Zenith Bank’s Profit After Tax in H1,2020 rises with the aid of using 16.8% to N103.8 billion
Zenith’s gross earnings grew by 4.4 % from N332 billion in H1,2019 to N346 billion in H1,2020.
In a clean demonstration of its robust marketplace percentage in Nigeria’s banking space, Zenith Bank Plc has published a Profit After Tax (PAT) of N103.826 billion in its 1/2 of yr 2020 result, up from N88.882 billion recorded in H1 2019. This confirmed an boom of 16.8%.
This turned into introduced with the aid of using the economic group in a declaration despatched to the Nigerian Stock Exchange on Thursday.
Despite the terrible disruption of financial sports resulting from the COVID-19 pandemic, the Tier-1 financial institution’s gross profits grew with the aid of using 4.4 % from N332 billion in H1,2019 to N346 billion in H1,2020
The financial institution additionally recorded nice boom throughout key economic metrics as follows, Profit Before Tax (PBT) multiplied to N114.124 billion in H1,2020 as towards N111.677 billion said in H1 2019.
As a testomony to its dedication to its shareholders, Zenith financial institution additionally introduced a proposed intervening time dividend 30 kobo according to regular percentage.
About per week ago, Mr. Ebenezer Onyeagwu the Group Managing Director/Chief Executive of Zenith Bank, entreated gamers withinside the non-oil export value-chain which include exporters and economic establishments to play their element withinside the power closer to increasing the nation’s non-oil export base.
Zenith Bank inventory rate recorded a tremendous benefit in its percentage rate after the discharge of this incredible H1,2020 result, gaining 1.47% to shut at N17.20.
Zenith Bank additionally prints a dividend yield of 16.28%, with profits according to percentage currently status at 7.12 and a marketplace capitalization of over N540 billion.
Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020
Vitafoam Nigeria Plc profit revealed 72.10% increase when compared with the N2.39 billion reported in the corresponding period of 2019.
Vitafoam Nigeria Plc has reported in its audited financial statement for 2020 that it made a profit of N4.11billion for the year ended 30 September 2020.
This represents a 72.10% increase in profit when compared with the N2.39billion profit reported in the corresponding period of 2019.
- Revenue increased to N23.44 billion in 2020, 5.21% Y-O-Y.
- Cost of Sales decreased to N12.43 billion in 2020, 8.06% Y-O-Y.
- Gross Profit increased to N11.01 billion in 2020, 25.68% Y-O-Y.
- Other income increased to N638.97 million in 2020, 63.91% Y-O-Y.
- Distribution costs increased to N1.05 billion in 2020, 8.13% Y-O-Y.
- Administrative expenses increased to N4.13 billion in 2020, 10.57% Y-O-Y.
- Operating profit increased to N6.47 billion in 2020, 45.58% Y-O-Y.
- Finance income increased to N106.51 million in 2020, 5.39% Y-O-Y.
- Finance Costs decreased to N930.17 million in 2020, 11.39% Y-O-Y.
- Profit from continuing operations increased to N3.92 billion in 2020, 58.88% Y-O-Y.
- Profit from discontinued operations increased to N191.63 million in 2020, 345.68% Y-O-Y.
- Profit for the year increased to N4.11 billion in 2020, 72.10% Y-O-Y.
What you should know
- Shares of the company have gained 9.6% within the first one hour of trading, largely at the backdrop of news of the company’s impressive performance as the current valuation of the company in the light of its results suggests that the shares of the Company are undervalued at the current price.
- Checks by Themoneymetrics as of 11:10 am today confirmed that the company is on a full bid, as 4,930,245 bids from 23 investors have been placed at the highest price for the day, without a single offer at a price lower than N8.55.
The profitability of the company was beefed up in 2020 on the back of the decrease in the cost of raw materials coupled with the increase in sales from the core segment of the company which led to the 5.21% increase in revenue in 2020.
However, it is important to note that the impressive performance of the Vitafoam Group was also strengthened by the increase in other profit owing to improvement in sales, this helped the company to also grow its revenue from services provided to customers’ after-sales.
GTBank sales for H1, 2020 rises to N225.14 billion
Profit After Tax stood at N94.3 billion in H1, 2020.
Guaranty Trust Bank’s sales for the half-yr of 2020 stood at N225.14 billion as in opposition to 221.87 billion recorded withinside the identical corresponding length of 2019.
However, Nigeria’s main lender’s Profit Before Tax for H1,2020 stood at N109.7 billion as in opposition to N115.eight billion recorded withinside the identical corresponding length of 2019, displaying a decline of approximately 5.2%.
Its Profit After Tax stood at N94.three billion in H1, 2020 as in opposition to N99.1billion recorded withinside the identical corresponding length of 2019.
These had been disclosed withinside the announcement issued via way of means of the tier-1 financial institution to the Nigerian Stock Exchange (NSE) on Wednesday.
