•Propose N444.52bn combined dividends
•Zenith remains most profitable bank in Nigeria
•Geregu first company to release Q1 2024 results, declares N14.46 billion profit
Eromosele Abiodun and Kayode Tokede
Despite daunting challenges in the banking sector and the economy, six leading banks in the country generated mouth-watering returns for their shareholders in the 2023 financial year.
THISDAY analysis of the six banks’ audited 2023 results showed that cumulatively, they generated about N3.11 trillion profit before tax, a growth of 216.4 per cent from the N982.5 billion they recorded in the 2022 financial year.
The banks are: Zenith Bank Plc, Access Holding Plc, United Bank for Africa Plc (UBA), Guaranty Trust Holding Company Plc (GTCO), Stanbic IBTC Holdings Plc, and Wema Bank Plc.
Firstbank Holdings Plc, FCMB Group Plc, Fidelity Bank Plc, Sterling Financial Holdings Company Plc and Jaiz Bank Plc have not released their audited full year 2023 results as at the time of filing this report.
Further findings revealed that the six banks generated N2.6 trillion profit after tax in 2023, a growth of 224.4 per cent from N807.65 billion reported in 2022.
Consequently, the six banks have proposed a total of N444.52 billion as dividends to their shareholders for the 2023 financial year.
Just as the banks are announcing their full year 2023 results, a major player in the power sector, Geregu Power Plc, announced its unaudited first quarter 2024 results. For Geregu, the results for the first quarter ended March 30, 2024, showed a 308 per cent growth in profit before tax (PBT) amid significant increase in revenue and effective cost management.
The power-generating company announced on the Nigerian Exchange Limited (NGX) N21.9 billion PBT in Q1 2024, representing an increase of 308 per cent from N5.37billion reported in Q1 2023.
After a N7.4 billion tax expenses, Geregu Power declared N14.46 billion profit after tax in Q1 2024, a growth of 307.56 per cent from N3.55 billion reported in Q1 2023.
Key profit drivers included: N50.43 billion revenue in Q1 2024, a growth of 254 per cent from N14.23 billion in Q1 2023 and N2.68 billion finance cost in Q1 2024, a decline of 27 per cent from N3.14 billion reported in Q1 2023.
Meanwhile, in 2023, the Nigerian banking sector was faced with a blend of economic shifts, regulatory changes and technological advancements.
These challenges stemmed from a variety of factors, including inflationary pressures, adverse global shocks, unfavorable domestic imbalances, structural rigidities, and the unintended consequences of certain corrective policy measures implemented to restore and realign domestic macroeconomic landscape.
However, Nigerian banks benefited tremendously from the foreign exchange unification policy of the Central Bank of Nigeria (CBN) that impacted on bottom-line results in 2023.
In the period under review, Zenith Bank sustained its positioned as most profitable bank in Nigeria, followed by UBA and Access Holdings.
Analysis of the audited results showed that while Zenith Bank generated N795.96 billion profit before tax in 2023, a growth of 179.6 per cent from N284.65 billion in 2022, UBA declared N757.68 billion profit before tax in 2023, an increase of 277.2 per cent from N200.88 billion in 2022.
On its part, Access Holdings announced N729 billion profit before tax in 2023, a growth off 334.76 per cent from N167.68 billion declared in 2022, to join Tier-1 banks with over N700 billion profit before tax threshold in 2023.
Commenting on the results, the Managing Director/CEO, Access Bank, Roosevelt Ogbonna in a statement said, “As we reflect on the results of 2023, characterised by robust growth, strategic acquisitions, and expansion into key trade hubs, I am excited about the prospects for Access Bank.
“Our relentless focus on customer-centricity, digital innovation, and operational excellence has positioned us strongly to capitalise on emerging opportunities.
“As we enter the consolidation and efficiency phase of our Africa and international expansion strategy, we remain committed to driving sustainable growth, enhancing shareholder value, and delivering exceptional banking experiences to our customers across Africa and beyond.”
