By Chinenye Anuforo and Chinwendu Obienyi
As the half year (H1) for most quoted companies, ended June 30, 2017, some financial institutions have released their financial results for the period.
Though Nigeria’s operating environment remains challenging, six out of the nation’s 25 banks posted profit before tax amounting to N240.85 billion. The banks include Access Bank, Diamond Bank, Fidelity Bank, Guaranty Trust Bank (GTB), Union Bank of Nigeria (UBN) and United Bank for Africa (UBA).
Given the Central Bank of Nigeria’s (CBN) warning that the economy remains fragile, these banks appeared to have pushed against recessionary headwinds. According to the results released on the Nigerian Stock Exchange’s (NSE)’s website, Access Bank recorded gross earnings of N246.6 billion, up 42 per cent from N174.1 billion in the corresponding period of 2016, while its Profit Before Tax (PBT) for the period rose to N52 billion, representing 18 per cent growth when compared to N43.9 billion in 2016. Similarly, its Profit After Tax (PAT) grew to N39.5 billion in 2017 from N33.6 billion in H1 2016.
The bank’s interest income grew by 44 per cent to N161.9 billion, from N112.3 billion, while non-interest income stood at 84.4 billion, showing an increase of 37 per cent compared with N61.7 billion in the corresponding period of 2016. Operating income increased by 29 per cent to N167.5 billion, from N130.2 billion.
For its part, Diamond Bank showcased strong growth in core financial parameters as its gross earnings jumped by 16.1 per cent over the previous year to N114.1 billion, while interest income also increased astronomically by 31.5 per cent to N89.1 billion. The bank’s Profit Before Tax (PBT) surged year-on-year by 2.8 per cent to N10.8 billion, while Profit After Tax (PAT) increased to N9.1 billion, following the leapfrogging of gross income over total expenses during the period under review.
In the same vein, Fidelity Bank Plc posted gross earnings of N85.8 billion in 2017, up 22 per cent from N70.2 billion recorded in the corresponding period of 2016. Interest income grew by 27.8 per cent, while interest expenses grew faster by 48 per cent to hit N38.2 billion compared with 25.7 billion in 2016. As a result, net interest income stood at N34.7 billion in 2017 compared with N31.2 billion, indicating a rise of 11 per cent. Impairment charges remained flat at N4.8 billion in 2017 as against N4.79 billion in 2016.
Despite the high inflationary trend, the bank reduced operating expenses by 1.7 per cent to N30.9 billion, from N31.4 billion in the corresponding period of 2016. Consequently, PBT rose by 66.6 per cent to N10.2 billion, from N6.131 billion in 2016, while PAT improved by 65.6 per cent from N5.457 billion to N9.04 billion in 2017.
For Guaranty Trust Bank (GTB) also PBT stood at N101.1 billion, representing a growth of 18 per cent over N85.69 billion recorded in the corresponding period of June 2016. Gross earnings for the period grew by 2 per cent to N214.1 billion from N209.9 billion driven primarily by growth in investment securities income as well as income from risk assets. Union Bank of Nigeria’s (UBN)’s gross earnings increased by 23 per cent to N73.7 billion against N60.1 billion achieved in the preceding period while its PBT grew by 6 per cent to N9.5 billion compared to N8.9 billion achieved in the corresponding period of 2016. Also, PAT stood at N9.2 billion as against N8.8 billion recorded in the previous period.
On the other hand, UBA showed remarkable performance across major metrics as its gross earnings for the period grew by 34.5 per cent to N222.7 billion, as against N165.6 billion reported in June 2016. Notwithstanding the impact of naira devaluation and double-digit inflation in Nigeria and a number of other African countries where UBA operates, the group managed, through its cost lines, to deliver a PBT of N57.5 billion, representing a significant growth of 65.5 per cent over N34.8 billion recorded in the corresponding period of June 2016.
Commenting on the results, Group Managing Director, Access Bank, Herbert Wigwe, said the bank’s performance in H1 reflected the strength and sustainability of the bank’s business as well as the effective execution of its strategy, adding that the bank’s retail expansion drive led to investments in its channels, distribution network, service quality and brand enhancement.
“We will continue to, however, intensify the implementation of our cost reduction initiatives in order to improve the bottom-line despite high inflationary environment. In view of the recovering macro, our focus remains growing the retail franchise through digital expansion to enable diversified earnings as well as continuous and proactive risk management as we selectively grow risk assets. We will remain resilient in the execution of our bold strategy for increased growth and profitability while maximising shareholder value in 2017 and beyond,” Wigwe noted.
Chief Exective Officer, Diamond Bank Plc, Uzoma Dozie, stated that despite the economic headwind, the bank would remain resilient and sustain the positive growth throughout the two remaining business quarters.
According to him, “the bank’s strong liquidity and capital adequacy ratios plus its digital infrastructure have strengthened and rightly positioned it to meet customer obligations and offer service deliveries that are beyond banking. The improving macroeconomic conditions will help stimulate and sustain the growth trajectory of the bank.