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Zenith Bank Nigeria First-Half Profit Little Changed on Fee Cuts

Aug. 15 (Bloomberg) -- Zenith Bank Plc, Nigeria’s third-largest bank by market value, said first-half profit was little changed after reductions in fees ordered by the central bank offset revenue from lending.

Net income in the six months to June rose to 45.4 billion naira ($281.6 million) from 42.4 billion naira a year earlier, the Lagos-based lender said in an e-mailed statement today. Revenue rose 13 percent to 171 billion naira, while loans and advances increased 7.9 percent to 1.1 trillion naira.

“The second quarter of this year was a particularly challenging one, especially with the commencement of the revised bank tariffs on services and products,” Chief Executive Officer Godwin Emefiele said in the statement.

The bank’s first-half net interest income rose 15 percent to 91.4 billion naira, while operating expenses rose 14 percent to 70 billion naira.

The Central Bank of Nigeria directed banks in sub-Saharan Africa’s second-biggest economy to lower fees and commissions starting April 1 to minimize conflict with clients. The Asset Management Corp. of Nigeria, or Amcon, which is partly funded by the nation’s lenders, also increased the assets banks are required to contribute to set aside for failed loans to 0.5 percent this year from 0.3 percent.

Zenith Bank’s shares fell 0.5 percent to 20.9 naira at 2:30 p.m. in Lagos. The stock rose 7.2 percent this year compared with a 19 percent increase for the Nigerian SE Banking Index, which tracks the 10 largest banks in Africa’s biggest oil producer.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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