Despite the domestic and global economic unpredictability, nine deposit money banks in Nigeria reported a N346 billion profit after tax in the first quarter of 2023, up 29.3% from the N267.69 billion reported in the first quarter of 2022.
Nigeria’s frail economy, which has undergone economic recessions on and off for the past six years, has been plagued by severe shortages of naira notes, with the amount of money in circulation falling to its lowest level in 14 years in the first quarter of 2023.
The National Bureau of Statistics (NBS) also reports that Nigeria’s inflation rate increased from 21.82 percent in January to 22.04 percent in March 2023, primarily due to the high cost of food, energy, and currency scarcity.
The hike in the MPR was announced by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), who said it was done to further combat inflation. The increased rate, according to analysts, would, nevertheless, have a negative impact on enterprises and, consequently, the overall economy.
The Nigerian Exchange Limited (NGX) has received unaudited first quarter results and accounts from a total of nine banks, with Access Holdings Plc topping the list as Nigeria’s most profitable financial institution.
Zenith Bank Plc, Guaranty Trust Holding Company Plc (GTCO), United Bank for Africa Plc (UBA), Ecobank Transnational Incorporated (ETI), Wema Bank Plc, Union Bank of Nigeria Plc, FCMB Group Plc, and Stanbic IBTC Holdings are more banks that have announced unaudited Q1 2023 financial results.
The Monetary Policy Rate (MPR) of the Central Bank of Nigeria (CBN) was increased from 14% to 11.4 trillion Naira (N1.14 trillion) in the first quarter of 2023, a rise of 45% from the N788.2 billion reported in the first quarter of 2022.
According to the banks’ statistics, Access Holding reported N71.66 billion in profit in Q1 2023, up 24% from N57.83 billion in Q1 2022, and Zenith Bank reported N66.01 billion in profit after taxes, up 13.43% from Q1 2022.
The third-most lucrative bank was GTCO, which declared an after-tax profit of N58.17 billion in the first quarter of 2023, up 35% from the N43.21 billion reported in the first quarter of 2022.
UBA reported an increase of 29% from N41.5 billion in Q1 2022 to N53.6 billion in profit after tax in Q1 2023.
Oliver Alawuba, Group Managing Director and Chief Executive Officer of UBA, said in a statement that despite high inflation and a difficult global climate, the Group was able to take advantage of rising interest rates and better digital products to increase funded and non-funded income.
“For 2023, we remain committed to improving the Group’s performance as we strategically position our entities to take advantage of emerging developments within their jurisdictions and across the globe. We will continue to deliver excellent rewards to our stakeholders.” Oliver said.
Despite the competitive environment and current global trend in the industry, the group’s Executive Director, Finance and Risk, Mr. Ugo Nwaghodoh, attributed the Q1 2023 performance to resilience and commitment to delivering value and enhancing the confidence of its customers, stakeholders, and the general public.
According to a report by THISDAY, Nwaghodoh stated “The impressive performance of UBA Group in first quarter 2023 is hinged on its continuous improvement and growth in gross earnings and balance sheet size as gross earnings grew by 47.5per cent year-on-year to N271.2billion and total assets up by 4.6per cent to N11.4 trillion from N10.9 trillion as at December 2022, ”
ETI, a pan-African bank, reported N40.41 billion in profit for the first quarter of 2023, up 5.4% from N38.32 billion in the corresponding period of 2022.
In a statement, Jeremy Awori, CEO of Ecobank Group, said: “Our results for the Q1 2023 demonstrated success despite the difficult macroeconomic situation in the world and in our region. Once more, we have proven the durability of our diverse, pan-African business model, our effectiveness, the strength of our balance sheet, the depth of our client connections, and the dedication of our 14,000+ Ecobankers.
“Net revenues increased by 11%, or 34% if you exclude the consequences of translating our affiliates’ financial results in their home currencies into US dollars. Revenue momentum was strong across all of our companies.
“In addition, sustained efficiency improvements enabled a 13% increase in pre-provision, pre-tax operational profits, a crucial indicator of the Company’s earning potential. However, due to currency fluctuations, profits before taxes at $125 million were flat, but up 31% at constant currency.
Stanbic IBTC Holdings, on its part, reported N28.86 billion in profit for the first quarter of 2023, up from N15.07 billion for the same period in 2022 (a 92% increase); Union Bank reported N12.63 billion in profit for the same period, up from N5.55 billion; FCMB Group reported N9.3 billion in profit; and Wema Bank reported N5.38 billion in profit, up from N2.86 billion in Q1 2022 (a 88% increase).
The MD/CEO, Union Bank, Mudassir Amray in a statement said, “A great start to 2023 with encouraging Q1 results. The strategy we put in place is working. We still have a long way to go, as we have ambitious targets. However, we are committed to developing the right balance between convenience and security.”
Chief Financial Officer, Union bank, Mr. Joe Mbulu said, “We are delighted with our financial performance because it came on the backdrop of a slow first quarter, occasioned by the general elections, the pushback of the naira redesign policy and persistent macroeconomic headwinds.
“Net operating profit after impairments rose by 34% to N32.65 billion from N24.32 billion in the first quarter of 2022 as a result of growing revenue from our core businesses, corporate, SME, and retail; operating expenses increased by 10% to N19.83 billion from N17.97 billion in Q1 2022, primarily as a result of the high inflationary environment, increased power costs, and increased non-discretionary regulatory costs.
We will continue to use technology to boost our productivity and non-interest income as the year goes on. We are sure that we will exceed our Q1 returns on equity and assets, which were 16.9% and 1.8%, respectively, and will continue to provide additional value to our shareholders.
