July 29, 2026/Zenith Bank Plc
Zenith’s credit expansion in the first quarter outpaced every other line on the balance sheet. Gross loans and advances to customers rose 8.6% year-on-year to ₦12.04 trillion, while net loans — after impairment allowances — jumped a sharper 13.2% year-on-year to ₦11.38 trillion, reflecting both fresh credit extension and an improving quality of the existing book.
That improvement in quality is the more important story for analysts and investors skeptical of loan growth achieved by lowering underwriting standards.
Zenith’s non-performing loan ratio — Stage-3, credit-impaired loans as a share of gross loans — stood at 3.79% at the end of March 2026, essentially flat against 3.82% at the end of 2025 but down sharply from 4.70% at the end of 2024, continuing a multi-year de-risking trend even as the loan book itself expanded.
Independent disclosures from full-year 2025 put Zenith’s loan-loss coverage ratio at 172.6% — meaning provisions held against bad loans exceed the value of the impaired loans themselves by more than 70%, a comfortable buffer well above what regulators require.
Growing the loan book faster than the balance sheet while simultaneously cutting the bad-loan ratio is a combination few Tier-1 African lenders can claim in the same quarter.
Interest and Fee Income: A Diversifying Revenue Engine
Zenith’s income statement shows a bank successfully diversifying away from pure interest-rate carry. Gross earnings for the quarter rose 6.1% year-on-year to ₦1.01 trillion, but the composition of that growth is the more telling detail.
Net interest income — the core spread between what the bank earns on loans and investments and what it pays on deposits — climbed 7.3% to ₦634.1 billion, the largest net interest income of any Nigerian bank in the quarter.
The standout, however, is fee income. Net fee and commission income surged 44.6% year-on-year to ₦81.0 billion, up from ₦56.0 billion a year earlier — a growth rate more than six times faster than net interest income and a clear signal that Zenith is successfully monetizing transaction banking, digital channels and card services rather than relying solely on its loan book for growth.
For full-year 2025, the bank’s net interest margin stood at 13.7%, one of the widest among Nigerian Tier-1 banks and a reflection of disciplined asset-liability pricing through a high-rate environment.
Return on Equity: Profitability That Outruns Balance-Sheet Growth
Return on average equity is where Zenith’s capital discipline shows up most clearly. The bank closed full-year 2025 with a return on average equity of 23.2% and a return on average assets of 3.4%, both figures independently disclosed alongside its FY2025 results.
That profitability was rewarded directly at the shareholder level: Zenith’s board doubled its total dividend for 2025 to ₦10.00 per share — split between a ₦1.25 interim payout and a ₦8.75 final dividend — from ₦5.00 the previous year, distributing roughly ₦410.7 billion to shareholders, one of the largest dividend payouts in Nigerian corporate history.
Cost discipline underpins the returns: full-year 2025 cost-to-income ratio came in at 45.2%, while the bank’s own Q1 2026 figures point to further improvement, with operating expenses absorbing roughly 47.15% of operating income for the quarter — a leaner ratio than the FY2025 run rate.
Against peers, the ROE story favors Zenith on a risk-adjusted basis.
Capital Adequacy: A Fortress Balance Sheet
Regulators and rating agencies alike have flagged Zenith’s capital position as a standout. The bank’s capital adequacy ratio stood at roughly 25% at the end of full-year 2025 and its liquidity ratio at 71%, both comfortably clear of the Central Bank of Nigeria’s regulatory minimums for systemically important banks. Fitch Ratings’ most recent update pegs Zenith’s standalone total capital ratio even higher, at 25.8% at end-2025, against a fully-loaded core capital ratio of 28% — a buffer Fitch frames as well in excess of regulatory requirements.
Equity research from CardinalStone projects that buffer widening further, forecasting a capital adequacy ratio of 28.7% for 2026 and 30.8% for 2027 as retained earnings continue to compound. A capital position this deep gives Zenith room to absorb credit shocks, fund loan growth internally, and — as its international ambitions make clear — write bigger cross-border checks without straining its own solvency.
A Historic Euromoney Double
The market recognition arrived in force this month. At the Euromoney Awards for Excellence 2026, presented July 16 at The Peninsula London Hotel against a record field of more than 770 entries, Zenith Bank was named both “Africa’s Best Bank” and “Nigeria’s Best Bank” — the latter for the second consecutive year, having also won the national title in 2025.
Zenith Bank, Group Managing Director Dr. Adaora Umeoji called the double “a reflection of the trust of our customers, the dedication of our unicorn workforce, and our unwavering commitment to building a truly African global financial institution.”