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In the last nine months of 2022, a total of six Deposit Money Banks have recorded an impressive N764.860 billion Profit Before Taxes (PBT).
A review of the performance of the top tier banks in the nine months 2022, showed that Zenith had the highest PBT of N202.549 billion, followed by GTCO at N169.724billion while Access Holdco came third with N147.296 billion.
The United Bank for Africa (UBA) stood in fourth position with N138.493 billion PBT. StanbicIBTC and Fidelity bank stood as the last two highest-earning top tier banks at N68.946 billion and N37.792 billion, respectively.
In terms of year-on-year (Y-o-Y) growth, Stanbic IBTC and Fidelity led with 52.2 per cent and 34.7 per cent, respectively, while others had less than a 15 per cent growth rate.
Concerning investor ratios, Fidelity Bank had the lowest return on equity (RoE) of 15.20 per cent and the highest cost-to-income ratio (CIR) of 68.8 per cent. Access holdings saw the highest non-performing loan ratio of 6.18 per cent as of half year (H1) 2022.
StanbicIBTC posted the best loan asset quality with an NPL of 2.60 per cent.
Analysis of the banks’ financial result show that the rise in banks’ CIR was due to persistent inflation pressure that continued to fourth quarter (Q4) 2022
Analysts at Proshare said the Holdco’s performance in the 9M 2022 felt the heat of the economic headwind, recording a marginal increase of +0.7 in net earnings after a decline in Q1 2022.
Generally, the banking sectors have seen a significant rise in interest income this year with the high-interest rate environment, which helped to widen their profit.
“However, GTCOs’ interest income growth was insufficient to move up the net earnings as the less inflow from e-banking pulled it down. In Q4, the group needs to deliberately scale up its e-banking income and interest income to improve net earnings,” the analysts stated in a research note.
UBA followed a similar rhythm, recording a +12.3 per cent PBT from N123.35 billion in 9M 2021 to N138.49 billion in 9M 2022 with sufficient support from interest and digital banking income.
The Group’s financial position improved with increased customer deposits, shareholder funds, and customers’ loans and advances.
However, the bank’s cost-minimisation strategy pinched a bit, with the CIR rising to 63.20 per cent as operating expenses increased. Analysts noticed the Group’s impairment charge grew by +107 per cent, resulting from a larger loan book and a rise in loan defaults.
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Further breakdown of UBA’s performances show that net interest income grew by +23.2 per cent between 9M 2022 and 9M 2021 with support from interest income and fees and income commission.
While Profit Before Tax increased by +12.3 per cent, Profit After Tax had a +10.9 per cent appreciation between 9M 2021 and 9M 2022.
UBA’s customer deposit increased to N7.03 trillion in 9M 2022 from N6.08 trillion, which generated a +20 per cent rise in interest expense.
Shareholders’ equity slightly appreciated N808.6 billion in 9M 2022 from N798.3 billion in 9M 2021.
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