Analysis of banking sector half year profit

This analysis is based on the financial statement for half year 2014 that was published by various Nigerian owned commercial banks. Banks’ half- year financial results for 2014 released so far indicate clearly that the industry is still grappling with regulatory headwinds that have significantly shrunk income in the last two quarters.

With the exception of a small number which posted impressive performances, most lenders announced a marginal increase in profits while quite a few actually reported the opposite-a decline in profits.

The table shows the financial statements of the fourteen Nigeria owned banks in the country. It shows the net profit income for banks for half of 2014 and 2013. BusinessDay Analyst is comparing the half year statement in 2014 against the corresponding period in 2013.

The Banking sector experience a drop of 1.6 percent of the net profit made for the period of banks in half year 2014 as against profits made in 2013 half year but has maintained strong underlying performance and sustainable profitability.

The banking sector recorded a profit after tax of N250.9 billion in the second quarter of 2013, but dropped to N249.9 billion in 2014. Analysts attribute the industry’s mixed half year performance to the Central Bank of Nigeria’s (CBN) tight monetary stance and other regulatory measures which affected lenders’ income streams such as their contribution to the banking sector regulation fund otherwise known as the sinking fund and the scrapping of the N100 Automated Teller Machine (ATM) fees.

Zenith bank profit after tax in half year 2014 is N47.5 billion. It shows a N2.1 billion increase in profit when compared to N45.4 year in the same period in 2013.

Diamond’s bank profit after tax for half year 2014 increased from N12.7 billion in 2013 to N13.8 billion in 2013 in the same period.
Fidelity Bank profit for the period increased in 2014 half year. It increased with N1.2 billion as against that of the corresponding period in 2013.

FCMB had a slight increase in the profit on the two periods under review.

Stanbic IBTC net income for half year 2014, recorded an increase of N5.8 billion when compared to the same period in 2013.

Skye Bank bank net profit for half year 2014 fell to N5.786 billion from N8.428 billion in the corresponding year of 2013.

Among banks that announced a fall in profit in the period under review were three of the oldest in the industry-First Bank, United bank for Africa (UBA) and Union bank.

GT Bank also recorded a fall in profit for half year 2014 of N44 billion from N49 billion.

Unity and Wema bank recorded an increase in their profit after tax for half year 2014.