Zenith Bank Is The Zenith of Alpha – PBT of N177 Billion in 9M 2020

Zenith Bank Plc has recorded a Profit Before Tax of N177.3 billion for 9 months ended September 30, 2020. GTBank put N167 billion during the same period. These are indeed the two best wholly indigenous banking institutions in Nigeria at the moment. They continue to put on really great shows. Yes, their abilities to capture value could be considered legendary when you look at the abysmal state of the Nigerian economy. The National Bureau of Statistics just recorded that the nation has entered recession. Well done Zenith Bank, understanding how to capture value is the most important skill in business.

The Q3 report released by the Nigerian Bureau of Statistics (NBS) showed that Nigeria’s economy has slid into recession for the second time in four years.

“Nigeria’s gross domestic product (GDP) recorded a growth rate of -3.62% (year-on-year) in real terms in the third quarter of 2020. Cumulatively, the economy has contracted by -2.48%,” the NBS said in the report.

It noted further that while the report represents an improvement of 2.48% points over the -6.10% growth rate recorded in the preceding quarter (Q2 2020), it also indicates that two consecutive quarters of negative growth have been recorded in 2020, and growth in Q3 was slower by 5.90% points when compared to the third quarter of 2019 which recorded a real growth rate of 2.28% year on year.

More highlights of the NBS data:

• The contraction in the oil sector represents 7.26% points lower than the growth recorded in the previous quarter (Q2 2020, -6.63%) while the non-oil sector contracted by 2.51% in the review quarter.
• The sector contributed 8.73% to total real GDP in Q3 2020, down from 9.77% and 8.93% respectively recorded in the corresponding period of 2019 and the preceding quarter, Q2 2020.
• The average daily oil production recorded in the third quarter of 2020 stood at 1.67 million barrels per day (mbpd), or 0.37mbpd lower than the average production recorded in the same quarter of 2019 and 0.14mbpd lower than the production volume recorded in the second quarter of 2020.
• On the other hand, The non-oil sector grew by –2.51% in real terms during the reference quarter, which is –4.36% points lower than the rate recorded in Q3 2019 but 3.54% points higher than in the second quarter of 2020.
• In real terms, the non-oil sector contributed 91.27% to the nation’s GDP in the third quarter of 2020, higher than its share in the third quarter of 2019 (90.23%) and the second quarter of 2020 (91.07%).

Looking at Zenith Bank’s 9M 2020 results, the company actually saw positives across key metrics.

• Gross earnings increased to N508.97 billion, +3.6% Y-o-Y.
• Profit Before Tax grew to N177.3 billion, +0.6% Y-o-Y.
• Net interest income increased to N225.18 billion, +4.91% Y-o-Y.
• Impairment charges grew to N25.11 billion, +37.5% Y-o-Y.
• Personnel expenses increased to N59.93 billion, +5% Y-o-Y.
• Loans and advances to customers grew to N2.7 trillion, Up by +32.7% Y-o-Y.
• Total assets increased to N7.97 trillion, +33.4% Y-o-Y.
• Customers deposit grew to N5.2 trillion, +32.2% Y-o-Y.
• Earnings Per Share boosted to N5.07k, +5.6% Y-o-Y.

Meanwhile, Nairametrics reports that banks are not lending, and the central bank has debited some of them.

Deposit Money Banks (DMBs) have collectively suffered a debit of N226 billion in compliance with the Cash Reserve Requirements (CRR) fixed by the CBN.

According to a reliable source, the debit occurred in the week ended November 20, 2020. This follows a whopping N917.5 billion debit recorded a month ago as reported by Nairametrics. The central bank imposed CRR sequesters on banks that fail to meet its minimum lending targets as a percentage of deposits.

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