Zenith Bank’s profit drops as bad loans rise

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Zenith Bank2
Zenith Bank2

Zenith Bank Plc witnessed declines in its top-line and profitability in the first half as the quality of the bank’s credit assets worsened. The proportion of non-performing loans to gross loans spiked up to 2.34 per cent by the end of first half 2016 compared with 1.44 per cent recorded in the comparable period of 2015.

Zenith Bank’s share price dropped by 2.50 per cent to close at N15.60 per share as the much-awaited results filtered into the stock market.

Key extracts of the audited report and accounts for the six-month period ended June 30, 2016 showed that gross earnings dropped by 6.23 per cent while pre and post tax profits declined by 12.35 per cent and 15.68 per cent respectively. Non-performing loans rose to N54.67 billion by first half of 2016, indicating addition of about N10 billion to the full-year classified loans of N44.9 billion.

The report indicated that while gross loans and advances grew by 15.3 per cent during the six-month period, non-performing loans rose by about 22 per cent. Gross loans, which closed 2015 at N2.03 trillion, rose to N2.34 trillion by June 2016.

The contraction in net earnings depressed earnings per share to N1.43 in first half 2016 as against N1.69 recorded in comparable period of 2015. The board of the bank has however recommended interim dividend per share of 25 kobo for first half 2016, retaining the same amount paid in 2015.

Gross earnings closed June 2016 at N214.81 billion as against N229.08 billion recorded in first half 2015. Profit before tax dropped from N72.20 billion to N63.28 billion. Profit after tax declined from N53.18 billion to N44.84 billion.

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About Haruna Magaji 2486 Articles
Haruna Magaji is a journalist, foreign policy expert and closet musician. He is a graduate of ABU Zaria and a member of the Nigerian union of journalists. JSA, as he is fondly called, resides in Suleja, Abuja. email him at - [email protected]r.com
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