Tier 1 lender Zenith Bank said its full-year profit hit a record N244.6 billion in 2021, boosted by trading gains that rose 37.6 per cent.
With N14 billion over the profit amount posted in 2020, the bank sustained its tradition of growing its profits every succeeding year.
The bank’s gross earnings for 2021 expanded by almost one-third from N696.5 billion to N765.6 billion, the year Africa’s biggest economy commenced a healing from its second recession in five years after taking a hit from the eruption of the pandemic.
The issuing of its audited earnings report on Monday was the first by any of Nigeria’s top five banks by assets, sometimes called FUGAZ by analysts by reason of their initials.
The lender owed the moderate improvement to jump in its trading gains (gains derived from investing in securities like bonds, treasury bills) at a time when growth in the two major traditional sources of revenue for lenders – interest income and fees & commission – did little to lift its profit.
Trading gains rose 37.6 per cent to N167.5 billion. That compares with the 1.61 per cent and 31 per cent at which interest income and fees & commission respectively grew.
But the financial institution’s operating expenses shot by as much as 22.1 per cent to N180.6 billion, heaping pressure on profit, with spending on IT mostly responsible for this.
As regulation demands, the lender made a provision of N59.9 billion for credit facilities that are likely to go bad relative to the N39.5 billion it devoted to the same purpose in 2020, also weakening earnings.
Earlier this year, Zenith Bank outranked Guaranty Trust Holding Company to become Nigeria’s biggest bank by market value, and the lender saw its share price rise by 0.56 per cent in Lagos on Monday, following the earnings release.
Profit before tax stood at N280.4 billion, 9.6 per cent higher than what it posted a year earlier.
Profit margin, which determines how much of revenue has turned into profit, was 31.9 per cent. It was 33.1 per cent a year before.
