ZENITH BANK'S ZENITH STILL IN VIEW

In spite of the trying times for banking and finance in 2015, Zenith Bank PLC closed the year with its view of the peaks still intact though blurred a little.
According to audited figures released to the stock market, major blows came from 20% increase in impairment charges, 15.6% rise in interest expense as interest income rose by lower 11.1% and 10.3% increase in operating expenses. All of these percentage were ahead of 7.24% rise in gross earnings from N403343m to N432535m
Zenith, the bank actually recorded an even lower 6.62% increase in gross earnings thus leaving subsidiaries with the job of moving it one digit up.
The group's interest income had closed at N348179m compared to N313422m previously while interest expense grew to N123597m from N106919m.
Impairment charges, on the other hand, ended at N15673m from 2014's N13064m although, remarkably the bank's own provision dropped by 10.5% to N11091m from N12392m.
The third of the blows was as operating expenses closed at N89928m from N81567m almost in the same proportion across the bank and subsidiaries. 
However, the main shock absorber was well managed 6.6% drop in group personnel costs to N67522m from N72320m driven more or less by higher 8% decrease in the bank's own personnel costs to N62428m.
Good helping hand also came from 50.1% rise in Other income to N5302m, 14.3% increase in trading income to N18150m and 65.2% rise in share of associated companies profit to N228n from N138m.
No wonder, tough as the year was, coupled with a lot higher provision for impairment, Zenith Bank ended with 29% profit margin down only very marginally on 2014's group 29.7%.
SO:
* The zenith will be more visible this year if something can be done about operating expenses growth to join personnel cost as shock absorber.
* It is instructive that resultant leap in impairment was from subsidiaries not the bank.

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