MDAS/ CEO, Zenith Bank, Peter Amangbo
Zenith Bank Plc and Guranty Trust Bank have continued in their stiff rivalry on the Nigeria financial market, with both banks posting impressive results for the year ended 2014.
The results show that both banks are narrowing the gaps between them as both their pretax and post-tax profit profiles indicated very slim differentials.
Zenith Bank declared an 8.3 per cent increase in profit before tax in its audited resulted for the financial published by the Nigerian Stock Exchange on Thursday.
The result showed that the group’s PBT rose from N110.597bn to N119.796bn in the review period, while its profit after tax edged up by 4.3 per cent to N99.455bn from N95.318bn in the previous year. This followed a 14.76 per cent year-on-year growth in gross earnings. Gross earnings rose from N351.470bn to N403.43bn. Earnings per share was up by 4.98 per cent to N3.16 from N3.01, while total assets jumped by 16.3 per cent to N3.755tn from N3.143tn in 2013.
The group also increased its loans and advances by 38.21 per cent to N1.729tn from N1.251tn. The results also showed that the board of directors had proposed a dividend of N1.75 per share – the same amount it proposed for 2013 – from the retained earnings account as at 31 December 2014. “This is subject to approval by shareholders at the next Annual General Meeting,” it said. The board added, “If the proposed dividend is approved by the shareholders, the bank will be liable to pay additional corporate tax estimated at N16.48bn, which represents the difference between the tax liability calculated at 30 per cent of the dividend approved and the minimum tax charge reported in the statement of profit or loss and other comprehensive income for year ended 31 December 2014.” Analysts at FBN Capital Research said, “All in all, the results were ahead of expectations. Zenith delivered an Return on Average Equity of 19 per cent for 2014. We would expect consensus estimates for 2015 to move up slightly.
“On the back of the results, we would expect the market to react positively, with the caveat that concerns about the impact of the fallout from the decline in oil prices are likely to linger a bit. Zenith shares have outperformed the index this year, gaining 3.2 per cent compared with a loss of -12.4 per cent for the ASI. We rate Zenith Bank shares Neutral.”
Guaranty Trust Bank Plc also announced a profit before tax of N116.385bn for the financial year ended December 31, 2014. The figure represents a nine per cent increase on the N107.091bn PBT it declared a year earlier. The bank’s profit after tax rose by 10 per cent year-on-year – from N90.024bn in 2013 to N98.695bn in 2014. The results, which the bank filed with the Nigerian Stock Exchange on Thursday, also showed that its basic earnings per share and fully diluted earnings per share appreciated by 10 per cent to N3.47 from N3.17 in 2013. In the year under review, the bank gave out more loans with loans and advances hitting N1.281tn, up by 27 per cent from the N1.008tn it gave out the previous year. Following the performance, the bank’s board of directors has proposed a final dividend of N44.147bn, representing N1.50 per share. It had paid a final dividend of N42.675bn, representing N1.45 per ordinary share in 2013 after an interim dividend of 25 kobo per share, amounting to N7.358bn; was paid during the year. The interim dividend of 25k (N7.358bn) was maintained for the 2014 financial. The total dividend of N51.504bn for the 2014 financial year was, however, 2.94 per cent higher than the N50.033bn it paid in 2013.
The proposed dividend is expected to be presented to shareholders for approval at the bank’s Annual General Meeting on April 14. Commenting on the results, FBN Capital Research noted that the bank’s profit and proposed dividend beat its estimate. It said, “On a full year basis, GT Bank’s PBT of N116.4bn came in ahead of management’s full year guidance of N110bn. The PBT also came in ahead of consensus full year PBT forecast of N109bn.” According to the firm, the performance was boosted by non-interest income, adding that the bank is expected to fare better through the challenging times.
It said, “Given that the positive surprise in the results was driven by non-interest income (and in particular FX trading), we do not expect much of the surprise to be carried forward as far as consensus forecasts are concerned. More importantly, these results do not yet reflect the fallout from the worst of the marked decline in oil prices. “We believe that GT Bank will fare better than most banks and should be viewed as a core holding for investors through the challenging times ahead. “However, we also acknowledge that growth, particularly for risk assets, is bound to slow down in 2015. GT Bank’s exposure to the oil and gas sector at over 20 per cent of its loan book is a slight concern also. “GT Bank has proposed a final dividend of N1.50 (interim was 25kobo). The payout ratio (for the full N1.75) of 55.2 per cent implies a dividend yield of 7.9 per cent. The final dividend.
