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ZENITHBANK 9M:2022 Financial Results-Loan Growth Boosts Performance

In its recently released 9M:2022 financials, Zenith Bank Plc posted a strong topline performance. Gross Earnings rose by 19.65% YoY to NGN620.57bn (on track to slightly exceed our 2022FY estimates) on the wheels of increased interest and non-interest income. For context, Interest Income climbed 26.52% YoY to NGN390.76bn while Non-Interest Income grew (+9.53% YoY) to NGN229.82bn. On the flip side, Operating Expenses surged 16.59% YoY to NGN255.23bn owing to rising energy costs amongst other factors. Consequently, Net Profit Margin in the period declined to 28.09% from 30.96%.

Overall, we maintain our target price at NGN29.82 for ZENITHBANK. This is a 49% upside from its current closing price of NGN20.00. Thus, we reiterate our STRONG BUY rating on the stock

Underlying
Zenith Bank PLC

Provider
ARM Securities Limited
ARM Securities Limited

ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape. ​

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