Zenith Bank reports 25% growth in PBT, proposes N1.77 final dividend

Zenith Bank Plc has announced 25 per cent increase in Profit Before Tax (PBT) from N125.6 billion in 2015 to N156.7 billion in 2016, driven by significant increase in non-interest income and gross earnings.

Also, Zenith Bank reported a Profit After Tax (PAT) of N129.7 billion in financial year ended December 31, 2016, 23 per cent increase over N105.7 billion recorded in 2015.

The bank in its report to Nigerian Stock Exchange (NSE) on Monday, announced that non-interest income gained 45.9 per cent to N123.44 billion as against N84.58 billion recorded in 2015.

Gross earnings grew by 17.4 per cent to N507.9 billion in 2016 compared with N432.5 billion recorded in 2015.

Based on the result, the Board of Directors proposed a final dividend of N1.77 kobo per share, which in addition to the N0.25 kobo per share paid as interim dividend amounts to N2.02 kobo per share.

The bank said: “The performance for the year ended December 31, 2016 re-affirms Zenith’s industry leadership and consistency in providing superior financial returns.

“This is demonstrated by the 25 per cent and 23 per cent growth in PBT and PAT respectively despite the continuously challenging macro-economic backdrop.

“The N157 billion PBT and N130 billion PAT reported in the current year resulted in an impressive return on average equity of 20per cent compared to 18per cent in the prior year.

“The impressive growth of non-interest income is primarily attributable to the banks electronic products delivery, retail drive and derivatives income. The increased focus on retail drive resulted in a 46per cent Y-o-Y growth in savings deposits.

“The cost control initiatives embarked by the Group continue to yield positive results with an eight per cent reduction in cost to income ratio to close at 53 per cent for the year ended December, 31 2016. While the year-end 2016 inflation rate was 18.55 per cent, the

“Group was able to keep its absolute operating expenses relatively flat moving by four per cent from N167.9 billion to N174.5 billion Interest expense, however, increased by 16.8 per cent mainly due to a 92 per cent increase in cost of borrowed funds which was is largely driven by the movements in the exchange rate.

“The loans and advances of the Group grew by 16 per cent Y-o-Y to close at N2.3 trillion as at December 31, 2016; mainly due to the devaluation of the Naira.

“The Group reported a Non Performing Loss (NPL) ratio of 3.02 per cent as at December 2016 compared to 2.18per cent in 2015 with a coverage ratio of 100per cent, which are attestations of the quality of the Group’s loan book.

“Liquidity ratio and Capital Adequacy Ratio (CAR) came in at 60per cent and 23per cent, which are higher than the regulatory requirements of 30per cent and 15per cent respectively. In spite of a competitive and challenging operating environment, management’s outlook is very positive barring any unpleasant shock, the group said in a statement.

Zenith Bank management said it would continue its focus on cost control and emerging opportunities in the growth and economic recovery agenda of the Federal Government.