Five Banks Grow Profit To N67.12bn Despite Economic Crisis

The financial position of most Nigerian banks have remained strong with marginal increases in the key profitability indicators.

THE WHISTLER observed that based on the financial report for the first half of 2020 ending June so far declared by five Deposit Money Banks, only one DMB recorded a fall in profit compared to the same period in 2019.

The banks including First Bank Nigeria Plc, First City Monument Bank Plc, Sterling Bank Plc, Unity Bank Plc and   Wema Bank Plc, recorded a combined profit of N67,12bn in the first six months of 2020.

The resilience shown by the country’s financial institutions comes despite the negative impact of the Covid- 19 on the country’s economy and other macro- economic challenges faced in the sector.

Analysis of the individual performance of the banks during the period revealed that First Bank at the end of the second quarter grew its Profit Before Tax to N41.4bn.

This is a 14.3 per cent increase when compared to the N36.2bn posted in June 2019.

FBN recorded Profit After Tax of N49.5bn, up by 56.3 percent  compared to the Jun 2019 result of  N31.6bn.

Net Assets grew by 6.5 per cent from N661bn to N704bn, while gross earnings grew by 5.7 per cent to N296bn from N280bn in the previous quarter.

First City Monument Bank’s  Profit Before Tax grew by 26 per cent to N11bn, while Profit after tax grew by 29boer cent to N9.7bn.  

FCMB revenue earnings grew by none per cent to N98bn from N90bn in the previous quarter.

During the period, the  bank’s net assets also witnessed a surge by 6.9 per cent from N201bn to N214bn.

Sterling Bank Plc revenue rose by N69bn from N71.1bn, while Profit After Tax grew marginally to N5.4bn from N5.3bn in half year 2019.

Based on the result posted by Unity Bank Plc, the bank’s profit was up by seven per cent to N1.03bn from N967.5m in 2019, while revenue grew by 11 per cent to N22.86bn from N20.5bn in the first six months of last year.

Wema Bank Plc however recorded a fall in profit as against the same period of 2019.

The bank pulled a total profit of N1.49bn representing a 35.2 percent decrease in profit from the N2.3bn recorded in 2019.

The bank’s revenue further dipped by percent to N37.95bn from 40.2bn in the same period of last year.

The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele had last month said that despite the negative impact of the Coronavirus pandemic, the banking sector remains strong, resilient and could effectively finance the economy.

He said, “The Nigerian banking system remain very strong and resilient. Unlike in other climes, the Nigerian banking system appears to be one of the well regulated industries in the world today. As at May 2019, Non-Performing Loans in the industry is 11.1 per cent, as at June 2020, it has dropped to 6.4 per cent.

“For Capital Adequacy Ratio which measures the size of capital that bank deploys into risk asset, as at June 2019, CAR was 15.2 per cent but as at June 2020, it remains flat at 15 per cent.

“On liquidity ratio, by August 2019, it was 48 per cent but as at June 2020, it had dropped to 37 per cent.

“So what we are saying is that inspite of these large sums granted,from N15.6trn to about N18.9trn, the prudential ratios still looking so strong is a clear demonstration that the Nigerian banking sector remain very strong and resilient and able to support economic development of Nigeria.”