Last week, Zenith Bank (ZENITHBA) released 1Q23 financial statements, reporting 41% y/y growth in gross earnings to N269.9bn, slightly below our N276.3bn forecast. This was mainly driven by a 52% y/y surge in interest income, which grew to N191.6bn, ahead of our N162.8bn estimate. In line with the trend seen across other banks, the growth was driven primarily by a 41% rise in income from loans and advances, made more impressive by the fact that the bank’s loan book remained flat in the first quarter. Also following the prevailing trend was the bank’s 174% surge in interest expense to N70.8bn, ahead of our N58.3bn projection, as the bank saw a 160% rise in interest paid on customer deposits and a 203% jump in interest paid on borrowed funds. This meant that the bank’s net interest income only grew by 20% y/y to N120.8bn, ahead of our N104.5bn forecast.
