By BUKOLA IDOWU |
Zenith Bank Plc has released its unaudited results for the first quarter ended March 31, 2021, posting a five per cent increase in profit after tax as it total loans and advances rose to N2.98 trillion in the period under review.
The financials of the bank released to the investing public showed that its Profit Before Tax (PBT) rose by four per cent to N61.0 billion, from N58.8 billion recorded in the comparable period of 2020, despite the challenging macroeconomic environment aggravated by the COVID-19 pandemic.
Profit After Tax (PAT) was up by five per cent from N50.5 billion in Q1 2020 to N53.1 billion in Q1 2021 as profitability was driven by the optimisation of the cost of funds and improvement in non-interest income.
Cost of funds reduced from 2.6 per cent in March 2020 to 1.1 per cent in March 2021, reflecting on the interest expense which dropped by 45 per cent from N32.8 billion to N18.0 billion over the same period.
Also, non-interest income increased by 10 per cent from N46.6 billion to N51.2 billion, driven by growth in credit-related fees and fees on electronic products. The banks said non-interest income was boosted by the increase in fees and commission income, which resulted from the increased volume of transactions across all its channels.
Cost of risk dropped from 0.6 per cent in March 2020 to 0.5 per cent in March 2021, as gross loans increased by two per cent from N2.92 trillion to N2.98 trillion in Q1 2021.
The bank in a statement said its robust customer acquisition strategy and the effectiveness of its electronic platforms and digital channels enabled it to deliver a N54 billion increment in the savings account balance, which is solely retail.
Customer deposits was up by six per cent from N5.34 trillion in December 2020 to N5.68 trillion in March 2021. Transactions on electronic channels also grew astoundingly as new customers continue to be attracted to the Bank’s various user-friendly digital platforms.
Going forward in 2021, the bank said it expects that the ongoing economic recovery and improvements in the yield environment will translate into improved numbers for the Group. This is expected to be supported by local and international COVID-19 vaccination campaigns, rising commodity prices, and global economic growth of up to six per cent as estimated by the International Monetary Fund (IMF).
The bank further said it would continue to position itself to take advantage of positive developments in the domestic and global economy to deliver improved financial performance and returns to all its stakeholders.