Financial Performance for the Year Ended 2013
Zenith Bank Plc had an impressive performance for the year ended December 31, 2013 as Gross Earnings increased by 14 percent y/y to N354.47 billion from N307.08 billion recorded in the corresponding period of 2012.
Despite tough regulatory environment, the bank grew interest income by 18 percent YoY to N260.04 billion as against N221.31 billion in FY’12, while net interest income were up 21 percent YoY to N260.04 billion for FY’13 compared to N221.3 billion recorded in FY’12.
Operating expenses however jumped by 23 percent Year on Year YoY to N147.2 billion in the review period from N119.6 billion as at FY’12.
Increase in AMCON charge to 0.5 percent from 0.3 percent of total asset may be responsible for growth in opex.
Zenith Bank has not been able to translate top line performance into its bottom line as profit before tax (PBT) for FY’13 rose slightly by 8 percent to N110.6 billion against N102.1 billion recorded in FY’12.
It means that the bank is not efficient and also they are a lot of profits lever which they are not pulling.
BALA AUGIE
Earnings per share EPS increased by 39 percent to 742k from 534k in FY’ 2012.
The bank’s tax income which in the review period surged by 977 percent YoY to N15.28 billion hurt Profit after tax(PAT) as it dipped by 8 percent YoY to N95.31billion for FY’13 from N100.68 billion as at FY’12.
Loans and advances climbed to 26 percent YoY to N1.25 trillion as against N989.81 billion recorded in the corresponding period of 2012.
The bank is aggressively expanding its depositor’s base as total deposits for the year ended December 31, 2013 rose impressively by 18 percent to N2.27 trillion compared to N1.93 trillion for the same period of the prior year.
Total assets were up 19 percent YoY to N3.14 trillion in FY’13 compared to N2.60 trillion recorded in FY’12.
The Return on Equity ROE declined to 18.86 percent from 22 percent for FY’ 2013, while Return on Average Assets ROA dropped to 3.03 percent from 3.8 percent for FY’ 2012.
Share Performance and Outlook
The wealth of shareholders of Zenith Bank has been maximized as share price on the floor of the exchange increased by 8.9 percent in the past one year to close at N22.08 on March 13th 2014.
The bank had a market capitalization of N707.9 billion on the same day.
Zenith Bank is trading at a price to book ratio of 1.37x, meaning that investors are not paying a high premium for its shares, perhaps because their efficiency level is less than some peer rivals banks, such as GTB with trades at a price to book ratio of 2.22x.
