Banks move to checkmate mobile networks with payment systems

OKEY ONYENWEAKU

Contrary to subdued expectations in many quarters, several Nigerian banks have posted strong earnings in the first quarter 2022. These banks include Zenith Bank, GTCO, UBA, FBNH, Fidelity Bank, FCMB, Stanbic IBTC, Union Bank among others.

In this regard, the general turbulence witnessed in the wobbling economy, occasioned by the Russia/Ukraine war, high inflation, high AMCON/ NDIC fees, heightened insecurity and low investment could not deter the DMBs.
Zenith Banks earnings up 22% to N191.5bn in Q1 2022

It announced its unaudited results for the first quarter ended 31st March 2022, with an impressive 22 percent growth in Gross Earnings from N157.3 billion reported in Q1 2021 to N191.5 billion in Q1 2022.

From the unaudited statement of account presented to the Nigerian Exchange (NGX) on Thursday, 28th April 2022, the strong double-digit growth in the topline culminated in an increase in the bottom line, as the Group recorded an 11% Year-on-Year (YoY) increase in profit before tax, growing from N61.02 billion in Q1 2021 to N67.99 billion in Q1 2022.

Profit after tax also grew by 10%, from N53.06 billion to N58.19 billion over the same period. The growth in the topline arose from both interest income and non-interest income. Interest income grew by 25%, from N101.12 billion in Q1 2021 to N126.38 billion in Q1 2022, while non-interest income grew by 12%, from N51.20 billion to N57.23 billion. The growth in interest income and non-interest income arose from the combined effects of an improvement in interest income on loans and advances (as risk assets continue to grow and pricing is gradually improving) and an improvement in non-interest income as the Bank continues to deploy its retail strategy, thereby acquiring more customers and expanding its electronic banking income from the increased volume of transactions across all its channels.

Total assets grew by 9% from N9.45 trillion to N10.32 trillion in 2022, mainly driven by growth in customers deposits. Customer deposits grew by 12%, from N6.47 trillion in December 2021 to N7.25 trillion in March 2022. Savings account balance, which is solely retail grew by over N68 billion and is a validation of the robust customer acquisition strategy and versatile electronic platforms and digital channels.

Loans and advances also grew by 6%, from N3.5 trillion in December 2021 to N3.7 trillion in March 2022, boosting the Groups interest income and displaying the Groups appetite for high-yielding risk assets creation. This development also helped to boost the net interest margin (NIM), as it improved from 6.0% in March 2021 to 7.3% in the current period, while the capital adequacy ratio improved slightly from 21.1% to 22.1%.

Going into the remainder of 2022, the Group is likely going to focus on sustainable growth across all its business segments and deploy technology platforms and digital assets intuitively to serve its various customers needs to deliver enhanced returns to its stakeholders.

Zenith Banks track record of excellent performance has earned the brand numerous awards, including being voted as Best Bank in Nigeria in the Global Finance Worlds Best Banks Awards, for three consecutive years from 2020 to 2022, Best Commercial Bank in Nigeria in the World Finance Banking Awards 2021, Bank of the Year (Nigeria) in The Bankers Bank of the Year Awards 2020, and Best in Corporate Governance Financial Services Africa 2020 and 2021 by the Ethical Boardroom. Also, the Bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021, Number One Bank in Nigeria by Tier-1 Capital in the 2021 Top 1000 World Banks Ranking by The Banker Magazine and the Retail Bank of the year at the BusinessDay Banks and Other Financial Institutions (BOFI) Awards 2020 and 2021.

Similarly, Zenith Bank was honoured as Bank of the Decade (Peoples Choice) at the ThisDay Awards 2020 and emerged winner in four categories at the Sustainability, Enterprise, and Responsibility (SERAS) Awards 2021, carting home the awards for Best Company in Reporting and Transparency, Best Company in Infrastructure Development, Best Company in Gender Equality and Women Empowerment, and the coveted Most Responsible Organisation in Africa.

UBA grows profit by 8.76% to N42 billion

On its part, the United Bank for Africa (UBA) Plc, released its unaudited results for the first quarter ended March 31st, 2022, recording impressive growth across its income lines.

The banks result which was released to the Nigerian Stock Exchange on Tuesday showed that gross earnings rose by 18.3% from N155.4 billion in 2021 to N183.9 billion; while operating income which stood at N106.6 billion as at March 2021, grew by N18% to N125.9 billion in the year under consideration.

The results revealed that the banks total assets also rose by 4.1% to N8.9 trillion in the period under review, compared to N8.5 trillion recorded at the end of the 2021 financial year; while shareholders funds grew by 2.6% to N825.7bn from N804.8 billion in the same period.

Leveraging on the growth in both interest and non-interest income, the banks profit before tax rose to N44.5 billion as at March 2022, up from N40.6 billion a year earlier, while profit after tax stood at N41.5 billion. As always, UBA sustained its strong profitability recording an annualized 20.4% Return on Average Equity (RoAE).

UBAs Group Managing Director/Chief Executive Officer, Mr Kennedy Uzoka, explained that despite the myriad of economic challenges on the global front which shaped the first three months of the year, the banks 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 spiralling inflation, sparking capital flow reversal from emerging and frontier markets.

Notwithstanding these developments, we were able to leverage gains from our large customer base and vast geographical spread to bolster earnings. We recorded double-digit growth of 18 percent in our gross earnings to N183.9 billion, with our Nigerian operation raking in 65 percent of the revenue while our operations in other countries accounted for the remainder, showing the diversity in our operations, Uzoka said.

