By NKIRUKA NNOROM
Zenith Bank Plc said its gross earnings for the financial year ended 31stDecember, 2011, rose to N244.07 billion, a 26.8 per cent increase over N192.48 billion recorded in the same period of 2010.

The bank said in a notice filed with the Nigerian Stock Exchange (NSE) that the directors have resolved to compensate the shareholders with N95 kobo dividends for their investment in the bank.

The profit before taxation at N60.99 billion was 21.3 per cent increase over N50.03 billion reported in corresponding period of 2010, while after tax profit jumped to N44.18 billion from the previous N37.41 billion.

However, analysts at FBN Capital said in their analyst note that the bank’s results fell below their expectation, though the proposed dividend implies a payout ratio of 70 per cent and a 6.8 per cent yield.

According to the investment firm, the profit was impacted by N17 billion loan provision made by the bank during the year, arguing “Likely that consensus’ 2012E earnings estimates will see modest revisions given the one-off nature of the provisions in quarter four.”

“The source of the disappointment in the results was the provisions line. Zenith booked N24.3 billion in provisions for the full year; N17 billion of that fell in quarter four alone, equating to a charge on gross loans of around eight per cent annualised (for the full year the charge was around three per cent). We suspect that this significant charge is related to oil-marketer Zenon lo.ans, which Zenith sold to AMCON.

“If we look at the underlying results before the operating expenses and the provisions charge, profit before provisions grew only 1.2 per cent year on year to N46 billion compared with an average of 47.5 per cent year on year over the quarter one to quarter three 2011 period. As such, Zenith’s underlying results were not as strong as we would have expected,” the report further stated.

“The N46 billion missed our estimate by 13.4 per cent. This was probably driven by both income lines. There was no new net lending in quarter four (net loans were down one per cent quarter to quarter) but other interest earning assets grew strongly in quarter four. Deposits jumped 7per cent quarter on quarter to N1.65 trillion. We would stress that at this stage investors should not read too much into the positive surprise on the Operating expenses (opex) line.