Smarting from its impressive 2018 report that was presented recently, Zenith Bank Plc has again recorded a profit after tax of N50.234 billion for the first quarter ended March 31, 2019.
The bank said its market dominance remained linked to improved profitability.
Zenith bank unaudited report for the first quarter ended March 31, 2019, released on the Nigerian Stock Exchange (NSE) showed a growth of 6.7 per cent in its profit after tax from N47.079 billion in Q1, 2018 to N50.234 billion, while earnings per share stood at N1.60, up from N1.50, though gross earnings dropped marginally by 6.55 per cent to N158.111 billion in Q1 2019.
Interest and similar income stood at N122.48 billion, up from N116.712 billion, while net interest income stood at N86.137 billion, representing an improvement of 23.07 per cent from the N69.992 billion in 2018, while operating income stood at N116.697 billion slightly from N115.702 billion in Q1, 2018, as operating expenses went down from N61.701 billion to N59.404 billion in 2019.
Operating income stood at N116.697 billion slightly from N115.702 billion in Q1, 2018, while operating expenses went down from N61.701 billion to N59.404 billion in 2019.
The balance sheet of the bank, gross loans and advances went down by four per cent to N1.938 trillion from N2.017 trillion as at December 2018, while customers’ deposits stood at N3.571 trillion lower than N3.690 trillion recorded in 2018, while the bank total asset declined marginally by one per cent to N5.877 trillion from N5.956 trillion, just as shareholders’ funds declined from N815.751 billion in December, 2018 to N780.887 billion under the period review.
The bank in a statement, said: “In the first quarter ended 31 March 2019, Zenith Bank Group recorded improved numbers across key metrics, driven by a solid performance in all business segments. This resulted in a Profit before Tax (PBT) of ₦57 billion, representing a 6% growth over the ₦54 billion achieved in the corresponding period in 2018. The Group’s on-going commitment to cost optimisation on the income statement and statement of financial position ensured earnings per share increased by 7% to ₦1.60 compared to Q1 2018.
“The growth in net interest income and operating income by 23% and 1% respectively mitigated the decline in gross earnings. The effective management of cost-to-income ratio, cost of funds and cost of risk offset top-line declines to deliver an enhanced operating income in the period.
“Our risk and asset quality continues to improve as cost of risk dropped significantly by 52% from 0.9% in the prior year to 0.4% for the period. This was achieved as impairment charges declined by 54%(₦2.5billion year on year reduction). Our cost of funds also improved, declining by 25% from 4%in Q1 2018 to 3% at quarter-end. This was supported by a 22% decrease in interest expense of ₦10billion over the same period, affirming the Group’s robust treasury and liquidity management. Our prudent cost management led to a 5% decline in our cost-to-income ratio by 5% from 53.3% in 2018 to 50.9% in the period with an absolute reduction in operating expenses by ₦2.3 billion year-on-year.
“The Group’s retail franchise continues to increase as retail deposits grew by N80bn between December 2018 and March 2019 representing a 9% growth notwithstanding the fact that total customer deposits dropped marginally by 3%. The drop in customer deposits was as a result of rebalancing of the deposit mix as expensive purchased deposits were forgone in favour of cheaper and stickier retail deposits.
“The volume and value of transactions across our electronic and digital platforms continue to grow as new customers are being acquired. Our balance sheet continues to strengthen as liquidity ratio is at 66.7%, loan to deposit ratio closed at 43%, and capital adequacy ratio ended the period at 25% respectively and remain above the relevant regulatory thresholds as at 31 March 2019.
“Going into the rest of the year and with improving economic fundamentals, we are confident of delivering value to all our stakeholders on our commitments even as we create more opportunities for businesses by supporting them through selective risk asset creation. We shall continue our investments in the retail segment of the market as we consolidate our leadership position in the corporate segment while maintaining a strong balance sheet.”
