Polaris Bank Surpasses Full-Year Profit in Eight Months

Nigeria’s leading digital commercial retail bank, Polaris Bank has surpassed its previous full-year profit before tax by more than 28 per cent in the first eight months of this year, on course for a record performance in a major highlight of the success of ongoing strategic initiatives.

Interim report and accounts so far showed that Polaris Bank is on course to deliver a record profitability as a combination of a steady business expansion and increasingly efficient credit risks and cost management continue to drive overall performance outlook.

Management accounts for the eight-month period ended August 31, 2024 indicated that Polaris Bank would significantly surpass all key performance indicators recorded in the year ended December 31, 2023.

Both actual figures and underlying performance ratios underlined significant improvements in the operations of the bank.

Average profit on every transaction by Polaris Bank has increased by about four steps this year when compared to the previous year while returns generally had nearly doubled the previous year’s positions.

Pre-tax profit margin for the eight-month period ended August 2024 stood at 10.62 per cent as against 6.61 per cent recorded for the full-year 2023, an increase of about four percentage points. Net interest income margin stood at about 52.6 per cent in August 2024 as against 52.1 per cent in December 2023. Pre-tax return on total assets for the eight-month period rose to 1.22 per cent as against 0.63 per cent recorded in full-year 2023. Pre-tax return on equity stood at 21.44 per cent in August 2024 compared with 13.15 per cent in December 2023.

At N16.733 billion in the first eight months of this year, profit before tax was 28.4 per cent ahead of the N13.033 billion recorded in full-year 2023. The bank had recorded net profit of N10.91 billion in 2023.

Key extracts of the management accounts and report for the period ended August 2024 indicated gross earnings of N157.59 billion, with interest income at N137.15 billion. Net interest income stood at N72.18 billion. Non-interest income closed at N20.44 billion while net operating income stood at N78.17 billion.

With total operating expenses at N61.43 billion, pre-tax profit surged to N16.733 billion, setting up the bank for its highest profit performance in recent years.

Key balance sheet items also underscored growing brand adoption and business penetration, with the bank continuing its tradition as a bank-to-go-to for small and medium enterprises. Customers’ deposits closed at N1.663 trillion. Total equity has surpassed full-year performance at N115.86 billion in August 2024 as against N99.13 billion for full-year 2023. Total assets is also already ahead of the previous full-year performance, at N2.060 trillion by August 2024 as against N2.058 trillion recorded by the end of 2023.

The bottom-line performance underscored a steady improvement in the core banking business. Growing customers’ confidence, improved margins and a strong performance in the core banking business over the past eight months signal that Polaris Bank has retained a competitive edge, despite the challenges in the operating environment.

The overall impressive outlook of the bank lent credence to the growing confidence and success of the new management of the bank, under the leadership of Mr. Kayode Lawal.

Managing Director, Polaris Bank, Mr. Kayode Lawal, said the results evidenced the early successes of the ongoing strategic initiatives aimed at strengthening the bank’s overall position in the banking industry.

According to him, Polaris Bank is positioned to sustain its upwardly growth trajectory while remaining focused on its people-centric principles.

“We are in stronger position now to steadily build on the early gains and deliver exceptional value to our stakeholders,” Lawal said.

He pointed out that increasing brand penetration shows that discerning banking public continues to trust Polaris Bank as a safe haven for their deposits and a reliable partner for their businesses.

Audited report and accounts for the year ended December 31, 2023 had shown gross earnings of N197.04 billion with interest income of N144.68 billion and net non-interest income of N44.9 billion. Non-interest income was boosted by net trading and unrealized foreign exchange (forex) income, which stood at N32.24 billion during the year. Operating income stood at N97.19 billion. With operating expenses at N84.15 billion, pre-tax profit closed at N13.033 billion. After taxes, net profit stood at N10.91 billion, implying earnings per share of 44 kobo.

A review of the loan disbursements during the first eight months of the year showed an uptick, with the bank continuing a strong focus on small and medium enterprises (SMEs). The loan portfolio continues to reaffirm the brand essence of Polaris Bank, impact-focused banking that prioritises retail banking, SMEs, equal opportunity, youth, healthcare, education, family and environment among others.

A member of the United Nations Environment Programme Finance Initiative (UNEP FI), Polaris Bank sees its business as not only a sustainable profitable entity but also as a social intervention to help humanity, starting from Nigerians, to achieve self-satisfaction and safety. The UNEP FI seeks to engage the private sector and the global financial sector to help create a financial sector that serves people and the planet while delivering positive impact.

About N60 billion has so far been disbursed in new loans to SMEs over the past eight months while about N17 billion was disbursed under personal loans. Instructively, in a period of macroeconomic headwinds, the bank has remained supportive of small and medium enterpreneurs. Invoice financing totaled N22.17 billion by August 2024, already ahead of N21.12 billion disbursed for full year 2023. Business loans were up to N23.8 billion by August 2024, on course to surpass N35.21 billion disbursed for the whole of 2023.

With its award-winning digital lending platform, VULTe digital bank, digital lending continues on the rise, with about N10 billion disbursed within the past eight months, on course to surpass N12.8 billion recorded for the whole of 2023.

The constitution of a full board for the bank recently was seen by industry analysts as a clear endorsement of the bank’s remarkable strides under the new management by the Central Bank of Nigeria (CBN).

Industry analysts expected the recent constitution of the full board of the bank, with a stronger management team and diverse board experience and expertise, to deepen growth and enhance the operational performance of Polaris Bank.

Analysts said the steady improvements in operational performances and stable management underlined the preparedness of the bank to retain a respectable and leading position as preferred banker in the post-recapitalisation banking industry.

The 10-man board is headed by Dr. Kassim Gidado as board chairman. Other non-executive directors included Dr. Akwa Okon, Mallam Umar Ambursa, Mrs. Ayaba Ayo-Joseph, Mrs. Subulade Giwa-Amu and Dr. Christopher Onosode.

The newly appointed non-executive directors will provide support for the executive management team led by Mr. Kayode Lawal, Managing Director; Mr. Chris Ofikulu; Executive Director, Retail and Commercial; Mrs. Abimbola Ozomah, Executive Director, Corporate & Investment Banking and Sharafadeen Muhammed, Executive Director, Operations.

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