H1 2020: 4 commercial banks report 16% decline in profit

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By Kayode Tokede

Sterling Bank Plc, Ecobank Transnational Incorporated (ETI) and two other banks have reported 16 per cent decline in profit, according to their unaudited half year (H1) ended June 30, 2020 results.

As gathered by Nigerian NewsDirect, the other two banks are Wema bank plc and Union Bank of Nigeria Plc.

The banking sector was one of the most affected sectors during the COVID-19 pandemic lockdown. Commercial activities inside the banking hall were halted to stop the spread of the virus. This, Nigerian NewsDirect gathered that affected gross earnings and impacted on interest on loans granted as most customers were unable to pay.

Nigerian NewsDirect gathered that Wema bank’s profit dropped to N1.49billion in H1 2020 from N2.25billion reported in H1 2019 while Ecobank reportedN48.5billion in profit from N59.49billion reported in prior half year results.

The group Chief Executive officer, ETI, Mr. Ade Adeyemi in a statement said, “The pandemic has completely changed the way that customers transact, accelerating the adoption of digital transactions which are gradually replacing cash.

“There is increased customers utilization of our digital channels, through our mobile app, Ecobank pay, OMNI, online and self service on our ATMs. The number of transactions in branches has dropped about 64 per cent year-on-year, while digital engagements have increased by 56 per cent.

“Going forward, the operating environment remains challenging as the pandemic continues to surge across the continent, though economic activities are slowly returning across our footprint. However, economic activity in sub-saharan African is forecast to reduce. But, our commitment to the continent, our stakeholders, and employees remains steadfast. We will continue to support our customers and ensure the sustainable viability of the organization.”

As Sterling Bank Plc    reports 4.3 per cent decline in profit to N5.42billion in H1 2020 from N5.66billion in H1 2019, Union Bank of Nigeria’s profit for the period dropped by 9.2 per cent to N10.76billion in H1 2020 from N11.85billion reported in H1 2019.

The Chief Executive Officer, Union Bank of Nigeria, Emeka Emuwa, in a statement said, “The impact of COVID-19 and associated movement restrictions on the Bank and the wider economy has been broad.

“The total lockdown of major commercial centers Lagos, Abuja and Ogun and partial lockdowns across the country, slowed business operations in Q2 2020.

I am pleased that the Bank has been able to support our employees, customers and the wider community through the ongoing COVID-19 crisis. In particular, the #UnionRiseChallenge which we launched in June recognised and rewarded customers who inspite of the COVID-19 pandemic are rising to support their communities.

“The Bank awarded N15 million to 90 recipients over a period of 4 weeks and helped amplify the great work of over 1500 community initiatives that were submitted through the campaign.

As we navigate the realities of the pandemic for the remainder of the year, we will continue to focus on increasing transaction volumes on our electronic channels, managing cost and strategic targeting of key customer segments to ensure we end the year well.

We will also continue to prioritise the health and safety of our employees and customers, while finding innovative ways to meet and exceed our customer expectations.”