Nigeria’s tier-one banks made a little more than half-a-trillion Naira in the three quarters of 2019 ended September 30, as profit growth rebounded from a steady slow-down which started in 2016.
The tier-one banks which include First Bank of Nigeria Holdings (FBNH), United Bank for Africa (UBA), Guaranty Trust Bank (GTB), Access Bank, and Zenith Bank posted a combined profit of N521.916 billion which is 14 percent more than they made in the same period last year.
The performance means the big banks are growing profit in double-digit for the first time since Nigeria exited recession in 2017.
In 2016, combined profit grew by 18 percent from 17 percent in the previous year and fell to 17 percent in 2017, 9 percent in 2018 before rebounding to 14 percent on the back of impressive results from Access Bank, UBA, and First Bank.
Across the board, the big banks saw improvement in their net interest income which outperformed non-interest income.
Non-interest income of banks is mainly earned from fees and commissions from deposits and transactions, electronic banking, monthly account service charges, check and deposit slip fees, and so on.
Interest income, on the other hand, refers to revenue earned by a lender on interest from its loans to customers and banks, as well as on investment securities.
Net interest income is the difference between what it pays its depositors for keeping their fund in the bank and what it earns by investing or loaning out the same funds.
In the 9 months, Access Bank, Nigeria’s biggest lender by asset and customer base, grew profit by 44.2 percent to N90.74 billion, as the recent merger with Diamond bank made it the fastest-growing tier-one bank in the review period.
The earning of the big bank was helped by a 71 percent growth in net interest income to N210.22 billion while non-interest income grew 3.3 percent.
Zenith Bank, the second-biggest lender by asset, grew its profit by 4.5 percent to N150.72 billion, the highest in the industry, on the back of a 21.8 percent growth in Non-interest income while interest income declined by 6.1 percent in the period.
GTB grew profit by 3.4 percent year-on-year in the nine months reported in 2019 to N146.99 billion, the second-biggest profit in the banking industry.
GTB which is Nigeria’s biggest bank by market capitalisation saw its non-interest income cross a billion naira mark to grow by 2.1 percent over the N99.73 billion recorded in 2018 9M. The non-interest income also grew faster than interest income which rose 1.3 percent to N172.94 billion in the 9 months.
First Bank, the oldest among the big lenders, grew profit by 15.3 percent to N51.84 percent as non-interest income growth of 6 percent supported earnings despite a net income decline of 4.6 percent.
In the third quarter, FBNH saw non-interest income rise by 47.9 percent.
UBA, pan-African bank, grew profit by 32.3 percent to N81.63 billion after it recorded double-digit growth in both net interest and non-interest income.
The big bank saw its net interest income rise by 5.5 percent to N158.914, although outpaced by 22.1 percent growth seen in non-interest income which hit N87.67 billion.
