Zenith Bank’s 2024 Q1 profit up 41% - Boosted by loan, asset and deposit growth

Zenith Bank (Ghana) Ltd emerged from the first quarter (Q1) of 2024 with impressive financial results, showcasing a robust performance across profitability, liquidity and capital adequacy. 

The Bank's unaudited financial statements for the period revealed a continuation of the stellar performance in 2023 with a 41.03 per cent year-on-year (YoY) growth in profitability to GH¢306.5 million, compared with GH¢217.3 million in the same period of 2023.

This performance was driven by a marked increase in both interest income and non-interest income, with interest income growing by 59 per cent to GH¢437.6 million in Q1 2024 from GH¢275.2 million in Q1 2023.

Consequently, net interest income, which reflects the difference between interest income and interest expense, also saw a substantial rise of 59.2 per cent to GH¢302.2 million in Q1 2024, up from GH¢189.8 million in Q1 2023.

Fees

Fees and commission income also grew by 9.6 per cent to GH¢64.3 million in Q1 2024 compared to GH¢58.7 million in Q1 2023. This increase, in addition to the trading income of GHS91 million, helped to diversify Zenith Bank's revenue streams.

The bank’s balance sheet also defines its strategic growth as its total assets grew by 39.6 per cent to GH¢15.1 billion in Q1 2024, from GH¢10.8 billion in the comparative period of 2023.

A striking feature of this growth was a 54.9 per cent increase in loans and advances to GH¢2.1 billion in Q1 2024, reaffirming the Bank's commitment to enhancing credit availability to various real sectors of the economy.

This also suggests a strong demand for credit from businesses and consumers, potentially indicating a pick-up in economic activities. The growth was also reflected in a GH¢1.75 billion increase in investment securities year on year, underscoring the Bank’s strategic approach to diversifying its portfolio of earning assets.

Deposits

Deposits from customers reached GH¢12.7 billion in the first quarter of 2024 compared to GH¢9.3 billion last year, indicating a 36.4 per cent increase year on year. This surge not only reflects the growing trust and confidence of the Bank’s clientele but also underscores its reputation for delivering exceptional value and customer service.

Beyond profitability, the Bank maintains a firm grip on its financial well-being. Its liquidity ratio, a key metric for measuring a Bank's ability to meet short-term obligations, improved to 99.84 per cent in Q1 2024, compared to 92 per cent in the same period last year. This indicates Zenith Bank Ghana's exceptional capability to manage its cash flow and fulfil its short-term financial commitments.

Furthermore, the Bank boasts an impressive Capital Adequacy Ratio of 31.76 per cent at the end of Q1 2024, surpassing the regulatory minimum requirement of 10 per cent. This robust capital adequacy ratio is a testament to the Bank’s strong capital base and its ability to absorb potential losses and maintain financial stability during economic downturns.

Improvement

Zenith Bank Ghana’s credit quality continues to improve, notwithstanding the growth in risk assets. The Bank's Non-performing loans ratio dropped from 5.05 per cent in Q1 2023 to 2.14 per cent in Q1 this year, suggesting credit risk management strategies are proving effective, leading to a high-quality loan portfolio.

Mr Henry Onwuzurigbo, the Managing Director/CEO of Zenith Bank (Ghana) Ltd. gave the assurance that, "Our approach is to deepen our understanding of customer needs and to provide financial solutions that will foster beneficial synergies for all stakeholders.

Our commitment to this strategy has been pivotal in achieving the remarkable results we see today, and we remain extremely grateful to customers for the beneficial relationship over the years. We will continue to team up with them for excellence in the remaining quarters of the year."