Zenith bank plc on Thursday reported 17per cent increase in Profit After Tax (PAT) to N103.8billion in half year ended June 30, 2020 as against N88.88billion reported in prior year period.
The audited results to the Nigerian Stock Exchange (NSE) on Thursday explained that Gross earnings grew by four per cent from N332 billion to NGN346 billion driven by six per cent growth (YoY) in non-interest income from N110 billion in H1 2019 to N116 billion in H1 2020.
The group successfully grew its low-cost deposits, contributing to a significant reduction in interest expense by 17 per cent to NGN60 billion in H1 2020 from N72 billion in H1 2019 and supporting strong growth in net-interest income.
Combined with the growth in gross income, this culminated in two per cent growth year-on-year in Profit before Tax which increased to N114 billion in H1 2020 from N112 billion in H1 2019. Earnings per share increased by 17 per cent to N3.30 in H1 2020 from N2.83 in H1 2019.
The group grew total deposits by 15 per cent from N4.3 trillion in December 2019 to N4.9 trillion at the close of H1 2020. This was driven by a 41 per cent increase in retail deposits (from N1.1 trillion to N1.6 trillion).
By driving such strong deposit growth and simultaneously reducing cost of funds by 26 per cent to 2.2 per cent in H1 2020 from three per cent in H1 2019 the Group grew its Net Interest Margin by five per cent from 8.6 per cent in H1 2019 to nine per cent in H1 2020.
Despite the challenging operating environment occasioned by the novel coronavirus (COVID-19) pandemic ravaging the world, the Group maintained its NPL ratio (4.7 per cent) within the regulatory threshold despite growing the gross loan book by 14 per cent from N2.5 trillion at December 2019 to N2.8 trillion at H1 2020.
This is a reflection of the Group’s conservative and prudent approach to credit risk management. Our liquidity and Capital Adequacy Ratios (CAR) remain above regulatory thresholds at 50.8 per cent and 20 per cent respectively as at H1 2020.
“Going into the second half of the year, we will continue to consolidate our leadership in the industry and deliver value to stakeholders.
“We expect to see an improvement in economic activities alongside the recovery in the global economy as we search for a cure or vaccine to tackle the coronavirus disease,” the management of the bank explained.