Zenith Bank improves PAT by 9% to N174.3bn in Q3 2022

By Chukwuemeke Iwelumo

Zenith Bank Plc has announced its unaudited results for the third quarter that ended September 30, 2022, improving its Profit After Tax (PAT) By nine per cent, from N160.6 billion to N174.3 billion in the same period.

The bank’s unaudited account presented to the Nigerian Exchange Limited (NGX), also, showed a remarkable double-digit growth of 20 per cent in gross earnings, from the N518.7 billion reported in the third quarter (Q3) 2021 to N620.6 billion in Q3 2022.

Demonstrating resilience against the current macroeconomic environment challenges, the lender recorded an interest income growth of 27 per cent, from N308.8 billion to N390.8 billion, driven majorly by growth in risk assets and an improvement in pricing.

Also, its earnings per share (EPS) grew by nine per cent to N5.55, while the Group recorded a 13 per cent year-on-year (Y-o-Y) increase in profit before tax, growing from N179.8 billion in Q3 2021, to N202.5 billion in Q3 2022.

Growth in non-interest income was enabled by the Group’s retail strategy, with continued substantial customer acquisition driving transactions, deposit growth and growth in electronic banking income.

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Due to inflationary pressure and the rising cost of doing business, its operating costs grew by 17 per cent. However, this was below the growth in gross earnings (20%), thereby facilitating the double-digit growth in the bottom line.

The continuing elevated yield environment affected the cost of funding which increased from 1.4 per cent to 1.7 per cent in the current period. This affected the net interest margin (NIM), which dropped due to the immediate implementation of higher yields on interest-bearing liabilities.

However, the NIM was expected to see a correction in subsequent quarters as the assets side is repriced correspondingly.

Furthermore, Zenith Bank’s total assets grew by 20 per cent, from N9.45 trillion to N11.34 trillion in 2022, mainly driven by growth in customers’ deposits. Customer deposits grew by 24 per cent from N6.47 trillion in December 2021 to N8.04 trillion in September 2022, due to the market’s confidence in the brand.

Loans and advances also grew by 16 per cent from N3.5 trillion in December 2021 to N4.06 trillion in September 2022, boosting the Group’s interest income and displaying the Group’s appetite for high-yielding risk assets creation.

As a result of this growth, Zenith Bank’s capital adequacy ratio reduced from 21 per cent to 19.1 per cent, while liquidity ratio reduced from 71.6 per cent to 68.9 per cent. Both prudential ratios remain very strong and are still well above regulatory thresholds.

“In the year’s final quarter, management is determined to sustain the strong performance trajectory while adapting to changes in the regulatory environment and focusing on creative initiatives to mitigate inflationary trends, foreign exchange pressures and the growing competitive environment,” the bank explained.