…Zenith bank leads industry with N696.67 Billion
A total of five Domestic Systemically Important Banks (D-SIBs) in Nigeria profits hits N2.2trillion between 2017 and 2020.
The five D-SIBs are Zenith Bank Plc, Guaranty Trust Bank Plc (GTBank), Access Bank Plc, United Bank for Africa Plc (UBA), Ecobank Transnational Incorporated (ETI) and FBN Holdings Plc.
D-SIB is a term used for banks that are believed to be too big to fail and if they plunge into crisis, government is expected to support them because of their importance to the economy and the wrong signal they could send to foreign investors.
These five Tier-1 banks have grown in profits, total assets and dividend payout to shareholders despite severe operating environment and stringent policies by the Central Bank of Nigeria (CBN).
Data gathered revealed that Zenith Bank, followed by GTBank are the two most profitable Tier-1 banks in Nigeria.
The breakdown of the profits between 2020 and 2017 revealed that these five Tier-1 banks generated N580.59billion profit in 2020 and N601.65billion profit in 2019.
Furthermore, the five banks generated N533.68billion profit in 2018 from N483.73billion generated in 2017.
Zenith Bank in the four years has sustainable maintained stronger profit, generating N696.67billion which is 32 per cent of the five Tier-1 banks profits generated in the period under review.
The bank in 2020 generated N197.85billion profit and in 2019, it reported N180.33billion profit. Also, in 2018, Zenith Bank reported N165.48billion profit while in 2017, it profit was N153billion.
Zenith Bank was ranked as the Number one Bank in Nigeria by Tier-1 capital in the 2021 Top 1000 World Banks ranking published by The Banker Magazine.
Zenith Bank’s financial performance for the year was underpinned by an eight per cent growth in non-interest income, with an improved market share in both retail and corporate sectors despite a very challenging macroeconomic environment exacerbated by the COVID-19 pandemic.
The Group Managing Director Ebenezer Onyeagwu sees the ranking as a demonstration of the resilience and doggedness as an institution given the very challenging macroeconomic environment brought about by the COVID-19 pandemic, which had a significant deleterious impact on businesses globally. It is also an affirmation of our commitment to delighting and creating value for our customers through a broad range of superior product offerings, best-in-class service and top-of-the-range technology”.
GTBank between 2020 and 2017 generated a total of N678.79billion profit. The breakdown revealed that GTBank in 2017 generated N158.73billion profit and it grew by 5.1per cent to N166.75billion profit in 2018.
GTBank’s profit closed 2019 at N166.75billion and in 2020, N177.19billion profit was generated.
While commenting on the financial institution 2020 performance, the former CEO/MD who is now CEO/MD, Guaranty Trust Holding Co, Mr. Segun Agbaje, said, “2020 was arguably the most challenging year that the world has faced in decades. In such unprecedented times, we sought to live out the full extent of our values; safeguarding lives and livelihoods for our people, our customers and across the communities where we operate.
“We were on solid footing going into 2020; the strength, scale and liquidity of our balance sheet, coupled with the quality of our past decisions and the efficacy of our digital-first customer-centric strategy gave us the resilience and flexibility to navigate the economic shocks and market volatility that dominated the year.”
He further stated that; “Amidst the many challenges that persist, we remain ardent believers in Africa’s growth potential.
“Our world is increasingly digital, and we see it opening new and exciting opportunities for empowering people and uplifting our communities.”
Between 2020 and 2017, ETI and Access Bank generated N280.66billion and N275.09billion profit respectively.
A breakdown of the four years period for ETI showed that in 2020 it generated N33.74 billion profit and in 2019, N99.46billion profit was generated; N77.46 billion in 2018 and N69.99 billion profit in 2017.
For Access Bank, in 2020 it generated N80.04 billion as profit; N70.12 billion in 2019; N71.6 billion in 2018 and N51.33 billion in 2017.
Coming close to Access Bank is UBA that generated N202.10billion profit between 2020 and 2017. UBA reported N56.91billion profit in 2020 from N62.75billion in 2019.
The Group Managing Director/CEO, UBA, Mr. Kennedy Uzoka in a statement noted that the year 2020 was important for UBA Group, as it gained further market share in most of its countries of operation.
He said: “We ended a very challenging year on a reassuring note. The Bank recorded double-digit growth in both our top and bottom lines, as gross earning s and after-tax profit grew by 10.8 per cent and 27.7 per cent to N620.4billion and N113.8 billon respectively.
UBA reported N41.05billion profit in 2018 and N41.4billion profit in 2017.
In addition, FBN Holdings reported N3386billion in 2020; N13.86billion in 2019; N9.34billion in 2018 and N9.28billion in 2017.
A shareholder, Mr. Ade Peterson who spoke with our correspondent expressed that Nigerian banks declaration of stronger profit means the sector is highly competitive, stressing that CBN polices also contributed to their performance.
According to him, “For banks to maintain growth in performance in four consecutive years means the sector is vibrant.
“The framework by CBN, adoption of electronic banking, and exposure to real sector are really pushing these banks profit every year.
“Also, their performance also showed more profit can be earned if regulatory costs are removed and this can drive banks to lend more to real sectors and SME that needed capital to stay afloat.”
An analyst, Mr Moses Adebayo, noted that the sector performance has proven how strong Nigerians are creative at doing business amid harsh government policies.
He maintained that the innovations by these banks have driven their profit, stressing that shareholders are also reaping dividend amid growth in profits.
The CBN recently, asked the banking public to disregard any report alleging insolvency in the Nigerian banking sector, insisting that the Nigerian banks and other financial institutions under its supervision are resilient, safe and sound.
This was disclosed by the apex bank via a statement issued by the Acting Director, Corporate Communications Department of the Bank, Osita Nwanisobi, in Abuja.
“The Nigerian banking system had proved to be very sturdy in spite of the global challenges posed by the coronavirus pandemic, in response to certain false and unfounded stories circulating in the social media attacking the soundness and safety of some Nigerian banks.
“Routine bank examination and stress test for financial institutions operating in the country indicated that no Deposit Money Bank licensed by the CBN was currently under any form of financial distress,” he said, adding that the banks had adequate capital to absorb unexpected losses that might arise.
In line with the bank’s resolve to ensure adherence to prudential standards, Nwanisobi stated that the CBN continued to monitor the activities of banks in order to ensure that no individual or institution breached the laid down guidelines.
He urged members of the banking public to take advantage of the services provided by banks, particularly intervention programmes initiated by the CBN, to enhance their economic status and contribute to overall national development.