28.98% to N232.12Billion in FY 2019 was largely driven by Fees and commission from fees from E-banking services 108.16%, Credit-related fees 13.30% and Foreign withdrawal charges 33.26% which increased by 22.36% from N81.81Billion in FY 2018 to N100.10Billion. Likewise, we noted Trading gains (T-Bills trading 21%, Bond trading 334.9%) growing by 46.88% from N80.20Billion to N117.79Billion, while other operating income declining by 20.79% from N17.94Billion to N14.21Billion in FY 2019 due to a drop in foreign exchange gains.

- Advertisement -
Read:  Burna Boy Wins ‘Best Africa Act’ Award at 2019 MTV EMA’s

Profit before tax (PBT) stood at N243.29Billion showing an increase of 5.01% from N231.68Billion recorded in FY 2018. Consequently, Profit after tax in FY 2019 spiked to N208.84Billion growing by 7.97% from 193.42Billion at the end of the corresponding period of 2018.

Read:  Burna Boy Wins ‘Best Africa Act’ Award at 2019 MTV EMA’s

Asset Quality; Net Loans and advances expanded by 26.46% to N2.31Trillion from N1.82Trillion in FY 2018. Loan to deposit ratio stood at 54.09% when compared with FY 2018 which settled at 49.40%. The total deposit also rose by 15.47% from N3.69Trillion in FY 2018 to N4.26Trillion at the end of FY 2019. Although the bank performance is marginally strong for the period, it is still unable to meet the 65% requirement for the Loan to Deposit Ratio fixed by the regulatory body.

The Bank declared a final dividend per share of N2.50K (interim of 30k), representing a dividend yield of 12.59%. Our blended target price is N36.71. Along with Our forward P/E x ratio of 3.33x. We recommend BUY at the current market price of N19.85, as the stock trade’s at a discount of 84.93% to our estimated value.

Zenith Bank Sustained rise in Non Interest Income Drives Earnings Growth

- Advertisement -

Greenwich Research

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

COVID–19, COSCHARIS SHUTS DOWN LAGOS AND ABUJA OPERATIONS

...in line with the Federal government directive As promised to continually update both all our internal and external stakeholders as...

COVID 19: Nigerian Air Force postpones entrance examination into AFMS, AFGMS

The Nigerian Air Force (NAF) has postponed the entrance examination into its Military secondary schools for males and females in Jos owing to the...

Covid-19: Oyo State Taskforce impounds 22 cars from errant clubs (Photos)

The Oyo State Covid-19 Taskforce saddled with the responsibility to carry out the State’s effort to mitigate the spread of the virus and enforce...

Best SEO Marketing’s 3 tips to instantly increase sales for your business to tide through the COVID-19 pandemic

SINGAPORE - Media OutReach - 30 March 2020 - Amidst the COVID-19 pandemic, many business owners might be worried on how to tide through this period.  ...
- Advertisement -
BrandsPur Weekly Cartoons
%d bloggers like this: