The full year 2017 audited results of banks have shown that the gap between the tier 1 and tier 2 banks in the country, in terms of market share, has continued to widen.
A review of the audited results of 11 banks, comprising the five tier 1 banks and six tier 2 lenders, showed that the tier 1 banks continued to control a significant chunk of the market in terms of assets, gross earnings, loans and advances, customer deposits and profit before tax.
The tier 1 bank results reviewed were those of Zenith Bank Plc, Guaranty Trust Bank (GTBank) Plc, United Bank for Africa (UBA) Plc, FBN Holdings Plc and Access Bank Plc.
On the other hand, the six tier 2 bank results reviewed comprised Fidelity Bank Plc, Stanbic IBTC, Sterling Bank, First City Monument Bank (FCMB), Ecobank and Wema Bank.
It is worthy of note that Diamond Bank Plc and Union Bank of Nigeria Plc notified the Nigerian Stock Exchange (NSE) of further delays in the release of their respective results, saying that their audited financial statements would be ready this month.
The review conducted by THISDAY showed that the total assets of the 11 banks increased to N34.631 trillion at the end of 2017, higher than the N30.665 trillion recorded in 2016.
But the five tier 1 banks listed above, at N22.355 trillion, accounted for 64.5 per cent of total assets in 2017, while the total assets of the tier 2 lenders stood at N12.276 trillion during the same period.
In 2016, the total assets of the five tier 1 banks stood at N19.581 trillion while those of the six smaller lenders accounted for N11.083 trillion of total assets in the same period. Â
Also, while the 11 banks realised combined gross earnings of N4.205 trillion in 2017, up from N3.515 trillion from the previous year, the five tier 1 banks alone accounted for N2.681 trillion or 64 per cent of total earnings in 2017, as against the N2.200 trillion recorded in 2016.
But in the year under review, the above-mentioned tier 2 banks reported gross earnings of N1.525 trillion (36%) in 2017, higher than the N1.316 trillion in 2016.
Findings also showed that total loans and advances of the 11 banks whose results were reviewed stood at N14.665 trillion in 2017, slightly higher than the N14.528 trillion recorded in the previous year. Just like other indicators, the five tier 1 banks gave out 63 per cent of the loans and advances as they accounted for N9.197 trillion in 2017, lower than that of N9.277 trillion in 2016.
However, the tier 2 banks in all gave out N5.468 trillion in 2017, higher than the N5.251 trillion recorded in 2016.
Similarly, while total customer deposits of the 11 banks stood at N21.132 trillion in 2017, higher than the N19.644 trillion they realised in the previous year, at N13.321 trillion, the five tier 1 banks accounted for 63 per cent of total customer deposits.
The tier two banks, on the other hand, posted combined customer deposits of N7.810 trillion or 37 per cent in 2017, higher than N6.996trillion in the previous year.
In the same vein, of a total of N838.719 billion posted as profit before tax (PBT) by the 11 banks in their combined full year 2017 results, higher than the N633.286 billion recorded in the previous year, the five tier 1 banks accounted for 77 per cent or N645.864 billion of the PBT they made in 2017, up from N525.813 billion in 2016.
The PBT of the six tier 1 bank in the year under review, however, stood at N192.855 billion, up from N107.473 billion in 2016.
Managing Director, Afrinvest Securities Limited, Mr. Ayodeji Ebo, attributed the yawning gap between the tier 1 banks and tier 2 banks to the fact that the bigger Nigerian lenders have been riding on economies of scale and larger branch networks.
“Because of these, the tier 1 banks have been squeezing out their tier 2 counterparts. What the latter can do is to ride on technology to improve their market share,†he explained.