It need to additionally be mentioned that the Board of Directors of Nigeria’s maximum treasured financial institution via way of means of marketplace price proposed an period in-between dividend charge of 30 kobos in keeping with regular proportion at the issued capital of 29,431,179,224 Ordinary Shares of fifty Kobo every payable to Shareholders at the sign up of shareholding on the closure date.
Just lately the N755 billion marketplace capitalized financial institution indexed at the Nigerian Stock Exchange and additionally at the London Stock Exchange, disclosed in a notice to its GDR holders that the organization which serves as custodian for this stocks similar to those certificates (Citibank Nigeria) is watching for authorization from the Central Bank to switch dividends for the 2019 economic yr in greenback terms.
Shortly after the discharge of Guaranty Trust Bank incomes end result for H1, 2020, the proportion fee rose barely better via way of means of 0.20% to shut at N25.65
What you need to know; A dividend is a charge made via way of means of a enterprise to its shareholders, normally as a distribution of profits.
When a enterprise earns a earnings or surplus, it reinvests a part of the earnings withinside the business (retained earnings) at the same time as paying a component as dividends to the shareholders.
Union Bank canters onward despite gallop from COVID-19
The rise in interest expense reflects the banks present struggles with generating low-cost deposit.
Union Bank made a profit of N10.7 billion in the Half Year (HY) of 2020 showing a reduced 9% from the N11.9billion posted y/y in 2019. The bank’s gross earnings upped by 10% to N79.9billion as at June 2020 from the N72.4billion in the earlier corresponding period. Interest income grew by 6.2% from N54billion to N57billion in June 2020 y/y, but when we consider interests and related expenses, we observe a 14% slump in the net interest income. These major components (profit, gross earnings and net interest income) at first glance summarily spells out the fortunes and how the bank has thrived thus far in 2020.
UNION is one of Nigeria’s oldest institutions that offers commercial banking services in Nigeria. It further offers wholesale banking services, brokerage, asset management services as well as mortgages through its subsidiaries.
As recently as January 2020, Union Bank divested shares in its London subsidiary and geographically streamlined its operations to harness its perceived abounding opportunities in the Nigerian market.
The Regulations and the Effects
The CBN’s stance on reducing transfer fees and card maintenance fees did impact Union Bank’s income, as commission income and other fees sank. The 24% improvement noticed in Non-interest income emanates materially from Foreign exchange revaluation gain, gains from disposal of fixed income securities and the consistently growing E-business fee income segment that generated N1.2billion in March 2019, N2.1billion in March 2020 and N3.7billion in June 2020.
The increase in Cash Reserve Requirements ratio to 27.5% have further impaired the working capital available and accessible to Union Bank as it shelled out a further N118.7billion from Q2 in fulfilment of the increased cash reserve requirement.
Banks are having to adjust to the severity of the mandates and policies from the CBN which though understandably paramount, are perceived by some to be one-sidedly focused on consumer protection at the severe discomfort of financial institutions.
A snapshot of the major components in the profit or loss statement and their variances in billions of Naira are thus:
COVID-19 effects Q2 vs Q1
Owing to the lethargic restart of the economy after lockdown was instigated in major cities across the country, earnings and profitability understandably experienced reductions in the three-month span from the end of Q1 till June 2020
- Profit in Q2 is 21.7% less than in Q1.
- Gross earnings plummeted by 16% in Q2.
- Operating income downed 8% from Q1’20.
COVID-19 by all indications is bane of world economy this year as it severely hampered earnings in Q2 when the virus peaked. However Union Bank maximized this period to devastating effect by furthering its digital banking campaign drive and on-boarding majority of its customers on multifarious transactional channels. This yielded fruits as record shows that 90% of transactions were completed digitally in 2020 vs 57% in H1’2019. The top line impact of this is bound to reflect massively in the long run.
Commenting on the result, Emeka Emuwa, CEO said “The impact of COVID-19 and associated movement restrictions on the bank and wider economy has been broad. The total lockdown of major commercial centres and partial lockdown across the country, slowed business operations in Q2’20.” “…the slowdown limited growth in key income lines including fees and commission and cash recoveries”.
Deposit from customers grew by 12% in 2020 while Interest expense consumed over 50.7% of interest income. The growth in deposits stems from increased customer demand for products depicting confidence in the UNION brand. The rise in interest expense reflects the banks present struggles with generating low-cost deposit.
Loan to Deposit Ratio is pegged at 65.1% in compliance with the Central Bank’s mandate. Cost to Income Ratio is at 75.5% while Return on Equity and Return on Assets are 8.5% and 1.2% respectively.
The bank continues to match stride for stride with New Generation Banks in the aspect of digitalization evidenced by the additional N1 billion generated from its E-business fee in HY 2020. Union Bank has literally come a long way over the decades of its existence with its iconic white stallion in steady motion. Like the CEO stated, Union must navigate the realities of the pandemic for the remainder of the year, and continue to focus on increasing transaction volumes on electronic channels, managing cost and strategically targeting key customer segments to ensure it finishes subsequent quarters on a high.
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