Monday, April 18, 2016 6:27PM /Cordros Capital
Zenith Bank Plc (ZENITHBANK) released first quarter result for three months ended 31 March 2016 today.
Profit after tax dropped by 4% y/y on weaker gross earnings (-12.3% y/y). Annualized EPS was N3.36 (versus N3.36 in FY'15) while ROAE was 17.4% down from 18.5% in FY'15.
ZENITHBANK's interest income increased by 3.4% y/y, aided by a 1.4% increase in net loans. On the other hand, interest expense slumped by 32.9%, with the bank benefiting from the low interest rate environment as interest charges on the typically expensive "term deposits" fell by 47.3% y/y. Consequently, Net interest income surged by 36.4% y/y.
Non-interest income slumped by 52.0% y/y and was the driver of the drop in gross earnings (-12.3% y/y). Key drivers for the weak non-interest income performance include (1) an exchange rate loss of N2.29 billion versus a gain of N4.3 billion in the previous year and (2) an 85% y/y decline in foreign currency revaluation gains.
Operating expense decreased by 3.2% y/y while impairment charges increased by increased by 23.3% y/y.
5. ZENITHBANK Grows Interest Income by 11.1 as Loan Loss Expense Spikes by 135 QoQ in Q4 15
9. ZENITHBANK Healthy upside potential even after mixed Q3 - Proshare