• Thursday, March 28, 2024
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BusinessDay

Zenith Bank, GTBank set to beat earnings guidance as analysts await FY 2018 results

Zenith-Bank-building-1

Banks may be bleeding badly on the equities market but that hasn’t stopped profitability from soaring in the past year, especially the Tier 1 banks. According to analysts forecast, Nigeria’s largest lender by assets, Zenith bank is set to beat its own profit after tax guidance of around N182 billion by around N10 billion, with an annualized PAT of N192 billion using its 9 months profit performance. GTBank, Nigeria’s most cost-efficient bank, in similar manner could also surpass its earnings guidance on PAT of N174.3 billion with an estimated N189.6 billion in profit after tax.

In financial reporting, earnings guidance or simply guidance is a publicly traded corporation’s official prediction of its own near-future profits or loss, stated as an amount of money per share. Earnings guidance is usually given in annual and quarterly presentations to forecast the corporation’s performance in the next accounting period. Guidance statements can include a variety of information typically based on the firms’ objectives towards sales projections, markets conditions and company spending.

As at the third quarter of the year, companies are expected to have achieved at least 75 percent of their full year target. Zenith bank and GTBank have crossed this hurdle easily, achieving 79 percent and 86 percent of their target profit after tax respectively.

Cumulatively, Tier 1 banks have forecast earnings of N624.3 billion in 2018.
On a year to year basis though, all banks are expected to post higher profits for FY 2018 than was reported in FY 2017. FBNH will see the highest year on year growth by around 50 percent, Access bank follows behind with 35 percent expected year on year growth in profitability based on full year estimated earnings of around N59.9 billion and N83.9 billion respectively for the banks versus 2017 achieved PAT of N40 billion and N62 billion respectively.

All figures are based on annualized profits using the 9 months actual profit performance and could differ materially from the actual full year forecasts based on reporting method and business performance in the fourth quarter of 2018.

IFEANYI JOHN