By Chinenye Anuforo and Chinwendu Obienyi
Majority of Nigerian banks have demonstrated their resilience in the last two years amid macro-economic challenges, which weighed on credit expansion, asset quality and capital adequacy to record positive performances this year.
Market watchers believe investors are taking positions on banks due to good fundamentals and in a bid to benefit from expected dividend the lenders declare as the economy improves gradually.
Following the release of their third quarter results recently on the Nigerian Stock Exchange (NSE)’s website, checks by Daily Sun revealed that seven out of 24 banks posted profit before tax amounting up to N386.13 billion. These banks include Access Bank, Diamond Bank, Fidelity Bank, First Bank of Nigeria (FBN) Holdings Plc, Guaranty Trust Bank (GTB), Sterling Bank and United Bank for Africa (UBA).
Access Bank recorded an increase in pre-tax profits from N69 billion in September 2016 to N72.9 billion in September 2017, closing the period with a 4 per cent year-on-year growth in Profit After Tax (PAT). The bank’s PAT grew to N56.4 billion in 2017 from N54.1 billion in 2016 while its gross earnings increased by 33 per cent year-on-year (YoY) from N275 billion to N365 billion, driven primarily by the strong performance on core revenue lines.
Diamond Bank displayed moderate growth in key financial parameters as its gross earnings jumped by 11 per cent YoY to N168.4 billion while Profit Before Tax (PBT) surged by 71 per cent to N6.7 billion.
FBN Holdings Plc gross earnings grew by 5.2 per cent YoY to N439.2 billion from N417.3 billion in 2016 driven largely by a 27.8 per cent YoY growth in interest income. The bank also recorded a PBT of N55.4 billion and PAT of N45.8 billion, up 7.8 per cent from N42.5 billion in 2016.
After successfully issuing $400 million Eurobond, which was priced at 10.50 per cent coupon recently, Fidelity Bank recorded an increase in its gross earnings by 17.9 per cent to N130.1 billion from N110.3 billion reported in the same period in 2016 while PBT soared by 65.1 per cent from N9.8 billion to N16.2 billion on the back of growth in the bank’s revenue lines and improved efficiency.
GTBank also posted a profit of N125.58 billion representing a growth of N8.49 billion as against N117.08 billion achieved in the corresponding period of 2016. The bank’s PBT rose to N150.03 from N137.99 billion in 2016. Further analysis showed that the bank’s total assets surged to N3.21 trillion from N3.12 trillion reported at the end of 2016 financial year.
Sterling Bank’s gross earnings increased by 19 per cent to N94.6 billion as against N79.7 billion during the corresponding period of 2016 and other performance indicators showed that non-interest income grew by 48.9 per cent to N16.0 billion as against N10.8 billion in Q3. PBT rose by 8.1 per cent to N6.6 billion as against N6.1 billion in 2016 while PAT also appreciated by 7.3 per cent to close the quarter at N5.9 billion compared with N5.5 billion in 2016.
On the other hand, UBA continued to sustain its strong performance in the financial industry as its gross earnings grew by 26 per cent to N333.9 billion as against N265.5 billion in 2016. The group’s operating income stood at N236.9 billion compared to N183.3 billion recorded in 2016 while its PBT grew by 33.2 per cent to N78.3 billion as against N58.8 billion recorded in the similar period of 2016.
Commenting on the results, Chief Executive Officer, Access Bank Plc, Herbert Wigwe, expressed satisfaction, adding that the bank will continue to gain momentum to achieve more diversified earnings.
“We will continue to gain momentum in our efforts to achieve more diversified earnings, as we strengthen our retail and digital offerings. I am excited at the prospects in the coming months and the board and management remain extremely grateful to our more than eight million customers, shareholders and dedicated employees for enabling us achieve several milestones within this period. We look forward to the next five years, with confidence in our ability to deliver superior service and optimised shareholder value,” Wigwe stated.
Chief Executive Officer, Diamond Bank Plc, Uzoma Dozie, stated that the bank’s modest growth in the last three business quarters under review, despite the lull in economic activity and hazy operating environment, was the result of management’s focus on key strategic projections across the three core segments of retail, business and corporate banking.
He further said, “we are happy with the progress we have made against our technology-led retail strategy and in areas of our financial performance but there is more to do in the remaining quarter and beyond.”
Specifically, we are committed to further developing our technology and operating infrastructure that allows us to scale rapidly, efficiently and cost effectively across Nigeria”
Group Managing Director, FBN Holdings Plc, Urum Eke, said “FBNHoldings has again demonstrated its resilience in revenue generation with a 5.2 per cent y-o-y growth in gross earnings to N439.2 billion following a y-o-y increase of 25.2% in net interest income to N254.3 billion. The Group is progressing in building the right structures for sustainable growth through an improved credit culture and risk management; increased technologically driven operational efficiencies; and the introduction of revenue enhancingplatforms.
Managing Director, Fidelity Bank, Nnamdi Okonkwo attributed the bank’s consistent delivery of strong financial results to the disciplined execution of medium term strategy which is centered on optimal balance management, strategic cost reduction and increased play in the digital and retail banking space.
Commenting further, Managing Director, Sterling Bank, Yemi Adeola said, “As economic recovery gains momentum, we are well positioned to respond to emerging opportunities in education, health and transportation sectors. Our existing collaboration with pioneering technology companies in these sectors has started yielding results and this will provide a springboard for growth in 2018”
Group Managing Director, UBA, Kennedy Uzoka, attributed the result to the attestation of the bank’s ability to sustainably grow earnings and market share.
His words, “These extremely positive third quarter results are an attestation of our ability to sustainably grow earnings and market share, notwithstanding the challenging operating environment. They are a tribute to our enhanced customer engagement and focus on continuous improvement in service quality”
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