Zenith Bank Plc reported a robust 21% year-on-year growth in profit after tax to ₦311.83 billion in Q1 2025, reflecting a resilient financial performance driven by the high-interest rate environment and disciplined cost management. The bank’s gross earnings surged 22% to ₦950 billion, up from ₦781 billion in Q1 2024, marking continued momentum in core banking operations.
The standout performer was interest and similar income, which rose 72% year-on-year to ₦838 billion, benefiting from elevated yields and an optimized asset portfolio. This more than offset the drag from a 67% drop in non-interest income, which was primarily due to a sharp decline in trading gains despite some improvement in other operating income.
Profit before tax rose by 10% to ₦351 billion, while profit after tax recorded a sharper increase due to efficient tax management. The bank’s strategic initiatives to manage funding costs paid off, with the cost of funds improving to 3.9% from 4.0% in Q1 2024. Similarly, cost of risk declined to 1.8% (vs. 2.8% in Q1 2024), highlighting progress in asset quality and risk management practices.
Zenith Bank’s net interest margin expanded significantly to 10.3% from 8.3%, reflecting the bank’s effective pricing strategy and balance sheet optimization. However, despite higher earnings, return on average equity (ROAE) and return on average assets (ROAA) fell to 29.4% and 4.0%, respectively. This dip is attributed to the capital expansion following the sector-wide recapitalization exercise, which diluted returns in the short term but positions the bank for stronger future growth.
On the balance sheet front, Zenith Bank maintained a prudent growth posture. Gross loans grew modestly by 1% to ₦11.08 trillion, while customer deposits increased by 3% to ₦22.68 trillion, reflecting continued customer confidence. Total assets rose by 8% to ₦32.42 trillion, underpinning the bank’s expanding footprint.
Crucially, the bank's capital adequacy ratio (CAR) of 24% and liquidity ratio of 60% remain comfortably above regulatory thresholds, while a coverage ratio of 217.2% demonstrates its strong provisioning buffers.
Key Highlights:
- PAT: ₦311.83bn (+21% YoY)
- PBT: ₦351bn (+10% YoY)
- Gross Earnings: ₦950bn (+22% YoY)
- Interest Income: ₦838bn (+72% YoY)
- Non-Interest Income: ↓67% YoY
- Cost of Funds: 3.9% (vs. 4.0% Q1 2024)
- Cost of Risk: 1.8% (vs. 2.8%)
- NIM: 10.3% (vs. 8.3%)
- ROAE / ROAA: 29.4% / 4.0%
- Customer Deposits: ₦22.68tn (+3%)
- Total Assets: ₦32.42tn (+8%)
- CAR / Liquidity Ratio: 24% / 60%
- Coverage Ratio: 217.2%
Conclusion:
Zenith Bank’s Q1 2025 results reflect operational strength and strategic clarity, with core interest income and disciplined cost controls anchoring performance. The decline in non-interest income and returns on capital is a short-term trade-off for a stronger capital base and regulatory compliance. With solid asset quality metrics and an improving risk profile, the bank is well-positioned to navigate macroeconomic uncertainties and leverage future growth opportunities—particularly through digital expansion and customer-centric innovation.
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