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Rising N54.7b bad loans weaken Zenith Bank

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Zenith Bank declares N56.5b dividend on N106b profit

Zenith Bank Plc has released its much-awaited first-half results with key performance indicators showing considerable declines in earnings, profitability and quality of assets.

The 148-page report released on Thursday at the Nigerian Stock Exchange (NSE) showed that the bank’s non-performing loans spiked up to N54.67 billion by June 2016 compared with N44.9 billion by the end of 2015.

The proportion of non-performing loans to gross loans worsened to 2.34 per cent by first half 2016 compared with 1.44 per cent recorded in the comparable period of 2015.

The audited report for the six-month period ended June 30, 2016 showed that non-performing loans rose to N54.67 billion by first half of 2016, representing addition of about N10 billion to the full-year classified loans of N44.9 billion.

While gross loans and advances grew by 15.3 per cent during the six-month period, non-performing loans rose by about 22 per cent. Gross loans rose to N2.34 trillion by June 2015 as against N2.03 trillion recorded by the end of 2015.

Gross earnings dropped to N214.81 billion as against N229.08 billion recorded in first half 2015. Profit before tax declined from N72.20 billion to N63.28 billion. Profit after tax declined from N53.18 billion to N44.84 billion. Earnings per share thus declined to N1.43 in first half 2016 as against N1.69 recorded in comparable period of 2015.

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However, the board of the bank has recommended interim dividend per share of 25 kobo for first half 2016, the same rate paid in 2015.

Zenith Bank ranked among the top 10 losers at the stock market as its share price declined by 2.50 per cent to close at N15.60.

The first-half 2016 results raised concerns about the prospects of the bank this year. Zenith Bank distributed a total of N56.51 billion to shareholders as cash dividends for the 2015 business year as it bank braced the odds to sustain growths in top-line earnings and profitability.

It paid a final dividend per share of N1.55, bringing total dividend per share for the year to N1.80. This brought the total dividend for the 2015 business year to N56.51 billion as against N53.37 billion distributed for the 2014 business year.

The full-year report ended December 31, 2015 showed that gross earnings rose from N403.34 billion in 2014 to N432.54 billion in 2015. Profit before tax rose by 4.86 per cent from N119.8 billion in 2014 to N125.62 billion in 2015. After taxes, net profit stood at N105.66 billion in 2015 as against N99.46 billion in 2014. Earnings per share improved from N3.16 in 2014 to N3.36 in 2015.

 

 

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