Zenith Bank records 91% rise in after-tax profit amid interest income boom

Zenith Bank’s net profit for the nine months to September grew by 90.5 per cent or N393.1 billion compared to the same period of last year.

The performance was supported by a major boost to the income the lender earned from loans and other financial assets.

Net interest income, which implies how much banks earn after deducting borrowing costs from the interest generated, increased more than threefold to N1.3 trillion, according to the bank’s unaudited financial report issued on Wednesday.

The high interest rate environment in Nigeria, created by successive rate hikes over the past twenty-nine months, has increased interest income’s share of banks’ revenue, helping many banks to post record profit.

Interest income contributed 67.2 per cent of Zenith Bank’s gross earnings of N2.9 trillion, up from 50.1 per cent a year ago.

The top-tier bank saw its credit quality drop during the period as its provision for impaired loans and other assets climbed by 127.5 per cent to N477.8 billion.

Also boosting revenue, trading gains scaled up to N686.3 billion from N127.4 billion.

Zenith Bank is in the process of restructuring into a holding company after the fashion of peers like Access Holdings, GTCO, FCMB Group, and FBN Holdings, among others who are branching away from traditional banking to explore opportunities in other financial services.

In April, the bank secured shareholders’ consent to proceed with the move.

Pre-tax profit for the review period surged 98.6 per cent to N1 trillion, while after-tax profit advanced to N827.3 billion from N434.2 billion.

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The lender earned 133.9 per cent more in other comprehensive income on the back of the substantial gain it recorded after translating its foreign currency income into naira, its reporting currency.

Return on equity stood at 23.6 per cent, slightly up from 22.6 a year earlier.

Zenith Bank, whose assets now total N30.4 trillion, lost its position as Nigeria’s second-largest bank earlier in the year to United Bank for Africa.