Oceanic Bank PLC has recorded 15.8 per cent jump in its deposit base to N644.5 billion as at 30th September 2010 from N556.8 billion in December 2009 , indicating increasing customer confidence in the bank. The improved fortunes of the Bank, one of the bailed-out banks was further confirmed by Fitch Ratings , which upgraded the bank’s individual rating from “F” to “E”.
Furthermore, despite the apathy to lending in the industry, the bank ‘s loans and advances, including advances under finance lease went up 7.5 percent to N420.2 billion from N391 billion.
Consequently, profit before Tax rose to N13.1 billion compared to Loss before Tax of N88.4 billion recorded nine months ago, while profit after Tax went up to N10.4 billion in contrast to Loss after Tax of N68.4 billion.
Commenting on the results, John Aboh, Chief Executive Officer of the bank said, “our turnaround program continues to yield good results; we are keeping operating costs in check, pursuing Non-Performing Loan (NPL) recoveries aggressively and focusing on risk management. If you look at the underlying business of Oceanic Bank, what you find is a solid institution with a resilient brand, committed workforce and loyal customers. This is our winning formula.
Sharing her outlook for the fourth quarter, Oyinkan Adewale, Executive Director/Chief Financial Officer said “following the recent court ruling, we look forward to receiving a major boost to the Bank’s liquidity from AMCON. With the resolution of insider-related NPLs, we expect a massive improvement in the Bank’s NPL ratio from 69 percent (end of third quarter) to about 50 percent and we look forward to deploying the proceeds to optimise our cost of funds”.
Gross earnings of the bank however declined to N89.4 billion in 2010 versus the N129.7 billion in 2009 comparative period due to drop in interest income and other income. Interest income of the bank also fell to N74.4 billion versus N101.8 billion as a result of the major reduction in interest rates and volume of inter-bank placements in the two periods
The bank was able to reduce its interest expense to N39.5 billion, down 24 percent from N52.0 billion, reflecting the Central Bank of Nigeria’s efforts at reducing interest rates and Oceanic Bank’s success in lowering the cost of customer deposits and improving its deposit mix. As a consequence, average Primary Cost of Funds for the 9 months ended Sept 2010 was 5.21 percent, down from 11.29 percent in the 2009 comparative period.