For UBA shareholders, in fulfilment of the promise made by the UBA Group Chairman, Tony Elumelu, to shareholders at the last Annual General Meeting, the Bank proposed a final dividend of N2.30 kobo for every ordinary share of 50 kobo, for the financial year ended December 31, 2023. The final dividend is subject to the ratification of the shareholders during its upcoming annual general meeting (AGM).
Commenting on the results, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, said: “I am very pleased with the unprecedented results achieved by our Group in FY2023. The Group made a profit before tax of N758billion, from N201 billion in the prior year. The balance sheet also grew to N20.7trillion from N10.8trillion in the previous year.
He said, “The Group’s shareholder’s funds crossed N2trillion from N922bn in 2022, whilst total assets crossed the N20 trillion mark (90.2% YoY growth). The Group is well positioned for further business expansion in FY2024 having closed FY2023 with Capital Adequacy Ratio of 32.6%.”
He added that the bank’s diversified business model (Pan-African and International strategy) is justified by the contribution of its Ex-Nigeria business to the Group’s results and reinforces its resolve to expand our market share of customers, funding, digital and transaction banking businesses across Africa.
“Driven by our customer service and execution-led delivery model, we will continue to expand our market share and create value for our shareholders and meet the expectations of our various stakeholders,” the GMD stated.
UBA’s Executive Director, Finance & Risk Management, Ugo Nwaghodoh, said the 2023 full year was a particularly eventful year, with galloping inflation and currency depreciation ravaging key markets, amidst pockets of regional conflicts and security challenges.
On the expectation for the 2024 financial year, he said, “The Group remains fervently committed to sustainable growth and maintaining its strong compliance and risk management practices culture even as we drive our business through the next phase of growth.”
For GTCO, it announced N609.31 billion profit before tax in 2023, an increase of 184.5 per cent from N214.15billiion reported in 2022.
The Group Chief Executive Officer, GTCO, Mr. Segun Agbaje, in a statement said: “The challenging operating environment of 2023 truly tested the business model we put in place for the Holding Company, for both our banking and non-banking business verticals.
“Harnessing the Group’s synergies yielded a strong performance, allowing us to strengthen our foothold in banking whilst also building viable and resilient businesses of HabariPay, Guaranty Trust Fund Managers, and Guaranty Trust Pension Managers.
“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld.”
Agbaje added: “In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.
“As we navigate the challenges and opportunities that lie ahead, we are confident that our robust underpinnings and focus on flawless execution will continue to drive sustainable growth across all our operations and deliver long-term value for our stakeholders.”
In addition, Stanbic IBTC closed 2023 with N172.91 billion profit before tax, a growth of 72 per cent from N100.27 billion in n2022, while Wema Bank declared to investing public N43.66 billion profit before tax in 2023, an increase of 193.4 per cent from N14.88 billion in 2022.
The Chief Executive, Stanbic IBTC, Dr Demola Sogunle stated, “Our strategic theme for 2023 was “Accelerating Growth,” and notwithstanding the trends in the Nigerian operating environment, we were able to record remarkable progress in our key focus areas.
“We recorded increase in profitability, growth in assets under management (AuM) while our loans and advances and customer deposits also grew during the year, showing growth in clients franchise and our ability to support our customers in meeting their financial needs.
“The group’s profitability increased by 74 per cent to N140.62 billion, which can be attributed to the rise in net interest income and growth in noninterest revenue. The 55 per cent YoY increase in net interest income is on the back of improvement in the volume and average yield on cumulative risk assets while growing our loan book.”
When contacted, capital market analysts stressed that banks operating in Nigeria are resilient and sound amid challenges.
Vice President, Highcap Securities Limited, Mr. David Adnori, said the banking sector recapitalisation directive by the Central Bank of Nigeria (CBN) was a major threat, assuring however, that Nigerian banks would raise the needed capital and expand their operations.
