Zenith Bank Doubles Its Interim Dividend

Good morning and welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.

The newsletter is divided into two:

Green White Green—focused on the Nigerian stock market.

Star-Spangled Banner—focused on the US stock market.

Green White Green Last Week

Zenith Bank doubles its interim dividend

Zenith Bank dropped its half-year 2024 audited numbers last Friday. There was a big bounce in the topline (gross earnings went up from N967 billion in 2023 to N2.1 trillion in 2024). Profit after tax rose from N291 billion in 2023 to N577 billion in 2024.

The firm is on track to join the niche group of companies that have made over N1 trillion in revenue by the end of the current financial year.

There are two factors behind this. Higher interest income and higher trading gains.

Net interest income rose from N261 billion in 2023 to N715 billion in 2024, up 173% year-on-year. Net interest income is the figure you get when you subtract interest income (money made from interest on loans and investments like treasury bills) from interest expense (money paid on funds deposited with the bank).

Trading gains rose from N173 billion in 2023 to N795 billion in 2024, up 672% year-on-year. That was largely due to gains on financial assets held. The movement in the exchange rate means the foreign currency assets have a higher value in naira terms.

The bank has proposed a N1 interim dividend. An interim dividend is one paid before the end of a company’s financial year. That's a 100% increase from the N50 kobo it paid last year.

Qualification date is September 13, 2024.

Payment date is September 20, 2024.

PZ woes

PZ Cussons Nigeria recorded a N76 billion loss for the 12 months ended May 2024. The firm is one of many that the exchange rate movement has wreaked havoc on its financials. It recorded an FX loss of N156 billion during the period

FBN Holdings (parent company of FIrst Bank) has cancelled its annual general meeting (AGM) which was scheduled to hold on August 22, 2024.

Green White Green This Week

We could see a few more banking results released within the week.

VFD Group Plc is scheduled to hold a board meeting today on Monday, by 12pm. The Board will consider as an agenda item the Q2 Management Report among other items.

Nigerian Breweries will hold an investor and analyst call on Friday.

Star-Spangled Banner Last Week

Nvidia results came in “below expectation.” We have those words in quotes because while there was growth, the markets seem to have gotten used to that, and the stock declined.

Meta (parent company of Facebook, WhatsApp et al) CEO Mark Zuckerburg disclosed the US government put pressure on it to censor COVID-19 content. He made this known in a letter to the House Judiciary Committee.

Warren Buffett ‘s Berkshire Hathaway made history last week as it became the first non-tech US firm to hit $1 trillion in market capitalisation. Market capitalisation is the figure you get when you multiply the share price of a company by the number of shares it has.

He also turned 94 within the week.

Star l-Spangled Banner This Week

Trading is abridged (shortened) this week, as today is Labour day, a public holiday in the US. So the stock market will be closed.

You have a few prominent earnings coming in during the week. They include cybersecurity firm Zscaler, chipmaker Broadcom, and retail giants DICK'S Sporting Goods and Dollar Tree.