One of Nigeria’s top banks, Zenith Bank Plc, suffered a slump as they fell to the lowest level in almost three weeks after reporting a 16 percent drop in first-half profit.
According to a report on Bloomberg, Zenith’s stock, which has experienced a steady decline for a period of in six days, slid 2.5 percent to 15.60 naira, the lowest closing price since July 22.
That pared gains this year to 11 percent, making it the fourth best-performing bank on the Nigerian Stocks Exchange All Share Index and giving Lagos-based Zenith a market value of 490 billion naira ($1.5 billion) Bloomberg reports.
In a statement from the bank, they reported that net income dropped to 44.7 billion naira from 53.1 billion naira from the year before.
Impairment losses almost doubled to 14.2 billion naira and trading income plummeted to a loss of 864 million naira from a year-earlier profit of almost 12 billion naira.
According to Bloomberg, FBNQuest analysts, including Tunde Abidoye and Olubunmi Asaolu, said in an e-mailed note that the bank provided 11.7 billion naira for loan losses, which was “significantly higher than our 4.4 billion naira estimate.”
They continued, “A quarter-on-quarter increase in provisions and operating expenditure “proved detrimental and overshadowed a healthy 18% quarter on quarter growth in profit before provisions,’’
According to Zenith, they reported that their non-performing loan ratio worsened to 2.34 percent from 1.44 percent a year ago but on the plus side, loans extended to customers expanded 15 percent in the six months through June.