Business
Zenith Bank builds N2.6trn assets in three months, sheds N200bn in bad loans
Zenith Bank Plc expanded its balance sheet by N2.6 trillion in the three months of operations in the second quarter (Q2) to close with a half-year reading of N16 trillion.
This is one of the most aggressive asset expansions seen in the business of banking around the world from N12.3 trillion closing figure in 2022 and from N13.4 trillion at the end of the first quarter.
There is equally a record throw-off of over N200 billion in bad loans in the three months of Q2 that consumed 79.4 percent of net interest earnings at half-year.
The asset expansion represents a jump of 29 percent in the bank’s large balance sheet in six months, meaning the creation of additional assets of N3.6 trillion over the short period.
This sets the bank pressing keenly on who rules the Nigerian banking industry by the size of the balance sheet.
The half-year audited financial report of the bank at the end of June 2023 shows equally top-speed growth on earnings that on the face of it speak of significantly increased ability in converting rapidly growing assets into much more rapidly advancing revenue.
The rapidly advancing revenue also yielded much more advancing growth in profit — all leading to a big harvest for shareholders.
Gross earnings of the group expanded by 139 percent to N967.3 billion at half year, close to five times the 29 percent increase in assets and already ahead of the closing gross income of N945.6 billion for last year.
After-tax profit rose much faster at 162 percent to N291.6 billion over the same period, already beating the full-year figure of N223.9 billion in 2022.
The bank’s aggressive growth strategy has been on since last year when it led asset expansion among the big league players in the banking industry with an increase of 30 percent, amounting to a creation of more than N2.8 trillion in new assets in the year.
Leading the rapid expansion of the balance sheet are derivative assets that surged from less than N50 billion in the same period last year to N632.2 billion at half-year.
Lending to other banks rose by 47 percent to N1.9 trillion, loans and advanced grew by 25.9 percent to over N5 trillion while investment securities portfolio expanded by 17 percent to over N2 trillion.
The spur for the towering earnings for the bank came from a huge foreign exchange (FX) windfall, amounting to N355.6 billion, swelling from an FX loss of N6.2 billion in the same period last year.
The huge inflow provided a saving grace for the bank from the massive credit loss of over N200 billion that rolled in in Q2 from only N7.73 billion in the first quarter (Q1).
The half-year loan loss charges of N207.9 billion is already well ahead of the full year figure of N123.3 billion the bank recorded in 2022.
The loan losses created a deep hollow in the bank’s income statement with a big cut of 66.2 percent in net interest income after loan impairment charges from N159.6 billion down to N53.9 billion at half-year.
That could have created a loss for the bank at half-year but for the FX windfall that filled up the hollow dug by loan impairment expenses and changed the earnings story to the cheer of shareholders.
Spurred by the FX gain, other operating income soared from a loss of N655 million in the same period last year to close at N368.7 billion at the end of half-year operations in June 2023.
Reflecting the strong growth in earning assets, the bank achieved an outstanding growth of 71.9 percent in interest income, amounting to N415.5 billion at half-year.
However, the cost of funds grew much faster over the same period at 169.5 percent to stand at N153.6 billion.
Massive growths in cost of funds and credit loss charges were the two critical challenges that the bank’s management faced in operations in Q2. The two cost lines consumed 87 percent of the interest earnings of the bank at half-year.
This is just as we highlighted at the end of Q1 that “profit prospects in the coming interims will be shaped by the impact of cost of funds on margins — whether it sustains on the downward side or reverses. Loan loss expense is also to be watched — whether it stays moderated and remains a cost saver or jerks up to the revenue consuming side”.
The bank, however, saved some cost from its moderated operating expenses, which added to the huge FX gain to swell the bottom line. Net profit margin is up from 27.5 percent to 30.2 percent over the review period.
The directors have announced an interim cash dividend of 50 kobo per share to shareholders with company register scheduled to close on 25th September and payment to be made on 29th September 2023.
Business
31 electricity towers affected as vandals destroy transmission lines in Edo communities
The Transmission Company of Nigeria (TCN) says vandals in Benin, Edo state, have destroyed 31 transmission towers.
In a statement on Friday, Ndidi Mbah, TCN’s director of public affairs, confirmed that vandals attacked transmission towers in Okada and Ofosu communities along the 330kV Benin-Egbin and Benin-Omotosho transmission lines.
Mbah said the vandalised towers, which suffered significant damage with critical components removed earlier in November, were discovered by TCN linesmen during a routine patrol.
“A total of 31 towers were affected in this incident,” she said.
“TCN engineers from the Benin Sub-Region have initiated repairs to prevent the collapse of the affected towers and to avoid disruption of bulk power supply.”
‘AHOADA-YENAGOA LINE UNDER REPAIR TARGETED BY VANDALS’
Mbah also said its Ahoada-Yenagoa 132kV line, which was under repair following a previous attack, was once again targeted by vandals.
The TCN spokesperson confirmed that the attack, which occurred on November 19, affected towers 29 to 31 and resulted in the theft of approximately one-third of the conductor.
On August 14, TCN announced that Bayelsa state would face a prolonged power outage following the destruction of 13 transmission towers along the Ahoada-Yenagoa 132kV double circuit transmission line by vandals.
The transmission company, on October 29, reported that 65 percent of the damaged transmission towers had been repaired.
The company said 17 transmission towers had been successfully erected, with work continuing on the remaining three.
“A team of TCN engineers, led by Engr. Emmanuel Akpa, General Manager of the Port Harcourt Region, has conducted an inspection of the site,” the statement reads.
