By Philemon Adedeji
Atotal of six banks have reported 22.1 per cent increase in profit before tax (PBT) to N663.5 billion in third quarter (Q3) 2022 from N543.3 billion reported in third quarter (Q3) 2021, this is according to investigation by Nigerian Newdirect.
The six leading financial institutions are, Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank of Africa (UBA), First Bank Holding, Fidelity Bank plc and Wema Bank Plc.
From the unaudited third quarter (Q3) 2022 results, Zenith Bank reported the highest Profit Before Tax, followed by Guaranty Trust Holding Company which recorded as the second, while United Bank of Africa (UBA) reported as the third. First Bank Holding of Nigeria recorded as the fourth, while Fidelity Bank and Wema bank reported the lowest.
Zenith Bank reported Profit Before Tax of N202.5 billion in nine months of 2022, representing an increase of 12.6 per cent year-on-year (Y-o-Y) from N179.8 billion in nine months of 2021, while Guaranty Trust Holding Company (GTCO) Profit Before Tax stood at N169.7 billion in nine months of 2022 from N151.9 billion in nine months of 2021, reflecting an increase of 11.7 per cent year -on-year (Y-o-Y).
After GTCO is United Bank of Africa (UBA) which Profit Before Tax grew significantly by 12.3 per cent year -on-year (Y-o-Y) to N138.5 billion in nine months of 2022 from N123.4 billion in the preceding year.
First Bank Holding of Nigeria reported Profit Before Tax of N105.5 billion in Q3 2022 from N52.9 billion in Q3 2021, representing an increase of 99.3 per cent.
Fidelity Bank reported Profit Before Tax of N37.792 billion in nine months of 2022, reflecting a marginal difference of 34.7 per cent to N28.051 billion in nine months 2021.
While Wema bank which reported lowest out of the six banks declared Profit Before Tax of N7.208 billion in nine months of 2021 from N9.457 billion in nine months of 2022, a growth of 31.2 per cent.
Zenith Bank reported gross earnings of N620.6 billion in third quarter Q3 2022 from N518.7 billion in the third quarter Q3 2021, reflecting a significant increase of 19.6 per cent.
United Bank of Africa (UBA), gross earnings grew marginally to a decent 12.3 per cent Y-o-Y to N608 billion in Q3 2022 from N493 billion accounted in Q3 2021, driven by significant improvement in net interest income and non-interest income contributing growth of 23.23 per cent and 24.9 per cent respectively.
First Bank Holdings of Nigeria announced N547.2 billion gross earnings in nine months of 2022, representing an increase of N432.6billion in nine months of 2021, while interest income hits N370.4billion in nine months of 2022, an increase of 26.6 per cent y-o-y from N260.1billion reported in nine months of 2021.
Guaranty Trust Holding Company achieved gross earnings of N364.306 billion, an increase of 14.4 per cent Y-o-Y from N318.508 billion achieved in the previous year
Fidelity Bank gross earnings increased by 38.7 per cent Y-o-Y to N241.9 billion on account of 53.1 per cent growth in interest and similar income to N210.4 billion from N137.4 billion was primarily driven by improved yield on gross earnings assets and 16.3 per cent YTD expansion in earnings base to N2,579.0 billion.
Wema bank reported gross earnings which rose significantly by 51.17 per cent (y-o-y) to N95.354 billion in third quarter Q3 2022, from N63.077 billion recorded in third quarter Q3 2021, reflecting an increase in loans and advances and supported by a higher interest rate environment.
The Vice Chairman of Highcap Securities Limited David Andori stated that, Fidelity bank and FBNH stood out in terms of higher profit growth. FBNH’s fantastic performance is due to write back of previously delinquent credits that are now performing, all others also tried considering the depressed state of the economy.
The MD’s of these banks said, the performance of third quarter Q3 results demonstrates the Group’s resilience against a challenging macroeconomic environment.
Commenting on the result, UBA’s Group Managing Director/Chief Executive Officer, Mr. Oliver Alawuba, remarked that the Group continues to show notable operating resilience amid significant headwinds in its presence markets amidst heightened global risk environment, adding that its strong diversification model and unwavering focus on customer satisfaction continues to give the bank an edge over its peers in the industry.
He said, “We continue to reap the benefits of our diversification strategy and Customer -1st philosophy and build resilience in our operations across Africa and the Rest of the World to support the mission of providing superior value to our stakeholders.
“This has translated into strong financial gains evident in growth in our customer deposits and Net interest margin. In addition, we are strategically positioned to drive our market share in our operating countries, with the strong growth of our payments and transaction banking offerings,” Alawuba stated.
Executive Director, Finance & Risk Management, Ugo Nwaghodoh, said, “the Group’s profitability increased by 12.3 per cent to N138.5 billion, with underlying growth in our key income lines and moderation in our cost of funds.
“We remain very cautious in risk asset creation as we defensively position our asset portfolios to minimize the impact of the heightened credit risk. Consequently, our NPL ratio remains within acceptable threshold at 3.2 per cent.”
United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than 25 million customers, across 1,000 business offices and customer touch points in 20 African countries. With presence in New York, London, Paris, and Dubai, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.
