By Philemon Adedeji

A total of seven banks Profit Before Tax  rose significantly to N1.23 trillion in full year 2022, representing an increase of 10.3 per cent from N1.113 trillion reported in 2021 financial year, this information provided is according to Nigerian NewsDirect investigation.

The seven financial institutions are: Zenith Bank plc, Ecobank plc, United Bank for Africa (UBA) plc, Guaranty Trust Holding Company (GTCO) plc, Access Bank, Stanbic IBTC and Union Bank plc.

From the audited financial results ended December 31, 2022, Zenith bank maintained the leader in Profit before tax, followed by Ecobank Transnational incorporation, while United Bank for Africa recorded as the third.

Likewise, GTCO recorded as the fourth in Profit Before Tax, while Access bank reported as the fifth as Stanbic IBTC and Union Bank reported the lowest.

Zenith Bank which maintained the lead reported N284.7 billion Profit Before Tax in full year 2022, representing ana increase of 2.0 per cent from N280.4 billion reported in the previous year 2021, Ecobank Transnational incorporation which closely followed increased impressively nearly 17.8 per cent from N195.720 billion in full year 2021 to N230.6 billion in full year 2022, as Guaranty Trust Holding Company which reported as the third in Profit before tax moved from N221.5 billion in the corresponding period of 2021 to N214.2 billion in the comparable period of 2022, indicating a marginal decline of 3.3 per cent.

Others are United Bank for Africa which gained nearly 31.2 per cent to N200.8 billion in 12  months of 2022 from N153.01 in 12 months of 2021, as Access bank Profit Before Tax declined by 5.1 per cent from N176.8 billion as of end of December 31, 2021 to N167.7 billion as of end of December 2022, while Stanbic IBTC improved largely by 52 per cent to N100.3 billion in FY 2022 from N66 billion in FY 2021, the growth in pre-tax profits was due to the increase in interest income boosted by loans and advances to customers and credit-related fees and commissions.

Union Bank which reported the lowest Profit Before Tax grew marginally by 47 per cent to N30.2 in 2022 financial year from N20.5 billion in preceding year 2021.

The Vice Chairman of Highcap Securities Limited, David Andori, commented that Zenith Bank and GTBank appears to have peaked in their income. Only stringent cost management will enhance their continued profitability.

UBA, Stanbic and Union Bank have demonstrated their growth potentials and are hence, growth stocks.

The decline in performance of Accesscorps is surprising. Perhaps their huge exposure to foreign assets may have adversely affected their income.

Commenting on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company Plc (GTCO Plc), Mr. Segun Agbaje, said, “Our ability to successfully navigate the peculiar challenges in the different markets where we operate underscores our strong business fundamentals and unwavering commitment to sound business strategies. Despite the varying challenges and headwinds that weighed on growth in 2022, we were determined to deliver a decent performance and scale effectively to strengthen our competitive edge and drive long-term growth.”

He further stated,“As an organisation, 2022 was quite significant for us being the first year after our corporate restructuring into a financial holding company in August 2021.

Today, across our Banking, Payment, Funds Management, and Pension businesses, we have successfully built a robust ecosystem with immense potential to deepen our addressable market and create more value for all our stakeholders. We will continue to prioritise innovation, service excellence, and execute seamlessly towards achieving our vision of leading financial services in Africa.”

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 23.6  per cent, Pre-Tax Return on Assets (ROAA) of 3.6 per cent, Full Impact Capital Adequacy Ratio (CAR) of 24.1 per cent per cent and Cost to Income ratio of 48.0 per cent.

GTCO is a leading financial services group with banking operations in Nigeria, West Africa, East Africa, United Kingdom alongside new businesses in Payment, Funds Management and Pension Fund Administration. Its leadership in the banking industry and efforts at empowering people and communities has earned it many prestigious awards over the years.

Recently, the Bank was recognized as Africa’s Best Bank and the Best Bank in Nigeria at the 2021 Euromoney Awards for Excellence. It also retained its position as Africa’s Most Admired Financial Services Brand in the 2021 ranking of The Brand Africa 100: Africa’s Best Brands.

Commenting on the result, the Group Managing Director/CEO, Oliver Alawuba, said notwithstanding the tight and challenging operating environment, UBA continues to deliver significant performance.

He said, “The Group delivered record headline earnings (+29.2 per cent) and profitability (+31.2 per cent) amid significant headwinds in markets where we are present and a heightened global risk environment. Our record earnings, growth, and robust capital levels supported higher returns for the shareholders.

The Group is on course to achieve its strategic goals, and we are confident we will achieve our targets.

