Zenith Bank reports 29.1% PAT 9 months’ growth

Shareholders of Zenith Bank Nigeria Plc may have started looking up for a resounding dividend for the 2017 financial year, as the company commits to meeting or surpassing its 2017 target.

Zenith bank’s third quarter result for the period ended 30th September, 2017, released by the Nigerian Stock Exchange (NSE) on Thursday, showed mixed performances , while the bank’s nine months report emerged bullish.

For the nine months period, Profit after tax (PAT) peaked at N129.24billion, indicating 29.1 per cent y/y growth. Nine months’ gross earnings closed at N531.27bn, reflecting 39.7 per cent y/y growth, while profit before tax of N152.55bn showed 25.8 per cent y/y advancement.

However, Zenith Bank’s Q3 2017 results showed low single digit y/y declines in both PBT and PAT. Profit before provisions of N114bn revealed a greater decline of -8 per cent y/y, provisions and opex lines proved significant, as it helped limit the decline on the PBT line.
Both revenue lines contributed to the decline in profit before provisions: while funding income was flattish, non-interest income declined -16 per cent y/y.

Also on a q/q basis, because of base effects again, the bank recorded a marked fall of -42% q/q for non-interest income.
Notwithstanding, non-interest income was stronger expected. However with the depressed performance in funding income however, the impact of the better-than-expected non-interest income result was not felt.

A significant positive surprise in loan loss provisions was the main reason for Zenith’s better-than-expected PBT (and PAT) result.
Investment expert speaking on the result said: “The market is likely to take some time to digest these results. On the one hand, the y/y comparables show declines on revenues and earnings. And the q/q changes in revenue are also weak, similar to what we have observed for other tier 1 banks.”

Bonny Amadi