May 4, 2021/Cowry Asset Research
In line with our expectations, Zenith Bank Plc’s financial result in FY 2020 was positive amid increase in capital gains from traded fixed income securities, foreign currency revaluation gain and lower cost of funds as rates across maturities crashed to a record low levels. Also, lower company income tax expense aided the boost in profitability as payment of dividend tax worth N22.15 billion in FY 2019 did not recur in the review period. Hence, the Tier-1 bank profit attributable to shareholders improved despite the COVID-19 pandemic challenges and the slump in economic activities in FY 2020.
We expect ZENITHBANK to grow its profit after tax marginally and sustain its dividend payout of N3.00, in a bear case. Hence, with the tier-1 bank delivering 13.95% dividend yield amid our Bb performance rating, we maintain a “BUY” recommendation on it shares.
Kindly click here to download details of our investment recommendation on ZENITH Bank Plc.
