Seven out of the sixteen commercial banks listed on the floor of the Nigerian Stock Exchange (NSE) have reported a total of N94.195 billion profits in the second quarter of the year ended June 30, 2018. The period covers from April to June 2018.
This is an improvement of N24.564 billion or 35.277 per cent on the N69.631 billion reported by the same banks in the same period of 2017.
Breakdown shows six out of the seven banks reported increase in profit, while Diamond Bank with N1.013 billion profit in 2018 suffered a drop of N2.768 billion or 73.20 per cent from N3.781 billion reported in the same period of 2017.
First City Monument Bank Group reported the most significant increase by percentage, with FBN Holdings reporting the lowest by percentage.
Statistics gathered showed that First City Monument Bank Group’s profit rose from N1.437 billion in 2017 to N3.139 billion, representing an improvement of N1.702 billion or 118.44
This was followed closely by Ecobank Transnational Incorporated Plc with 36.6 per cent increase in profit to N51.6 billion from N37.7 billion reported in the comparable period of 2017.
Wema Bank Plc, with a profit N1.57 billion also reported a 28.8 per cent rise compared to N1.22 billion profit reported in the same period of 2017, while, Union Bank of Nigeria Plc followed, rising by 39.56 per cent from N8.600 billion to N12.0 billion in the period under consideration.
FBN Holdings Plc reported N18.708 billion in the period under consideration from N13.059 billion reported in the same period of 2017, representing an increase of N5.649 billion or 43.25 per cent.
Sterling Bank posted a profit of N6.214 billion from N3.802 billion in the corresponding period of 2017, representing an improvement of N2.412 billion or 63.44 per cent.
Reacting to the performance of his bank, Abubakar Suleiman, Managing Director, Sterling Bank, said: “Sterling Bank would continue to explore and exploit opportunities already identified across the growth sectors of the economy while actively supporting special intervention and social investment programmes.”
The management of FCMB Group in a statement said, “The improved performance reflects the improving performance of the bank, as well as, the effects of diversification through our investments in asset and wealth management.”
In a statement, the new Chief Executive Officer, Wema Bank, Mr. Ademola Adebise, said, “With these half-year results, we believe we are on track to deliver on our commitments to shareholders at the beginning of the year.”
Also, the Chief Executive Officer, Union Bank of Nigeria, Mr. Emeka Emuwa, said: “In the first half of the year, we have continued to see positive results from our efficiency and productivity drive. Across all our business lines, we witnessed strong underlying performance, translating to improved earnings. We continue to focus on the recovery of non-performing loans.
“The Group continues to demonstrate its ability to deliver strong results notwithstanding a competitive and challenging operating environment.
“In the second half of the year, we will continue to focus on productivity, leveraging on our enhanced platform to deliver best-in-class services to our customers and taking advantage of targeted opportunities across business lines and geographies.”
Analysts have said the increase in the performance of the banks was as a result of more prudent management of their activities as regards reduction in impairment losses and increasing gross earnings.
Guy Czartoryski, Head of Research, Coronation Research, said: “For two years, Nigerian banks have had an easy time, earning good income on risk-free government-backed, Naira-denominated securities. That era is drawing to a close as T-bill rates fall.
“Asset yields are trending south, and it is almost impossible to re-price liabilities to match. So, banks must either find other sources of income or face an average 15 per cent drop in their profits before tax expectation for 2018.
“For the banks to replace the portion of income threatened by declining yields on securities, they must grow risk-weighted assets. This means a 6-12 per cent rise in customer loans in 2018.”