“We have navigated unprecedented macroeconomic headwinds and made significant gains in our diversification strategy and Customer 1st philosophy as we build resilience in our operations across Africa and the Rest of the World to support the mission of providing superior value to our stakeholders.

“The Group’s Profit After Tax increased by 43.5 per cent to N170.3billion, with underlying growth in our key income lines and moderation in our cost of funds, resulting in robust growth of 14.6 per cent in the Group’s Shareholders’ Funds and stronger liquidity. We continued to sharpen our risk management structure and practices to align with evolving risks,”Alawuba said.

On the outlook for the year 2023, Alawuba said, “we are strategically positioned to increase our market share in our countries of presence, with expansion to Dubai, United Arab Emirates and strong growth of our digital banking and payment businesses, which is pivotal to the evolving cashless economy in Nigeria. We strive to deliver increasingly attractive returns to our shareholders and continued positive impact in the geographies and economies in which we operate.”

UBA’s Executive Director, Finance and Risk Management, Ugo Nwaghodoh, said going by this recent performance, UBA remains on strong footing and is comfortably positioned to take on more opportunities in Nigeria, Africa and beyond.

“UBA Group’s 2022FY performance was buoyed by strong balance sheet growth and improvement in Net interest margin, as Group’s Total Assets and customer deposits grew 27.2 per cent and 22.9 per cent respectively, whilst NIM grew to 5.61 per cent  from 5.57 per cent. The continuous rejigging of the Groups’ risk management approach resulted in moderation of the NPL ratio, from 3.6 per cent to 3.1 per cent. The Group continued to rely on lower cost funds, further reducing its cost funds to 2.1 per cent.”

“We are delighted with the strategic progress we have made in FY22 riding on our customers’ trust, the dedication of our people, and the support of our wider partners and stakeholders. The bank remains committed to its business development drive, prudent risk management practices, and we are optimistic to deliver best value for our stakeholders in the days ahead,” he noted.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than 25 million customers, across over 1,000 business offices and customer touch points, in 20 African countries and across 4 continents.

With presence in the United States of America, the United Kingdom and France and more recently the United Arab Emirates, 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.

The Chief Executive Stanbic IBTC Holdings, Dr Demola Sogunle, in a statement said, “2022 was a peculiar year for us as a financial services provider within the Nigerian operating environment. Despite the volatile macro-economic indicators, coupled with varying regulatory burdens, we made substantial progress towards achieving our set financial goals based on our guidance for the year.

“We recorded growth in our profit metrics, loans and advances, and deposits during the year. The Group’s Profit After Tax increased by 42per cent to N80.81billion, being the second highest PAT in the history of the organisation.

“This was largely attributable to significant increase in net interest income and growth in non-interest revenue. The 50 per cent YoY increase in net interest income resulted from growth in the volume and average yield on cumulative risk assets while growing our loan book.

“In addition, non-interest revenue was driven by growth in trading revenue following an improvement in trading activities as well as 9 per cent growth in fees and commissions compared to the prior year.

“The improvement in our earnings led to an increase in our return on equity to 20.4 per cent from 14.7 per cent in 2021, well above our target range. Increased focus on our cost savings initiatives led to a moderation in our cost-to-income ratio to 53.9 per cent from 62.3 per cent in 2021, which is in line with our target of at most 55per cent for the year.

“We particularly exceeded our guidance for loan growth as gross customer loans increased by 31per cent to N1.24 trillion, attaining the one-trillion-mark as we continue to support our clients in achieving their financial goals.

“The non-performing loan ratio moved up to 2.4 per cent, still within the acceptable limit of five per cent, as the total non-performing loans increased YoY due to proactive recognition of increased credit risks in specific clients. We will continue to extend loans in a responsible manner and in line with our established credit risk management practices.

“The increase in our loan book was funded by a 11per cent YoY growth in customer deposits. The current account to savings account ratio increased to 71.7per cent, exceeding our target of at least 70per cent due to accelerated growth in low-cost deposits.”

He added that, “We demonstrated our commitment towards promoting sustainable finance and climate action during the year as 32 bank branches and seven pension locations now run on solar powered energy solutions. We have also recycled 14 tonnes of waste papers in return for tissue papers during the year.

“We are sincerely grateful to our valuable customers, employees, investors, regulators, and other stakeholders for contributing to these achievements in 2022.”

On prediction for this year, he said, “In 2023, we will focus on our theme for the year- ‘Accelerating Growth’. We aim to accelerate growth in the areas such as digitisation, customer focused initiatives, ecosystems, and partnerships as well as value chain banking, all in a bid to deliver value to our esteemed stakeholders.”