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11 Banks Rake in N261.99Bn Net Profit in 3 Months

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Increased lending by banks to businesses and the economy jacked up interest income in the banking sector, hence, reflecting on the cumulative net profit of N261.991 billion declared by 11 banks during the first quarter (Q1) ended March 31, 2022.

11 Banks Rake in N261.99Bn Net Profit in 3 Months

This, according to Leadership findings, arose as a result of effective funding optimisation and drive for efficiency in the concerned banks.

The banks are; Zenith Bank Plc, Guaranty Trust Holding Company (GTCO), Access Holdings, Ecobank Transnational Incorporated Plc (ETI), United Bank for Africa (UBA), Fidelity Bank, Jaiz Bank, Union Bank of Nigeria (UBN), Sterling Bank, Unity Bank, and Wema Bank.

According to the results released on the Nigerian Exchange (NGX), total net profit released by the financial institutions for the period under review increased by 8.78 per cent from the N240.855 billion posted Q1, 2021 to N261.991 billion in Q1, 2022.

The performance in the first quarter reflects the resilience of banks’ business model. Despite the general turbulence witnessed in the wobbling economy, occasioned by the Russia/Ukraine war, high inflation, heightened insecurity and low investment, the banks still declared an impressive financial performance in the quarter under review.

Capital market analysts said, banks delivered a strong base for growth in Q1, 2022, through effective funding optimisation and drive for efficiency.

Leading in the profit line for the period was Zenith Bank Plc that reported N58.19 billion net profit, a growth of 9.67 per cent. Access Holdings net profit grew by 9.23 per cent to N57.991 billion in Q1, while GTCO declared profit after tax of N43.208 billion, lower than N45.546 billion in Q1, 2021.

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.

UBA achieved a net profit of N41.496 billion as against N38.155 billion in 2021; ETI reported total profit of N38.324 billion as against N30.494 billion in 202; while Fidelity Bank net profit stood at N9.515 billion, lower than N9.590 billion recorded in Q1, 2021.

Meanwhile, Union Bank, Sterling Bank, Wema Bank, Jaiz Bank and Unity Bank posted profit after tax of N5.551 billion, N3.543 billion, N2.856 billion, N1.040 billion and N869.264 million respectively, as against N6.207 billion, N2.395 billion, N1.305 billion, N832.297 million and N721.537 million, respectively in Q1, 2021.

Speaking on the Bank’s performance, Mr Kennedy Uzoka,  group managing director/chief executive officer, UBA, explained that, despite the myriad of economic challenges on the global front which shaped the first three months of the year, the bank’s 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 spiraling inflation, sparking capital flow reversal from emerging and frontier markets.

Moreover, Mr. Segun Agbaje, CEO of GTCO, said: “our first quarter results show a decent improvement across key revenue lines as well as other financial metrics, which demonstrates our ability to effectively navigate the evolving business landscape anchored on our strong business fundamentals.

“With this performance, we are optimistic about the rest of 2022 as we rapidly consolidate the gains of our new holding company structure to deliver superior stakeholder value.”

Ade Ayeyemi,  chief executive officer, Ecobank Group, stated that the performance was achieved in a difficult operating environment characterised by the strengthening of the US dollar against local operating currencies, high inflation, high interest rates and tight labour markets across Africa as the Russia-Ukraine conflict continued to take its toll.

“Despite these challenges, we continued to support our customers effectively, which paid off as our businesses grew their revenues and profits. These were driven by trade, cash management, FICC and payments, while we also achieved modest loan growth with support from higher interest rates,” he said.

Assessing the performance, Mr. Rotimi Olubi, managing director, ARM Securities Limited, said:, “Interest income has been a major driver of earnings across all banks. We have seen a significant increase in banks interest income due to rise in loans from customers and institutions.”

He noted that there was increase in banks gross earnings across all banks as a result of recovery from the COVID-19 pandemic.

Mr. Ambrose Omordion, chief operating officer, InvestData Limited, said the Q1 2022 is a reflection of economic recovery in Nigeria post COVID-19.

According to him, the performance showed the local economy is not doing bad in the Q1, 2022 as projected by the world bank. Banks been the cash flow of the economy have performed beyond expectations.

Speaking from a shareholder’s perspective, Boniface Okezie, chairman of the Progressive Shareholders Association of Nigeria, noted that, Nigerian banks have proven to be resilient in growing profits and savings from customers despite domestic and global challenges.

“It is a good thing that Nigerian banks are still resilient and are doing very well despite economy challenges. The resilient is what investors are seeing in our banks and are taking position. The Q1, 2022 performance is encouraging and with the growth, shareholders are expecting higher dividend in 2022 full year,” he pointed out


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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E-Financial

CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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