How securities trading, commissions lift Zenith Bank’s profitability in 2017

FELIX OLOYEDE

Significant improvement in Zenith Bank’s securities trading income and commission on turn-over influenced its better-than-expected performance in 2017.

The lender’s just released 2017 financial statement showed its profit-after-tax was up 37 per cent to N177.93 billion in Q4 2017, buoyed by 456 per cent rise in securities trading gains to N157.97 billion compared to N28.4 billion in 2016 with treasury bills trading, which rose 928 per cent and 242 per cent increase in derivative income during period instrumental to this improvement. Fee and commission which climbed 32 per cent to N90.14 billion also bolstered the bank’s performance.

Zenith Bank grew its gross 47 per cent to N745.19 billion as  interest and similar income rose 23 per cent, while other operating income tumbled -16 per cent on the back of -51 per cent drop in foreign currency revaluation gain, due to the stability in the country’s forex market in the better part of 2017.

The advancement in the bank’s top-line came with a significant rise in costs in 2017 as interest and similar expenses increased 50 per cent to N216.64 billion from N144.38 billion in 2016. Personnel cost was up 9 per cent to N64.46 billion, while operating expenses rose 43 per cent to N148.35 billion during the period under review.

And despite the -8 per cent cut in the bank’s loans and advances to N2.1 trillion, its impairment provision went up by a whopping 204 per cent to N98.23 billion in Q4 2017 against N32.35 billion in the preceding year. Meanwhile, customers’ deposits swelled 15 per cent to N3.44 trillion.

There was a 37 per cent upswing in Zenith Bank’s earnings per share to N5.66 from N4.12 in Q4 2016.

Investors reacted positively to the impressive performance of the bank in 2017, causing its stock to 0.32 per cent to N31 on Monday.