Story by Kayode Tokede
Access Bank plc, Fidelity Bank plc and three other banks have reported N1.28trillion in gross earning for half year (H1) ended June 30, 2019 results, 7.4 per cent increase over N1.19 trillion reported in half year ended June 30, 2018.
Ecobank Transnational Incorporated (ETI) leads the banking sector in gross earnings, gaining 5.4 per cent to N405.2 in H1 2019 from N384.6 billion in H1 2018. The pan-African financial institution explained that
Following ETI is Zenith Bank plc with N331.6billion in gross earnings in H1 2019, 2.9 per cent increase over N322.2 billion reported in H1 2018.
According to the bank, gross earnings increase was driven by a significant growth of 24 per cent in non-interest income from N88.6 billion in H1 2018 to N109.7 billion in H1 2019.
With the current merger with Diamond Bank, Access Bank reported N324.4 billion gross earnings in H1 2019, 28.2 per cent increase over N253 billion reported in H1 2018.
The group Managing Director, Access Bank, Mr. Herbert Wigwe explained to investors and analysts that gross earnings increase consisted of 84 of interest income and 16per cent non-interest income.
According to him, “increase in gross earnings also reflects what was just about a three per cent increase in gross earnings when you do it on a quarter on quarter basis. Interest income was up by 46per cent year on year and 32per cent quarter on quarter with the major contributors being a 138per cent increase in income from investment securities to about N107 billion.
“Half year 2018 this was N45.3 billion. And there was a 14per cent increase quarter on quarter, i.e. the second quarter of this year compared to the first quarter of this year. The second quarter was N57 billion and the first quarter was N50.8 billion.”
However, FBN Holdings plc reported 0.31 per cent increase in gross earning to N294.2 billion from N293.3 in H1 2018 while Guaranty Trust Bank plc reported 2.1 per cent decline in gross earnings to N221.9 billion in H1 2019 from N226.6 billion reported in H1 2018.
The lender in a presentation to investors/analysts said gross earnings decline was as a result of eight per cent decline in interest income which completely offset the gains of 12.6 per cent recorded in the Non-interest line.
The bank explained that interest income decline was due to declining yield enviromnemt in H1 2019 relative to H1 2018.
According to GTBank, earnings asset yield declined by 101 basis points from 13.07 per cent in H1 2018 to 12.06 per cent in H1 2019 as a result of portfolio yields on T-bills which averaged 15.6 per cent in H1 2019 as against 17.4 per cent in H1 2018.
In addition, Fidelity Bank plc reported 12.3 per cent increase in gross earnings to N103.7 billion in H1 2019 from N92.3 billion reported in H1 2018.
Fidelity Bank explained that increase in gross earnings was driven by 52.4 per cent growth in fee-based income and a 7.2 per cent growth in interest income.
“We recorded double digit growth across the following income lines: credit related fees (238.7 per cent, foreign exchange income, 76.1 per cent; trade income, 75.7 per cent; digit banking income, 26.3 per cent and account maintenance fees, 20.3 per cent.”
The lender explained further that digital banking continued to gain traction driven by new initiatives in retail lending segment (Fidelity Fastloan) and increase cross-selling of digital banking products.
“We now have 45 per cent of our customers enrolled on the mobile/internet banking products, 82 per cent of total transactions now done on digital platforms and 29 per cent of fee-based income now coming from digital banking.”