November 29, 2020

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Zenith Bank records N509b earnings in Q3 2020

2 min read

Our Reporter

 

Zenith Bank’s gross earnings for the third quarter of 2020 rose to ?509 billion from the  ?491 billion posted in the same period last  year, according to figures released on Friday by the bank.

The  unaudited account which was presented to the Nigerian Stock Exchange (NSE) shows that the growth was driven by non-interest income which grew by 11% to ?173 billion from ?157 billion recorded at the end of Q3 2019.

This development is said to be a reflection of the  Group’s increasingly diversified business model and its resilience against the backdrop of a challenging macro-economic environment brought about by the Coronavirus (COVID-19) pandemic.

The Group’s Profit Before Tax (PBT) rose marginally to ?177 billion at the end of Q3 2020, representing a 1% growth over the ?176 billion posted in the corresponding period last year.

The result also demonstrates the Group’s ability to deliver optimal pricing for its interest-bearing assets and liabilities in a declining yield environment, as net interest income grew by 5% Year-on-Year (y-o-y) to ?225 billion despite the drop in total interest income from ?322 billion to ?319 billion. Interest expense and cost of funds were down 13% and 27% to close at ?94 billion and 2.2% respectively, reflecting the Group’s robust treasury and liquidity management.

Total deposits closed at ?5.2 trillion at the end of Q3 2020 up from ?4.3 trillion in December 2019, dominated by low-cost deposits. Retail deposits grew impressively by 58% to ?1.7 trillion at the end of Q3 2020 up from ?1.1 trillion as at December 2019, underpinned by the continuous expansion and improvement of the Group’s digital platforms.

In terms of asset quality, the Group’s Non-Performing Loan (NPL) ratio improved to 4.80% (FYE 2019: 4.95%), despite growing loans and advances by 17 % from ?2.5 trillion as at December 2019 to ?2.9 trillion at the end of Q3 2020, affirming the Group’s prudent credit risk management. The liquidity and capital adequacy ratios (CAR), at 67.4% (Bank: 52.5%) and 21.5% respectively at the end of Q3 2020, remain above regulatory thresholds of 30.0% and 15.0%.