Banks Profit Rises to N2.1tn in Q3 – Report
Six top banks in Nigeria grew their profits by 214 per cent to N2.06tn in the period ended September 2023 compared to N656.15bn recorded in the same period in 2022, despite the economic headwinds of its operating environment
According to the financial statements submitted to the Nigerian Exchange Limited, the financial institutions’ profits jumped by N1.4tn within the period under review when compared year-on-year.
The banks under review include Access Holdings Plc, Zenith Bank International, United Bank for Africa, Guaranty Trust Holding Company Plc, FBN Holdings and Stanbic IBTC Holdings.
The report showed that all banks recorded triple-digit growths in their profit led by Zenith Bank whose total comprehensive income for the period increased by 412.55 per cent to N647.74bn from N126.37, UBA followed as it experienced 287.18 per cent increase in profit over the period to N109.25bn.
GTCO experienced a 181.87 per cent increase in its profit to N367.41bn from N130.35bn, FBN Holdings recorded 159 per cent increase to N236.50bn, Stanbic IBTC saw its profit rise by 97.96 per cent to N109.25. Of the six lenders, Access Holdings had the lowest percentage increase at 82.92 per cent to N250.44bn from N136.91bn as of Q3, 2022.
The financial institutions have been reporting positive results following the harmonisation of the segments of the currency market by the Central Bank of Nigeria in mid-June.
While the real sector suffered from increasing borrowing costs, foreign exchange losses, banks gained leading the apex bank in September to direct commercial banks to refrain from utilising their foreign exchange revaluation gains for dividends and operational expenditures.
The new directive was conveyed in a letter dated September 11, 2023, signed by the Director, Banking Division Department, Haruna Mustafa, where the CBN said it had assessed the consequences of the recent FX rate regime change on the banking system and identified its potential to substantially impact the Naira values of banks’ foreign currency assets and liabilities.
Meanwhile, the value of the assets of the banks appreciated by 43.57 per cent to N83.55tn from N58.19tn as of the end of the 2022 financial year with an increase in their loan books as a major contributor to the rising value of assets over the nine-month period.
Reacting to the increase in the assets of the bank, a former President and Chairman of Council, Chartered Institute of Bankers of Nigeria, Professor Segun Ajibola, pointed out that banks have a role to play in boosting the economy and that while the effects of their lending may not be felt immediately, it will yield results later.
