As the much expected banks’ 2012 results trickle in at the Nigerian Stock Exchange (NSE), analysts say that the International Financial Reporting Standards (IFRS) compliant results will help to bolster the nation’s capital market.
Specifically, the analysts are of the opinion that given the stellar performance typified by dividend payout, there is the possibility of these impressive results coupled with their corporate actions impacting positively on the stock market.
Already, five banks, Ecobank Transnational Incorporated (ETI) plc, GTBank plc, Zenith Bank plc, Access Bank plc and Sterling Bank plc, have announced their audited full year 2012 results at the Nigerian bourse.
Zenith Bank for instance reported gross earnings of N307.082 billion against N243.948 billion in 2011, representing 26 percent rise. Its profit before tax stood at N102.100 billion against N67.440 billion in 2011, showing 51 percent increase.
Guaranty Trust Bank plc (GTBank) statement of cash flow showed that its cash flow from operating activities rose to N96.534 billion against N80.783 billion in same period of 2011, indicating 19 percent increase. The group’s profit before income tax rose to N103.028 billion against N62 billlion in 2011. Profit for the year rose to N87.296 billion against N51.741 billion.
ETI gross earnings rose to N362.141 billion against N235.968 billion in 2011; its profit before tax rose to N55.209 billion against N43.278 billion in 2011.
Access Bank also recorded 54 percent rise in gross earnings to N208.309 billion against N135.635 billion in 2011. The bank’s profit before tax rose to N44.880 billion against N24.107 billion in 2011, indicating an increase of 86 percent.
Sterling Bank plc grew its gross earnings to N68.856 billion against N47.740 billion in 2011. Its profit before tax rose to N7.499 billion from N5.640 billion in 2011.
For most of these banks, analysts also observed that their profitability increased due to lower cost-to-income ratio and higher net interest margin, which improved asset quality with increase in capital adequacy ratio and reduced non-performing loan ratio.
“The choppiness is over as the floodgate of results should open in April. Banks record results and record dividend payout should lift the market,” said Bismarck Rewane, CEO, Financial Derivatives Company.
He said that recent result releases and dividend declaration has triggered the question of capital gains versus dividend.
IHEANYI NWACHUKWU
