Zenith Bank disclosed in its semi-annual investor presentation that 29.9% of its non-performing loans are oil and gas-related loans.
The bank currently has a total non-performing loan of N134.8 billion, of which its oil and gas loans are approximately N40 billion (29.9% of the loans).
Zenith Bank Plc, Nigeria’s largest bank by net assets, has an NPL ratio of 4.51% as of June 2021 compared to 4.29% as of June 2020, mainly due to an increase in oil and gas NPLs. The bank has a diverse loan portfolio of N2.99 trillion, of which the upstream and downstream oil and gas numbers are respectively 18.4% and 4.9%, totaling 23.3% of the total loan portfolio. The bank informed investors that it has diversified its portfolios over the past year to support asset quality.
However, Zenith Bank’s non-performing oil and gas loans of about N40 billion mean that only 5.9% of total oil and gas loans are bad, up slightly from the same period in 2020. Oil and gas loans as a percentage of non-performing loans were 29.87% in 2020 or N37.3 billion.
The bank also reported that foreign currency loans were $2.8 billion as of June 2021, down from $3.1 billion reported over the same period in 2020. Again, oil and gas-related loans make up the bulk at about $1.4 billion, although down from $1.6 billion a year earlier. Zenith Bank has also restructured approximately 37% of its oil and gas loans.
Zenith Bank Plc, one of Nigeria’s most highly capitalized financial institutions, has also proposed to pay the aggregate amount of N9.42 billion as interim dividends to its shareholders for the half-year period ending June 30, 2021. The company is expected to pay an interim -dividend of 30kobo per share on all outstanding 31,396,493,786 common shares of the company, amounting to N9.42 billion
Zenith Bank had previously announced a half-year profit of N106.12 billion in HY 2021, indicating a slight increase of about 2.2% year-over-year.