• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Markets

Zenith Bank: A Chicken and Egg Situation

Nairametrics by Nairametrics
March 20, 2018
in Markets, Stock Market
How this ₦28.3 billion egg factory benefits pharmaceutical companies

Eggs in a crate

Share on FacebookShare on TwitterShare on Linkedin

RelatedStories

Report: Nigerian banks paying their staff less salaries compared to African peers, blames AMCON 

Report: Nigerian banks paying their staff less salaries compared to African peers, blames AMCON 

June 13, 2025
Retail Kings; Banks with the largest retail deposits in Nigeria in 2024 

Retail Kings; Banks with the largest retail deposits in Nigeria in 2024 

May 27, 2025

ARM| Analysis of Zenith Bank’s 2017 results

  • Full-year 2017 result of Zenith Bank (Zenith) showed EPS growth of 37.2% YoY to N5.67 (2016: N4.13) largely on the back of strong growth in non-interest revenue (+119.2% YoY to N270 billion) which masked elevated loan loss provision (+203.6% YoY to N98.3 billion). The bank declared a final dividend of N2.45, which alongside interim dividend of N0.25 translates to a total dividend of N2.70. At current pricing, final dividend translates to a yield of 8%.
  • Possible haircut on 9mobile exposure? Over Q4 2017, Zenith booked ~N52 billion in impairment (9M 17: N47 billion) with Cost of Risk expanding by 8.8pps QoQ to 9.7%. In ascertaining the driver for the higher impairment, breakdowns provided by Zenith throws up higher impairment (specific) to ICT and Oil & Gas sectors over H2 2017 by 1724% and 233.8% accordingly. While we await management clarification on the assets in both sectors, our findings suggest that the sale of 9mobile resulted in a discount to market value. Consequently, in line with IFRS, the bank must have taken a haircut of ~40% on its exposure to the telecoms firm. Non-performing loans (NPL) printed at 4.7% (+50bps QoQ) with Oil & Gas, General Commerce and Transport contributing ~37%, 28% and 16% in that order.
  • Non-interest Revenue boosted by trading income. As earlier stated, the key driver for the earnings growth, despite higher impairment, was the non-interest revenue (NIR) which expanded over two-fold YoY. Over the Q4 2017, NIR expanded 97% QoQ with much of the jump growth in earnings emanating from trading income (+362% QoQ). First off, the bank reported treasury bills income of N36 billion like prior quarter (N34 billion) which reflects trading income from its swap position (Notional value: $1.5 billion). Irrespective, much of the improvement in NIR stemmed from FX trading income of N39 billion (Q3 17: FX trading loss of N17.6 billion).
  • $250 million net-long position drives FCY gains. Further supporting the jump in NIR was the N5.5 billion booked in the quarter, stemming from FCY revaluation gains on its net FCY position which our estimate puts at $250 million. The gains reflected revaluation of its FCY position at the NIFEX rate (N330/$) from prior CBN rate (N305/$).
  • Eurobond coupon payment weakens funding cost. Despite a 13% expansion in interest income with asset yields rising 35bps QoQ to 8.5% (stemming from interbank placement and loans), Zenith funding cost worsened over Q4. Interest expense jumped sharply by 52% QoQ with cost of funds (WACF) expanding by 142bps QoQ to 5.0%. Looking through the breakdowns, funding cost pressure emanated from interest expense on borrowed funds which jumped 230% QoQ to N47 billion. From our analysis, the jump in interest expense on borrowed funds emanated from coupon payment on its $500 million Eurobond issued in May 2017 and first coupon payment due in November 2017. Consequently, Net Interest Margin (NIM) contracted by 100bps QoQ to 5.0%. Overall, despite higher NIR, the impact of decline in net interest income (-9.6% QoQ) and higher impairment (+999% QoQ) dipped EPS in Q4 by 9.7% QoQ to N1.55 (Q3 17: N1.72).
  • The Bank will be holding a conference call Tomorrow, Wednesday, March 14 at 2pm Lagos Time (1pm London/ 3pm Johannesburg/ 9am New York). Click here for conference call details.
  • Zenith is trading at a P/B of 1.19x which is at a discount to peers of 1.7x – ROE of 21.7%. Our last communicated FVE on Zenith Bank is N36.37 which translates to an OVERWEIGHT rating on the stock. We will revisit our numbers after further analysis and discussion with management.
Tags: STOCK PICKSZenith Bank News
Nairametrics

Nairametrics

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

Related Posts

Report: Nigerian banks paying their staff less salaries compared to African peers, blames AMCON 
Financial Services

Report: Nigerian banks paying their staff less salaries compared to African peers, blames AMCON 

June 13, 2025
Retail Kings; Banks with the largest retail deposits in Nigeria in 2024 
Exclusives

Retail Kings; Banks with the largest retail deposits in Nigeria in 2024 

May 27, 2025
Best performing Nigerian banks in 2022 judging by their numbers 
Exclusives

Debtors incur N8.4 trillion in interests payments to Nigerian banks in 2024

April 25, 2025
Nigerian Banks
Exclusives

Which Nigerian banks pay their staff the most and the least in 2024 

April 22, 2025
Zenith Bank
Business News

Zenith Bank reports 53% female workforce in 2024, up from 50% in 2023 

March 31, 2025
Zenith Bank
Company Results

Zenith Bank generates N80 billion from e-business in 2024 

March 29, 2025
Next Post
Unity Bank denies $1 billion investment from Milost Global

Unity Bank denies $1 billion investment from Milost Global

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • NIN database grows by 7 million in half-year 2025 as NIMC targets 95% coverage 
  • Zylus Homes relaunches Arizon Estate with first-ever Real Estate Sports Championship
  • Nigerian Crude surges to $72 amid Houthi attack fallout

Follow us on social media:

Recent News

NIMC, world Bank

NIN database grows by 7 million in half-year 2025 as NIMC targets 95% coverage 

July 9, 2025
Zylus Homes relaunches Arizon Estate with first-ever Real Estate Sports Championship

Zylus Homes relaunches Arizon Estate with first-ever Real Estate Sports Championship

July 9, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics