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Zenith Bank tops up balance sheet to N18trn in Q3

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Zenith Bank Plc grew the balance sheet by N2.1 trillion in the third quarter (Q3) to close at N18.1 trillion at the end of the nine months of operations.

This is a sustaining rapid growth in assets for three quarters running from N1.1 trillion in the first quarter (Q1) to N2.6 trillion increase recorded in the second quarter (Q2) and further to N2.1 trillion expansion in Q3.

Over the nine months of operations so far, the bank has expanded the size of the balance sheet by nearly N6 trillion from the closing figure of N12.3 trillion in 2022.

Bad loans are experiencing the same galloping speed growth with assets at N210 billion at the end of September, more than five and half times the loan loss expenses of N37 billion the bank recorded in the same period in 2022.

The Q3 financial report of the bank at the end of September 2023, shows that the asset volume drivers are loans and advances, which grew by N1.8 trillion to N5.8 trillion, lending to other banks, which rose by N1.2 trillion to N2.5 trillion and cash and bank balances, which expanded by N940 billion to N3.1 trillion over the respective closing numbers in 2022.

Other top growing assets over the same period include treasury bills which grew by N598 billion to N2.8 trillion, investment securities, which swelled by N566 billion to N2.3 trillion, derivative assets, which rose by N433.8 billion to N483.7 billion and other assets that advanced by N218 billion to close at N431.5 billion.

Asset expansion was financed by a huge increase of N4.4 trillion in customer deposits in nine months to stand at N13.4 trillion at the end of Q3, an expansion of N901 billion in borrowings to N1.9 trillion and a boost of N523 billion in shareholders’ funds to over N1.9 trillion.

The high growth in assets translated into an outstanding increase in revenue with gross earnings jumping by 114 percent year-on-year to close at N1.3 trillion at the end of Q3. The nine-month revenue figure has already beaten the 2022 full-year gross earnings figure by N383.5 billion.

Leading revenue growth is foreign currency revaluation gain of over N378 billion – which multiplied more than 34 times from N11 billion in the same period last year.

The bank’s main income line – interest earnings– grew by 71.7 percent year-on-year to hit N670.9 billion at the end of Q3, already ahead of the 2022 full-year figure of N540 billion.

The cost of funds keeps growing far ahead of interest earnings, which continues to impinge on margins. At N255.7 billion, interest expenses rose by 137 percent compared to the 71.7 percent improvement in interest income.

Net interest income, therefore, grew at a slower pace than interest income at 46.8 percent to N415.2 billion over the period.

The bank was pressured further by the upsurge in loan losses, which consumed all the increase in net interest earnings, leading to a drop in net interest earnings after loan impairment charges from N245.8 billion to N205.2 billion over the review period.

The drop in net income was, however, remedied by a huge increase in other income from N20.5 billion to N400.4 billion over the period– which was driven by the windfall from foreign exchange revaluation.

A moderated increase in operating expenses supported the strong growth in other income, powering an elevated bottom line.

Zenith Bank posted an after-tax profit of N434.2 billion at the end of Q3, which towers a clear 149 percent above the corresponding third quarter profit figure of N174.3 billion in 2022.

The Q3 profit figure also stands at 94 percent above the full-year figure of N223.9 billion in 2022.

Rapid increases in the cost of funds and credit loss charges remain the two critical challenges facing the bank’s management so far this year, though their combined claim on interest income went down from 87 percent at half-year to 69.4 percent at the end of Q3.

Net profit margin is further up from 30.2 percent at half-year to 32.7 percent at the end of September 2023, and from 28.1 percent in the same period last year.

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Home delivery of passports to start in June, says Tunji-Ojo

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Olubunmi Tunji-Ojo, minister of interior, says home delivery of passports will start in June.

Tunji-Ojo spoke on May 24 when he inspected the electronic gates at the Nnamdi Azikiwe International Airport’s new terminal in Abuja.

He said the delivery will not include every location to avoid overloading and damaging the system.

The minister said the Nigerian Immigration Service (NIS) would start home delivery in Lagos, Port Harcourt, Kano, and Abuja.

Tunji-Ojo said for those in the diaspora, the service would begin in the United States and the United Kingdom, with testing to ensure its effectiveness.

According to the minister, the lack of data centres delayed the home delivery of passports.

He said NIS had been using a private company’s data centre but needed to establish a permanent solution to address the issue.

“We have completed the whole solution but when we came on board, we realised that the data centre was not really there,” Tunji-Ojo said.

“We were leveraging on a private company data centre and we appreciate them for that assistance. We think that it is better to create a permanent solution to problems rather than quick fixes.

