Zenith Bank Nets N144.18bn Q3 Profit, As Loan Loss Charge Drops By 69.5%

Zenith Bank Plc, on Thursday joined the group of early filers, as the board presented its unaudited financials for the nine-month ended September 30, 2018, highlights of which included the rise in profit, making it the most profitable yet, despite the 10.66% drop in gross earnings. The numbers received considerable boost from the 69.53% decline in impairment loss on financial assets from N47.053bn in the first nine months of 2017 to N14.338bn. Nigeria’s operation accounted for N12.785bn of the impairment; just as the management successfully contained growth in interest and similar expense from N160.297bn in the corresponding period of 2017 to N110.546bn, representing a 31.04% drop.

Specifically, gross earnings dropped by 10.66% from N531.266bn to N474.607bn; with N417.223bn or 87.91%; followed by N49.609bn from the rest of Africa; while N13.269bn was earned from Europe.
Interest and similar income slipped by 6.28% from N361.789bn to N339.063bn; while interest and similar expense dropped to N110.546bn, from N160.297bn, N95.131bn of which came from Nigeria; resulting in net interest income of N228.517bn from N201.492bn, a 13.41%.
Net interest income after impairment loss on financial assets came to N214.179bn, up by 38.68% from N154.439bn in 2017; fee and commission income dropped from N71.021bn to N69.967bn, with growth hampered by the 50% drop in current account maintenance fees from N28.584bn to N14.672bn. The impact of the drop was however moderated by the N9.216bn or 109.17% rise in fees on electronic products from N8.442bn to N17.658bn; among others.

Trading income fell 35.3% to N52.934bn from N81.809bn, slowed down by the N20.774bn loss from derivatives, as against the prior income of N28.788bn; while income from treasury bill trading jumped to N75.197bn from N52.881bn. This was in addition to a loss from bonds trading of N14.489bn, the bulk of which was the N1.805bn recorded in the three months between July and September. Other income reduced to N12.643bn from N16.647bn; depreciation of property and equipment dropped to N1.745bn from N8.66bn; with personnel expenses rising to N51.687bn from N45.93bn.

Operating expenses was flat at N116.74bn, compared to N115.611bn, boosted by the N28.542bn payment to the Asset Management Corporation of Nigeria, up from N21.419bn; followed by the N13.902bn cost of fuel and maintenance, down from N14.432bn; and the N8.515bn Deposit insurance premium paid to the Nigeria Deposit Insurance Corporation (NDIC); among others.
All of these resulted in profit before tax of N167.307bn, up 9.67% from N152.552bn. Income tax expenses stood at N23.128bn from N23.317bn, following which profit after tax rose 11.56% to N144.179bn from N129.235bn, representing Earnings Per Share of N4.56, as against the previous N4.11 each. The foreign currency translation differences for foreign operations was positive at N6.173bn, as against the previous N1.048bn loss; bringing total comprehensive income for the period to N151.191bn, 19.38% better than the previous N126.647bn.
A further breakdown of the net profit shows that like all other parameters, the Nigerian business accounted for the lion’s share of N126.59bn, followed by N14.124bn from Africa; and N7.112bn from Europe, which shows the need to diversify and grow contributions from across Africa and Europe.

Total assets rose to N5.617tr from N5.131t, with loans and advances dropping from N2.155tr in 2017, to N1.824tr, representing a N331.025bn or 15.36% slide; while investment securities jumped by N347.957bn, or 143.58% to N590.305bn, as against N242.348bn.
Total liabilities for the period fell from N4.364tr to N4.839tr, with customer deposits representing N3.275tr, up by N213.333bn or 5.97% from N3.062tr; while shareholders’ fund stood at N777.904bn from N767.69bn

https://investdata.com.ng/2018/10/zenith-bank-nets-n144-18bn-q3-profit-as-loan-loss-charge-drops-by-69-5/#more