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H1 2022: Ecobank, Zenith Bank, others report 5.6% growth in deposits to N34.3trn



…As Ecobank leads with N8.318trn

By Philemon Adedeji

A total of five banks deposit rose significantly to N34.3 trillion in half year 2022 results, representing 5.6 per cent increase from N32.4 trillion reported as of end of December 2021 – this is according to Nigerian NewsDirect investigation.

The five leading financial institutions are Ecobank Nigeria, Zenith Bank plc, Access Bank plc, United Bank of Africa (UBA) Plc, and Guaranty Trust Holding Company (GTCO).

From the audited half year 2022 financial statement, Ecobank Nigeria, reported highest deposit, followed by Access bank which recorded as the second, while Zenith bank recorded as the third.

United Bank of Africa and Guaranty Trust Holding Company reported the lowest.

Ecobank reported N8.318 trillion deposit in H1 2022, representing a decrease of one per cent from N8.660 trillion in full year 2021, while Access Bank Holding deposit hit N7.839 trillion in H1 2022 from N6.954 trillion in FY 2021, an improvement of 12.7 per cent.

After Access Bank is Zenith Bank with aggregate deposit of N7.152 trillion in H1 2022, from N6.472 trillion as of December 2021, reflecting a  marginal increase of 11 per cent.

United Bank of Africa (UBA) grew its deposit by 6 per cent to total sum of N6.729 trillion in H1 2022, from N6.369 trillion reported in full year 2021 and GTCO which reported lowest out of the five banks reported a marginal in 6.24 per cent increase in deposit to N4.262 trillion in H1 2022 from N4.012 trillion in FY 2021.

The Group Chief Executive Officer of Guaranty Trust Holding (GTCO Plc), Mr. Segun Agbaje, in a statement said, “Our results show an increase in key revenue lines and a strong performance in other financial metrics which reinforce our growth prospects as a leading financial services company. Our priority at the start of the 2022 financial year was to bring the Group’s new businesses on-stream, starting strong with a focus on long-term viability. At present, we have successfully expanded our financial services ecosystem to include HabariPay Ltd, Guaranty Trust Fund Managers Ltd, and Guaranty Trust Pension Managers Ltd, and all of them are P&L positive.”

He further stated that, “These newly created businesses will operate alongside our flagship banking franchise to offer increased value to our growing customer base as well as other stakeholders. We will continue to build on our core strengths of service excellence, innovation, and flawless execution to deliver our corporate objectives for the year and further our vision of being Africa’s leading financial services institution.”

UBA’s Group Managing Director/Chief Executive Officer, Mr. Oliver Alawuba said, “Our performance in the first half of year 2022 is in line with our expectations as the Group grew gross earnings by 17.8 per cent, largely from double digit growth in both net interest and non-interest income. We have continued to leverage our Customer -1st philosophy to pursue the mission of providing superior value to our stakeholders. This is evident in the increase in low-cost customer deposits, and strong growth of our payments and transaction banking.

“The financial year 2022 showed initial signs of recovery of economies across the globe, despite continued COVID-induced supply-chain disruptions.

“However, geopolitical challenges including the Russia and Ukraine conflict, resulted in escalation of global commodity prices, particularly those of grains and crude oil, which have taken a toll on several economies. Notwithstanding these developments, our half-year numbers came out stronger than the prior year, with top and bottom-line reaching new record highs.

“The Group’s profitability increased by 12.6 per cent to N85.7 billion, with double-digit growth recorded across our key income line. We recorded a decent 20 per cent growth in our net interest income as we continued to moderate our cost of funds whilst improving yield on assets, thereby contributing to the strong 20 per cent growth in operating income.

“Our investments in state-of-the-art technology continue to yield expected results, evident in the huge boost of our digital banking income, which grew 22.7 per cent year-on-year to N36.3 billion. These gains have enabled us to optimize net earnings amid the accelerating inflationary pressure, the currency devaluation, and increased regulatory induced cost.”

In a swift response, the Vice President of HIGHCAP Securities Limited, David Adonri said, “The above report shows that the deposit liabilities of those  banks grew significantly in 2022 when compared to the same period in 2021 may be probably due to hike in interest rate and increasing economic activities.”

Also reacting, the CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr.Yusuf Muda, said, “The growth in deposit is an indication that economy is gradually recovering, when economy is recovered, the level of deposit will also increase.”

Money market

UBA pledges $6bn to support SMEs in Expert expresses confidence in Tinubu’s 2024 budget proposaltrade deal



A Professor of Capital Market at Nasarawa State University, Keffi, Uche Uwaleke, has expressed optimism about the proposed 2024 budget presented by President Bola Tinubu.

Uwaleke, who is also the President of the Association of Capital Market Academics of Nigeria, made this statement during an interview with journalists in Abuja on Sunday.

