Zenith Bank Plc has announced its unaudited results for the first quarter ended 31st March, 2020, with profit before tax rising by 3% to N58.7 billion.
The unaudited account, which the bank presented to the Nigerian Stock Exchange (NSE), stated that the group’s profit before tax improved 3% from N57.3 billion in the prior-year period to N58.8 billion in March, 2020.
The bank said the increased profits benefited from the twin effects of continuing top-line growth and focused cost-of-funds optimisation. Cost of funds declined significantly from 3.0% in March 2019 to 2.6% in the quarter, translating to a 10% decrease in interest expense dropping from N36.3 billion in March 2019 to N32.8 billion in the quarter. Despite this drop, the current low yield environment necessitated the reprising of interest-bearing assets which in turn resulted in a 13% compression in net interest margin, decreasing from 8.9% in March, 2019 to 7.7% in the current period.
The report also said the bank recorded a 6% increase in Gross Earnings from N158.1 billion in March 2019 to N166.8 billion for the period. This top line growth is an outcome of the 43% expansion in non-interest income from N32.7 billion in the prior-year period to N46.6 billion in March 2020. Non-interest income growth was driven by a 98% surge in trading income from N7.8 billion in March, 2019 to N15.5bn in the quarter.
Zenith Bank has continued to gain customer acceptance with customer deposits increasing by 5% from N4.26 trillion in December, 2019 to N4.46 trillion in the current period. Our customer deposit mix rebalancing remains on-track as the group added N150 billion in savings account balances in Q1 2020, supported by our retail drive. Our customer acquisition strategy has been underpinned by the versatility of our electronic platforms and digital channels which continue to resonate with our customers.
The bank total assets increased by 12% growing from N6.35 trillion in December 2019 to close at N7.13 trillion in the current period. In the quarter, gross loans grew by 11% from N2.46 trillion in December, 2019 to N2.74 trillion within the period. While seeking opportunities in select sectors, risk management and prudence took precedence as cost of risk moved marginally from 0.4% to 0.6%.