Zenith Bank Nigeria PLC - Earnings edge estimates
​ZENITHBANK released Q1’16 results reporting better than expected performances across most line items; EPS of N0.84 (Consensus: N0.74, Vetiva: N0.69). Although the performance came in relatively weaker y/y, earnings were stronger on a q/q basis, supported by significant improvement in efficiency. Notably, Gross Earnings (N99 billion) declined 12% y/y (3% behind our estimate). The top line growth was pressured by a 52% decline in Non-Interest Income following losses incurred on FX trading and Bond trading amidst significant reduction in foreign currency revaluation gains (Q1’16: N1.34 billion vs. Q1’15: N9.20 billion). With a mild 3% decline in loan portfolio, Interest Income was limited to modest 3% y/y rise. Following significant 200bps moderation in CoF, Interest Expense declined 33%, coming in 12% better than our estimate.
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