Zenith Bank Plc has reported a stellar performance in its unaudited Q1 2025 financial results, achieving a historic quarterly interest income of N837.64 billion—a 71.46% year-on-year (YoY) increase from Q1 2024. The impressive interest income was the key driver behind a robust pre-tax profit of N350.82 billion, up 9.56%, and a post-tax profit of N311.83 billion, marking a 20.7% YoY growth.
This bottom-line achievement represents over 30% of the bank’s total profit for the full year 2024, signaling a strong start to 2025.
Key Q1 2025 Financial Highlights (YoY)
- Gross Earnings: N949.86 billion (+21.68%)
- Interest Income: N837.64 billion (+71.46%)
- Interest Expense: N246.45 billion (+35.34%)
- Net Interest Income: N591.19 billion (+92.92%)
- Net Fee & Commission Income: N56.04 billion (-2.90%)
- Earnings Per Share: N7.59 (-7.66%)
- Loans and Advances to Customers: N10.05 trillion (+16.19%)
- Cash and Cash Equivalents: N9.54 trillion (+16.89%)
- Total Assets: N32.42 trillion (+33.50%)
- Customer Deposits: N22.68 trillion (+35.14%)
Interest Income: The Growth Engine
Zenith’s stellar Q1 showing was driven primarily by strong performance in its core revenue line—interest income, derived from lending and investment operations.
- Loans and Advances to Customers & Financial Institutions generated N460.97 billion, accounting for 55% of total interest income, though this marks a decline from 66% in Q1 2024.
- Income from Investments in Securities (largely treasury bills) surged by 113.24% to N328.8 billion, reflecting Zenith’s aggressive capital deployment strategy amid high-yield market conditions.
- The bank increased its treasury bill holdings by N2.68 trillion in Q1 2025 alone.
- Cash Balance Placements with other banks contributed N47.87 billion, up 41% YoY.
This diversified income profile indicates Zenith’s strategic repositioning to optimize earnings across asset classes amid changing macroeconomic conditions.
Rising Costs, But Higher Margins
Zenith’s interest expenses rose 35.34% to N246.45 billion, driven mainly by higher deposit costs, which comprised over 70% of the total. This reflects a more competitive deposit market and the bank’s N5.9 trillion growth in its deposit base during the quarter.
Despite this, the bank posted a net interest income of N591.19 billion, a 92.92% increase—accounting for over 70% of gross interest income, an improvement from 2024 levels.
More impressively, impairment charges on loans dropped 27.81% to N35.95 billion, signaling enhanced asset quality and risk management. This led to a post-impairment net interest income of N541.81 billion, up a massive 116.31% YoY.
Non-Interest Income: Modest, Yet Stable
Zenith’s non-interest income recorded modest growth of 0.98% YoY, totaling N78.98 billion. Key contributors included:
- Account Maintenance Charges: N20.06 billion (+18.74%)
- Electronic Banking Income: N16.17 billion (-19%)
While some digital income streams declined, the bank’s non-interest revenue base remains resilient, providing supplementary support to the strong interest-driven performance.
Balance Sheet Strength: Size and Stability
Zenith’s balance sheet grew significantly in Q1 2025, with total assets increasing by N8.13 trillion to N32.42 trillion. This was underpinned by:
- A N5.9 trillion increase in customer deposits, which rose to N22.68 trillion (+35.14%)
- A N2.24 trillion rise in restricted deposits with the CBN, tied to regulatory cash reserve requirements
- Strong liquidity positions, with cash and cash equivalents rising to N9.54 trillion (+16.89%)
The bank’s loan book expanded to N10.05 trillion, a YoY growth of 16.19%, pointing to continued credit expansion without a proportional increase in defaults.
Conclusion: A Solid Start to 2025
Zenith Bank’s Q1 2025 results reflect a well-executed strategy built around smart asset deployment, disciplined cost management, and strong risk controls. The record-setting interest income, balanced by moderated credit risk and strategic investment in high-yield securities, positions the bank for sustained profitability amid a challenging economic climate.
As Nigeria’s interest rate environment continues to shape financial sector dynamics, Zenith’s adaptability and focus on core income lines are expected to remain key drivers of its performance through the rest of the year.