Nigeria:Zenith Bank Posts N216bn On Interest Income

  • 08 September 2020 / News / 85 / ABI 1


Nigeria:Zenith Bank Posts N216bn On Interest Income

Zenith Bank has recorded strong earnings growth in the first half of 2020, as it posted N216 billion gross interest.

Interest income grew to NGN216.95bn, supported primarily by the income from loans and advances to customers (+11.6% year on year to NGN128.37bn) as risk asset creation has been strong in the year so far (+13.8% YTD to NGN2.62 trillion).

The other contributory line recorded a decline – investment securities (-18.1% y/y).

The decline in income from investment securities was expected, as yields across assets have pared significantly from the prior year.

Interest expense declined by 17.4% y/y to NGN59.55bn, reflecting lower interest cost on borrowings over the corresponding period of the prior year (-50.7% to NGN17.00bn) and despite the increased cost on deposits from customers (+13.3% to NGN42.54bn).

Continuing the trend during the year, non-interest income (NII) was strong, settling 6.2% higher y/y at NGN116.49bn.

The strong growth recorded was supported by expansions in FX revaluation gains (+239.6% y/y to NGN22.02bn), and gains on investment securities (+30.4% y/y to NGN58.83bn).

This expansion in NII, alongside the growth in net interest income, led to an expansion in operating income of 4.8% y/y to NGN249.97bn.

Operating expenses growth was moderate, as the bank continued to focus on cost management in the face of moderate gross earnings growth.

Opex grew by 7.1% y/y to NGN135.85bn, with the most pressure exerted by other operating expenses (+16.6% y/y to NGN21.22bn) such as I.T, and maintenance costs.

Also, profitability was stronger, with profit-before-tax settling 2.2% higher year-on-year.

However, profit-after-tax settled 16.8% higher year-on-year, on account of a 54.8% decline in income tax expense.


source: dailytrust.com.ng