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Effective funding optimisation lifts 14 banks Q1 net profit by N256 billion

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Banks

Effective funding opimisation and drive for efficiency have enhanced profit goals of 14 listed banks, as they achieved cumulative profit of N256.088 billion for the first quarter (Q1) ended March 31, 2019.

The banks are Guaranty Trust Bank (GTB), Ecobank Transnational Incorporated Plc (ETI), Stanbic IBTC, Sterling Bank, Access Bank, United Bank for Africa (UBA), Zenith Bank, FBN Holdings, Fidelity Bank, Jaiz Bank, Union Bank of Nigeria (UBN), Unity Bank, Wema Bank and FCMB Group.

Capital market analysts said that the banks’ performance in Q1 reflects the resilience of their business model, noting that despite the slow growth environment and election-related activities, the banks delivered a strong base for growth in Q1, 2019, through effective funding optimization and drive for efficiency.

Going by the results released on the Nigerian Stock Exchange (NSE), total net profit of the 14 banks for the period increased by 16.514 per cent from the N219.791 billion in Q1, 2018 to N256.088 billion in Q1, 2019.

Leading in the profit line for the period was Zenith Bank Plc that reported N50.234 billion profit, followed by Guaranty Trust Bank, Access Bank and ETI with N49.302 billion, N41.147 billion and N30.587 billion respectively. UBA reported N28.665 billion while Stanbic IBTC profit was N19.150 billion.

Unity Bank with N464.86 million, Wema Bank, N1.144 billion, Sterling Bank N3.240 billion, FCMB, N3.618 billion, Union Bank, N5.274 billion, while Fidelity Bank and FBNH posted N5.939 billion and N15.792 billion respectively. Jaiz Bank net profit for the period stood at N428.684 million.

Two banks had their profit declined against the comparable period of 2018. Stanbic IBTC’s profit dropped by 16.98 per cent, from N23.067 billion to N19.150 billion, while Union Bank Profit decreased against similar period by marginal 0.26 per cent to stand at N5.274 billion against N5.288 billion.

Speaking on the first quarter results, the Managing Director/CEO of Guaranty Trust Bank, Segun Agbaje, said: “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables.

“We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”

“Whilst ensuring the long-term growth of our business is the greatest value that we can create for our communities, we are also leveraging our resources, expertise and network to help people thrive.

“That’s why, from April 28 to May 1, 2019, we are organizing the biggest food and drink festival in Africa to give small businesses in the food industry the platform, network and access to the markets that they need to grow.”

The Chief Executive Officer of Access Bank, Herbert Wigwe, stated that “following the successful completion of the merger with Diamond Bank in March 2019, we have now fully positioned ourselves in the retail market with a view to bringing the power of banking to the doorsteps of millions.

“We are providing a broader platform to facilitate payments services in Nigeria and across Africa, by harnessing our significantly enhanced digital technology capabilities.”

According to Wigwe, we have made solid progress throughout the first quarter of 2019 in line with our 2018 to 2022 five-year strategy, and we remain committed to the achievement of our strategic imperatives going forward; as we continue to invest in our people, technology and most importantly, our product offerings to customers.

“Our focus is to become the world’s most respected African Bank by leveraging on the strength of our retail and wholesale business to provide unrivalled value to our customers.”

An independent equities analysts at Tradelines Limited, Tunde Jeariogbe, said that the Nigerian banking sector performance can be rated fair in the first quarter of 2019, observing the released statistics by various listed equities, none of the 14 banks released a negative profit for the period ended March 31, 2019.

According to Jeariogbe, total profit released by all banks for the period increased by 16.51 per cent. Total Deposits reported through the period equally improved by 8.80 per cent to stand at N29.192 trillion as against the N26.831 trillion in similar quarter of 2018.

Meanwhile, total loans and advances mildly increased by 1.37 per cent over the comparable period of 2018. We have estimated the total loans and advances through the first three months of 2019 at N17.645 trillion as against the N17.406 trillion in 2018.

In other words, in 2019 first quarter, total loans and advances for all banks is same as 60.44 per cent of the deposits received, this is slightly below the 64.87 per cent estimated in 2018.


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