“Preliminary findings indicate that the incident occurred at night. In an attempt to prevent further theft while repair arrangements are being made, local security has been engaged at Ula Ikata in Ahoada East LGA to secure the site until repairs are completed.
“Additionally, the line will be energized from the Ahoada end as a preventive measure.”
Mbah added that efforts are underway to replace the stolen 250mm conductor.
Despite challenges posed by difficult terrain and flooding, she said the restringing of the Ahoada-Yenagoa 132kV line is approximately 85 percent complete.
The public relations officer stressed that the incidents underscore the urgent need to address the growing problem of vandalism and theft, which continue to affect Nigeria’s power infrastructure.
She urged the public to support efforts to tackle such criminal acts, which have hindered the expansion and stability of the national grid.
Mbah also called on security operatives and local communities to remain vigilant in protecting power infrastructure in their areas as TCN intensifies its efforts to safeguard its installations.
Business
NCAA issues aerodrome certification for Lagos, Abuja international airports
The Nigeria Civil Aviation Authority (NCAA) has issued Aerodrome Certification for Murtala Muhammed International Airport in Lagos and Nnamdi Azikiwe International Airport in Abuja.
This recertification is a significant achievement, highlighting the ongoing improvements in the safety standards of Nigeria’s international airports.
The announcement was conveyed via a post on the official X (formerly Twitter) account of the Federal Airports Authority of Nigeria (FAAN) on Friday.
The Aerodrome Certificates were formally presented to the Managing Director/Chief Executive of FAAN, Mrs. Olubunmi Kuku, by the Acting Director General of the NCAA, Capt. Chris Najomo.
“@NigeriaCAA just issued Aerodrome Certification for the Murtala Muhammed International Airport Lagos and the Nnamdi Azikiwe Airport Abuja. The recertification is a major boost and attestation to the continued improvements of the safety standard of our Airports,” the tweet read in part.
The certification confirms that Lagos and Abuja airports adhere to the strict safety, operational, and technical standards of the International Civil Aviation Organization (ICAO). This milestone is anticipated to enhance trust among domestic and international airlines, strengthening Nigeria’s standing in global aviation.
Business
Lagos state government plans traffic diversion in Ikeja for 10km Capital City Race today
The Lagos State Government has announced plans for a traffic diversion to accommodate the 10km Capital City Race scheduled for Saturday, November 23, 2024.
The race, which runs between 5:00 AM and 11:00 AM, will affect several major roads in the Ikeja axis, requiring motorists to explore alternative routes during the event.
A statement published on the official X (formerly Twitter) account of the Lagos State Commissioner for Transportation, Oluwaseun Osiyemi, on Friday, highlighted the affected routes.
These include Shoprite Alausa, Billings Way, Kudirat Abiola Way, Opebi Link Bridge, Allen Avenue, Adeniyi Jones, and Oba Akran Avenue.
The race will conclude at the Police College Sports Secretariat/Gym. Junctions and intersections along these roads will be temporarily blocked and manned by officials from the Lagos State Traffic Management Authority (LASTMA), the Nigeria Police Force (NPF), the Federal Road Safety Corps (FRSC), and the Lagos State Neighborhood Corps (LSNC) to ensure a smooth event.
“The Lagos State Government has announced that traffic will be diverted to accommodate the maiden edition of the 10-kilometer Capital City Race between 5:00 am and 11.00 am tomorrow Saturday, 23rd November, 2024.
“To this end, the following route starting from; Shoprite Alausa Ikeja inwards Billings Way to Kudirat Abiola Way, Opebi Link Bridge, Opebi Glo Tower inward Allen Avenue, Allen Junction, GTBank on Adeniyi Jones, AP Filling Station on Oba Akran Avenue, Samsung Authorized Service Centre to Police College Sports Secretariat/Gym will be partially closed off to vehicular movement.
“Consequently, all junctions and intersections from Shoprite Alausa Ikeja to the destination (Police College Sports Secretariat/Gym) will be blocked with barriers, manned by LASTMA, NPF, FRSC, and LSNC to prevent other road users access to the main race corridor,” the statement read in part.
The Lagos State Commissioner for Transportation urged motorists to remain patient as the road closures are part of the traffic management plan for the event. He added that intersections will be intermittently reopened as the race progresses to minimize inconvenience for road users.
Motorists are advised to plan their movements accordingly and cooperate with traffic officials to ensure the success of the inaugural Capital City Race.
In addition to the planned traffic diversion in Ikeja for the 10km Capital City Race, other traffic diversions are currently in effect across Lagos to accommodate critical infrastructure projects.
The Lagos State Government recently announced a 15-month traffic diversion at Mile 2, which began on November 11, 2024, to facilitate the construction of the new Transport Interchange Terminal. This project aims to integrate rail, bus, water, and non-motorized transport, addressing the city’s growing transportation needs.
The diversion affects Loop 1 on the Apapa-bound lane and Loop 4 on the Badagry-bound lane and will last until February 16, 2026. Motorists are advised to use alternative routes, such as Akinwande Road for Badagry-bound traffic and Durban Road for Apapa-bound traffic, to ease congestion.
Additionally, a three-month traffic diversion on the Marine Bridge, outbound Apapa, commenced on Monday, November 18, 2024. This diversion, set to run until February 25, 2025, is to allow for urgent asphalt repairs overseen by the Federal Ministry of Works.
Motorists heading toward Lagos Island are advised to use the Eko Bridge via Costain Roundabout, while those heading to Ijora Causeway or Iddo can navigate through Ijora 7up or other designated routes.
These diversions are part of ongoing efforts by the Lagos State Government to improve transportation infrastructure while minimizing disruption for road users.
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