Zenith Bank Plc (NGX Ticker: ZENITHBANK) has declared an interim dividend of 30Kobo for the half year period ended 30 June 2021, as it declares a Profit for the period after tax of N106.11 billion. The Bank’s Interim Report for the period was published earlier on Friday on the Nigerian Exchange Limited.
In an accompanying Corporate Actions Announcement, the bank directors declared an Interim Dividend of 30Kobo for every share of 50K, subject to appropriate withholding tax. The interim dividend will be paid to shareholders whose names appear in the Register of Members as at the close of business on the 10th day of September, 2021.
On September 20, 2021, dividends will be paid electronically to shareholders whose names appear o the Register of Members as at September 10, 2021 and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.
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A glance through the financial statements by Investogist, shows a single digit decline in the Interest and Similar Income, and single digit growth in Profit for the period after tax following a double digit increase in Net Income on Fee and commission Income.
Analysis of the report: Statement of Profit or Loss and Comprehensive Income
The Bank’s statement of profit or loss shows a delicate balancing act to keep the Bank on a positive trajectory.
There was a 6.00% drop in the Interest and Similar Income for the period in review, as it went from N216.95bn reported in H1 2020 to N203.93bn in H1 2021. This is attributable to the decline in income from Treasury Bills, while it earned N28.38bn from Treasury Bills in H1 2020, it only managed to earn N20.28bn from same in H1 2021.
On the other hand, Interest and Similar Expense declined by 26.12% to N43.994bn (H1 2020: N59.54bn).
ZENITHBAN did remarkably well in growing its Net Income on Fees and commission, boosting it by 42.27% from N33.50bn to N47.66bn.
Account Maintenance fee and Fees on electronic products were the highest earning segments for the bank in regard. While the income from Account maintenance grew from N9.43bn in H1 2020 to N14.47bn, the Fees on electronic products rose from N8.93bn to N17.04bn.
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Personnel expenses dropped by 3.32% from N38.86bn to N37.57bn, while Other operating expenses increased by 17.95% from N23.92bn to N97.57bn.
The increase in the Other operating expenses was due to an Increase in the AMCON levy, from N30.94bn to N37.92bn. Banks in Nigeria contribute an annual levy equivalent to 0.3 percent of their assets to secure AMCON (Asset Management Company of Nigeria) operations through the Banking Sector Resolution Cost Fund (RCF).
In the period in review, ZENITHBANK paid a total of N10.94bn in taxes (H1 2020: N10.29) comprising of the following;
- Corporate tax: N6.62bn (H1 2020: N7.62bn)
- Minimum tax expense: N1.44bn (H1 2020: N1.52bn)
- Information technology tax: N1.11bn (H1 2020: N0.93bn)
- Tertiary Education tax: N1.08bn (H1 2020: N0.78bn)
- Police Trust Fund levy: N6.0mn (H1 2020: N5mn)
The Profit for the period after tax stood at N106.11bn, up by 2.21% from the N103.82 reported in H1 2020.
Analysis of the report: Statement of Financial Position
There was minimal change in the Bank’s balance sheet;
- The Cash ad cash balances with central banks decreased by 10.49% to N1.42tn as at 30 June 2021, down from N1.59trn the Bank had on 31st December 2020.
- Total Assets remained relatively unchanged at N8.51tn
- Total Liabilities was also relatively unchanged at N7.37tn
- The Total Shareholder’s Equity grew by 2.21% from the N1.11tn as at 31st December 2020 to N1.14tn as at 30 June 2021
Analysis of the result: Statements of Cash Flows
An analysis of the Cash flow statement shows the below movement in cash over the period in review;
- Net cash flows generated from operations increased to N576.815 billion, from N72.95 billion generated in H1 2020.
- Net cash used in investing activities reduced to N11.827 billion, from N12.66 billion.
- Net cash of N8.362 billion used in Financing activities stood at N310.63 billion, against the N8.36 billion generated in H1 2020.
Cash and cash equivalents at the end of the period was N1.48 trillion, an increase from the N786.18 billion held at the same time in 2019.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
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