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How seven banks fared in interest income, PBT in Q1 2024 —Analysis

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THE first quarter (Q1) of 2024 saw a mixed performance from  Nigerian banks especially in their Interest Income and Profit Before Tax, a Nigerian Tribune analysis has shown.

They are: First Bank of Nigeria Plc, Zenith Bank Plc, Guaranty Trust Bank, United Bank for Africa (UBA), Access Bank, Fidelity Bank and Wema Bank plc.

First Bank of Nigeria Plc showcased a steady performance in Q1 2024. Despite facing management challenges, the bank managed to maintain a stable financial position. Interest income shows a modest increase of 153.32 percent to N454.98 billion from N179.61 billion recorded in Q1 2023. The Profit Before Tax (PBT) stood at N238.53billion, an increase from N56.11billion in the previous year.

Similarly, Zenith Bank Plc announced a growth of 154.94 percent in interest income from N191.63 billion recorded previously to N488.55 billion, driven by transaction volume. PBT increased by 269.72 percent to N320.19 billion, which shows the bank’s cost management and strong revenue growth. Analysts say this was a notable achievement, considering the challenging economic environment. The bank’s mobile app and internet banking services also significantly increased customer adoption, contributing to higher non-interest income.

Also, Guaranty Trust Bank’s performance was shaped by several positive developments and challenges. The Q1 results reported impressive interest income growth of 170.61 percent, reaching N281.65 billion compared to N104.08 billion in Q1 2023.

This was driven by an increased fee-based income from digital channels. PBT rose by 1,587.48 percent to N509.35 billion, reflecting GTBank’s cost control measures.

United Bank for Africa (UBA) reported growth reaching N440.76 billion, a 129.71 percent increase compared to N191.88 billion in Q1 2023. This was due to increased transaction volumes across its African operations.

UBA’s Q1 profit after tax (PAT) from continuing operations, grew 27 percent year on year (y/y) to N38.2 billion. Underpinning the double-digit earnings growth were increases of 13-14 percent y/y on both revenue lines and a -23 percent y/y reduction in credit loss impairments.

These positives underpinned PBT growth of 24 percent y/y. Further down, the PAT growth after other comprehensive income and minorities accelerated by 275 percent y/y because it improved to N70 million vs -N15 billion Q1 ‘20.

However, the profit before tax recorded a loss of 60.74 percent to N61.37 billion compared to N156.34 billion recorded in Q1 2023.

Access Bank Plc, one of Nigeria’s largest financial institutions, performed well in the first quarter 2024. This indicates a solid start to the year, driven by increased deposits and customer loan growth. Access Bank reported an interest income increase of 183.07 percent year-on-year (Y-o-Y), reaching N719.60 billion, up from N254.22 billion in Q1 2023.

Furthermore, Fidelity Bank Plc,  posted 120.1 per cent growth in profit before tax for the first quarter (Q1) period ended March 31, 2024.

The Bank Q1 results released on the Nigerian Exchange (NGX) revealed that pre-tax profit for the period under review stood at N39.5 billion as against N17.9 billion at the end of Q1, 2023.

Gross Earnings increased by 89.9 percent year-on-year (yoy) to N192.1 billion from N101.1 billion in Q1, 2023. The increase was led by a combination of interest income of 90.7 percent yoy and non-interest income of 84.0 percent yoy.

Growth in interest income was primarily spurred by a higher yield environment and strong earning assets base, while the increase in non-interest income was led by double-digit growth in account maintenance charges, FX-related income, trade, banking services, and remittances, supported by increased customer transactions.

In the period under review, the bank grew net interest income by 89.5 percent to N99.6 billion from N52.6 billion in Q1, 2023, driven by interest and similar income as the yield on financial instruments improved to 14.7 percent from 10.1 percent in Q1, 2023.

In FY 2024, analysts expect Fidelity Bank to achieve a PBT of N171.5 billion, marking a potential 38.0 percent increase from its FY 2023 print. This earnings projection aligns with the bank’s guidance of N170.0 billion and is consistent with potential benefits from the high-interest rate environment.

