Operating efficiency drives Polaris Bank’s impressive profitability
Nigeria’s leading digital commercial retail bank, Polaris Bank has surpassed its previous full-year profit before tax by more than 28 percent in the first eight months of this year, in a major performance shift that underlines significant improvements in the bank’s cost and credit risk management.
Growing customers’ confidence, improved margins and a strong performance in the core banking business over the past eight months signal that Polaris Bank could be on the way to a momentous performance in 2024.
Annualised, management accounts for the eight-month period ended August 31, 2024 showed that Polaris Bank would significantly surpass all key performance indicators recorded in the year ended December 31, 2023.
With average profit on every transaction four steps ahead of the previous year, the bottom-line performance underscored a steady improvement in the core banking business, despite the challenging operating environment.
The overall impressive outlook of the bank lent credence to the growing confidence and success of the new management of the bank, under the leadership of Mr. Kayode Lawal.
The constitution of a full board for the bank two weeks ago was seen by industry analysts as a clear endorsement of the bank’s remarkable strides under the new management by the Central Bank of Nigeria (CBN).
Pre-tax profit margin for the eight-month period ended August 2024 stood at 10.62 percent as against 6.61 per cent recorded for the full-year 2023, an increase of about four percentage points.
Net interest income margin stood at about 52.6 percent in August 2024 as against 52.1 percent in December 2023. Pre-tax return on total assets for the eight-month period rose to 1.22 percent as against 0.63 percent recorded in full-year 2023. Pre-tax return on equity stood at 21.44 percent in August 2024 compared with 13.15 percent in December 2023.
At N16.733 billion in the first eight months of this year, profit before tax was 28.4 percent ahead of the N13.033 billion recorded in full-year 2023. The bank had recorded net profit of N10.91 billion in 2023.
Key extracts of the management accounts and report for the period ended August 2024 indicated gross earnings of N157.59 billion, with interest income at N137.15 billion. Net interest income stood at N72.18 billion. Non-interest income closed at N20.44 billion while net operating income stood at N78.17 billion.
With total operating expenses at N61.43 billion, pre-tax profit surged to N16.733 billion, setting up the bank for its highest profit performance in recent years.
Key balance sheet items also underscored growing brand adoption and business penetration, with the bank continuing its tradition as a bank-to-go-to for small and medium enterprises. Customers’ deposits closed at N1.663 trillion.
Total equity has surpassed full-year performance at N115.86 billion in August 2024 as against N99.13 billion for full-year 2023. Total assets are also already ahead of the previous full-year performance, at N2.060 trillion by August 2024 as against N2.058 trillion recorded by the end of 2023.
Managing Director, Polaris Bank,Kayode Lawal, said the results evidenced the early successes of the ongoing strategic initiatives aimed at strengthening the bank’s overall position in the banking industry.
According to him, Polaris Bank is positioned to sustain its upward growth trajectory while remaining focused on its people-centric principles.
“We are in a stronger position now to steadily build on the early gains and deliver exceptional value to our stakeholders,” Lawal said.
He pointed out that increasing brand penetration shows that the discerning banking public continues to trust Polaris Bank as a safe haven for their deposits and a reliable partner for their businesses.
