There seems to be a consensus among watchers of the Nigerian banking sector that these days the changing dynamics foisted the nation’s economy by both the current local and international economic realities and are already taking their toll on Nigerian banks.
However, as the nation’s population grows, so also the need for banking services by the people, Hence, the rise in population and the corresponding rise in the number of unbanked and underbanked Nigerians are creating a new dimension of competition among banks in the country.
Therefore, as competition for the sphere of influence becomes fierce, analysts said only banks with a rack record of consistent preparation for emerging challenges will stand.
Meanwhile, the achievements recorded in the African financial landscape have been buoyed by the increased financial integration, increased mergers and acquisitions within and across borders, and lower trade barriers between markets. Also, advances in communications technology have accelerated international economic integration for the banks.
Despite the challenges of rough competition, rise in inflation rates, foreign exchange (FX) liquidity to insecurity issues, the Nigerian banks have grown their profits before tax (PBT) as well as profit after tax (PAT) impressively in the first nine months of the current financial year.
With these significant challenges, most banks’ vision to be the world’s most respected african bank still stand as strategic investments and expansion to countries provided with opportunity to deliver outstanding customers service to clients across the globe thereby investing in the people and communities and as well drive financial inclusion to ensure that there’s reduction in numbers of unbanked individual in the society.
2023 Reports For the Financial Performances of Five Top Banks
Nigerian Banks has grown remarkably not only in its financial Performances, but also in its social and environmental competence. And it has positioned the banks on the list of Africa’s top 10 banks.
Though, the year, was truly remarkable in terms of financial performance as banks reached the trillion Naira mark in revenue by achieving 287.2 per cent growth for UBA profit after tax (PAT), Zenith Bank Plc 162 per cent growth (PAT), FBN Holdings 159 per cent growth (PAT), Access Holdings 138.27 per cent growth (PAT), while Gtbank has 155.2 per cent growth of profit before tax (PBT) respectively.
According to the bank report, for the nine month period ended September 30, 2023, FBN Holdings reported a 159 percent growth in its profit after tax.
First Bank of Nigeria Limited said its profit after tax increased to N236.4 billion from N91.2 billion in the same period of 2022.
He said, “The substantial increase of 49.3 percent year-on-year in net interest income reflects our commitment to managing interest rate dynamics effectively and optimising our interest-earning assets, while the impressive growth of 111.6 percent year-on-year in non-interest income underscores our success in diversifying the bank’s revenue streams and providing value-added services to our customers.
“Growth of 157.9 per cent and 158.2 percent year-on-year in profit before tax and profit after tax respectively reflect our commitment to delivering exceptional value to our shareholders and stakeholders.”The bank’s net interest income rose to N371.0 billion from N248.5 billion.
Net loans and advances to customers increased to N5.3 trillion as of September 2023, up 40.1 percent from N3.7 trillion in December 2022. Customers’ deposits stood at N8.9 trillion in September 2023, up 29.2 percent from N6.9 trillion in December 2022.
The holding company’s merchant banking and asset management group, FBNQuest, recorded 83 percent growth in profit before tax to N21
billion, up from N11.5 billion.
Gross earnings amounted to N60.6 billion, up 68.7 percent from N35.9 billion in the similar period of 2022. FBNQuest’s total assets stood at N609.7 billion in September 2023, indicating 23.1 percent growth from N495.4 billion in December 2022.
Consolidating on its recently released performances, Africa’s Global Bank, United Bank for Africa (UBA) Plc, announced a splendid performance in its unaudited financial results for the third quarter ended September 30, 2023, recording impressive growth across all key performance metrics.
Replicating the remarkable performance achieved in the first two quarters of the current fiscal year, the bank’s gross earnings grew by 115.2 per cent to N1.309 trillion up from N608bn recorded last year, while operating income rose by 146 per cent from N414 billion in September 2022; to N1.018 trillion in the year under consideration.
Meanwhile, the bank’s financial report filed with the Nigerian Exchange Limited, indicated a whopping 262 per cent rise in Profit before Tax (PBT) to close at N502.01 billion compared to N138.49 billion recorded at the end of the third quarter of 2022, while profit after tax also rose impressively by 287.2 per cent from N116 billion recorded a year earlier to N449.29 billion massively surpassing its annualised return on average equity for Q3 2023 at 131 per cent to 44.37 per cent.
As in the preceding quarters, UBA continues to maintain a very strong balance sheet, with Total Assets rising to N16.24 trillion, representing a 49.5 per cent increase over the N10.86 trillion recorded at the end of December 2022, just as the bank benefitted largely from its technology-led initiatives targeted at improving customer experience over the past few years, with Customer Deposits rising to N11.63trillion, representing a 48.6 per cent rise, up from N7.8 trillion at the end of the last financial year.
UBA shareholders’ funds remained very strong at N1.778 trillion up from N922.1 billion recorded in December 2022 again reflecting a strong capacity for internal capital generation and growth.
Access Holdings Plc recorded N126.82 billion of pre-tax profits in the third quarter of 2023. This was revealed in the Group’s release of its third-quarter financial statements for the period ending 30 September 2023.
