Insight Details
Zenith Bank – Earnings Below Expectation: Lower Provision for Loan Loss Saves the Day
The recently released H1’18 audited result by Zenith Bank Plc shows a decline of 15.31% in its gross earnings as it reduced to ₦322.20 billion (vs. ₦380.44 billion in H1’17).
The decline in top-line is attributed to the poor performance across board as both interest income and non-interest income declined in the period under review. In the first quarter of 2018, interest income of the bank fell by 12.81% to ₦228.67 billion (vs. ₦262.26 billion recorded in first half of 2017) while non-interest income reduced by 20.86% to ₦93.53 billion (vs. ₦118.18 billion in the first half of 2017).
However, interest expenses reduced by 39.41% to ₦74.71 billion in H1’18 (vs. ₦123.30 billion in H1’17) while non-interest expenses increased by 6.40% to ₦130.41 billion (vs. ₦122.56 billion in H1’17).
Consequently, net interest income increased by 10.79% to ₦153.96 billion in H1’18 (vs. ₦138.96 billion in H1’17) while net non-interest expense increased by 741.89% to ₦36.88 billion in H1’18 (vs. ₦4.38 billion in H1’17). The bank made a provision of ₦9.72 billion in H1’18 (H1’17: ₦42.40 billion) for impairment charge for credit loss.