Zenith Bank has reported an exceptional second quarter in 2024, with pre-tax profits soaring to N406 billion, a staggering 370% increase from the N86.8 billion reported in the same period last year. This extraordinary growth was primarily driven by substantial gains in the bank’s trading books, which saw profits surge to N871.6 billion for the first half of the year, up from just N77.9 billion a year earlier.
Record-Setting Half-Year Performance Zenith Bank’s performance in the first six months of 2024 has set the stage for potentially becoming the first Nigerian commercial bank to achieve N1 trillion in annual profits. The bank’s half-year pre-tax profits reached an impressive N727 billion, underscoring its strong financial standing and strategic positioning in the market.
Key Financial Highlights
Net Interest Income: N408.6 billion, a 238% increase YoY.
Loan Impairments: N359.3 billion, a significant 4548% rise YoY.
Net Interest After Impairments: N49.3 billion, down by 56%.
Operating Income: N677 billion, up by 264% YoY.
Operating Expenses: N270 billion, a 172% increase YoY.
Pre-tax Profit: N406.8 billion, up by 370% YoY.
Earnings Per Share (EPS): N10.2, a 434% increase YoY.
Loans and Advances: N9.29 trillion, up by 131% YoY.
Total Deposits: N19.6 trillion, a 115% increase YoY.
Net Assets: N3.19 trillion, up by 121% YoY.
Total Assets: N27.5 trillion, a 106% increase YoY.
Key Drivers of Growth The remarkable increase in Zenith Bank’s profits was largely driven by forex-related trading gains, which totaled N871.6 billion (net N795 billion) for the first half of 2024, compared to N77.9 billion (net N103 billion) in the same period last year. These gains included N123 billion from derivatives, compared to N65.2 billion previously. The bank’s trading gains encompass a variety of financial instruments, including trading assets and liabilities, fair value changes, interest, dividends, and foreign exchange differences.
However, alongside these gains, Zenith Bank also recorded a significant impairment loss of N359.3 billion in the second quarter alone, bringing the total impairments for the year to N415.2 billion. This marks a substantial increase from the N409.6 billion impairment charge taken for the entire year of 2023 and the N123.2 billion recorded in 2022.
Segment Performance In terms of segment revenue, Zenith Bank’s Nigerian operations contributed N645.3 billion to the group’s profits, while its operations outside Nigeria contributed N81.7 billion.
Dividend Declaration Reflecting its strong financial performance, Zenith Bank has declared an interim dividend of N1 per share for its shareholders.
Looking Ahead With its robust half-year performance, Zenith Bank is on track to achieve unprecedented profitability by the end of 2024. The bank’s focus on strategic trading activities and prudent risk management continues to drive its growth, solidifying its position as a leader in Nigeria’s banking sector.
