April 25, 2016

Profits of 5 banks drop by N10.52bn in first quarter

Stockmarket, week


By Peter Egwuatu

Five banks quoted on the Nigerian Stock Exchange, NSE have recorded a total Profit After Tax, PAT of N90.07 billion for the first quarter,Q1 financial period ended March 31, 2016, representing a drop of N10.52 billion or 10.5 per cent from N100.59 billion in the corresponding period of 2015.

Nigerian Stock Exchange

Nigerian Stock Exchange

The first banks are Guaranty Trust Bank, GTBank Plc, Union Bank of Nigeria Plc, Zenith Bank Plc, Ecobank Group, and United Bank for Africa, UBA Plc.

Similarly, the five banks recorded a total Profit Before Tax, PBT of N106.29 billion for the three months period ended March 31, 2016, indicating a drop of 11.15 per cent from N119.63 billion recorded in each of the banks’ financial performance for the first quarter 2016 as released on the Nigerian Stock Exchange, NSE, last weekend, show that Guaranty Trust Bank, GTBank Plc continued to consolidate on its position recording moderate growth from its core banking activities.

However, decline in trading and revaluation gains occasioned by Foreign Exchange, FX paucity robbed off on the impressive performance recorded with a 4.6 per cent decline in gross earnings to N75.39 billion as against N79.02 billion in Q1, 2015 . The bank recorded a 6.1 per cent decline in PBT to N30.68 billion as against N32.65 billion in 2015 and 3.6 per cent decline in PAT to N25.61 billion against N26.56 billion in 2015. The bank also reported a post-tax Return On Average Equity ROAE of 24.19 per cent and Return on Average Assets,  ROAA of 3.96 per cent respectively.

In line with the bank’s Risk Management strategy, the bank approached its loan growth with disciplined strategy, thus Non Performing Loans (NPL) of the bank for the period under review is still well within range at 3.51  per cent and Net Interest Margin (NIM) for the period under review declined marginally by 9 bases points , bps to 8.12 per cent  from 8.21 per cent  in Q1 2015.

Commenting on the financial results, Segun Agbaje, the Managing Director and Chief Executive Officer of GTBank stated that “Despite a slow start in economic activity in 2016 and the extremely challenging business environment, the Bank recorded decent performance across key financial indices during the period.” He added that “We understand that there’s a lot more work to be done, we are however prepared for the challenges and opportunities that lie ahead the 2016 financial year.”

A review of the Union Bank of Nigeria Plc first quarter results show that  PBT  dropped to ¦ 4.7billion from ¦ 4.9billion in Q1 2015; excluding gain on sale of subsidiaries which  increased by 85 per cent  to ¦ 4.7billion from ¦ 2.5billion  in Q1 2015.

The bank’s PAT for the first quarter 2016 was N4.72 billion as against N4.91 billion in the corresponding period of 2015.

Union Bank recorded gross earnings of ¦ 26.6billion as against ¦ 29billion in Q1 2015; excluding gain on sale of subsidiaries which was at par with prior year at ¦ 26.6billion.

Interest income was up 5 per cent to ¦ 21billion as against ¦ 20 billion  in Q1 2015.  This was as a result of improvement in asset yield from 14.36 per cent  in Q1 2015 to 15.65 per cent in Q1 2016.

Commenting on the Union Bank’s first quarter results, Emeka Emuwa, Chief Executive Officer said:”Our first quarter results reflect steady progress on the execution of our strategic priorities. The Bank’s core PBT in Q1 2016 is up significantly by 85% to ¦ 4.7bn compared to ¦ 2.5bn in the same quarter last year. With the sale of non-banking subsidiaries near completion, the Bank is now focused on growing and delivering results through its core banking business.

Customer deposits grew 9 per cent in the year to March 2016, compared to March 2015, reflecting increased customer confidence in our service channels, new product offerings and a re-energised brand identity.

Our priorities to sustain growth in 2016 remain focused on growing our deposit base and new customer acquisitions, as well as driving gains in transactional income.