Kayode Tokede
Despite economic headwinds fuelled removal of petroleum subsidy, leading Nigerian banks-FBN Holdings Plc, Stanbic IBTC Holdings and five others reported N703.3billion profit in the full year ended December 31, 2023.
This represents a growth of 111.56 per cent from N332.43 billion profit reported in full year ended December 31, 2022.
Others are: Fidelity Bank Plc, Wema Bank Plc, Sterling Financial Holdings Company Plc, FCMB Group Plc and Jaiz Bank Plc.
The impressive increase in profit declared by these seven banks is on the backdrop of significant increase in interest income on loans to customers, revenue from non-interest income and foreign exchange revaluation gain.
The 2023 financial year witnessed one of the highest inflation rate in Nigeria as the Central Bank of Nigeria (CBN) increased its Monetary Policy Rate to 18.75 per cent from 16.5 per cent amid tackling inflationary pressure.
The CBN, Mr. Olayemi Cardoso had expressed that the assessment of the economy reveals significant challenges, including high and rising inflation, inadequate foreign exchange supply, depreciation of the exchange rate, limited external reserves, weakened output, and high unemployment.
“These challenges have led to increased interest rates, discouraging investments in productive activities. Within the banking system, high inflation has affected asset quality and solvency ratios. Additionally, the persistent depreciation of the naira poses a significant risk for domestic banks with foreign exchange exposures, ”he said.
The new administration led by President Bola Tinubu in its moves to unify the local currency saw naira closing 2023 at N899.39 against dollar from N448.55 against the dollar it opened for the year, as most leading banks in Nigeria benefited tremendously.
Analysis of the banks’ unaudited results showed that FBN Holdings reported N310.01 billion profit in 2023, an increase of 127.43 per cent from N136.3 billion in 2022, while Stanbic IBTC Holdings declared N140.62billion profit in 2023, representing an increase of 74.2 per cent from N80.73 billion in 2022.
For Fidelity Bank, it announced N101.3 billion profit, a growth of 117 per cent from N46.7 billion in 2022, as FCMB Group closed 2023 with N95.52 billion profit, an increase of 206.86 per cent from N31.13 billion in 2022.
In addition, Wema Bank reported N23.36billion profit in 2023 from N11.35billion in 2022, while Sterling Financial Holdings Company reported N21.52billion profit in 2023, an increase of 11.5 per cent from N19.3billion in 2022.
In addition, Jaiz Bank declared N10.97billion profit in 2023, an increase of 59.4 per cent from N6.88 billion reported in 2022.
The Group Managing Director, FBN Holdings, Mr. Nnamdi Okonkwo in a statement stated that the oldest financial institution in Nigeria has continued to deliver a strong financial performance despite the complex operating environment,
While commenting on the FBN Holdings audited half year June 2023 result and accounts, he said, “Across our businesses, we continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practises to anticipate and creatively deliver products and services that delight the different customer segments that we serve. Furthermore, we are committed to leveraging technology via digital platforms to enhance operational efficiency.”
From the unaudited result and accounts, the seven banks listed on the Nigerian Exchange Limited (NGX) declared N823.84 billion profit before tax, representing an increase of 110.86 per cent from N390.7 billion reported in 2022.
By percentage, FCMB Group leads the chart with the highest profit before tax, followed by FBN Holdings.
In the period under review, FCMB grew its profit before tax by 177.4 per cent to N101.46billion in 2023 from N36.57billion in 2022.
FBN Holdings declared N362.24billion profit before tax in 2023, a growth of 129.41per cent from N157.9billion in 2022, as Fidelity Bank announced N122.06billion profit before tax in 2022, a increase of 127.4 per cent from N53.7billion reported in 2022.
The likes of Wema bank posted 104.7 per cent growth in profit before tax to N30.46billion in 2023; Stanbic IIBTC Holdings announced 72.44 per cent increase in profit before tax to N172.9 billiion; Jaiz Bank reported 68 per cent growth in profit before tax to N11.14 billion and Sterling declared nearly 14 per cent growth in profit before tax to N21.52 billion in 2023.