Zenith Bank, a leading Nigerian lender, reported a 19.1% decline in net profit for the first half of 2026, according to its latest audited earnings report. The bank's post-tax profit decreased to N430.8 billion from N532.2 billion in the same period last year. This marks the second consecutive half-year period that the bank has reported a profit drop. The decline was attributed to a contraction in revenue and increased cost pressures.
The bank's revenue was significantly impacted, with gross earnings plummeting by almost a quarter to N2.5 trillion. This decline was primarily due to weaker interest and similar income, which is the bank's top revenue source, and a substantial trading loss. Net interest income, the difference between what a bank earns on its interest-bearing assets and what it pays on its liabilities, fell 7.4% to N1.3 trillion. The decline was triggered by lower interest on treasury bills and on placements with banks and discount houses.
Zenith Bank's performance was also affected by a surge in taxation, which more than doubled to N206.8 billion from N93.4 billion in the same period last year. This increase in tax bill had a direct impact on the bank's earnings. However, the lender reduced the cash it set aside as a provision for toxic assets by 81.5% to N141.1 billion, which softened the blow on net interest income after impairment charges.
The bank's operating expenses rose 9.7% to N451.3 billion, driven by higher spending on information technology, as well as fuel and maintenance. Despite this, pre-tax profit increased to N637.6 billion from N625.6 billion. The bank's total assets grew 3.8% to N32.6 trillion during the period. Zenith Bank recently opened a branch in Manchester, UK, and is on track to complete a secondary listing on the London Stock Exchange by 2027.
Zenith Bank's trading performance was impacted by a huge loss on other trading books, resulting in trading losses of N92.2 billion, compared to trading gains of N467.8 billion in the same period last year. The bank's impairment charges increased by 87.8%. However, the lender's stock has performed well, with a 118% increase so far this year.
The bank has announced an interim dividend per share of N1.5, which is higher than the N1.25 paid for the same period last year. This translates to a potential dividend payout of N61.6 billion for the period. The increased dividend payout is a positive development for shareholders, despite the decline in profit.
Zenith Bank's financial performance in the first half of 2026 reflects the challenging operating environment faced by banks in Nigeria. The bank's management will need to navigate these challenges and implement strategies to improve revenue and reduce costs in the second half of the year. The bank's expansion plans, including its UK branch and potential London Stock Exchange listing, will also be closely watched by investors.
Key points
- Zenith Bank's net profit declined 19.1% to N430.8 billion in the first half of 2026.
- The bank's revenue contracted due to weaker interest income and a substantial trading loss.
- Zenith Bank announced an interim dividend per share of N1.5, translating to a potential payout of N61.6 billion.
