2016 was supposed to be the year that the bottom line of Nigerian top banks would feel the pain of a recessed economy, weak oil prices and regulatory headwinds. But, if the 2016 full year results reported by five leading banks in the country are anything to go by, it appears that lenders’ performance last year will top 2015’s.
An analysis of the 2016 full year results announced by Guaranty Trust Bank, Zenith International Bank, United Bank for Africa (UBA), Access Bank and Stanbic IBTC, for instance, show that the five lenders reported total profits of almost N434 billion compared to N357 billion that they reported for the previous year.
Specifically, Guaranty Trust Bank (GTB), which led the pack, posted Profit After Tax (PAT) of N132. 281 billion for the financial year ended December 31, 2016, compared with N99.437 it earned in the previous year, accounting for a growth of 33.03 per cent.
According to the group, its Profit Before Tax (PBT) increased to N165.14 billion in 2016, representing a growth of 37 per cent over N120.69 billion recorded in the corresponding period of December 2015.
Further review of the results reveals that the group’s gross earnings for the period grew by 37 per cent to N414.62 billion from N301.85 billion reported in the December 2015.
Similarly, 2016 full year results announced by Zenith Bank show that the lender declared a PAT of N129.65 billion for the financial year ended December 31, 2016 compared with the N105.66 billion it posted in the preceding period of 2015, representing an increase of 22.7 per cent.
The lender reported that its PBT rose to N156.75 billion in 2016 from the N125.63 billion declared in 2015.
It also reported a 17.4 per cent growth in gross earnings to N507. 99 billion last year from the N432.54 billion posted in 2015. Zenith Bank was trailed by Access Bank, which declared N71 billion as its PAT for the financial year ended December 31, 2016, compared with N66 billion reported for the previous year.
It reported a PBT of N90.3 billion for 2016 as against N75.038 billion posted in 2015 while its gross revenues grew by 13 per cent to N381.3 billion in 2016 from N337.4 billion posted in the previous year.
Similarly, the United Bank for Africa (UBA) reported that its PAT rose by 22 per cent to N72 billion for the financial year ended December 31, 2016, from N60 billion recorded the previous year.
The Group said there was a 32 per cent growth in PBT to N91 billion, compared with N68 billion recorded over the same period of 2015. It also recorded a 22 per cent growth in gross earnings to N384 billion in 2016, from N315 billion at the end of the 2015 financial year.
However, the highest percentage increase in PAT among these banks was recorded by Stanbic IBTC Holdings as it, last Wednesday, reported that its 2016 PAT rose by 51 per cent to N28.52 billion from N18.89 billion posted in the previous year, while its PBT increased to N37.209 billion last year from the N23.651 bilion posted in 2015.
The lender also announced higher revenue of N156.43 billion for 2016, up 12 per cent from N140.03 billion in 2015.
Expectedly, the impressive results posted by these banks have given their shareholders a lot to be pleased about as virtually all the lenders have proposed to pay dividends.
For instance, UBA said in a statement that its Board of Directors proposed a final dividend of 55 kobo, subject to the approval of the shareholders at its forthcoming annual general meeting, scheduled to be held on 07 April, 2017, at the Eko Hotel and Suites in Lagos.
The bank had earlier paid an interim dividend of 20 kobo to shareholders, bringing the total dividend for the 2016 financial year to N0.75, a significant yield of 13.9 per cent, based on the stock’s unit price of N5.39.
Commenting on the results, UBA’s Group Managing Director and Chief Executive Officer, Kennedy Uzoka, expressed satisfaction at the resilience of the lender, despite the macro-economic challenges in many countries where it operates.
“Given the operating environment in 2016, I am very pleased with our profitability – an impressive 32 per cent growth in profit before tax to N91 billion – whilst we have also focused keenly on operational efficiencies, illustrated by the reduction in our Cost-to-Income Ratio,” Uzoka said.
Speaking on the outlook for the 2017 financial year, Uzoka expressed optimism that UBA’s pan-African operations are increasingly gaining critical mass across its chosen markets.
Just last week, global credit rating agency, Fitch Ratings, issued a report predicting that Nigerian banks will face further challenges in 2017 following an extremely difficult 2016.
The agency stated: “The outlook for the rest of 2017 is not much brighter.
We believe that the banks will continue to face extremely tight FC (foreign currency) liquidity despite the authorities’ best efforts to normalise the foreign-exchange (FX) interbank market and improve the supply of US dollars.”