Financial Result: Zenith Bank Reports N620.6bn in Q3 2022

According to its unaudited result, which was presented to the Nigerian Exchange (NGX), Zenith Bank Plc has recorded doubledigit growth of 20 per cent in gross earnings from N518.7 billion reported in Q3 2021 to N620.6 billion in Q3 2022.

The bank said the performance is a demonstration of the group’s resilience against a challenging macroeconomic environment. The report showed that interest income grew by 27 per cent from N308.8billion to N390.8billion in the current period, driven majorly by growth in risk assets and an improvement in pricing. These indicators, the bank said, raised earnings per share (EPS) by nine per cent to N5.55.

Its total assets grew by 20 per cent from N9.45trillion to N11.34trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 24 per cent from N6.47trillion in December 2021 to N8.04 trillion in September 2022 due to the market’s confidence in the brand.

The group also recorded a 13 per cent year-on-year (YoY) growth in profit before tax, growing from N179.8 billion in Q3 2021 to N202.5 billion in Q3 2022. Profit after tax equally grew by 9 per cent from N160.6 billion to N174.3 billion in the same period.

Growth in non-interest income was enabled by the group’s retail strategy, with continued substantial customer acquisition driving transactions, deposit growth and growth in electronic banking income.

Due to inflationary pressure and the rising cost of doing business, operating costs grew by 17 per cent. However, this was below the growth in gross earnings (20 per cent), thereby facilitating the double-digit growth in the bottom line.

“The continuing elevated yield environment affected the cost of funding which increased from 1.4 per cent to 1.7 per cent in the current period. This affected the net interest margin (NIM), which dropped due to the immediate implementation of higher yields on interest-bearing liabilities. However, the NIM is expected to see a correction in subsequent quarters as the assets side is repriced correspondingly,” the bank said in a statement.

Its loans and advances also grew by 16 per cent from N3.5trillion in December 2021 to N4.06trillion in September 2022, boosting the group’s interest income and displaying its  appetite for high-yielding risk assets creation.

As a result of this growth, the capital adequacy ratio reduced from 21 per cent to 19.1 per cent, while the liquidity ratio reduced from 71.6 per cent to 68.9 per cent. Both prudential ratios remain very strong and are still well above regulatory thresholds.

The bank’s management expressed determination to sustain growth trajectory in the final quarter of this year while adapting to changes in the regulatory environment and focusing on creative initiatives to mitigate inflationary trends, foreign exchange pressures and the growing competitive environment.

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