Business

Four banks post strong earnings in FY 2022

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Okey Onyenweaku

Nigerian banks have posted strong performances in all measurement indices for the year ended 2022.

The final year results which just trickled in seem very impressive. These banks which have show cased their strengths against all odds include, Stanbic IBTC, Fidelity Bank, FCMB Group, Wema Bank Plc and Sterling Bank.

Analysis of these banks’ figures reveal good fortunes for investors, for instance;
Stanbic IBTC performed beyond expectations to post profit before tax of N100.5billion, representing a growth of 52.4 per cent over N66.003billion in the corresponding period of 2021. Its gross earnings rose 39.3 per cent from N206.6billion in 2021 to N287.8billion in 2022.

At the close of business year, the bank interest income grew 45.7 per cent from N104.7 billion in 2021 to N152.6billion in 2022. Whereas its operating expenses increased 21.5 per cent from -N106.6billion in 2021 to -N129.5billion in 2022.

As turbulence as 2022 was for businesses, Stanbic IBTC expanded its loans advances by 29 per cent from N937.1billion to N1.208trillion in 2022. Total assets also grew 10.7 per cent from N2.74trillion to N3.037trillion in 2022.

STERLING BANK achieved profit before tax of N20.066billion in 2022, representing a growth of 38.6billion over N14.47billion in the corresponding period of 2021. The banks gross earnings increased by 17.3 per cent from N148.1billion in 2021 to N173.7billion in 2022. While interest income increased by 15.1per cent from N110billion to N127.6billion in 2022, operating expenses grew 19.8 per cent from-N72.830billion in 2021 to -N87.250billion in 2022.

After paying tax of increase of 48.4 per cent, it recorded a total asset growth of 14.5 per cent from N1.629trillion in 2021 to N1.865trillion in 2022. Total deposit also increased by 10.9 per cent from N1.224trillion to N1.357trillion in 2022. The paid huge tax in 2022 as it rose by 116.2 per cent from -N959million to N1.423billion in 2022. While total loans & advances rose by 5.8 per cent to N853.6billion in 2022, total assets also grew by 14.5 per cent to N1.865trillion. Similarly, its total deposits increased by 10.9 per cent to N1.357trillion in 2022.

FCMB GROUP also achieved impressive results with profit before tax growing by a whooping 63.3 per cent from N22.717billion in 2021 to N37.105billion in 2022. Gross earnings increased by 32.9 per cent from N212.01billion in 2021 to N281.71billion in 2022. In the same vein, the bank interest income increased by 34.5 per cent to N217.9billion in 2022 while operating expenses also jumped 16.5 per cent to -N112.08billion in 2022.

While net impairment loss increased by 63 per cent to -N24.955billion, the banks total asset recorded a growth of 19.3 per cent to N2.97trillion in 2022. At the close of business in 2022, the bank’s total deposits rose 20.7 per cent; total loans and advances advanced by 12.3 per cent; while taxation increased by 150 per cent to N4.514billion.

Wema Bank achieved profit before tax growth of 17 per cent from N12.377billion to N14.59billion in 2022. Its gross earnings also increased by 38.1 per cent from N93.632billion in 2022 to N129.306billion in 2022. While its interest income stood at N104.3billion, representing a growth of 39.6 per cent over the N74.798billion in 2021,total loans & advances grew by 25.1per cent to N523.9billion in 2022. In fact, the bank’s total deposits inched up 22.4 per cent to N1.184trillion while total assets increased by 22.2 per cent from N1.175trillion to N1.436trillion in 2022.

Analysts believe that these are impressive performances given the high level of volatility in the operating environment.

Nigeria’s economy has in most of the past seven years been struggling, giving out discouraging signals to would -be investors in the country. This has become a source of concern to the discerning especially economic experts whose expectations are not met.

Throughout this year the impressions of the Bretton Woods institutions do not seem to see signs of improvements in the economic policies for positive growth, but that of gloom and uncertainty. This is despite their projections that the economic will grow by over 3 per cent.

Giving credence to this story is the recent down grading of Nigeria and banks by the
international rating agency, Moodys, on the premise of weak macro-economic environment.

Details according to Moody’s is that the downgrade of the long-term ratings of nine Nigerian banks are based on two factors, the weakening of operating environment as captured by Moody’s lowering of its Macro Profile for Nigeria to ‘Very Weak’ from ‘very weak +’ and the connection with the sovereign’s weakened creditworthiness and the banks’ balance sheets, given banks’ holdings of sovereign debt securities.

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The banks affected here include; Access Bank Plc, Zenith Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc and Guaranty Trust Bank Limited. Others are Union Bank of Nigeria plc, Fidelity Bank Plc, FCMB (First City Monument Bank) Limited and Sterling Bank Plc.

Critically, recent statistics reveal that the rate of unemployment, one of the highest in the world is 40%. At the same time, the underemployment rate stood at 25%; even as inflation, which is hitting the roof top at 21.6, though tempered from 22 percent, remains the highest point in the last seven years. At the same time, Diaspora remittances which recorded $23billion before the covid -19 year is still down.

Also remarkable is the country’s heavy debt burden at N44trillion ($103b)and expected to continue to hit N77trillion if the N21trillion CBN ways and means to FG is securitised; of the budget of N21trillion budget deficit stood at N12 trillion as over 80 per cent of revenues is used to service debt. More worrisome is that the country has set new borrowing limit from 25 per cent of GDP to 40 per cent of the GDP. This was contained in the Medium Term Debt Strategy.

The major revenue earner for the country, crude oil price, which has hit $75 pbd and above presently still fluctuates.

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 parades the most poverty stricken people in the world, competing with India. The Naira which sold at N220/$ in June 15, 2015 has depreciated by 300 per cent to N735/$ as at yesterday Saturday 4, 2022.

 

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