N40bn In Oil And Gas Loans Are Not Performing — Zenith Bank

Zenith Bank has disclosed in its half-year 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 out of which its oil and gas loans amount to about N40 billion (29.9% of the loans).

Zenith Bank Plc, Nigeria's largest bank by net asset, has an NPL ratio of 4.51% as of June 2021 compared to 4.29% as of June 2020 mostly due to an increase in oil and gas NPL. The bank has a diverse loan portfolio of N2.99 trillion out of which Upstream and Downstream Oil and gas numbers are 18.4% and 4.9% respectively, totalling 23.3% of the total loan portfolio. The bank informed investors it diversified its portfolios over the last year to support asset quality.

However, Zenith Bank’s oil and gas non-performing loans of about N40 billion means just 5.9% of total oil and gas loans are bad, a slight increase 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 as of June 2021 were $2.8 billion, a drop from $3.1 billion reported same period in 2020. Again, oil and gas-related loans make up its largest chunk with about $1.4 billion, though down from $1.6 billion a year earlier. Zenith Bank has also restructured about 37% of its oil and gas loans.

Zenith Bank Plc, one of Nigeria’s most capitalized financial institutions, also proposed to pay the total sum of N9.42 billion as interim dividends to its shareholders for the half-year period ended 30th of June, 2021. The company is expected to pay an interim dividend of 30kobo per share on all the outstanding 31,396,493,786 ordinary shares of the company, amounting to N9.42 billion

Zenith Bank had earlier declared a half-year profit of N106.12 billion in HY 2021, indicating a slight increase of about 2.2% YoY.