The growth in interest income could be attributed to the impact of risk asset repricing, while the increase in non-interest income primarily resulted from loan recoveries and foreign currency revaluation gains.
Regarding efficiency, the cost-to-income ratio improved from 55 per cent to 53.4 per cent in the current period, supported by a bolstered income line.
The cost of risk also moderated from 0.8 per cent to 0.7 per cent during the same period due to an enlarged loan book. However, Zenith Bank’s cost of funding doubled YoY from 1.3 percent in Q1 2022 to 2.7 percent in Q1 2023, owing to a considerable spike in interest rates between both periods as interest expense grew from N25.8 billion in Q1 2022 to N70.8 billion in Q1 2023.
This impacted the net interest margin (NIM), which reduced from 7.3 per cent to 6.9 per cent over the same period.
Total assets expanded by nine per cent from N12.29 trillion in December 2022, to N13.36 trillion in March 2023, primarily driven by growth in customer deposits and other funding sources, such as borrowings.
