Zenith Bank posts 15.68 % drop in profit

For the half year ended June 30, 2016, Zenith Bank Plc reported Profit After Tax (PAT) of N44.8 Billion, down by 15.68 per cent when compared with N53.1 Billion recorded within same period in 2015.

  Details of the result released on Thursday revealed that gross earnings of the group also declined by N14.270 billion, indicating 6.2 per dropped.

  However, deposits increased by five per cent to N2.7 trillion from N2.6 trillion in the previous year.

 The Board of the Bank also proposed N0.25 interim dividend, “The performance for the period ended June 30, 2016 further confirms Zenith’s industry leadership and consistency in providing superior financial returns”.

Zenith Bank in a statement said: “Despite the challenging operating environment, the Group recorded gross earnings of N214.8 billion which represents a marginal drop of 6.2per cent over the same period last year. The Group also reported an increase of 2.9per cent (Y-o-Y) in interest income, and a decrease in its interest expense by 14.5per cent (Y-o-Y).

“The drop in Interest expense was as a result of the Group’s deliberate policy on focusing on low cost deposits. Profit before Tax (PBT) dropped by only N9billion (Y-oY) despite a drop in top line revenue by N14billion for the same period. This is attributable to the Group’s operational efficiency and cost optimization efforts.

“The Group continues to maintain high quality risk assets and closed with Gross Loans and Advances of N2.3trillion as at June 30, 2016. This represents a 15.1per cent increase over the N2.0trillion recorded at the end of the 2015 financial year.

“This increase is mainly due to the impact of the devaluation of the Naira on our foreign currency loans. Also, it partly accounts for the growth of NPLs to 2.34 per cent as at 30 June 2016, with coverage ratio was 110per cent”.