In its unaudited report for the half year which ended on June 30, 2020. Zenith Bank Plc declared profit after tax of N103.83bn from N88.8bn, accounting for 16.82 per cent growth.

The unaudited statement of account presented to the Nigeria Stock Exchange on Thursday shows that the bank’s gross earnings rose by 4.37 per cent from N331.59bn in March 2019 to N346.09bn. Profit before tax stood at N114.12bn from N111.68bn in 2019, representing a growth of 2.19 per cent.

The report stated that Interest Income grew by 1.1 per cent, supported primarily by the income from loans and advances to customers. Other contributory line recorded a decline – investment securities. The decline in income from investment securities was expected, as yields across assets had pared significantly from the previous year.

The report also stated that interest expense declined by 17.4 per cent to N59.55bn, reflecting lower interest cost on borrowings over the corresponding period of the prior year and despite the increased cost on deposit from customers to N42.54bn.

Continuing the trend during the year, non-interest income was strong, settling 6.2 per cent higher at N116.49bn. The strong growth recorded was supported by expansions in FX revaluation gains (+239.6 per cent to NGN22.02bn), and gains on investment securities (+30.4 per cent to NGN58.83bn). This expansion in NII, alongside the growth in net interest income, led to an expansion in operating income of 4.8 per cent to NGN249.97bn.

According analysts at Cordros Capital, operating expenses growth was moderate, as the bank continued to focus on cost management in the face of moderate gross earnings growth.

Opex grew by 7.1 per cent to NGN135.85bn, with the most pressure exerted by other operating expenses (+16.6 per cent to NGN21.22bn) such as I.T, and maintenance costs. Consequent to the Opex growth relative to operating income growth, the bank’s cost-to-income ratio settled higher at 54.3 per cent relative to 52.7 per cent and 50.9 per cent in the prior quarter and the corresponding period of the previous year. Also, profitability was stronger, with profit-before-tax settling 2.2 per cent higher year-on-year.

However, profit-after-tax settled 16.8 per cent higher year-on-year, on account of a 54.8 per cent decline in income tax expense.