The GMD pointed out that amid the Great Resignation wave that has seen a record number of employees across the globe quit their jobs, disrupting the performance of many businesses, UBA, in the last quarter of 2021, thoughtfully reviewed upwards, the salaries of its staff as part of broad measures to retain talents, adding, We believe our staff is part of our success story with their welfare as a top priority.

Emphasising the banks commitment to sustain value for its shareholders in the 2022 financial year, the GMD said, With strategies in place to further increase revenue and drive cost lower, we are determined to achieve our Cost-to-Income ratio target of below 60.0% by year-end; and for 2022, we are committed to consolidating on the strong start, surpassing our goals and targets, as we look forward to delivering stronger returns to our esteemed shareholders.

Breaking down the figures, UBAs Group Chief Finance Officer(GCFO), Ugo Nwaghodoh, said, Our Q122 financial numbers show we are off with a good start. Particularly, 1 am pleased with how we deployed our balance sheet in the period to grow revenues and increase our market share in a number of West African markets. Driven majorly by interest from customer loans and our investments in long-dated instruments, we grew interest income by an unprecedented quarterly rate of 15 percent to N125.1 billion.

We drove down our annualized cost of funds by 11 basis points to 2.1%. This was achieved despite the uptick in the interest rate environment in the period, the GCFO said.

He expressed confidence that the bank will meet and surpass its target for the remaining three quarters of the year, adding that We remain well-capitalized and liquid to fulfil our growth strategy, take up opportunities in key sectors, whilst navigating impending macroeconomic headwinds.

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-five (25) million customers, across 1,000 business offices and customer touchpoints in 20 African countries. With a presence in New York, London and Paris, UBA is connecting people and businesses across Africa through retail, commercial and corporate banking, innovative cross-border payments and remittances, trade finance and ancillary banking services.

 

GTCO reports N43bn profit for Q1 2022

As for Guaranty Trust Holding Co Plc (GTCO), the holding company of Guaranty Trust Bank, reported N43.21 billion profit for its first quarter 2021 results, representing a 5.13% drop year on year.

 

The bank also reported earnings per share of N1.51, a 5.63% drop from the N1.60 reported a year earlier in 2021, according to the result released on Tuesday.

Further breakdown of the numbers showed that interest income grew by 9.09% from N52.43 billion to N57.20 billion in the current period.

The companys profit performance is on the back of margin growth as income from interest and fees and commission income appreciated year on year.

However, net trading income declined y-o-y by 5.03%, subduing bottom-line profit, as well as other expenses.

The bank earned N70.64 billion, from its lending business as Interest income grew by 17.14% from N60.31 billion.

Loan losses during the period depreciated by 35.03%, but net interest income after impairments appreciated by 10.72% to stand at N55.99 billion.

The lender, however, grew its income from fees and commission rising 21.39% to N17.57 billion year on year.

Other highlights include:

Account maintenance charges for the Q1 2022 period grew by 23.83% from N4.18 billion in the corresponding period of 2021 to N5.17 billion, generating the highest F&C income for the group.

Also, the group generated a total of N15.30 billion in net trading income on financial instruments representing a 5.03% decline year on year.

The bank also made income from mark to market gains on trading investments which raked in a total of N6.83 billion.

The banks e-banking income raked in N4.05 billion, representing a 4.98% increase from N3.85 million in 2021. This indicates that the bank has made significant progress in its use of e-banking channels to deliver financial services to its consumers.

In addition, the bank also grew its deposits from customers by a marginal 0.82% to N4.05 trillion while its total assets are now N5.50 trillion. Net assets rose 2.89% to N908.76 billion.

Access Holdings Plc posts N57bn profit for Q1 2022

Access Holdings Plc has posted a profit of N57.40 billion in Q1 2022, a 9.23% increase from the corresponding quarter of 2021.

The results for the period released recently also showed earnings per share of N1.63, representing a 9.40% increase from the N1.49 reported a year earlier in Q1 2021.

The latest profit figure shows that Access Bank has grown its Q1 profits by 160% in 4 years since hitting N22 billion in Q1 2018 with the profit now touching roughly N57.40 billion.

A further look at the numbers showed net interest income for the period declined by 7.03% from N93.96 billion to N87.36 billion.

The companys profit performance is on the back of margin growth as income from interest, foreign exchange gains and fees and commission income all appreciated year on year.

The company also earned N160.32 billion, from its lending business as Interest income grew by 27.27% from N125.97 billion.

It recorded loan losses growth of 9.17%, while net interest income after impairments depreciated by 9.52% to stand at N73.67 billion.

Nonetheless, the company grew its income from commission and fees rising 44.54% to N56.30 billion year on year and also generating a total of N85.83 billion from net foreign exchange gains as against N1.08 billion year on year.

However, net loss on financial instruments stood at N44.63 billion, on the back of an N85 billion loss on non-hedging derivatives.

The groups e-business income raked in N20.13 billion, representing a 12.33% spike from N17.92 billion in 2021. This suggests that the bank has improved in its utilization of the e-banking channels in the delivery of financial services to its customers.

Equally, credit-related fees and commissions stood at N21.15 billion during the period.

In addition, the group also grew its deposits from customers by a whopping 7.76% to N7.49 trillion while its total assets are now N12.08 trillion. Net assets rose 4.77% to N1.08 trillion.

The banks Board of Directors proposed a final dividend per share of N0.70 per share, to be paid on each of the 35,545,225,622 issued ordinary shares and payable to shareholders on the register of shareholding at closure.

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