Banks post strong performance in H1 2022 despite head winds


Financial institutions in Nigeria, especially deposit money banks (DMBs) may not escape posting lower profit margins at the close of the financial year ending 2021, Business Hallmark can hazard.

This is on account of the fact that there is a consensus that the realities of the macro-economic environment have clearly not favourable to businesses and cannot spare even banks which are the engine room of growth and development.

Indeed, a foreshadowing of this anticipated weak performance scenario can already be noticed as has been expressed in their results from the first, second and third quarters which have generally shown decline outcomes almost consecutively.

Zenith Bank

For instance, Zenith Bank had posted a growth of 4 per cent to N61.0billion in the first quarter ended 31st March 2021, compared to N58.8billion in the corresponding period of 2020. The largest bank by profit achieved a growth in profit before tax of 3.0 percent from N114 billion reported in H1’20 to N117 billion in H1’21. Zenith Bank also posted a profit Before Tax  of N180 billion for the nine months period ended 30 September 2021, reflecting a one per cent growth over the N177 billion recorded in the same period in the previous year. This makes it tight for the bank’s prospects of achieving a wonderful performance at the close of business in December 2021.

GT Holdco

GT Holdco, known as the best bank in service delivery reported profit before tax of N53.7 billion for the first quarter of 2021, ended March 31, representing a 7.8% decline compared to the N58.2billion recorded in the corresponding period of 2020. In its half year 2021 results, it reported a profit before tax of N93.1billion, representing a dip of 15.2% compared to N109.7billion recorded in the corresponding period of June 2020.

The Group also reported profit before tax of ₦151.9billion, representing a drop of 9.2% over ₦167.4billion recorded in the corresponding period of September 2020.

Access Bank

Access Bank, the largest bank by assets solidly grew its Profit Before Tax (PBT) by 30 percent to N60.1 billion, from N46.2 billion recorded in the same period last year, an impressive performance despite the challenging operating environment.

The bank’s profit before tax saw a significant increase of 31per cent y/y to N97.5billion (H1 2020: N74.3billion).

In the third quarter ended September 30, 2021, the bank’s Profit before tax grew by 16% to N135bn from N116.623billion in 2020.

Fidelity Bank

As analysts surmise, the foundation for Fidelity’s performance was laid right from the first quarter of 2021 when the bank’s profit before tax (PBT) grew by 53.9 per cent: from N6.6 billion in the corresponding period in 2020 to N10.1 billion in the period under review.

Fidelity bank’s PBT in half year 2021 also showed a 72.4 per cent growth when compared to the N12.0 billion recorded in the comparative period of 2020. And now

Fidelity Bank’s 9-months results for the period ended September 30, 2021 results showed double-digit growth in revenues, deposits and profitability.

Gross earnings grew by 12.5 percent to N174.4 billion from N155.0 billion in the same period in 2020 while profit before tax (PBT) jumped by 31.4 percent to N28.1 billion from N21.3 billion in the first 9 months of 2020.


FBNH’s profit before tax had declined by 34% in the first quarter ended March 31, 2021 to N19bn from N28.680billion in 2020. Similarly, its Profit before tax declined by 9% to N45bn in the second quarter ended June 30, 2021 from N41.415bn in the corresponding period of 2020.

FBNH had also notified the regulatory authorities that it may be able to submit its results in October due the ongoing interim auditing of its financial statements for the period ended September 2021.

‘’In view of the on-going interim audit, the company is not able to submit results of its operations for the third quarter ended September 30, 2021 until the conclusion of the audit’’, the Holdco said.

United Bank for Africa

UBA displayed strength leveraging on modest growth in both interest and non-interest income as well as increased efficiency to deliver a 24 per cent spike in profit before tax (PBT), which printed at N40.6 billion, compared with N32.7 billion in 2020.

Also, the pan African financial institution delivered a 33.4 per cent growth in its profit before tax which rose to N76.2 billion as at June 2021, up from the N57.1 billion recorded in the same period of 2020.

Also in the third quarter ended September 30, 2021, UBA reported a 37 per cent rise in Profit Before Tax to close at N123.4 billion compared to N90.4 billion recorded at the end of the third quarter of 2020, while profit after tax rose significantly by 36 per cent to N104.6 billion up from N77.1 billion recorded a year earlier.


FCMB group’s Profit Before tax (PAT) of ₦4.227 billion, for the first quarter of 2021, dropped 22.2% from N5.434billion in 2020.  Profit before tax declined by -20% to N8.9bn in second quarter from N11.071billion in 2020.

In the third quarter ended 2021, Profit after tax dropped slightly by less than 1% Y-o-Y to N13.8 billion during the period under review. However, on a quarterly basis, the group recorded a 57% surge in its bottom line to N6.2 billion from N4 billion recorded in Q2 2021.


Stanbic IBTC Holdings Plc reported a 50 percent decline in profit before tax from N24.413 billion recorded in the first quarter (Q1) of 2020 to N12.142 billion in the first quarter of 2021.

Its audited result and accounts released to the Nigerian Exchange Limited (NGX) also reported 52.9 per cent drop in profit before tax to N24.71billion in H1 2021 from N52.41billion reported in H1 2020.

Profit before tax declined by 41% to N45.3bn in q3 2021 from N76.865billion in 2020.

