Zenith Bank Plc, a leading African financial institution, has announced a remarkable triple-digit growth of 189% in Gross Earnings, soaring from ₦270 billion in Q1 2023 to ₦781 billion in Q1 2024, according to its unaudited financial results for the first quarter ending March 31, 2024. This significant achievement comes amidst a challenging operating environment and a tightening monetary policy stance in the country.
The robust growth in topline performance also translated into impressive bottom-line figures, with Profit Before Tax (PBT) surging to ₦320 billion in Q1 2024, marking a staggering 270% increase from the ₦87 billion reported in Q1 2023. Similarly, Profit After Tax (PAT) witnessed substantial growth, soaring by 291% from ₦66 billion in Q1 2023 to ₦258 billion in the current period.
The surge in Gross Earnings can be largely attributed to both interest and non-interest income. Interest income witnessed a remarkable 155% increase, rising from ₦192 billion in Q1 2023 to ₦489 billion in the corresponding period of 2024. This growth is primarily attributed to the repricing of risk assets due to the increased Monetary Policy Rate (MPR) by the central bank, currently standing at 24.75%.
Despite the impressive performance, the bank reported an impairment charge of ₦56 billion for Q1 2024, up from ₦8 billion recorded in Q1 2023. This increase is mainly attributed to the significant growth in risk assets, primarily driven by the revaluation of its USD loans, necessitating additional impairment on the bank’s foreign currency-denominated loans.
Furthermore, the cost of funds increased by 48% from 2.7% in Q1 2023 to 4% in Q1 2024 due to the high-interest rate environment. However, net interest margin (NIM) grew by 20%, reaching 8.3% in the current period compared to 6.9% in the corresponding period of 2023.
