Zenith Nigeria’s Full-Year Profit Doubles as Costs Fall

Zenith Bank Plc, Nigeria’s third largest lender by market value, said full-year profit doubled as its cost-to-income ratio fell.

Net income advanced to 100.6 billion naira ($634 million) from 48.7 billion naira in the year-earlier period, the Lagos-based lender said in a statement today. Revenue increased 26 percent to 307 billion naira as loans and advances climbed 10 percent to 1 trillion naira. Zenith Bank’s cost-to-income ratio fell to 54 percent from 63 percent.

“Amid the challenging business environment witnessed in 2012, notably the restrictive monetary policies and the double-digit headline inflation rates, Zenith bank delivered yet another year of strong performance,” Chief Executive Officer Godwin Emefiele said in the statement. “Efficiency in our operations led to the significant improvement in our cost-to-income ratio.”

Zenith, which listed $850 million of global depository receipts on the London Stock Exchange on March 21, doesn’t expect Nigerian banking industry earnings this year to be “as aggressive” as 2012, Emefiele said in an interview on the same day. 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.

The stock rose 1.6 percent to 21.65 naira in Lagos trading today, the biggest since March 5. Zenith has advanced 11 percent this year compared with the 25 percent gain of the Bloomberg NSE Banking Index, which tracks Nigeria’s 10 top banks by market value.

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