Zenith Bank Records N1.039 Trillion Profit After Tax for 2025
Zenith Bank (ZENITHBANK) delivered a broadly resilient FY 2025 performance (audited), underpinned by strong revenue growth but moderated by, weaker trading income, and higher operating costs. Gross earnings expanded by 6.7% to N4.08trn, driven primarily by a robust 35.0% y/y surge in interest income to N3.67trn.
This reflected the impact of higher yields in the current rate environment (c.16.0% average yield on earnings assets) despite only modest balance sheet expansion, while interest expense increased at a much slower pace (+4.1% y/y), supporting a 217bps expansion in net interest margin to 11.5%. This suggests improved asset repricing dynamics and a more efficient deployment of interest-earning
assets, which grew 2.5% y/y to N23.24trn.
Meanwhile, the cost of funds declined by 65bps to 4.2%, indicating that funding pressures eased slightly, even as customer deposits grew 10.8% y/y to N24.33trn.
Non-interest revenue performance was mixed. Fees and commissions grew strongly by 41.1% y/y to N291.8bn, reflecting increased transaction volumes and digital banking traction. However, this was significantly offset by a sharp reversal in trading income[KA1.1][BI1.2], which declined by 105.7% y/y to a loss of N63.1bn, due to normalization from Naira depreciation in 2024 as well as mark-to-market losses in the banks other trading books. Meanwhile, other income surged by 185.5% y/y to N176.8bn, providing some cushion. Overall, total operating income growth was modest at 1.0% y/y, as the strong core banking performance was diluted by weaker market-related income lines.
Cost pressures remained evident, with operating expenses rising 23.3% y/y to N1.04trn, driven by higher personnel expenses (+44.1% y/y), regulatory fees, and other operational expenses. Consequently, the cost-to-income ratio deteriorated by 433bps to 34.1%. Pre-provision operating profit was largely flat (+1.0% y/y), while loan impairment charges increased by 12.7% y/y to N742.2bn, however there was a 57bps
moderation in cost of risk to 6.7% indicating some improvement in asset quality, consistent with the decline in NPL ratio to 3.8% (from 4.7% in FY 2024), although this may also reflect write-offs in line with the exit from forbearance.
Profit before tax declined 4.8% y/y to N1.26trn, largely due to the weaker trading income line and cost pressures. Profit after tax, however, improved slightly by 0.7% y/y to N1.04trn, supported by a significantly lower effective tax charge (-24.2% y/y). The bottom-line growth translated to an EPS of N25.32. On a quarterly basis, performance was stronger, with Q4 net profit rising 34.0% y/y and 18.9% q/q, showing
improved momentum into year-end.
From a balance sheet perspective, growth was relatively modest. Total assets expanded by 5.0% y/y to N31.46trn, with net loans increasing 4.9% y/y to N10.45trn, indicating cautious risk asset creation in a high-rate environment. Gross loans were largely flat (+0.6% y/y), while interbank placements declined sharply (-44.9% y/y). Securities grew 6.1% y/y, reinforcing a preference for lower-risk assets. On the funding side, total liabilities rose 2.3% y/y to N26.53trn, while shareholders’ equity increased significantly by 22.2% y/y to N4.92trn, strengthening capital buffers.
Profitability ratios weakened despite the strong margin expansion. ROAE declined by 928bps to 23.2%, while ROAA fell by 72bps to 3.4%, due to the combined impact of a higher equity base, cost pressures, and softer bottom-line growth. Nonetheless, profitability remains robust relative to peers.
The group declared a final dividend of N8.75 per share, bringing the total dividend for the year to N10.00 (vs N5.00 in 2024), the proposed dividend represents a dividend yield of 8.5% based on its closing price of N103.00 yesterday (7th April 2026).
