Zenith Bank Plc has declared an interim dividend of 50 kobo to its shareholders for the period ended 30 June 2023.
The financial giant reported the Gross Earnings of N967.261 billion for the 6 months period, up by 138.97% from N404.763 billion reported the previous year.
Profit after tax grew year on year by 161.85% to N291.731 billion from N111.413 billion reported the previous year.
Earnings per share of Zenith Bank stands at N9.29. At the share price of N34.8, the P/E ratio of Zenith Bank stands at 3.75x with earnings yield of 26.7%.
Qualification date for the proposed dividend is 22nd September 2023. The Register of Shareholders will be closed on the 25th of September 11, 2023. Payment date is on 29th of September 2023.
Highlights of the bank financial shows that it recorded a 71.9% y/y growth in funded income to NGN415.43 billion, driven by (1) higher yields in the fixed income market and (2) growth in its earning assets (+22.5% YTD to NGN12.25 trillion).
Across the contributory lines, the bank generated higher income from loans and advances to banks (+457.8% y/y to NGN21.54 billion), loans and advances to customers (+55.4% y/y to NGN253.95 billion), and investment securities (+88.0% y/y to NGN139.94 billion) in the review period.
Interest expense advanced by 169.5% y/y to NGN153.56 billion, as the elevated interest rate pushed the bank’s funding costs higher.
For clarity, the bank incurred higher costs on its customers’ deposits (+236.1% y/y to NGN120.29 billion) as its CASA mix deteriorated to 82.4% (2023FY: 84.6%).
In the same vein, the bank’s cost of borrowing increased by 69.4% to NGN32.70 billion following the increase in interest-bearing borrowings (+28.3% YTD to NGN1.63 trillion).
After accounting for credit impairment charges (+727.7% y/y to NGN207.93 billion), net interest income (ex-LLE) settled lower by 66.2% y/y to NGN53.94 billion.
Expectedly, non-interest income (NII) surged by 246.1% y/y to NGN515.69 billion, as the naira devaluation drove the significant gains generated from foreign exchange revaluation of NGN355.59 billion (vs. the NGN6.25 billion loss recorded in H1-22).
In addition, the FX revaluation gains and income from trading investment securities were sufficient to offset the lower income from net fees and commission (-31.8% y/y to NGN43.92 billion) in H1-23. Consequently, the impressive NII expansion, alongside the growth in net interest income (+41.7% y/y), led to an 84.6% y/y increase in operating income to NGN568.63 billion.
Operating expenses expanded by 22.8% y/y to NGN219.27 billion, triggered by the increased costs incurred on personnel expenses (+41.6% y/y to NGN56.25 billion) and NDIC insurance premium (+38.8% y/y to NGN13.58 billion) in the review period.
Consequent to the faster growth in operating income relative to OPEX, the cost-to-income ratio (ex-LLE) improved, settling at 38.5% (relative to 57.9% in HY-22).
Overall, profitability came in significantly higher, as the profit-before-tax grew by 169.5% y/y to NGN350.36 billion. Likewise, PAT grew by 161.8% y/y to NGN291.73 billion despite the higher income tax expense (+215.3% y/y to NGN58.63 billion).