Zenith Bank Displays Resilience As Profit Before Tax Grew By 4% In Q1, 2021
Zenith Bank Plc has announced its unaudited results for the first quarter ended 31st March 2021, with Profit Before Tax (PBT) rising by 4 per cent to N61.0 billion, from N58.8 billion recorded in March 2020. This is despite a very challenging macroeconomic environment aggravated by the COVID-19 pandemic.
According to the unaudited statement of account presented to the Nigerian Stock Exchange (NSE) on Friday, 30th April 2021, Profit After Tax (PAT) also grew by 5 per cent from N50.5 billion in Q1 2020 to N53.1 billion in Q1 2021.
The profitability was driven by the optimization of the cost of funds and improvement in non-interest income. The Bank’s cost of funds reduced significantly from 2.6 per cent in March 2020 to 1.1 per cent in March 2021. This was also reflected in interest expense which dropped by 45 per cent from N32.8 billion to N18.0 billion over the same period. Non-interest income increased by 10 per cent from N46.6 billion to N51.2 billion, driven by growth in credit-related fees and fees on electronic products.
Non-interest income was boosted by the increase in fees and commission income, which resulted from the increased volume of transactions across all the Bank’s channels. Cost of risk dropped from 0.6 per cent in March 2020 to 0.5 per cent in March 2021, which affirms the Bank’s prudent risk management, even as gross loans increased by 2 per cent from N2.92 trillion to N2.98 trillion in Q1 2021.
The Bank’s robust customer acquisition strategy and the effectiveness of its electronic platforms and digital channels enabled it to deliver a N54 billion increment in the savings account balance, which is solely retail. Customer deposits grew by 6 per cent from N5.34 trillion in December 2020 to N5.68 trillion in March 2021.
According to the unaudited statement of account presented to the Nigerian Stock Exchange (NSE) on Friday, 30th April 2021, Profit After Tax (PAT) also grew by 5 per cent from N50.5 billion in Q1 2020 to N53.1 billion in Q1 2021.
The profitability was driven by the optimization of the cost of funds and improvement in non-interest income. The Bank’s cost of funds reduced significantly from 2.6 per cent in March 2020 to 1.1 per cent in March 2021. This was also reflected in interest expense which dropped by 45 per cent from N32.8 billion to N18.0 billion over the same period. Non-interest income increased by 10 per cent from N46.6 billion to N51.2 billion, driven by growth in credit-related fees and fees on electronic products.
Non-interest income was boosted by the increase in fees and commission income, which resulted from the increased volume of transactions across all the Bank’s channels. Cost of risk dropped from 0.6 per cent in March 2020 to 0.5 per cent in March 2021, which affirms the Bank’s prudent risk management, even as gross loans increased by 2 per cent from N2.92 trillion to N2.98 trillion in Q1 2021.
The Bank’s robust customer acquisition strategy and the effectiveness of its electronic platforms and digital channels enabled it to deliver a N54 billion increment in the savings account balance, which is solely retail. Customer deposits grew by 6 per cent from N5.34 trillion in December 2020 to N5.68 trillion in March 2021.
Transactions on electronic channels also rose astoundingly as new customers continue to be attracted to the Bank’s various user-friendly digital platforms.
Going forward in 2021, the Bank expects that the ongoing economic recovery and improvements in the yield environment will translate into improved numbers for the Group.
Going forward in 2021, the Bank expects that the ongoing economic recovery and improvements in the yield environment will translate into improved numbers for the Group.
This is expected to be supported by local and international COVID-19 vaccination campaigns, rising commodity prices, and global economic growth of up to 6 per cent, as estimated by the International Monetary Fund (IMF).
The Group will continue to position itself to take advantage of positive developments in the domestic and global economy to deliver improved financial performance and returns to all its stakeholders.
