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FBN Holdings and Sterling Bank have recorded the fastest profit expansion among peers in the first quarter, as a benign yield environment is a boon for sector players who operate in a punitive regulatory environment.
FBNHoldings and Sterling Bank saw net income surge by 118.95 percent and 107.71 percent as at March 2022, according to data gathered by MoneyCentral.
And that compares with First City Monument Bank’s bottom line growth of 44.61 percent; Stanbic IBTC Holdings, 33.87; Unity Bank, 20.71 percent; Zenith Bank, 9.68 percent; Access Bank; 9.23 percent; United Bank for Africa, 8.76 percent.
However, Fidelity Bank and Union Bank fell off the cliff as they both recorded a reduction in net profit by 0.7813 percent and 10.57 percent respectively.
Nigerian banks have continued to strengthen their non-interest revenue base that added impetus to gross earnings as they benefited from effective management of risk portfolio.
The gradual rise in the yield environment paves the way for them to enjoy juicy yields and the central bank’s hawkish tone is expected to bolster banks’ earnings.
The Monetary Policy Committee (MPC) of the CBN surprised the market by raising its monetary policy rate (MPR) from 11.5 percent to 13.0 percent for the first time in almost six years while keeping other parameters constant.
Data gathered by MoneyCentral shows the 11 largest and most liquid lenders on the NGXASI saw combined net income increase by 16.51 percent to N274.06 billion in March 2022 from N235.22 billion the previous year.
Their non-interest income spiked by 42.11 percent to N361.52 billion in the period under review from N254.38 billion the previous year.
The NGXASI Banking index has reduced by 2.27 percent so far this year, underperforming the NGXASI index.
Investors’ apathy towards banks’ shares have heightened on the back of punitive rules and the refusal of the government to relax the capital control rules stifling foreign direct investment.
Also, another elephant in the room is the high capital reserve ratio that is one of the highest globally.
Focus remains on optimising margins while innovatively strengthening revenue and diversification opportunities.