While acknowledging the promising nature of the budget, Uwaleke highlighted the challenges posed by the distortionary impact of the Foreign Exchange (FX) regime.

He emphasised that addressing this issue is crucial for the successful implementation of the budget.President Bola Tinubu presented the 2024 Appropriation Bill, titled the “Budget of Renewed Hope,” to a joint session of the National Assembly on Wednesday.

The proposed budget amounts to N27.5 trillion. In Uwaleke’s view, the 2024 budget proposals offer significant potential for the economy if effectively executed.

“A major snag, however, stems from the likely distortionary impact of the new fx regime.

“A Naira float in the face of weak supply and strong demand with its attendant FX market volatility introduces uncertainty in budget implementation.

“This is why I consider the N750 to the dollar rate used for the 2024 budget as a tall order.

“It is most likely the exchange rate will be the major cause of wide variances in the 2024 budget on account of Nigerian Autonomous Foreign Exchange Market (NAFEM) operations,” he said.

Uwaleke said that a volatile and high exchange rate would increase the cost of servicing external debt and further widen the budget deficit.

“This is particularly so in respect of the dollar-denominated component of the budget, much of which can be found in the over three trillion Naira proposed defence spending as well as in recurrent debt expenditure.

“In my view, a well implemented and corrupt-free dual, not multiple, exchange rate regime helps to bring certainty in government procurements and short term planning in general,” he said.

He said that one tier of the dual rates should be official, including for debt service, and the other tier for other transactions.

According to Uwaleke, a related issue has to do with the mode of financing the over nine trillion Naira deficit and its likely impact on cost of capital for firms and the stock market.

“In previous budgets, the amount voted for new borrowings were split fairly equally between domestic and foreign sources.

“This time around domestic borrowing is taking up a huge chunk at about 78 per cent, N6.1 trillion out of N7.8 trillion, provisioned for new borrowings

“This can have the effect of crowding out the private sector, hiking interest rates, increasing cost of funds, and depressing the equities market as investors migrate to fixed income securities.

“The outcome will be a further weakening of the productive sector,” he said.

He advised the Federal Government to explore more opportunities for concessional project-tied loans from multilateral and bilateral sources.

He said that this would help to boost fx reserves and stabilise the exchange rate.

“With respect to borrowing domestically, it’s important that emphasis should be placed on the use of the right instruments such as infrastructure bonds as opposed to Federal Government of Nigeria (FGN) bonds that are inflationary prone,” he said.

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Money market

Access Bank boosts MSME loan scheme to N50bn, receives Govt praise



Access Bank Plc has received commendation from the Federal Government for increasing its loan scheme for Micro, Small and Medium Enterprises (MSMEs) from N30 billion to N50 billion.

Senior Special Assistant to the President on MSMEs and Job Creation, Office of the Vice-President, Mr Temitola Adekunle-Johnson made this announcement in a statement on Monday in Abuja.

In November, Access Bank had initially announced the provision of N30 billion to support four million MSMEs, women, and youth businesses in Nigeria.

The Group Managing Director of the bank, Mr Roosevelt Ogbonna, had disclosed this during a meeting with Vice-President Kashim Shettima at the Presidential Villa.

The decision to increase the loan scheme was made to benefit more individuals and have a greater impact on livelihoods.

The loans will be given to beneficiaries at a discounted rate of 15 percent. Any further adjustments to the loan scheme will be based on its performance after a year.

Vice-President Shettima expressed his appreciation for the bank’s gesture and praised the impact of its partnership with the Federal Government in the MSMEs sector.

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Money market

Subscribe to FG bonds with competitive interest rates for Dec. 2023 — DMO invites investors



…Auctions N406.10bn worth of T-bills in July

By Sodiq Adelakun

The Debt Management Office (DMO) has announced the subscription process for two-year and three-year Federal Government of Nigeria bonds for December 2023.

The bonds will have an interest rate of 12.287 percent and 13.287 percent respectively and will mature on March 13th, 2024. The subscription period will last for 5 days, from December 4th to December 8th, 2023.

The DMO made the announcement on its official website..

The statement read, “Under the Debt Management Office (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, CAP. L17, LFN 2004 DEBT MANAGEMENT OFFICE on behalf of the FEDERAL GOVERNMENT OF NIGERIA Offers for Subscription and is authorized to receive applications for the Federal Government of Nigeria saving bonds.”

The interest rate for the two-year bonds stands at 12.287 percent per annum, while the three-year bonds offer an interest rate of 13.287 percent per annum.

The statement also specifies the settlement date for both bond offerings as December 13th, 2023, with coupon payments scheduled for March 13, June 13, September 13, and December 13.

These bonds will accrue interest payments every quarter.

The DMO outlines the units of subscription as “N1,000 per unit, subject to a minimum subscription of N5,000, and subsequent multiples of N1,000, with a maximum subscription limit of N50,000,000.”