Wema Wema Bank, Nigeria’s foremost innovative bank and pioneer of Africa’s first fully digital bank,  announced a 196 percent increase in Profit Before Tax (PBT) from N14.75billion to N43.59billion, 220.4percent increase in Profit After Tax (PAT) from N11.21billion to N33.66billion, 70.63percent increase in Gross Earnings from N132.30billion to N225.75 billion.

The bank also recorded a 53.64percent increase in Loans disbursed from N521.43billion to N801.10billion and a remarkable 220.53percent increase in Earnings per share from N87.2 to N279.5, among other successful upturns.

Meanwhile, having secured the approval of shareholders, the lender recently hinted on plans to raise N200 billion capital requirement in conformity with the directive of the Central Bank of Nigeria (CBN) for national banking license, as the lender sets ambitious goal of attaining a tier 1 bank status in the nearest future.

Speaking at the bank’s hybrid Annual General Meeting (AGM) held on Tuesday May 28, 2024, Group Managing Director/Chief Executive Officer Mr. Moruf Oseni disclosed the Bank’s progress towards realising the recapitalisation target of N200 billion. Expressing gratitude to the Bank’s stakeholders for their contributions to the tremendous results achieved, Oseni said, “As a Bank, we feel privileged and lucky to have enjoyed the support of our Shareholders and Stakeholders, especially in the past year. The Bank’s performance has been stellar throughout the year and the figures testify to that.

“None of it could have been possible without the support of the Board, my colleagues in Executive Management, and our customers who are extremely loyal and committed to helping us improve, but I think the most important ingredient of all is the followership of the 5000+ employees that I lead as the MD/CEO of Wema Bank.

“We have given them a purpose which has resonated with them, and they are working day and night to ensure that your Bank gets to the top. That is the reason you see the results you have seen.”

According to him, the owners of the Bank and Shareholders have been relentless in their support of the administration and have constantly challenged it to achieve greater while giving their support.

“As always, we will continue to rise to the occasion. The apex Bank has done its due diligence and approved our N40bn Rights Issue, which is currently undergoing SEC approval to be listed on the Nigerian Exchange. Our Capital Base now stands not at the current N15 billion but with the Rights Issue, at N55 billion—significant headway towards N200 billion.

“Following the shareholders’ and Board’s approval, we are set to raise the N200billion within the 24-month timeline through public placements and a public offer, which we are confident that we will achieve before the timeline expires.

We have shared our plans with the CBN, and we will work assiduously to meet up with the balance our Capital Base in the nearest future. At a minimum, Wema Bank will remain a National Bank. We will keep working tenaciously to become a Systematically Important Bank, reattain Tier-1 status, and continue providing optimum value for every shareholder and stakeholder of Wema Bank”, Oseni concluded.

According to shareholder testimonials, not only was the 2023 Wema Bank AGM allegedly the best AGM in the Bank’s history, the financial performance as captured in its FY 2023 Annual Report, is also allegedly the Bank’s best so far.

Exercising their voting rights, the Bank’s shareholders unanimously approved a N0.50 dividend for the year ended December 31st, 2023, as well as the appointment of two new Non-Executive Directors of the Bank—Yewande Zaccheaus and Yusuf Kazaure, and the new Executive Director, Segun Opeke, as new additions to the Wema Bank Board of Directors.

Commending the exceptional results, Mr. Badmus Tunde, a Shareholder of the Bank added, “I welcome the new Chairman on board and our MD/CEO as well, it is evident that they are very capable of steering the ship. I want to congratulate the Bank for coming this far, 79 years is not child’s play and I pray God grants us long life. Since 1945, Wema Bank has seen the good, the bad, the beautiful and the ugly, and through thick and thin, it has gotten to where it is today. The results are overwhelming, and profitability has been maintained. Kudos to the Board and Management”.

Upon Shareholder approvals, Wema Bank is set to disburse the N0.50 dividend for FY 2023 to its shareholders by May 29, 2024. In view of the Bank’s financial progress over the past 5 years, it is predicted that Wema Bank’s 2024 financial performance will outdo its past accomplishments, including that of the year ended December 31, 2023. Following SEC approval, the Bank’s N40bn Rights Issue is set to be listed on the Nigerian Exchange in the nearest future.

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