GMD of Zenith Bank Plc., Peter Amangbo
Leading financial institution, Zenith Bank Plc., has released its full year (FY) 2017 results. The summary of the results indicates that strategic Gross earnings was higher by 46.69% during the year at NGN745.19 billion which is 55.14% higher than Bloomberg’s polled estimates, and 8.49% higher than other market forecast.
Other key figures showed that interest income (+23.42%) increased to NGN474.63 billion – lagging our estimates marginally by 1.59%.
NIR surged by 119.18% to NGN270.56 billion, owing to significant rise in trading income by 456.29%.
As a result, total operating income in the year was 45.36% higher at NGN528.55 billion – 178.00% higher than polled expectation.
Within the period under review, loan impairment provision surged by 203.64% to NGN98.23 billion – 83.40% higher than our forecast.
Operating expenses was 29.99% higher than the previous year at NGN226.86 billion, and 3.50% than our estimate of NGN219.20 billion.
PBT and PAT stood at NGN203.46 billion and NGN177.93 billion, 29.80% and 37.24% higher than their respective figures in the previous year, and Bloomberg’s polled forecasts of NGN193.59 billion and NGN159.52 billion.
Over Q4-2017, Gross earnings (+41.83% q/q and +67.59% y/y) increased to NGN212.92 billion – its second highest during the year, after Q2-2017’s NGN232.70 billion. This came in higher than our forecast by 27.26%.
Interest income also improved by 13.37% q/q and 14.11% y/y to NGN112.84 billion.
The significant upticks in trading income (+361.86% q/q and +535.34% y/y) and other income (+277.65% q/q, +207.59% y/y) during the quarter, muted the decline in fee and commission income (-42.52% q/q and -13.72% y/y), to drive growth in the NIR by +97.07% q/q and +251.45% y/y.
Loan impairment provision (+999.33% q/q and +387.74% y/y) surged to NGN51.17 billion during the quarter – 686.74% higher than our estimate of NGN6.51 billion.
Total opex was higher by 13.73 q/q and 67.38% y/y in the quarter.
PBT and PAT came lower than their respective quarters by 15.67% and 9.68%, but 103.79% and 64.64% higher than their previous year values at NGN50.91 billion and NGN48.70 billion. The PAT and PBT came 4.54% and 22.44% higher than our estimates.
Dividend of NGN2.45 (2016: NGN2.02; 2017F:2.15) was proposed, equating to 7.90% yield on today’s price of NGN31.00.
