Feb 20 (Lagos) - Zenith Bank Plc (
ZENITHBANK ) reported 16. 2 per cent increase in its profit before tax (PBT) as well as 11.3 per cent growth in profit after tax (PAT) of N 193.42 billion for the year ended December 31, 2018.
However top line contracted and that is not likely to send a good signal to analysts and investors. Fixed income was the main driver of earnings not lending. From a pure banking point of view, these results are disappointing. Loans and advancements fell from N 1.823 trillion, as against N2.1 trillion in 2017.
Dividend proposed of N 2.5 is likely to provide a tailwind to the stock and prevent investors from dumping the stock.
According to the audited results made available yesterday, the lender recorded a decline in gross earnings from N 745.18 billion in 2017 to N 630.34 billion in 2018.
Net interest income improved to N 295.59 billion compared with N 257.99 billion in 2017.
Shares of
ZENITHBANK currently trade at N 25.35 per unit at the Nigerian Stock Exchange in Lagos.
The dividend yield is almost 10% based on yesterdays closing price. The dividend yield is lower than what investors can get from investing in fixed income instruments like T-bills. That is what the Bank is even doing with its money. Overall a disappointing result.
