Banking and financial sector recorded year on-year growth of 28.4 percent based on second quarter GDP numbers published recently by National Bureau of Statistics (NBS).
The banking sector accounts for over 38.0 percent of total activity on the Nigerian Stock Exchange and the sector has remained resilient, emerging as the best performing as part of the boarder financial services sector.
Reviewing the first half of 2020 financial results of top banks, Ayodeji Ebo, managing director, Afrinvest Securities Limited said Gtbank’s gross earning also referred to as total revenue or top line, increased by 1.5 percent year-on-year from N222 billion in the first half of 2019 to N2225 billion in the first half of 2020 while profit after tax or bottomline declined by 4.9 percent year-on-year to N94 billion from N99 billion in the first quarter of 2019.
The loan impairment loss, which refers to the provision made for loans that may not be gotten back, surged by 209 percent yearon-year to N7 billion from
N2 billion reflecting the impact of Covid-19 on their loans. Despite the increase in the cost to income ratio of Gtbank to 45 percent due to higher regulatory charges – that is the cost that banks are mandated to incur by law – the bank remains the most cost-efficient.
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The bank increased loans and deposit by 8% and 27 percent respectively between December 2019 and June 2020. The bank declared an interim dividend of N0.30 translating to a dividend yield of 1.1 percent based on the current share price of N26.55k. qualification date is September 15, 2020 and payment date is September 21, 2020.
Zenith Bank Plc posted an impressive audited half year result. Gross earnings improved by 4% year-onyear from N332 billion to N346 billion. Profit after tax advanced by 17 percent year-on-year from N89 billion to N104 billion supported by 55 percent year-on-year reduction in income tax expense.
The bank increased loans and deposits by 16 percent and 15 percent respectively between december 2019 and June 2020.
Non-performing Loans (NPL) which refers to loans with interest and or principal payment outstanding for more than three months reduced to 4.7 percent despite the Covid-19 impact due to the restructureing of the loans. This is a strategy to help customers with difficulties in meeting up with their obligations.
The cost to income stayed flat at 50 percent. Zenith declared an interim dividend of 30 kobo, a dividend yield of 1.7 percent based on the share price of N17.40k. Qualification date is september 16, 2020 and payment date id september 22, 2020.
UBA’S gross eranings increased by 2% year-on-year from N294 billion in the first half of 2019 to N300 billion in the fist half of 2020 while profit after tax dipped 22 percent in first half of 2020 to N44 billion from N57 billion in first half of 2019.
This is the stipest yearon-year profit after tax decline among the top banks. The decline in profitability can be attributed to the 150 percent and 21 percent year-on-year increase in loan impairment charges and operating expenses. UBA declared an interim dividend of 17 kobo resulting in a dividend yield of 2.6 percent based on the share price of N6.45k. qualification date is September 15,2020 and payment date is September 23, 2020.
Stanbic IBTC Holding Plc grew both its top and bottom lines. The bank’s gross earnings increased by 7.8 percent year-on-year from N117 billion in the first half of 2019 to N126 billion in the first half of 2020.
Profit after tax was up 25 percent to N45 billion from N36 billion in 2019 despite the 1,250 percent year-onyear increase in laon impairments.
The PAT was helped by reveunue from trading gains in FX and fixed income secrities, which increased 27 percent year-on-year to N69 billion.
However, the bank cut its interim dividend to 40 kobo from N1.00 in 2019, translating to a dividend yield of 1.1 percent based on its share price of N38.00. qualification date is September 15, 2020 and pyament date is september 30, 2020.
In a similar positie trend, Access Bank Plc grew its gross earnings by 22 percent year-on-year from N324 billion in the first half of 2019 to N397 billion in the first half of 2020, boosted by a whopping 191 perceny yearon-year jump in non-interest income.
Non-interest income relates to income from other sources apart from loans, bonds, and treasury bills. The bank’s PAT dipped marginally by 1.4 percent year-on-year to N61 billion in the first half of 2020 from N62 billion in the first half of 2019 on the back of significant y-o-y increase in loan impairment charges and operating expenses.
The bank proposed an interim dividend of 25 kobo resulting in a dividend yield of 3.9 percent based on the current share price of N6.45k. qualification date is september 17, 2020 and payment date is september 28, 2020.
