Zenith Bank Plc has announced its unaudited results for the first quarter ending March 31, 2023, with double-digit growth of 41% in gross earnings, increasing from ₦191.5 billion in Q1 2022 to ₦270 billion in Q1 2023.
The unaudited statement of account submitted to the Nigerian Exchange (NGX) on Friday indicated that the double-digit growth in the topline also boosted the bottom line, with the group experiencing a 27% year-on-year (YoY) increase in profit before tax (PBT), rising from ₦68 billion in Q1 2022 to ₦86.6 billion in Q1 2023. Profit after tax (PAT) also grew by 13% from ₦58.2 billion to ₦66 billion during the same period.
The bank said the growth in the topline was propelled by substantial increases in both interest income and non-interest income. Interest income surged by 52% from ₦126.4 billion in Q1 2022 to ₦191.6 billion in Q1 2023, while non-interest income expanded by 27% from ₦57.2 billion to ₦72.8 billion.
It added that growth in interest income can be attributed to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
Regarding efficiency, the cost-to-income ratio improved from 55% to 53.4% in the current period, supported by a bolstered income line. The cost of risk also moderated from 0.8% to 0.7% during the same period due to an enlarged loan book. However, the cost of funding doubled YoY from 1.3% in Q1 2022 to 2.7% in Q1 2023, owing to a considerable spike in interest rates between both periods as interest expense grew from ₦25.8 billion in Q1 2022 to ₦70.8 billion in Q1 2023. This impacted the net interest margin (NIM), which reduced from 7.3% to 6.9% over the same period.
Total assets expanded by 9% from ₦12.29 trillion in December 2022 to ₦13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings. Customer deposits increased by 2% from ₦8.98 trillion in December 2022 to ₦9.14 trillion in March 2023.
Loans and advances also experienced marginal growth of 1% from ₦4.12 trillion in December 2022 to ₦4.15 trillion in March 2023 as customers continued to adjust to the full impact of higher rates on risk assets. Both the capital adequacy and liquidity ratios remained robust at 19.5% and 72%, respectively, with both prudential ratios comfortably exceeding regulatory thresholds.
