By Yakubu LAAH InvestAdvocate
Lagos (INVESTADVOCATE)-Zenith Bank Plc on Wednesday reported its half-year profit after tax (PAT) rose 4.5 percent to N47.445 billion from N45.419 billion in the same period of 2013.

Similarly, profit before tax (PBT) grew 7.0 percent to N57.859 billion in the reviewr period from N54.083 billion in the second half of 2013.

Gross earnings of the Nigerian lender also increased 7.8 percent to N184.434 billion from N171.024 billion in the corresponding period of 2013.

However, at the end of trading on the floor of the Nigerian bourse, share price of the bank dropped 0.20 percent from N25.00 to N24.95 losing 0.5 kobo.

Peter Amangbo, group managing director/chief executive officer (GMD/CEO) of the bank while commenting on the result said the lenders strong results for the first half of 2014 further confirm its continued leadership in consistently delivering superior performance and returns.

‘’Driven by our innovative processes, cutting edge technology and committed staff, the group recorded total revenue of N184.8 billion for the second quarter, which represents an 8.0 percent increase over the 2013 half year. The group also recorded profit before tax (PBT) of N 57.9 billion compared with PBT of N 54.1 billion recorded in the same period in 2013, an increase of 7.0 percent YoY,’’ he said.

According to Amangbo, the group’s strategic focus on creating competitively priced, high quality risk assets is evident in the YoY growth of loans and advances to N1.4tn (10.7percent growth), with a significant decrease in cost of risk from 0.68 percent to 0.44 percent.

’’The growth in risk assets (priced to maximise returns) was effectively matched by a corresponding increase in competitively priced deposits with a view to maximizing net interest margin,’’ the CEO of Zenith Bank said.

He affirmed that the bank remains stable and adequately capitalised, which positions it strategically to take advantage of emerging business opportunities.

‘’The Group’s liquidity ratio of 61 percent and capital adequacy ratio of 23 percent, which are above the regulatory limits of 35 percent and 16 percent respectively, further confirm the group’s capacity to expand,’’ Amangbo said.

The Zenith Bank chief further affirmed that the second half of 2014 has high prospects of increased economic growth and development, presenting the group with ample prospect to grow its customers and business volume. ‘’We therefore anticipate enhanced returns on investment and value-add for our myriad of stakeholders in the years ahead,” he said.

Amangbo said the core banking operations of Corporate, Retail banking and Custodial services contributed 90% of group profit for the six months ended June 30, 2014. The group’s continuous consolidation of its foreign banking subsidiaries resulted in a 10 percent contribution from those entities to the group profit before tax, compared to 7.0 percent in the prior year.

On his part, Ebenezer Onyeagwu, (executive director credit & risk management Division) said the group continued with its strategic growth of risk assets in the first half of 2014, resulting in a growth of 10.7 percent ( NGN 1.41tn) of these assets. ‘’The nature and quality of our risk assets remain one of the best within the industry given that the group closed the second quarter with an NPL ratio of 2.8% and a cost of risk below 1.0 percent. With a loan-to-deposit ratio of 55.8 percent, the group is well positioned to grow its risk assets as more acceptable business opportunities emerge,’’ Onyeagwu said.

He said the group has capacity to explore and take advantage of emerging opportunities for growth in the country and in all other locations where the bank have presence, given its strong capital base, high capital adequacy ratio and competitive loan deposit ratio.

While Stanley Amuchie (chief financial officer) said in the first half the group continued to consolidate its revenue generating capacity as well as increase its market share.” The group’s YoY growth in gross earnings and non-interest income of 7.8 percent and 30.1percent respectively are notable achievements that will be sustained during the year,’’ he said.

Amuchie said in spite of the increasing cost of operations, which is influenced by the unusual operating environment, the group was able to maintain a stable cost of funds and cost-to-income ratio between June 2013 and June 2014.