Both interest income and non-interest income have helped to drive three-digit growth in the topline metrics of Zenith Bank Plc for the third quarter ended September 2023.

This was revealed in the lender’s unaudited third-quarter financial results filed with the Nigerian Exchange Limited.

According to the financial group’s Q3 results,  Zenith Bank recorded 149 percent increase in profit before tax, from N202.5bn in Q3, 2022 to N505bn in Q3, 2023.

Profit after tax also grew by 149 percent from N174.3bn to N434.2bn within the same period.

Despite the challenging macroeconomic environment, interest income grew in the current period by 72 percent to N670.9bn from N390.8bn in Q3, 2022, while non-interest income grew by 186 percent from N212bn to N607.2bn.

In a statement accompanying the financial statements, the group said that “Interest income increased because of the growth in risk assets as well as the effective pricing thereon.

“The non-interest income growth is largely driven by the revaluation gain due to the unification of exchange rates during the year. The cost-to-income ratio reduced from 55.8 percent in Q3 2022 to 37.8 percent in the current period.

“Impairment levels increased due to the deliberate incremental provisions necessitated by the conservative approach towards the heightened risk environment and the creation of a counter-cyclical buffer needed to deal with any impending volatility of exchange rates.  This caused the cost of risk to deteriorate from 1.3 percent in Q3 2022 to 5.5 percent in Q3 2023, however, this is an improvement from Q2 2023 where cost of risk printed at 8.8 percent because of prudent management of risk assets.”

In the first nine months of  2023,  Zenith Bank’s total assets grew by 48 percent to N18.2tn from N12.3tn as of December 2022.

Customers’ deposits grew by 49 percent from N8.98tn in December 2022 to N13.38tn in September 2023.  The growth in customers’ deposits cuts across both corporate and retail segments with the savings portfolio (all currencies) growing from N2.7tn in December 2022 to N4.6tn in September 2023.

Gross loans increased by 48 percent from N4.1tn in December 2022 to N6.1tn in September 2023 due to the revaluation of foreign currency-denominated loans as well as the growth in local currency loans to strategic and thriving sectors of the economy.

The non-performing loan ratio improved to 3.8 percent in the period ended 30 September 2023, which is well below prudential limits. Net interest margin printed at 5.6 percent from 6.2 percent reported in September 2022 due to low yield in government securities.