Zenith Bank Plc has achieved remarkable growth in the first half of the year, with gross earnings soaring to N2.1 trillion, marking a significant milestone for the bank.
According to the audited financial report for the six months ending June 30, 2024, released at the Nigerian Exchange (NGX) over the weekend, gross earnings surged by 117%, while pre-tax profits and post-tax profits increased by 108% and 98%, respectively.
These impressive results come as both existing shareholders and new investors demonstrate a strong interest in Zenith Bank’s shares.
The bank is currently offering a rights issue of 5.233 billion ordinary shares at 50 kobo each, priced at N36 per share. Existing shareholders are entitled to one new ordinary share for every six shares held as of the close of business on July 24, 2024.
Additionally, Zenith Bank is making available 2.767 billion ordinary shares to the general public at N36.50 per share, with a minimum subscription of 250 shares, allowing investors to become co-owners of Nigeria’s leading bank for just N9,125. The application period for these offers, which began on August 1, 2024, will close on September 9, 2024.
With earnings per share rising from N9.29 in the first half of 2023 to N18.41 in the same period of 2024, the bank’s board has declared an interim dividend of N31.4 billion, translating to N1 per share—setting a new record for both the bank and the industry.
Gross earnings increased from N967.3 billion in the first half of 2023 to N2.1 trillion in the first half of 2024, while profit before tax rose from N350 billion to N727 billion, reflecting a 108% increase. Profit after tax also saw a substantial rise of 98%, from N292 billion to N578 billion.
A closer look at the figures reveals that the growth in earnings was driven by significant increases in both interest and non-interest income. Interest income reached a record N1.1 trillion, up 177% from N415.4 billion in the first half of 2023, while non-interest income rose by 74% from N515.7 billion to N899.3 billion.
The bank’s balance sheet has also expanded, with total assets growing by 35% from N20.4 trillion in December 2023 to N27.6 trillion in June 2024. Customer deposits increased by 29%, from N15.2 trillion to N19.6 trillion, and gross loans improved by 44%, rising from N7.1 trillion to N10.2 trillion, driven by customer loan disbursements and the impact of foreign currency loans.
Despite a slight increase in the cost-to-income ratio from 38.5% to 39.4%, the bank has maintained operational efficiency. The cost of risk rose from 8.8% to 9.7% due to a heightened risk environment, while the cost of funds increased from 2.6% to 4.4%, leading to a rise in interest expenses from N153.6 billion to N434.4 billion.
Nevertheless, the net interest margin improved by 49%, climbing from 5.9% in the first half of 2023 to 8.8% in the first half of 2024, reflecting effective management of interest-earning assets and liabilities.
Zenith Bank’s stringent risk management practices have kept the non-performing loan ratio relatively stable, increasing only slightly from 4.4% in December 2023 to 4.5% in June 2024. The capital adequacy ratio improved from 21.7% to 23%, while the loan-to-deposit ratio rose by 11% from 46.5% to 51.7%. The liquidity ratio decreased from 71% to 59%, with all prudential ratios remaining well above regulatory requirements.
The bank emphasized that its strong brand and commitment to quality service have positioned it to explore new business opportunities in strategic sectors and regions.
In line with its expansion strategy, Zenith Bank has received regulatory approval to establish a third-country branch in Paris, France, which will enhance its international product offerings.
The bank is also focused on enhancing its digital banking capabilities and is accelerating the upgrade
