Zenith Bank Plc, Nigeria’s third-largest lender by market value, jumped to the highest level in more than 4 1/2 years after it reported that full-year profit doubled as costs fell.
The lender advanced 2.9 percent to close at 22.28 naira in Lagos, the commercial capital where Zenith is based, the highest since Sept. 1, 2008. Zenith has added 14 percent this year, compared with the 25 percent gain for the Bloomberg NSE Banking Index, which tracks Nigeria’s top 10 banks by market value.
Net income rose to 100.68 billion naira ($636 million) in 2012 from 48.7 billion naira a year earlier, as its cost-to-income ratio fell to 54 percent from 63 percent, Zenith reported late yesterday.
“Zenith’s operating efficiency showed material improvement” driving earnings higher, Muyiwa Oni and Rele Adesina, Lagos-based analysts at Stanbic IBTC Holding Co., wrote in an e-mailed note today.
Zenith doesn’t expect Nigerian bank industry earnings this year to be “as aggressive” as in 2012, Chief Executive Officer Godwin Emefiele said in a March 21 interview. Earnings may be affected as the Asset Management Corp. of Nigeria, set up in 2010 to buy lenders’ bad debts, requires banks to pay more toward the cost of saving the industry, according to Emefiele.