Check out the 11 banks that made a net profit of N261.99 billion in just three months.

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Check out the 11 banks that made a net profit of N261.99 billion in just three months.

 

Increased bank lending to enterprises and the economy boosted interest revenue in the banking industry, resulting in a total net profit of N261.991 billion reported by 11 banks for the first quarter (Q1) ended March 31, 2022.

According to the conclusions of LEADERSHIP, this resulted from successful funding optimization and a desire for efficiency in the involved banks.

Zenith Bank Plc, Guaranty Trust Holding Company (GTCO), Access Holdings, Ecobank Transnational Incorporated Plc (ETI), United Bank for Africa (UBA), Fidelity Bank, Jaiz Bank, Union Bank of Nigeria (UBN), Sterling Bank, Unity Bank, and Wema Bank are among the financial institutions involved.

According to the results released on the Nigerian Exchange (NGX), the total net profit released by the financial institutions for the period under review increased by 8.78 percent from the N240.855 billion posted in Q1 2021 to N261.991 billion in Q1 2022.

The performance in the first quarter reflects the resilience of the banks’ business model. Despite the general turbulence witnessed in the wobbling economy, occasioned by the Russia-Ukraine war, high inflation, heightened insecurity, and low investment, the banks still declared an impressive financial performance in the quarter under review.

Capital market analysts said banks delivered a strong basis for growth in Q1, 2022, through effective funding optimization and a drive for efficiency.

Zenith Bank Plc, leading in the profit line for the period, reported an N58.19 billion net profit, a growth of 9.67 percent. Access Holding’s net profit grew by 9.23 percent to N57.991 billion in Q1, while GTCO declared a profit after tax of N43.208 billion, lower than the N45.546 billion in Q1, 2021.

Trust Bank, Access Bank, and ETI had N49.302 billion, N41.147 billion, and N30.587 billion respectively. UBA lost N28.665 billion, while Stanbic IBTC profited N19.150 billion.

UBA achieved a net profit of N41.496 billion as against N38.155 billion in 2021; ETI reported a total profit of N38.324 billion as against N30.494 billion in 202; while Fidelity Bank’s net profit stood at N9.515 billion, lower than the N9.590 billion recorded in Q1, 2021.

Meanwhile, Union Bank, Sterling Bank, Wema Bank, Jaiz Bank, and Unity Bank posted a profit after tax of N5.551 billion, N3.543 billion, N2.856 billion, N1.040 billion, and N869.264 million, respectively, as against N6.207 billion, N2.395 billion, N1.305 billion, N832.297 million, and N721.537 million, respectively in Q1, 2021.

Speaking on the bank’s performance, the group managing director/chief executive officer, UBA, Mr. Kennedy Uzoka, explained that, despite the myriad of economic challenges on the global front that shaped the first three months of the year, the bank’s business model continued to show resilience.

These challenges, among others, he noted, include the ongoing crisis between Russia and Ukraine that has resulted in a huge supply shock, pushing up commodity prices; and the hike in the interest rates in most advanced countries aimed at tackling spiraling inflation, sparking a capital flow reversal from emerging and frontier markets.

Moreover, the CEO of GTCO, Mr. Segun Agbaje, said: “Our first-quarter results show a decent improvement across key revenue lines as well as other financial metrics, which demonstrates our ability to effectively navigate the evolving business landscape anchored on our strong business fundamentals.”

“With this performance, we are optimistic about the rest of 2022 as we rapidly consolidate the gains of our new holding company structure to deliver superior shareholder value.”

The chief executive officer of Ecobank Group, Ade Ayeyemi, stated that the performance was achieved in a difficult operating environment characterized by the strengthening of the US dollar against local operating currencies, high inflation, high-interest rates, and tight labor markets across Africa as the Russia-Ukraine conflict continued to take its toll.

“Despite these challenges, we continued to support our customers effectively, which paid off as our businesses grew their revenues and profits.”

“These were driven by trade, cash management, FICC, and payments, while we also achieved modest loan growth with support from higher interest rates,” he said.

Assessing the performance, the managing director of ARM Securities Limited, Mr. Rotimi Olubi, said: “Interest income has been a major driver of earnings across all banks. We have seen a significant increase in the bank’s interest income due to a rise in loans from customers and institutions.

He noted that there was an increase in banks’ gross earnings across all banks as a result of the recovery from the COVID-19 pandemic.

The chief operating officer, InvestData Limited, Mr. Ambrose Omordion, said that Q1 2022 is a reflection of the economic recovery in Nigeria post-COVID-19.

According to him, the performance showed the local economy is not doing bad in Q1 of 2022 as projected by the World Bank. Banks, the cash flow of the economy, has performed beyond expectations.

Speaking from a shareholder’s perspective, the chairman of the Progressive Shareholders Association of Nigeria, Boniface Okezie, noted that Nigerian banks have proven to be resilient in growing profits and savings from customers despite domestic and global challenges.

It is a good thing that Nigerian banks are still resilient and are doing very well despite economic challenges. Resilient is what investors are seeing in our banks and are taking positions. “The Q1 and 2022 performance are encouraging and with the growth, shareholders are expecting a higher dividend in the 2022 full year,” he pointed out.

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