Zenith,GT Bank Post Best Mid Year Result

In what seems a repeat performance, GTBank Plc and Zenith Bank Plc have declared robust results for their 2013 half year operations, raising the prospect of a big haul for the two banking giants at the end of the year, reports Festus Akanbi (Thisday Newspaper)

As money deposit banks make their 2013 first half year results public, there are indications that the neck-to-neck performance of the two leading players in the nation’s banking industry- Guaranty Trust Bank Plc and Zenith Bank Plc- may repeat itself by the time the full year results are compiled later in the year.

This is because a comparative analysis of the first half year performance of the two banks showed sustenance of their remarkable performance in their 2012 financial year.
THISDAY survey also showed that most of the banks that have released their results so far were able to maintain the tempo of the impressive runs started in their 2012 full year results.

GTBank
According to the audited IFRS results for the six months ended June 30 of the GTBank, a profit before tax of N57.36 billion was declared as against N53.64 billion posted in the same period of 2012. Consequently, the bank has recorded an increase of 6.95% in PBT compared to half-year 2012, driven by improved interest income derived from a 14.68% loan book growth from December 2012 and good yields on fixed income securities.

The bank also announced a profit after tax of N49.01 billion as against N45.55 billion recorded in the same period of last year.

The bank recorded earnings per share of N1.73kobo, an improvement of over N1.59 kobo recorded in the same period of 2012. The bank therefore approved a half-year dividend of 25 kobo per share.

Other highlights of the results showed interest income of N92.00 billion, whereas N83.18 billion was recorded in the first six months of last year. The half-year results include gross earnings of N124.2 billion, total assets of N1, 860.49 billion and total deposits of N1, 272.10 billion.

According to the international financial advisory firm, Renaissance Capital, the performance has shown that GTBank remains adequately funded and poised to take advantage of opportunities that may emerge in the market, while maintaining a prudent and conservative approach to lending.

The bank also posted loans to deposits ratio of 70.70%, while non-performing loans to total loans of 3.41% was recorded.

The Managing Director of the bank, Mr. Segun Agbaje, attributed the bank’s success during the half-year period to the continued support of its customers, hard work of its dedicated staff and strong corporate governance standards.

According to him, a major objective for the bank this year is adding value to its stakeholders through excellent customer service delivery, innovative products and value adding services. It is the bank’s beliefs that success on these fronts would enable it deepen its share of market across all sectors and improve profitability, despite today’s extremely challenging business environment. He thanked the customers for their loyalty and staff for their continued hard work and dedication.

Zenith Bank
In the same vein, Zenith Bank announced a profit before tax of N54.1 billion for the six-month period ended June 30, 2013, compared to N50 billion it posted in the corresponding period of 2012.

The results, which were posted on the website of the Nigerian Stock Exchange, showed that the bank’s gross earnings rose by 13 per cent from the N151 billion it reported in the first half of 2012 to N171 billion in the same period in 2013.

It also showed that Zenith Bank’s profit after tax rose from N42.41 billion to N45.419 billion. Following the same pattern, the bank’s interest income grew by 16 per cent from N111 billion to N128 billion, net interest income appreciated by 15 per cent from N79.9 billion to N91.35 billion, while earnings per share rose by 11 per cent from 134 kobo to 144 kobo.

Its customers’ deposits were also up, rising by 18 per cent from N1.701 trillion to N2 trillion, indicating customers’ confidence in the bank. However, its cost to income ratio reduced from 57.2 per cent to 53.3 per cent.

Commenting on the result, Group Managing Director of the bank, Mr. Godwin Emefiele, said, “The second quarter of this year was a particularly challenging one, especially with the commencement of the revised bank tariffs on services and products. This notwithstanding, I am happy to say that Zenith Bank Plc remains steadfastly on course to delivering an impressive 2013 performance.

“The group recorded a modest operating income growth of over 11% YoY on the back of a strong NIM at 8.87%, despite the 19% YoY increase in interest expenses and improved treasury activities and trading income.

“Our balance sheet remained strong and liquid with over 6.7% growth recorded in total assets year-to-date and capital adequacy and liquidity at 27% and 64% respectively.

“We remain determined in our efforts to ensure that our vision of premium returns to all our stakeholders is sustained. To this end, we note the significant progress being recorded in our drive to sustain our leadership position in the corporate end of the market, while seeing substantial growth in our retail banking businesses through a number of products introductions and innovations.”

GTB, Zenith in N100bn League
A review of the audited report for the period ended December 31, 2012 showed that GTB gross earnings increased from N182.408 billion in year 2011 end to N221.940 billion in the review period of year 2012, representing an increase of 21.7 percent.

Profit after tax of GTB rose by 81.3 percent as the bank posted N86.686 billion in 2012 end compared to N47.803 billion recorded in year 2011 end.

Also, profit before tax grew from N62.080 billion in year 2011 end compared to N103,027 billion in the review period of year 2012; indicating a growth of 66 percent.

In terms of asset quality, the bank impressed as non-performing loans (NPL) ratio stood at 3.4 percent compared to 3.5 percent in 2011, while Cost-to-Income ratio improved significantly to 42.7 percent from 52.9 percent in 2011. The Return on Equity (ROE) and Return on Assets (ROA) closed at 33.9 percent and 5.2 percent from the 23.2 percent and 3.7 percent recorded in 2011, respectively.

Zenith Bank, which is in the same position with GTB, recorded gross earnings of N307.082 billion in 2012 compared to N243.948 billion in 2011.

Profit after tax of the bank stood at N100.681 billion in 2012 financial year as against N48.704 billion recorded in 2011. In the same vein, the total non-performing facilities to total credit facilities in 2012 are three percent as against six percent in 2011.

Zenith Bank maintained its dividend boost as it declared N1.60 for its audited year ended December 31, 2011.