Potential investors are advised to reach out to stock brokerage firms authorised by the Debt Management Office (DMO) to inquire about FGN bonds.

These bonds can be traded on the NGX (Nigerian Exchange Group). It is crucial to understand that FGN bonds are completely supported by the federal government of Nigeria.

…Auctions N406.10bn worth of T-bills in July

Also, DMO has announced that it sold Treasury bills (T-bills) valued at N406.10 billion in its auctions in July 2023. This information was revealed in the FMDQ Markets Monthly Report for July.

The amount sold represents a 0.39 percent increase (N1.59 billion) compared to the previous month of June 2023, when T-bills worth N404.51 billion were sold.

In addition, the DMO reopened two 10-year, one 15-year, and one 30-year Federal Government of Nigeria (FGN) Bonds, totaling N657.84 billion in July 2023.

The report highlighted that the total sale of these bonds was oversubscribed by 182.73 percent and represented a 39.03 percent increase (N184.68 billion) compared to the amount sold in June 2023 (N473.16 billion) for the same bond maturities.

The report also mentioned that the Central Bank of Nigeria (CBN) did not conduct any public Open Market Operations (OMO) Bills auctions in July 2023.

Furthermore, the FMDQ report revealed that no corporate bonds were listed on the FMDQ Exchange in July 2023, in contrast to the N17.50 billion worth of corporate bonds listed in June 2023.

According to the report, there were no corporate bonds listed on the FMDQ Exchange in July 2023 compared to N17.50 billion worth of corporate bonds listed in June 2023.

“As a result, the total outstanding value for corporate bonds remained unchanged at N1,757.95 billion in the review month,” it said.

The report stated that the total value of Commercial Papers (CPs) quoted on the FMDQ Exchange in July 2023 was N117.32 billion, representing a MoM increase of 42.85 percent (N35.19 billion) from the value of CPs quoted in June 2023.

“Quoted CPs were issued by institutions from various sectors including Financial Services (5), Manufacturing (4), Real Estate (3), Agriculture (2), Chemical Supply & Oil Field Services (2), Commodities Trading (1), Public Sector (1), Telecommunications (1) and Consumer Staples (1)./

“As a result, the total outstanding value of CPs increased MoM by 14.10 percent (N117.32 billion) to N949.26 billion,” it said.

According to the report, secondary market turnover on the FMDQ Exchange in July 2023 was N19.92 trillion, representing a MoM decrease of 8.37 percent (1.82 trillion) and a YoY increase of 0.81 percent (N0.16 trillion) from June 2023 and July 2022 figures, respectively.

It noted that Foreign Exchange (FX), Money Market (MM), and CBN Bills transactions dominated secondary market activity, accounting for 73.98 percent of the total secondary market turnover in July 2023.

“Total spot market turnover for all products traded in the secondary market was N18.47 trillion in July 2023, representing a MoM increase of 3.68 percent (N0.66 trillion) from June 2023 figures./

“The MoM increase in total spot market turnover was driven by an improvement in turnover across MM and FI transactions which increased MoM by 16.35% (N0.90 trillion) and 12.16 percent (N0.91 trillion), respectively, despite the MoM decline in FX transactions by 24.34 percent (N1.16 trillion)./

“The uptick in MM turnover was driven by an increase in Repos/Buybacks, offsetting the MoM decline in Unsecured Placement/Takings transactions. Likewise, the improvement in FI turnover was driven by a MoM increase across all FI products, excluding CBN Special Bills and FGN Bonds which decreased in the review period,” the report noted.

According to the report, “Spot FX market turnover was N3.61 trillion ($4.66 billion) in July 2023, representing a MoM decrease of 24.34 percent (N1.16 trillion) from the turnover recorded in June 2023 (N4.77 trillion).

“In the FX Market, the US Dollar appreciated against the Naira, with the spot exchange rate ($/N) increasing by 22.94 percent ($/N143.60) to close at an average of $/N769.51 in July 2023 from $/N625.90 recorded in June 2023./

“In July 2023, the Nigerian Naira experienced decreased exchange rate volatility, with the currency trading within a range of $/N740.08 – $/N803.90. This was a significant improvement compared to the range of $/N464.67 – $/N770.38 recorded in June 2023.”

The report also highlighted that the turnover in the financial instruments (FI) market reached N8.43 trillion in July 2023, showing a month-on-month increase of 12.16 percent (N0.91 trillion) compared to the turnover of N7.52 trillion in June 2023.

The increase in FI market turnover was primarily driven by significant upticks in turnover across T.Bills, OMO Bills, and Other Bonds, which saw increases of 52.55 percent (N0.94 trillion), 63.75 percent (N0.98 trillion), and 402.37 percent (N0.03 trillion) respectively. These increases offset the decreases in turnover for CBN Special Bills and FGN Bonds, which experienced declines of 57.36 percent (N1.00 trillion) and 1.24 percent (N0.03 trillion) respectively.

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