Commenting on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc (GTCO Plc), Mr. Segun Agbaje, said, “The Group’s 3rd quarter result reaffirms our strategy for long-term growth and underscores our capacity to deliver sustainable strong performance despite the volatilities in our operating environment. We have also kept in focus our vision of supporting small and medium enterprises specifically through our free business platforms to help them stay in business and expand their offerings. With our non-banking businesses fully operational alongside our core banking subsidiary, we are well positioned to maximise our earnings potential going into the 4th quarter of the year.”
He further stated, “In creating a thriving financial services ecosystem, our goal is to offer great experiences to all who interact with our brand whilst continually enhancing access to innovative financial solutions for individuals and businesses across Africa. We are appreciative of all our customers and other stakeholders who are with us on this journey of building a truly global African financial services institution.”
Overall, the Group continues to post one of the best metrics in the Nigerian Financial Services Industry in terms of key financial ratios i.e., Pre-Tax Return on Equity (ROAE) of 25.8 per cent, Pre-Tax Return on Assets (ROAA) of 4.0 per cent, Full Impact Capital Adequacy Ratio (CAR) of 20.7 per cent and Cost to Income ratio of 45.1 per cent.
GTCO Plc is a fully-fledged financial services group with banking operations across West and East Africa and the United Kingdom as well as non-banking businesses in several key industry segments including payment, funds management, and pension fund management. With 5.8 trillion in assets and over 28 million customers, the Group remains one of the most profitable and best-managed financial services companies out of Nigeria providing commercial banking services and non-banking financial services across 11 countries. Its leadership in the banking industry and efforts at empowering people and communities have earned it many prestigious awards over the years including Best Banking Group in Nigeria and Most Innovative Bank in Nigeria at the 2022 World Finance Banking Awards. It also retained its position as Africa’s Most Admired Financial Services Brand in the 2022 ranking of The Brand Africa 100.
Commenting on the results, MD/CEO, Fidelity Bank Plc , Nneka Onyeali-Ikpe stated, “We are happy to report sustained growth across key financial indices in our nine months 2022 results. Gross Earnings increased by 38.7 per cent YoY to N241.9billion on account of 53.1 per cent growth in interest and similar income to N210.4 billion from N137.4 billion in 9M 2021. The increase in Interest Income was driven by improved yield on earnings assets and 16.3 per cent YTD expansion in earnings base to N2,579.0 billion.
“Similarly, Total Deposits increased by 13.3 per cent YTD to N2,294.7billion from N2,024.8bn in 2021FY, driven by double-digit growth in low-cost deposits. Low-cost deposits increased by 24.2 per cent YTD to N1,873.6 billion and now represents 81.7 per cent of total deposits from 74.5 per cent in 2021FY. FCY deposits increased by $432 million (45.9 per cent YTD) to $1.4 billion and now accounts for 26.2 per cent of total deposits from 19.7 per cent in 2021FY, as we continue to harness the benefits of our renewed drive in the export business and the diaspora banking space.
“The statement of account also showed considerable growth in Net Loans and Advances by 20.0 per t YTD to N1,989.3 billion from N1,658.4 billion in 2021FY with intervention fund facilities and the impact of naira devaluation accounting for 33.8 per cent of the absolute YTD growth in risk assets book. The Bank was able to keep Other Regulatory Ratios above the required thresholds maintaining its liquidity ratio at 41.3 per cent and capital adequacy ratio (CAR) at 19.4 per cent compared to the minimum requirement of 15.0 per cent.
“We successfully redeemed our $400mn Reg S /144a Senior Unsecured 5 -yr Notes on 17th October 2022. Noteholders received a total of $421mn covering the principal amount and the accrued 6 months coupon in line with the executed Trust Deeds. We look forward to sustaining the momentum in Q4 towards achieving our set targets for 2022 Financial Year,” Onyeali-Ikpe explained.
Fidelity Bank is a full-fledged commercial bank operating in Nigeria with over 7.2 million customers serviced across its 250 business offices and digital banking channels. The bank was recently recognized as the Best SME Bank Nigeria 2022 by the Global Banking & Finance Awards and received the Platinum and Service Ambassadors awards from the Development Bank of Nigeria (DBN) for its support of small businesses in the country. The bank has also won awards for the “Fastest Growing Bank” and “MSME & Entrepreneurship Financing Bank of the Year” at the 2021 BusinessDay Banks and Other Financial Institutions (BAFI) Awards.
Commenting on the result, the Managing Director, Chief Executive Officer of the bank, Mr. Ademola Adebise said, “The impressive results are built around three core areas; strong management of our credit exposures despite a difficult economic and regulatory landscape; increased customer acquisition and wallet share of those customers and a stronger focus on the corporate and SME segments. We expect the bottom line to improve even further in the final quarter of the year.”
Also speaking on the result, the bank’s Chief Finance Officer, Mr. Tunde Mabawonku, explained that the bank’s continuous investment in digital assets is a contributing factor to the strong performance in the last quarter.
“It has been a good 9 months with our earnings growing by 52 per cent year on year and earnings per share at 84.9kobo,” Mabawonku said.
“This performance is a result of our ability to translate our digital play in two ways. One, by making ourselves the key partner for FinTechs in the country, and secondly by improving customer satisfaction through improved services and features on our digital platforms. In addition, we have managed to navigate the turbulent economic and regulatory spaces with a strong focus on cost management and reduction while also driving business in attractive sectors.”