According to the Group’s financial statements for Q3 2023, the company’s profit after tax (PAT) was N115.004 billion, a 138.27 per cent increase from the N48.265 billion recorded in the corresponding period in 2022.
The Group’s profit before tax was up 156.19 per cent to N126.816 billion from N49.500 billion posted in 2022, driven by strong growth in interest income and foreign exchange gains. This is on the back of increasing inflation, which the economy continues to struggle with. Headline
inflation increased to 26.72 per cent, representing a 0.92 per cent – point rise from the previous month’s 25.80 per cent.
This financial performance in Q3 2022 took the group’s pre-tax profit in the first nine months of 2023 to N250.444 billion, a whopping increase of 82.93 per cent from the N136.914 billion recorded in the first nine months of 2022.
As of the end of Q3 2023, the Group’s Fair value and foreign exchange gain stood at N122.555 billion, a 119.35 per cent increase from the previous quarter.
However, key performance indices of the Group posted impressive performance year-on-year, with one of the factors being foreign exchange gains. For instance, the Group recorded a 119.35 per cent year-on-year increase in its foreign exchange gains and a 130.56 per cent increase in interest income which helped to boost its performance.
The Group reported profit before tax of N433.2billion, representing an increase of 155.2 per cent over N169.7billion recorded in the corresponding period ended September 2022.
The Group’s loan book (net) grew by 17.7 per cent from N1.89trillion recorded as at December 2022 to N2.22trillion in September 2023, while deposit liabilities increased by 37.9 per cent from N4.61trillion in December 2022 to N6.36trillion in September 2023.
The Group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing at N8.6trillion and N1.3trillion, respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 25.1 per cent, while asset quality was sustained as IFRS 9 Stage 3 Loans improved to 3.8 per cent in September 2023 from 5.2 per cent December 2022, however, Cost of Risk (COR) closed at 4.1 per cent from 0.6 per cent in December 2022 owing to Management’s conservative stance on provisioning as macros worsened year-on-year, weighing negatively on the ECL variables.
Commenting on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc, Mr. Segun Agbaje, said, the GTCO 3rd Quarter performance underpins our strategic positioning as a leading Financial Holding Company and reaffirms our strong capabilities to successfully navigate the challenges in our operating environment. Going into the final quarter of the year, we will continue to leverage the strengths within our growing financial services ecosystem to improve our products and service offerings, enhance customer experience, and maximise shareholder value.”
He further said, “We are proud of our work towards Promoting Enterprise across the African continent over the years and remain committed to helping indigenous small businesses thrive through our consumer-focused fairs.
Overall, the Group continues to post one of the best metrics in the Nigerian Financial Services industry in terms of key financial ratios i.e., Pre-Tax Return on Equity (ROAE) of 52.4 per cent, Pre-Tax Return on Assets (ROAA) of 7.7 per cent, Full Impact Capital Adequacy Ratio (CAR) of 25.1 per cent and Cost to Income ratio of 29.7 per cent.
Zenith Bank Plc also announced its audited results for the half-year ended 30 June 2023, recording an astounding triple-digit growth of 139 per cent in gross earnings from N404.8 billion reported in H1 2022 to N967.3 billion in H1 2023.
This is a clear demonstration of its resilience and strong market share despite a very challenging macroeconomic environment and persistent headwinds.
According to the bank’s audited half-year financial results presented to the Nigerian Exchange (NGX) on Monday, 11th September 2023, the triple-digit growth in the top line also spurred the bottom line as the Group recorded a 169 per cent Year on Year (YoY) increase in profit before tax, growing from N130 billion in H1 2022 to N350.4 billion in H1 2023. While profit after tax also grew by triple digits, growing by 162 per cent from N111.4 billion to N291.7 billion in the same period.
The growth in gross earnings arose from both interest income and non-interest income. Interest income grew by 72 per cent from N241.7 billion in H1 2022 to N415.4 billion in H1 2023, while non-interest income grew by 246 per cent from N149 billion to N515.7 billion.
The growth in interest income is attributed to the impact of both the growth and repricing of risk assets. The liberalization of the foreign exchange market during the period spurred the growth in non-interest income as revaluations gains improved significantly.
Total assets grew by 31 per cent from N12.3 trillion to N16.0 trillion in December 2022, mainly driven by growth in customers’ deposits and the devaluation of the local currency. Customers’ deposits grew by 30 per cent from N9.0 trillion in December 2022 to N11.6 trillion in June 2023.
Loans and advances also grew by 32 per cent from N4.12 trillion in December 2022 to N5.38 trillion in June 2023 partly due to the revaluation of the foreign currency denominated loans as well as growth in local currency loans. Non-performing loans ratio improved from 4.3 per cent to 3.9 per cent in December 2022 despite the deterioration of the macros and heightened risk environment because of the currency mix of risk assets.
Capital adequacy ratio improved from 19.8 per cent to 22.0 per cent, while liquidity ratio reduced from 75 per cent to 61 per cent in the current period. Both prudential ratios are still well above regulatory thresholds.
