- Zenith Bank’s Q1 Profit Grows to N54bn
Zenith Bank Plc saw its pretax profit for the first quarter of the year grow by 22.17 per cent to N54bn, compared to N44.2bn in the same period of last year.
The company’s profit after tax for the period ended March 31, 2018 stood at N47.08bn, up from N37.49bn in the first quarter of last year, according to its consolidated and separate interim financial statements filed with the Nigerian Stock Exchange on Thursday.
Its total assets grew to N5.68tn at the end of the Q1 2018 from N4.74tn recorded in the same period of 2017, while its total liabilities increased to N4.94tn from N4.05tn.
Analysts at FBNQuest Capital, in an emailed note, said the 22 per cent growth in pretax profit put the bank on track to meeting its full year target of N210bn.
They said, “Revenue growth was mixed: funding income grew by 36 per cent year-on-year while non-interest income fell -10 per cent y/y. Notwithstanding, total revenues grew by a healthy 22 per cent y/y and helped to offset a 33 per cent y/y rise in operating expenditure.
“A 42 per cent y/y reduction in loan loss provisions also helped. PAT grew faster than PBT (by 33 per cent y/y) because of a helping hand from other comprehensive income (N4.8bn), thanks mainly to foreign exchange translation gains.”
The analysts said the bank’s earnings were close to their forecasts, adding, “We are surprised at the revenue split, however.”
They said, “The q/q changes are material: 70 per cent in magnitude for both. We suspect some reclassification is at play here. As such, we choose not to place too much emphasis on the separate revenue lines, but the total revenue instead which was in line with our forecast. Q1 results are not audited. As such, we also would not make too much of the differences between the opex and provisions figures compared with ours for now.
“On the balance sheet, a 16 per cent q/q decline in the loan book is a major surprise. Zenith’s loan book has now declined, consistently, from a peak of N2.3tn in Q1 2017 as non-interest income and government securities have been preferred to lending. The bank guides to loan growth of 10 per cent for the full year. With government yields continuing to trend down, loan growth will have to pick up substantially over the coming quarters.”
