Zenith Bank Plc reported a 1.91% increase in profit before tax (PBT) to N637.6 billion for the first half of 2026, following its audited financial statements submission to the Nigerian Exchange (NGX). The bank proposed an interim dividend of N1.50 per share, marking a 20% rise from N1.25 in H1 2025. Shareholders on record by October 23, 2026, will receive the dividend electronically on October 30.

Pre-tax profit growth was primarily driven by stronger margins, leaner funding costs, and improved asset quality. Zenith Bank's net interest margin (NIM) improved to 12.4% from 11.9% in H1 2025, contributing to N1.25 trillion in net interest income. A key factor was an 81% year-on-year decline in impairment charges to N141.1 billion, following a clean-up of forbearance-related facilities. This reduction substantially improved the cost of risk to 2.2% from 14.3% previously.

Despite the PBT increase, Zenith Bank's gross earnings declined by 24.6% to N1.90 trillion from N2.52 trillion in H1 2025. Profit after tax also fell by 19.1% to N430.76 billion, primarily due to a 121% surge in tax expenses to N206.84 billion.

The bank recorded trading losses of N92.24 billion, a significant swing from gains of N467.79 billion in the prior year. Operating expenses also increased by 9.7% to N451.33 billion.

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The proposed interim dividend increase signals a higher payout to shareholders, despite the decline in after-tax profit. Zenith Bank maintained a strong balance sheet, with gross loans expanding 14% to N12.57 trillion, and its non-performing loan (NPL) ratio improving to 3.78% from 3.82%. Capital adequacy and liquidity ratios of 25.1% and 60.5% respectively exceeded regulatory requirements. Its shares have gained approximately 118% year-to-date, rising from N61.80 to N134.70.

Zenith Bank continued its operational expansion during the first half of 2026, opening six new branches in Nigeria and establishing operations in Côte d'Ivoire. The bank also completed its acquisition of 100% of Paramount Bank Kenya Limited, extending its regional footprint. As of June 30, 2026, the group operated 472 branches and 87 cash centres, alongside increased point-of-sale terminals and customer cards issued. The adoption of the new tax framework under the Nigerian Tax Act 2025 impacted bottom-line earnings.

Key Takeaways

Zenith Bank's first-half 2026 results present a nuanced picture for investors, marked by a modest increase in pre-tax profit (PBT) but a notable decline in after-tax profit (PAT) and gross earnings. While the 1.91% PBT growth to N637.6 billion was largely driven by an 81% reduction in impairment charges--a positive sign of improved asset quality and a cleaner loan book--this was overshadowed by several headwinds. Gross earnings contracted by 24.6% to N1.90 trillion, primarily due to a significant swing from trading gains to losses, amounting to an adverse impact of approximately N560 billion.

Furthermore, the bank faced a substantial 121% increase in tax expenses to N206.84 billion, attributed to the new tax framework under the Nigerian Tax Act 2025, which directly impacted the bottom line and led to the 19.1% PAT decline. Rising operating expenses, up 9.7% to N451.33 billion, also added pressure. Despite these challenges, the bank's decision to increase its interim dividend by 20% to N1.50 per share suggests confidence in its underlying financial strength and commitment to shareholder returns. Concurrently, Zenith Bank continued its strategic expansion, opening new branches in Nigeria and completing an acquisition in Kenya, indicating a long-term growth outlook amidst a complex operating environment.