Zenith Bank Plc has proposed a 20 per cent increase in its interim dividend after reporting a rise in half-year profit before tax, as lower funding costs, stronger fee income and reduced credit impairment charges helped cushion the impact of higher taxation.
The bank’s audited financial results for the half-year ended June 30, 2026, show profit before tax rose by 1.91 per cent year-on-year to N637.6 billion, from N625.63 billion in the corresponding period of 2025.
The directors proposed an interim dividend of N1.50 per share, up from N1.25 per share a year earlier, signalling an improved shareholder payout despite a decline in profit after tax.
Profit after tax fell to N430.76 billion from N532.18 billion in the first half of 2025, as tax expense more than doubled to N206.84 billion from N93.45 billion. The reported results attributed the increase partly to the adoption of the Nigerian Tax Act 2025 framework.
The proposed dividend is scheduled for electronic payment on October 30, 2026, to shareholders whose names appear on the Register of Members as of October 23, 2026, subject to completion of e-dividend registration and authorisation of direct payment through the registrar. Holders of Global Depositary Receipts are expected to receive their dividends after that date.
A major contributor to the bank’s performance was a 13 per cent year-on-year reduction in interest expense to N421.8 billion, reflecting what management attributed to continued optimisation of its liability mix and funding structure.
The decline in funding costs helped lift net interest margin to 12.4 per cent from 11.9 per cent in the corresponding period last year, while the cost of funds eased to 3.3 per cent from 4.0 per cent.
Net interest income stood at N1.25 trillion, underscoring the contribution of interest-generating activities to the bank’s earnings despite the reduction in interest expense.
The improvement in margins suggests that Zenith Bank benefited from a more efficient funding structure, allowing it to retain a greater proportion of the income generated from its interest-earning assets.
However, the overall increase in profit before tax remained modest, indicating that gains in funding efficiency and other income streams were partly offset by pressures elsewhere in the income statement.
Non-interest revenue also strengthened, with net fee and commission income increasing by 39.6 per cent year-on-year to N178.77 billion from N128.06 billion.
The growth was attributed to higher transaction volumes across the bank’s digital banking channels, highlighting the increasing contribution of transaction-related services to earnings.
Other operating income also rose sharply, increasing by 314 per cent year-on-year and providing additional support to the group’s financial performance.
Improved asset quality was another significant factor in the half-year results, as impairment charges declined by 81 per cent year-on-year to N141.1 billion following the bank’s clean-up of forbearance-related facilities.
The reduction helped bring the cost of risk down to 2.2 per cent from 14.3 per cent in the first half of 2025, reducing the burden of credit-related losses on profitability.
The improvement coincided with continued growth in the loan portfolio, suggesting that the bank expanded lending while recording a lower non-performing loan ratio.
Gross loans increased by 14 per cent to N12.57 trillion from N11.06 trillion at the end of December 2025. The non-performing loan ratio edged down to 3.78 per cent from 3.82 per cent at the end of 2025.
The combination of loan growth and a lower NPL ratio points to improved reported asset-quality indicators during the period. However, the substantial fall in impairment charges also reflects the comparison with the elevated charges recorded a year earlier, making subsequent periods important in determining whether the improvement can be sustained.
Zenith Bank’s balance sheet continued to grow during the first half, supported by higher customer deposits and an expansion in lending.
Customer deposits rose by 8 per cent to N26.35 trillion, while total assets increased by 4 per cent to N32.65 trillion.
The deposit growth provides a larger funding base for the bank’s lending and investment activities, while the increase in gross loans reflects continued credit deployment across productive sectors of the economy.
The bank also reported a capital adequacy ratio of 25.1 per cent and a liquidity ratio of 60.5 per cent, both above regulatory requirements, according to the supplied results.
Its return on average equity stood at 17.6 per cent, while return on average assets was 2.7 per cent. The cost-to-income ratio was 49.9 per cent.
Beyond its financial results, Zenith Bank expanded its international operations during the period by establishing operations in Côte d’Ivoire and completing the acquisition of Paramount Bank in Kenya.
The bank also opened six additional branches in Nigeria, extending its domestic distribution network.
