Nigeria’s leading bank Zenith Bank Plc has declared N106.1 billion ($257.8 million) in profits in the first half of 2021 on the back of a double-digit decline in interest expenses, which canceled out the drop in interest income.
Zenith Bank is a leading multinational financial service provider based in Nigeria. Aside from its robust operations throughout Africa’s largest economy, the bank also operates through its subsidiaries in Anglophone West Africa.
The leading financial services provider was recently rated as Nigeria’s most profitable bank and the second-largest bank in market capitalization behind Guaranty Trust Holding Company.
Figures contained in the lender’s half-year financial results revealed that it recorded a three-percent growth in earnings, with profits increasing from N103.8 billion ($252.2 million) in the first half of last year to N106.1 billion ($257.8 million).
The single-digit profit growth is majorly attributed to the 26-percent decrease in interest expenses, which mitigated the six-percent decline in interest income.
This led to a two-percent rise in net interest income, from N157.4 billion ($392.5 million) in the first half of 2020 to N159.9 billion ($388.6 million).
Zenith Bank’s profit was also strengthened by a nine-percent growth in non-interest income from N116.5 billion ($283.1 million) in June 2020 to N126.8 billion ($308.1 million) in June 2021.
As the group’s retail journey continues to deliver positive results, the board recommended an interim dividend of N9.4 billion ($22.8 million), which translates to a payout of N0.30 ($0.00073) per share on all 31,396,493,786 ordinary shares held by shareholders.
The management also revealed that its retail deposits grew by N38.2 billion ($92.8 million) from NGN1.72 trillion ($4.2 billion) to N1.76 trillion ($4.3 billion) year-to-date. Its savings balances in the period also grew marginally by two percent from N1.16 trillion ($2.8 billion) to close at N1.18 trillion ($2.9 billion).
As of the closing of the Nigerian Exchange yesterday, Aug. 27, shares in the bank closed at N24.3 ($0.0591) per share, 41-basis points higher than its opening price for the day.
At the current share valuation, the bank’s market capitalization is valued at N766.1 billion ($1.9 billion).
The market value of all the 5,072,104,311 shares in the bank held by Nigerian businessman Jim Ovia, who founded Zenith Bank in 1990, is valued at N123.3 billion ($299.6 million).
Ovia is on course to pocket an interim dividend of N1.52 billion ($3.7 million) from the bank on Sept. 20.