“We could have done it in February but we had to build our data centre from scratch to be able to keep the integrity of our data and national security intact. This is more important.

“It is disgraceful that NIS is 61 years old and NIS is a custodian of biometric data of Nigeria and we believe that NIS should be in charge of the data of Nigeria.

“It is not acceptable that this data is domiciled in a third party and that is why we have been able to do this.”

Tunji-Ojo said the data centre has been constructed and the passport delivery solution has been resolved.

“It is about national security and I can assure you that It is comparable with anyone you can find anywhere in the world,” he said.

“We have built the data centre, sorted the passport delivery solution and done the final presentation in terms of technology deliverables and the tracking solution which will all be embedded in the application we have so we do not create multiple lines of failure.”

‘E-VISA PROCESSING TIME REDUCED TO 48 HOURS WITH NEW TECHNOLOGY’

Tunji-Ojo said the final presentation of the electronic visa has been completed, adding that it will reduce the visa processing time from 72 hours to 48 hours.

“The passport automation process is almost complete,” he added.

Also speaking, Kemi Nandap, comptroller-general (CG) of NIS, said over 107,000 passports are ready for collection and urged applicants to pick them up.

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Naira gains at official window, depreciates at parallel market

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The naira depreciated to N1,510 against the dollar at the parallel section of the foreign exchange (FX) market on Friday.

The current FX rate signifies a decline of 0.33 percent from the N1,505/$ reported on May 22.

Currency traders, also known as street traders, in Lagos, quoted the buying rate of the local currency at N1,485/$ and the selling rate at N1,510/$ — leaving a profit margin of N25.

At the official window, the naira appreciated by 0.19 percent against the dollar from N1,485.66/$ on May 23 to close at N1,482.81 on Friday.

According to FMDQ Exchange, a platform that oversees the official window, a dollar was sold as high as N1,511 and at a low rate of N1,400 during trading hours.

The daily foreign exchange market turnover was $556.25 million.

On May 23, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), said the pains caused by ongoing monetary and fiscal reforms will soon be over if Nigerians remain focused on supporting the policies.

“As the Governor of the Central Bank of Nigeria, I remain committed to repositioning the bank to deliver meaningful data-driven and sustainable solutions with a clear positive impact on the livelihood of all Nigerians,” he said.

“However, addressing these challenges requires the concerted effort of all stakeholders, especially the monetary and fiscal authorities working in harmony.”

Cardoso said the CBN will continue to implement bold reforms to make the economy work for all Nigerians, and the apex bank has started tightening monetary policy to combat inflationary pressure and produce favourable outcomes.

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Turkish Airlines to resume flight operations to Nigeria today

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Turkish Airlines says it will resume flight operations to Nigeria on May 25 following the disruption of the company’s operations.

In a report by NAN on Friday, the airline said the decision came after discussions with officials from the Nigerian Civil Aviation Authority (NCAA) and the Federal Airports Authority of Nigeria (FAAN) during which they assessed its request.

“Due to actions at our counter at the Lagos Murtala Muhammed International Airport that jeopardised our flight safety and continued for four days, we had to cancel our scheduled flights to Lagos as of Tuesday, May 21,” Turkish Airlines said.

“Turkish Airlines, prioritising the safety and security of its passengers and crew, will resume flights to Nigeria on Saturday, May 25, as it has done since 2006.

“As long as the NCAA and FAAN authorities take the necessary precautions and maintain safety of flights, crew, Turkish Airlines Lagos personnel, and passengers at the airport, we will continue to operate with the same sensitivity.”

Turkish Airlines said the decision was also influenced by a joint press release from the NCAA and FAAN, which announced that additional security measures would be implemented to prevent similar incidents from happening again.

The airline said Olubunmi Kuku, FAAN general manager, provided a written statement, promising to implement unprecedented measures to ensure the safety of its operations.

“We want to thank the authorities for the assurance they provided, and we will like to emphasise that Turkish Airlines is the airline flying to more countries than any other in the world,” the airline said.

“We adhere fully to the laws and regulations of the countries we operate in and act in accordance with international business ethics principles.

“We have informed the relevant authorities that we will not be able to carry out the scheduled flights until our flight safety is guaranteed and requested assurances from them.”

On May 22, NCAA said it would not hesitate to impose severe penalties on Turkish Airlines for its alleged mistreatment of Nigerian passengers.

NCAA said over 300 passengers were affected by the discord involving the Turkish Airlines and aviation unions, as the carrier has cancelled flights in and out of Nigeria from May 21 until May 23.

The Nigeria Labour Congress (NLC), on May 21, picketed Turkish Airlines in Lagos over the dismissal of some of its members.

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