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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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Diesel price increased to N1,462 per litre in June, says NBS

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The National Bureau of Statistics (NBS) says the average price of automotive gas oil (AGO), also known as diesel, was N1,462.98 per litre in June.

In its automotive gas oil (diesel) price watch for June 2024 on Wednesday, the bureau said this represents an increase of 4.20 percent compared to N1,403.96 reported in May.

“The average retail price of automotive gas oil (diesel) paid by consumers increased by 79.32% on a year-on-year basis from a lower cost of N815.83 per litre recorded in the corresponding month of last year (i.e., June 2023) to a higher cost of N1462.98 per litre in June 2024,” NBS said.

“On a month-on-month basis, an increase of 4.20% was recorded from N1403.96 in the preceding month of May 2024 to an average of N1462.98 in June 2024.

“Looking at the variations in the state prices, the top three states with the highest average price of the product in June 2024 include Niger State (N1979.23), Cross River State (N1920.86), and Taraba (N1742.46).

“Furthermore, the top three lowest prices were recorded in the following states namely, Lagos state (N1210.77), Ogun state (N1239.17), and Abuja (N1240.00).”

Based on zonal representation, the bureau said the north-east zone has the highest average diesel price of N1,659.07; while the south-west zone has the lowest price of N1,280.54.

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CBN announces date to hold MPC meeting

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The Central Bank of Nigeria (CBN) has announced its forthcoming monetary policy committee (MPC) meeting.

In a statement on Tuesday, the CBN said its 296th MPC meeting between July 22 and 23.

The committee is the highest policy-making committee of the bank, led by Olayemi Cardoso, CBN governor.

The MPC meeting is set up to review the country’s economic and financial conditions and determine the appropriate monetary policy direction in the short to medium term.

At the last meeting held on May 20 and 21, the committee raised the monetary policy rate (MPR), which benchmarks interest rates from 24.75 percent to 26.25 percent.

The MPC retained the asymmetric corridor at +100 basis points and -300 basis points around the MPR.

The committee also retained the cash reserve ratio (CRR) at 45 percent for deposit money banks and 14 percent for merchant banks.

Speaking to the press after the meeting, Cardoso had said the reason for the interest rate hike was to tame inflation.

He also said the committee’s efforts to contain inflation are yielding results.

On July 15, the National Bureau of Statistics (NBS) in its consumer price index (CPI) report for June, said Nigeria’s inflation rate rose to 34.19 percent in June 2024 — up from 33.95 percent in May.

According to the bureau, the headline inflation rate in June showed an increase of “0.24% points when compared to the May 2024 headline inflation rate”.

NBS also said food inflation surged to 40.87 percent in the month under review as prices of food and non-alcoholic beverages continued to surge.

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Nigerians can now obtain UAE visas, says FG

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Mohammed Idris, minister of information and national orientation, says Nigerians can now apply for and obtain visas to the United Arab Emirates (UAE).

Idris said the federal government has reached an agreement with the UAE to allow Nigerian passport holders to obtain visas for travel to the Arab nation starting today, July 15.

The minister spoke with the State House correspondents in Abuja on Monday, shortly after the weekly federal executive council (FEC) meeting.

He said the agreement includes updated controls and conditions to be fulfilled before the issuance of a UAE visa.

On December 13, 2021, the UAE issued a travel restriction on passengers from Nigeria and the Democratic Republic of the Congo, citing a surge in the countries’ COVID-19 cases among passengers from the two African nations.

However, TheCable reported the travel ban might not be unconnected with the diplomatic row between Nigeria and the UAE over Air Peace’s flight frequency to the Arab country.

Air Peace had requested a slot of three weekly flights from Nigeria to Sharjah Airport in the UAE, but only one was granted by the country’s General Civil Aviation Authority (GCAA).

GCAA said Air Peace should not expect to retain its flight frequency after pulling out of Sharjah Airport; the Nigerian airline, however, denied the claim.

In retaliation for Air Peace’s treatment in the UAE, the federal government dropped Emirate’s slots from 21 to one, leading to the Dubai-based airline suspending all its flights to Nigeria.

In September 2023, the federal government said the airline would resume services in Nigeria, signaling a resolution of the dispute.

The assurance followed a meeting between President Bola Ahmed Tinubu and Mohamed bin Zayed, president of the United Arab Emirates.

But since the meeting and the federal government’s announcement, Emirates has yet to begin scheduled flight operations.

In April, Festus Keyamo, minister of aviation and aerospace development, said Emirates Airlines is prepared to resume flight operations to Nigeria.

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Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others

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