Zenith Bank Plc reports N291.73bn profit for Half-Year 2023

Zenith Bank Plc (NGX: ZENITHBANK) has reported a profit after tax of N291.73bn for the half-year period ended 30 June, 2023.

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The interim financial statement of the company released on Monday shows that the banking group booked foreign currency revaluation gain of N355.58 billion.

The Foreign currency revaluation gain represents net gain on the revaluation of foreign currency-denominated assets and liabilities held in the group’s nontrading books. This also includes the effective portion of the gains on the derivatives designated in the fair value hedge of the foreign currency risk.

An impairment charge of N207.92bn (H1 2022: N25.12bn) on financial and non-financial instruments was recorded in the interim report. Of these impairment charges, N204.84bn was for loans and advances to customers.

The Board of Directors, pursuant to the powers vested in it by the provisions of section 426 of the Companies and Allied Matters Act (CAMA 2020) of Nigeria, proposed an interim dividend of N0.50 per share (2022: Interim dividend of N0.30 per share) from the retained earnings account as at 30 June 2023. This will be presented for ratification by the shareholders at the next Annual General Meeting.

Review of the Financial Statements

Income Statement:

Interest and similar Income: Zenith Bank grew its interest income by 71.86% from N241.72bn to N415.42bn. Interest from loans and advances to customers was the biggest contributor with N253.94bn (H1 2022: N163.41bn). N153.56bn was recorded as interest expense, N56.98bn interest expense was reported in H1 2022.
Net income on fee and commission: Zenith Bank reported 31.85% decrease in net fee and commission income, posting N43.92bn in H1 2023, against N64.44bn reported in H1 2022. Of the N80.06bn income on fee and commission (H1 2022: N78.50bn) earned by the group, account maintenance fee and fees on electronic products contributed N21.02bn *H1 2022: 19.77bn) and N22.27bn (H1 2022: N24.63bn) respectively. The decrease in the net income was due to increase fee and commission expense, which went up from N14.05bn to N36.14bn.
Foreign exchange income: Zenith reported N355.58bn gain from foreign exchange revaluation (H1 2022: minus N655mn). The foreign exchange revaluation gain relates to unrealized gain. An unrealized gain occurs when the current price of a security is higher than the price the investor initially paid for the security, including any fees associated with the purchase.
Personnel expenses: The personnel expenses of the group rose by 44.58% from N38.90bn in H1 2022 to N56.25bn.
Other operating expenses: The Banking Group’s operating expenses increased by 18.77% from N124.60bn to N148.00bn. AMCON levy of N5738bn (H1 2022: N44.01bn) was the biggest item on the operating expenses’ list.
Profit Before Income Tax: There was a 169.50% growth in the profit before tax, from N130.00bn to N350.36bn.
Profit After Tax: Zenith posted a profit after tax of N291.73bn, 161.85% higher than the N111.41bn it reported in H1 2022.
Earnings Per Share: N9.29 against N3.55 reported in the preceding year.

Balance Sheet:

Total Assets: The Banking Group’s total asset grew by 30.98%, from N12.28tn to N16.09tn. Loans and advances to customers amounting to N5.05tn (31 Dec. 2022: N4.01tn) was the biggest component of the Group’s asset, followed by cash & bank balances with N2.73tn (31 Dec. 2022: N2.20tn).
Total Liabilities: The total liabilities increased by 30.67% from N10.90tn to N14.29tn. Deposits from customers constituted a bulk of the liabilities, accounting for N11.62tn (31 Dec. 2022: N8.97tn).
Shareholders’ Fund: The shareholders’ fund went up by 29.23%, from N1.37bn to N1.78tn. The retained earnings, the biggest component of shareholders’ fund accounted for N784.37bn (31st Dec. 2021: N625.00bn).

Cashflow:

Operating activities: N986.51bn was generated from operating activities, as against N422.35bn generated in H1 2022.
Investing activities: N951.82bn was used in investing activities (H1 2022: N402.54bn used).
Financing activities: N287.34bn was used in financing activities, against N170.43bn used for the same activity in H1 2022.
Cash and cash equivalents: As at 30 June 2023, Zenith Bank Plc had cash and cash equivalent of N2.46tn (30 June 2022: N972.92bn).

About the Company

Zenith Bank Plc was incorporated in Nigeria under the Companies and Allied Matters Act as a private limited liability company on May 30, 1990. It was granted a banking licence in June 1990, to carry on the business of commercial banking and commenced business on June 16, 1990.

The Bank is domiciled in Nigeria and was converted into a Public Limited Liability Company on May 20, 2004. The Bank’s shares were listed on October 21, 2004 on the Nigerian Stock Exchange. In August 2015, the Bank was admitted into the Premium Board of the Nigerian Stock Exchange.

The registered office adress of the company is Plot 84/87 Ajose Adeogun street, Victoria Island, Lagos.

The principal activity of the Bank is the provision of banking and other financial services to corporate and individual customers. Such services include granting of loans and advances, corporate finance and money market activities.

The Bank has six subsidiary companies namely; Zenith Bank (Ghana) Limited, Zenith Pensions Custodian Limited, Zenith Bank (UK) Limited, Zenith Bank (Sierra Leone) Limited, Zenith Bank (The Gambia) Limited and Zenith Nominees Limited. The Bank also has a representative office in China in addition to operating a branch of Zenith Bank (UK) Limited in the United Arab Emirates.