April 7, 2026/Cordros Report

Zenith Bank Plc (ZENITHBANK) released its audited 2025FY financial results this morning, delivering a modest 0.7% y/y growth in profit after tax (PAT) to NGN1.04 trillion (2024FY: NGN1.03 trillion). Earnings performance was supported by a strong expansion in net interest income (+52.7% y/y), which sustained bottom line growth despite a sharp reversal in investment securities gains. Ultimately, the board proposed a final dividend of NGN8.75/s (2024FY: NGN4.00/s), translating to a dividend yield of 8.5% based on the last close of NGN103.00/s.

Interest income grew by 35.0% y/y to NGN3.67 trillion, driven by stronger earnings across key asset classes, particularly investment securities (+57.9% y/y), loans to customers (+20.2% y/y), and banks (+27.1% y/y). This was supported by an expansion in investment securities (+29.5% y/y), while loan growth remained more moderate (+4.9% y/y).

Interest expense, however, rose only marginally by 4.1% y/y to NGN1.03 trillion, as the bank’s deleveraging efforts in its borrowings (-68.2% y/y to NGN651.16 billion) helped moderate the impact of higher customer deposit costs (+22.9% y/y). Consequently, net interest income expanded sizably by 52.7% y/y to NGN2.64 trillion. After accounting for credit impairment charges, which rose 12.7% y/y to NGN742.19 billion, net interest income ex LLE surged by 77.3% y/y to NGN1.90 trillion.

Non-interest income declined sharply by 63.1% y/y to NGN405.53 billion, driven entirely by trading losses of NGN63.11 billion (vs gain of NGN1.10 trillion in 2024FY). This single line item remained the primary drag on non-funded income, weighing on an otherwise solid underlying performance, with net fees and commissions growing by 41.1% y/y to NGN291.80 billion and the bank recording FX revaluation gains of NGN105.98 billion (2024FY: NGN178.02 billion loss).  As a result, operating income increased by 6.1% y/y to NGN2.30 trillion.

Operating expenses grew by 23.3% y/y to NGN1.04 trillion, driven by elevated personnel costs (+44.1% y/y), AMCON levy (+54.7% y/y), and IT expenses (+36.6% y/y). The cost-to-income ratio consequently deteriorated to 34.1% from 29.8% in 2024FY.

Overall, pre-tax profit declined by 4.8% y/y to NGN1.26 trillion, while a lower tax expense (-24.2% y/y) provided some support to bottom line performance, resulting in a marginal 0.7% y/y growth in profit after tax.

Comment: ZENITHBANK’s 2025FY results highlight the resilience of its core franchise, with strong net interest income growth providing sufficient support to sustain earnings despite the full reversal of exceptional investment securities gains that bolstered the 2024FY base. Going into 2026, we expect core momentum to be sustained, driven by continued growth in earning assets and an improved funding mix. We anticipate stronger bottom line performance as the bank has taken significant provisioning on legacy forbearance and impaired loans, creating room for more moderate credit costs in 2026 and supporting earnings expansion. Our estimates are under review.