In the first quarter ended
31 March 2019, Zenith Bank Group recorded improved numbers across key metrics,
driven by a solid performance in all business segments an unedited Q1 results
released by the bank revealed.
This solid performance resulted
in a Profit before Tax (PBT) of
₦57 billion, representing a 6% growth over the ₦54 billion achieved in the
corresponding period in 2018 according to information available.
The Group’s on-going commitment to cost
optimisation on the income statement and statement of financial position
ensured earnings per share increased by 7% to ₦1.60
compared to Q1 2018 further details revealed.
The growth in net interest
income and operating income by 23% and 1% respectively mitigated the decline in
gross earnings. The effective management of cost-to-income ratio, cost of funds
and cost of risk offset top-line declines to deliver an enhanced operating
income in the period the unaudited results showed.
More information revealed
that the risk and asset quality continues to improve as cost of risk dropped
significantly by 52% from 0.9% in the prior year to 0.4% for the period. And this
was achieved as impairment charges declined by 54%(₦2.5billion year on year
reduction).
The figures available further showed that cost
of funds also improved, declining by 25% from 4%in Q1 2018 to 3% at
quarter-end. This was supported by a 22% decrease in interest expense of ₦10billion over the same
period, affirming the Group’s robust treasury and liquidity management.
Added revelation revealed
that prudent cost management led to a 5% decline in the cost-to-income ratio by
5% from 53.3% in 2018 to 50.9% in the period with an absolute reduction in
operating expenses by ₦2.3 billion year-on-year.
The Bank’s retail franchise
continues to increase as retail deposits grew by N80bn between December 2018
and March 2019 representing a 9% growth notwithstanding the fact that total
customer deposits dropped marginally by 3%. The drop in customer deposits was
as a result of rebalancing of the deposit mix as expensive purchased deposits
were forgone in favour of cheaper and stickier retail deposits according to
details available.
The volume and value of
transactions across electronic and digital platforms continue to grow as new customers
are being acquired. And the balance sheet continues to strengthen as liquidity
ratio is at 66.7%, loan to deposit ratio closed at 43%, and capital adequacy
ratio ended the period at 25% respectively and remain above the relevant regulatory
thresholds as at 31 March 2019 the Q1 unaudited report further revealed.
According to a statement
from the bank ‘’Going into the rest of the year and with improving economic
fundamentals, we are confident of delivering value to all our stakeholders on
our commitments even as we create more opportunities for businesses by
supporting them through selective risk asset creation. We shall continue our
investments in the retail segment of the market as we consolidate our
leadership position in the corporate segment while maintaining a strong balance
sheet.’’
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