Ecobank Transnational Incorporated

Ecobank Transnational Incorporated said its profit before tax rose by 22 per cent to N40.3bn in the first quarter of 2021 from N33bn reported at the same time in 2020

Ecobank Transnational Incorporated Profit before tax grew by 33% to N85bn in Q2 ended June 30,2021 from N64.133billion in 2020. Its profit before tax also rose 316% in third quarter ended September 30,2021. The result which was delayed to audit the financial results showed profit before tax jumped 316% from N34.498billion in 2020 to N143.674billion in 2021.


Wema Bank’s Profit before tax grew by 34% to N1.5bn for the period ended March 30, 2021 from N1.130 billion in 2020

The bank also recorded impressive growths across major performance indices in the first half of this year with pre-tax profit rising by 149 per cent to N4.30 billion in six months, from N1.72 billion in 2020.

The bank announced its unaudited nine-month 2021 financial results, showing an increase of 135.8 per cent in profit before tax (PBT) to close the quarter at N7.2 billion.

While these banks’ results are seemingly impressive going by their performances in this year so far, it is particularly notable that Wema Bank, Fidelity Bank, United Bank for Africa, Ecobank Transnational Incorporated and Access Bank performed wonderfully, maintaining double digit profit before tax to stand tall among their peers in the industry, others have not done so well.

Those who were carried away by the initial results of financial institutions which seemed very impressive are beginning to retrace their steps. Business Hallmarks research has, in fact, shown that the results were after all, mixed. While the likes of UBA, Access Bank, Wema Bank, Ecobank Transnational Incorporated and Fidelity Bank among others posted strong performances, others may not be as impressive. A critical observation of the third quarter results of the Deposit Money Bank (DMB) has shown a mixed bag. In an economy which has recorded slide in three successive quarters last in recent years, expectations will be very modest on performance. This harsh condition has been compounded by the devaluation of the Naira, restriction of access to foreign exchange for importers of 41 items and the devastating effect of Covid-19 and its mutating variants which become most troubling with travel restrictions.

Available statistics from the Nigerian Stock Exchange (NSE) show that while some banks recorded strong improvements from the previous year results, others incurred declines, a development attributable to the unfolding economic realities in country.

Managing Director of HighCap Securities ltd, Mr. David Adonri  told Business Hallmark in a telephone interview that the financial year end for banks may not be too impressive.

He revealed that discerning analysts are not unaware that some of the delinquent facilities they gave to customers before the meltdown are bogging them down.

Adonri who also said that insecurity has crippled banking business in many parts of Nigeria explained that the rate of yield from bonds and treasury bills which the banks have made huge revenues for banks is now very low.

‘’Therefore, I don’t see their performance being much better than that of third quarter’’, he said.

Similarly, a financial analyst, Mr. Olisa Egbunike of the Renaissance group blamed the regulatory policy frame work for the changes the banks’ appear to suffer currently which are likely to drag down profit margins of banks.

“If nothing is done about these policies which levy 0.5% of banks’ total assets for Asset Management Corporation of Nigeria (AMCON) and the Cash Reserve Ratio (CRR) at 27.5% which remove huge money from the banks, their profit margin will continue to decline’’, said Egbunike.

‘’This will continue to incapacitate banks’’, he added. The financial industry has barely recovered from the 2007/2008 global financial meltdown, also called subprime mortgage crisis, severe contraction of liquidity in global financial markets that originated in the United States as a result of the collapse of the U.S. housing market. This was even to be worsened by the disruptions from Covid-19.

From early 2020, when the Covid -19 pandemic was detected and the attendant lockdowns and disruptions in supply chains among other challenges became rife, the Deposit money banks have like many other sectors been struggling.

This is besides the high inflation rate which has however tapered from above 18.17 per cent earlier in the year to 15.99 per cent; high unemployment at more than 33 per cent; underemployment above 22 per cent; and high insecurity caused by the Boko Haram sect, insurgents, kidnappers and bandits. At the same time, Diaspora remittances inflow fell 27 per cent year on year (YoY) to $17.2billion in 2020 from $23.55billion.

Also notable is the country’s heavy debt burden at almost N38 trillion and expected to hit N40 trillion and above at the end of 2021 and still growing. Of the budget of N13.08trillion for 2021, the budget deficit stood at N5.6trillion as over 90 per cent of revenues are now used to service debts.

More worrisome is that the country has set a new borrowing limit, up from 25 per cent of GDP to 40 per cent of the GDP. This was contained in the Medium Term Debt Strategy and continues to leave many analysts scratching their heads given that the major revenue earner for the country, crude oil price, which has hit $75 pbd and above presently still fluctuates.

At the same time, insecurity has not only hobbled agriculture, many parts of Northern Nigeria have been taken over by bandits such that not much business activities can subsist. The World Bank just noted that Nigeria’s revenue to GDP ratio hovered between five and six per cent last year and remains the lowest in the world. These days almost everybody is aware that Nigeria is the poverty capital of the world, since over taking India with over 100 million people living in poverty. The Naira which exchanged at N220/$ by June 15, 2015 has depreciated by about 100 per cent to N565/$ this November 2021.

Despite these challenges, the banks appear to have shown resilience and posted profits. But fears are beginning to creep in that it may not be all roses for the DMBs at the end of the business year 2021. And shareholders and investors are advised to lower their expectations in the short term and focus more on the long haul.


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