Amaechi Raphael Chinedu

@Official_ARC·2h

Zenith's profit before tax went up. Its profit after tax fell 12%. Here's why

Zenith Bank released its nine-month results today, and the two profit lines point in opposite directions. Pre-tax profit rose 1.2% to ₦928.8bn. Profit after tax, the part that actually belongs to shareholders, fell 11.6% to ₦675.8bn. How can both be true? It helps to know what each line measures. 1. Profit before tax (PBT) is what the business earned from lending, fees and trading, after costs and bad-loan provisions. 2. Profit after tax (PAT) is what's left once the tax bill is paid. Earnings per share and dividends come from this number. 3. The gap between them is the tax charge, and it can change a lot from year to year. For ZENITHBA$ZENITHBA, the tax charge jumped 65% to ₦253.0bn. Roughly 27% of pre-tax profit went to tax, up from about 17% a year ago. That one line erased the small gain in PBT. It's not just Zenith. $GTCO reported this week too: PBT slipped 2.3% to ₦879.9bn, but PAT fell 12.2% to ₦614.6bn, because a bigger share went to tax. The other big swing at Zenith: impairments, the money set aside for loans that may not be repaid, fell 70.5% to ₦230.8bn. That saving is what kept pre-tax profit growing while gross earnings fell 15% and trading turned into a ₦229.2bn loss. The takeaway: when you read a results headline, check which profit it's quoting. PBT shows how the business ran. PAT shows what shareholders actually get. Which line do you look at first when results come out? Tell us below 👇 Not financial advice.