Zenith Bank Q2 2025 – Earnings Resilient Amid Heavy Impairment

Event

Zenith Bank recorded a sharp decline in profitability in Q2 2025 as impairment costs weighed heavily on earnings. Profit after tax fell to N220.35bn from N319.67bn in Q2 2024, reflecting the industry-wide wind down of regulatory forbearance mandated by the monetary authorities. The shift triggered a steep 98% rise in net impairment charge to N711.44bn from N359.32bn, while the Group also wrote off N1.18trn in legacy exposures. As a result, loan and advances fell by about 4% on a year-to-date basis.

Outlook

We also raise our fair value estimate to N76.01 from N62.15 in our previous report. This implies a justified P/E multiple of 2.45x and a forward P/E of 2.11x, both below the 10-year average of 3.13x. At current valuation levels, Zenith Bank remains attractively priced relative to its fundamentals and long-term earnings potential. We therefore maintain our BUY recommendation.

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