Zenith Bank Plc Q3-2020 financials shows growth in gross revenue by 3.60% from N491.27 to N508.98bn despite a marginal drop in interest income. Notably, interest income declined by 0.97% from N321.94bn to N318.82 followed by a reduction in interest expense.
A 12.74% decrease in interest expense leads to a 4.92% growth in Net interest income. However, rise in impairment charges by 37.51% moderated net interest income after impairments to N200.07 representing a 1.89% growth when compared with Q3-2019.
Trading income boost earnings amid dwindling fees and commission income
A 34.34 % growth in trading revenue majorly from Treasury bill and bond trading income despite the loss on derivatives instruments boosted operating income by 5.79%.
Particularly, Zenith bank generated N89.82bn in trading revenue up from the N66.86bn in Q3 last year. This was however accompanied by a 19.94% drop in net fee and commission income from N73.85bn in Q3-2019 to N59.12 billion in the current period.
Fall in fee and commission income was major as a result of declining credit-related fees, fees on electronic products with rescue coming from current account maintenance charge income.
Higher Operating cost weigh on the bottom line
In spite of the 5.79% increase in operating income, operating expenses advanced by 10.93% from N176.94 to N196.28 arising from increased personnel and information technology-related cost.
Consequently, Profit before tax only advanced by 0.62% from N176.18 to N177.28 with profit after tax rising by 5.70% buoyed by lower taxes. Specifically, Zenith bank made N159.32bn PAT with EPS increasing to N 5.07 from the N4.80 generated in Q3-2019.