Zenith Bank Plc (ZENITH)has released its Financial Year 2017 results which showed that Gross earnings was higher by 46.69% during the year at NGN745.19 billion – 55.14% higher than Bloomberg’s polled estimates, and 8.49% higher than our forecast.

The bank made a profit before tax (PBT) and profit after tax(PAT) stood at NGN203.46 billion andNGN177.93 billion, 29.804 Bloomberg’s polled forecasts of NGN193.59 billion and NGN159.52 billion.

According to Condros Capital the bank’s NIR surged by 119.18% to NGN270.56 billion, owing to significant rise in trading income by 456.29%.As a result, total operating income in the year was 45.36% higher at NGN528.55 billion – 178.00% higher than polled expectation.
The bank’s Loan impairment provision surged by 203.64% to NGN98.23 billion – 83.40% higher than our forecast.Operating expenses was 29.99% higher than the previous year at NGN226.86 billion, and 3.50% than our estimate of NGN219.20 billion.

Over Q4-2017, Gross earnings (+41.83% q/q and +67.59% y/y) increased to NGN212.92 billion – its second highest during the year, after Q2-2017’s NGN232.70 billion. This came in higher than our forecast by 27.26%.
Interest income also improved by 13.37% q/q and 14.11% y/y to NGN112.84 billion.

The significant upticks in trading income (+361.86% q/q and +535.34% y/y) and other income (+277.65% q/q, +207.59% y/y) during the quarter, muted the decline in fee and commission income (-42.52% q/q and -13.72% y/y), to drive growth in the NIR by +97.07% q/q and +251.45% y/y.
Total opex was higher by 13.73 q/q and 67.38% y/y in the quarter.

Dividend of NGN2.45 (2016: NGN2.02; 2017F:2.15) was proposed, equating to 7.90% yield on price of NGN31.00

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