Cumulatively, banks listed on the Nigerian Stock Exchange (NSE) grew their earnings to N2.3 trillion in the third quarter (Q3) of 2014 driven largely by modest rise in loan book, as well as overall interest earning on their asset bases.
In addition, analysts said higher yield accretion in some banks, which re-priced and optimised the mix of assets also provided support for their top-line growth.
“From my observation, most of the banks are reporting strong growth in interest income and other incomes during the period. Although, interest from loans to customers recorded the most growth, placement income and gains from trading in financial instruments also grew significantly. And some of the income are from govplacement at the standing deposit facility of the CBN, hence justifying the excess liquidity claim of the monetary authority”, said Femi Ademola, head research and intelligence, BGL Plc.
Looking at the results at the Nigerian Stock Exchange (NSE), Access Bank Plc reported top-line figure of N181.387 billion, interest income accounted for N131.724 billion. Ecobank Transnational Incorporated (ETI) Plc reported N344.558 billion in gross earnings, the bank’s interest income stood at N207.745 billion in the same period.
Out of the gross earnings of N331.693 billion reported by FBN Holdings Plc, N255.722 billion came as interest income. GTBank Plc earned N199.472 billion, the bank’s interest income accounted for N148.187 billion. United Bank for Africa Plc reported N210.715 billion in Q3 earnings, interest income accounted for N149.409 billion.
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In the review Q3 period, Zenith Bank Plc reported N273.738 billion in gross earnings, interest income accounted for N213.011 billion. Diamond Bank Plc reported N151.596 billion in Q3 gross earnings, N120.032 billion was income from interests. FCMB Group Plc reported Q3 gross earnings of N104.973 billion, interest income accounted for N84.501 billion.
“Banks’ fee-based revenues were modest across board, except for a few players like Zenith Bank Plc, which rode on credit-related fees and FX gains to post strong growth in non-interest earnings,” said Rasaq Abiola, analyst at Associated Discount House Limited.
Also in the Q3 period, Fidelity Bank Plc earned N96.023 billion, interest income was N76.818 billion; Stanbic IBTC Plc reported Q3 gross earnings of N94.637 billion, interest income accounted for N52.308 billion.
According to the analyst, higher funding cost and rising operating expenses (OPEX) of banks, which were partly impacted by regulation as well as higher effective tax charge eroded gains from the top-line growth.
He said: “This is notable in the mixed bottom-line performance of the lenders; strong and robust profit growth flagged by players like Stanbic and ETI as against relatively weak showing from the Tier-1 peers, except Zenith Bank, which reported a modest 6 percent year-on-year (YoY) growth in profit for the year”.
Sterling Bank Plc reported N73.006 billion in Q3 earnings, the bank’s interest income accounted for N56.691 billion. Skye Bank Plc earned N97.126 billion in Q3, while its interest income was N79.507 billion, while Union Bank of Nigeria Plc reported Q3 earnings of N74.772, interest income stood at N56.150 billion.
