The first half (H1) financial statement of Zenith bank released yesterday on the Nigeria stock exchange (NSE) reveals that a reduction in interest payment and impairment on loans losses by 39 and 77 percent saved the tier one bank from a lower earnings as the bank saw a 9 percent increase in its profit after tax (PAT) when compared to the same period last year.
The banks grew its PAT for H1 2018 to 82 billion from 75 billion in H1 2017, recording a growth of 9 percent. This increase in profit could be said to be as a result in the management efficiency in managing its impairment losses.
A look at the H1 2018 financial position of Zenith bank shows that the bank’s interest and similar expenses reduced by 39 percent as the expenses fell from 123 billion in H1 2017 to 75 Billion in H1 2018. In the same vein the impairment loss on financial asset dropped from 42 billion to 10 billion in H1 2018 a decrease of 77 percent.
The banks financials showed that impairment loss incurred by the bank was lower than what was incurred in the first half of 2017. The bank improved in its impairment loss on financial assets by 77 percent from N42.4 trillion recorded as at H1 2017 to N9.72 trillion recorded in H1 2018.
On further analysis, it could be seen from the balance sheet that the banks deposit from customers reduced to N3.2 trillion in H1 2018 from N3.4 trillion in H1 2017, which may be the reason why the company’s interest payment reduce in the H1 2018 as the banks also showed a 75 percent drop in its time deposit expenses as it fell from 92 billion in H1 2017 to 23 billion in H1 2018.
A look at the H1 2018 financial position of Zenith bank reveals that the bank cut down on its loans and advances to its customers by 11 percent as the loans and advances fell from N2.1 trillion in H1 2017 to N1.9 trillion in H1 2018 which could explain the reduction of losses on impairment on the income statement.
The tier one bank also announced an interim dividend of N0.3k for every share of 50k to be paid to its shareholders on the 24th of August 2018.
The share price of the bank on Monday the day its H1 2018 was released the share appreciated by 0.42 percent as the share price appreciate to N23.95 at the close of the day from its opening price of N23.85.
