A breakdown of the cumulative nine months’ results of seven leading banks that have so far submitted their results to the Nigerian Stock Exchange (NSE) shows that despite the harsh economic environment, they grossed a total of N546.6 billion as profit after tax (PAT).
The difference, which amounts to N55.6 billion, is 10.2 percent growth on the 9 months results of 2018 which was N491.1 billion, analysis of the results has shown.
The seven banks which have so far released their results are Access N90.7billion (N62.9bn 2018), Stanbic N55.5bn (N59.7 2018), Wema N4bn (N2.6bn 2018), UBA N98.2bn (N79.1 2018), Unity N1.4bn (N600m 2018), Zenith N150bn (N144bn 2018) and GTB N146.9bn (N142bn 2018).
Four out of the seven banks (Zenith, GTB, UBA and Access) account for N484.9bn of the total profit result in a total share of 88.6 percent. A further breakdown in the results of the seven banks reveals that the total revenue grossed by the banks before deducting expenditure rose to N1.6 trillion from N1.4 trillion released within the same period in 2018.
Zenith Bank led as the highest revenue earner with N491bn, followed by GTB which raked in N334.8bn and UBA with N265.9bn. Others are Stanbic N176.1bn, WEMA N64.8bn and Unity N31.3bn.
The result also revealed that the seven banks grossed a total of N44.7bn from account maintenance fees as against N62.8bn realized from credit related transactions.
It would be recalled that the Central Bank of Nigeria (CBN) in 2016, directed banks to introduce a “negotiable” current account maintenance fee to replace the Commission On Turnover (COT) fee, which was abolished on January 1, 2016.
In a circular issued to banks, CBN directed them to charge a fee not exceeding N1 per N1,000 in respect of all “customer induced debit transactions.” The CBN directive was targeted at easing the pressure on Nigerian banks faced with declining oil prices, which have caused non-performing loans to spike and Nigeria’s economic growth to slow down; the abolishing of the COT, which will slash revenues by nearly 20 percent; and the introduction of the Treasury Single Account, which withdrew federal government deposits of over N1 trillion from banks.
A breakdown of the N44.7bn realized from account maintenance fees shows that Zenith led the pack with N15.8bn followed by Access Bank which made N10.1bn. GTB N8.5bn, UBA N6.0bn, Stanbic N2.9bn, WEMA N802 million and Unity N674 million. On credit related fees, Access Bank led the pack with N24.4bn, followed by Zenith with N14.2bn, UBA N13.4bn, GTB N8.0bn, Stanbic N1.8bn, WEMA N662 million and Unity N327 million.
Speaking on their results, the management of Zenith Bank said: “Our robust risk management framework has ensured that non-performing loans (NPL) ratio declined from 4.98% in December 2018 to 4.95% in the current period. “Our commitment to maintaining a shock-proof balance sheet remains with liquidity and capital adequacy ratios at 63.8% and 23.8% respectively, both above regulatory thresholds.
“In this final quarter of the year, we will sustain our competitiveness and share of market in the corporate segment and build upon our digital foundations to reinforce our retail banking initiatives.” it added. The Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, said: “The resilience of our business model and our focused growth of earning assets has yielded a 10.8% growth in interest income.
In addition to the commendable yield on interest earning assets, we also achieved a 22.1% growth in non-interest income, driven largely by the increased penetration of our superior digital banking offerings, credit expansion, remittances and other lifestyle transactional services.”
“UBA remains committed to its vision of becoming the undisputed leading and dominant financial services institution in Africa. We will continue to innovate and lead in all our business segments, whilst delivering top-notch operational efficiencies and best-in-class customer service. “We are beginning to realise early gains from our ongoing transformation programme and I am indeed excited about the days ahead,” Uzoka stated.
The Managing Director/CEO, Mrs. Tomi Somefun, commenting on Unity Bank’s third quarter results said: “Diversifying our stream of income into other assets and trade activities has been impactful and led to increased earnings for the bank.”
She further stated that despite the uncertainties that characterised the business environment, doubled-down by double digit inflation rate all year, the resilience of the bank has seen it ride the waves and remain consistent with its strategic business continuity framework and its commitment to excellent service delivery to its customers.
The opportunities in the agribusiness also continued to provide backbone to diversify earnings base in the retail market and leveraging on the value chains it offers in building scales and growth, she said.
Speaking on its prospects, she said “the bank is completely out of the woods and facing even brighter prospects particularly counting on experiences gained from the past and putting in place dynamic strategy to further penetrate the market, maintain quality of assets creation, grow multiple income streams and bottom-line.”