The combined net interest income of eight Nigerian banks surged by 141.1 percent within a year, BusinessDay analysis of their latest financial statements shows.
The lenders are Zenith Bank Plc, United Bank for Africa (UBA) Plc, Access Holdings Plc, FCMB Group Plc, Stanbic IBTC Holdings Plc, Guaranty Trust Holding Company (GTCO) Plc, Fidelity Bank and Wema Bank Plc.
Their total net interest income jumped to N1.36 trillion in the first quarter of 2024 from N564.7 billion in the same period of 2023.
Net interest income is the difference between the interest a bank earns and the interest it pays out to customers.
“Banks’ net-interest income, which is the core income from loans and advances to customers, investment securities and cash and cash balances, are mostly driven by interest rate hikes,” Tesleemah Lateef, a banking analyst at Cordros Securities Limited, said.
“A loan is given to customers backed by the interest rate during the period. At the current interest rate, it is expected that banks reprice assets to increase the rate to be more beneficial to them,” she added.
The Central Bank of Nigeria in March raised its monetary policy rate for the second straight time by 200 basis points to 24.75 percent in a bid to fight inflation. In February, the CBN increased the interest rate by 400 basis points to 22.75 percent.
Before the rate was hiked to 24.75 percent, the apex bank had increased it by 750 basis points to 18.75 percent last July from 11.25 percent in March 2022.
Apart from the MPR hike, the liberalisation of the foreign exchange regime in June weakened the naira from N463.38/$ to N 1459.7/$ as of May 9, 2024. At the parallel market, the naira is being traded at around 1,422.5/$ as against 762/$ before the FX reform.
Further analysis of the statements show that Access Holdings recorded the highest growth in net interest income of 189.30 percent to N275.7 billion, followed by GTCO with a 176.5 percent increase to N227.3 billion, and Zenith Bank with a 153.7 percent rise to N306.5 billion.
UBA, Stanbic IBTC Holdings, Fidelity Bank, Wema Bank, and FCMB Group had 151.2 percent, 111.3 percent, 89.4 percent, 80 percent, and 74.8 percent increase respectively.
Analysis of individual firms
Access Holdings
Access Holdings’ net interest income increased to N275.7 billion in Q1 2024 from N95.3 billion in the same period of last year.
Access’s net interest income growth rate rose to 189.30 percent during the period under review.
The holding company recorded an after-tax profit increase of 121.80 percent to N159.3 billion from N71.8 billion. Its interest income rose to N719.5 billion from N254.2 billion.
Access Holdings Plc is a financial institution headquartered in Nigeria and traded on the Nigerian Stock Exchange. It operates through four subsidiaries in sub-Saharan Africa and the United Kingdom.
GTCO
GTCO’s net interest income increased to N227.3 billion in Q1 2024, up 176.5 percent from N82.2 billion in the same period of last year.
The holding company recorded an after-tax profit increase of 685.40 percent to N457.1 billion from N58.2 billion. Its interest income rose to N281.7 billion from N104.1 billion.
GTCO is a multinational financial service group headquartered in Victoria Island, Lagos, Nigeria. It offers retail and investment banking, pension management, and payment services.
Zenith Bank
Zenith Bank’s net interest income increased by 153.7 percent to N306.5 billion in Q1 2024 from N120.8 billion in the same period of last year.
The bank’s interest income increased to N488.5 billion from N191.1 billion while after-tax profit rose to N258.3 billion from N66 billion
The conglomerate is a large financial service provider in Nigeria and Anglophone West Africa, headquartered in Victoria Island Lagos.
It is licensed as a commercial bank by the Central Bank of Nigeria, the national bank regulator.
UBA
UBA’s net interest income increased to N300.7 billion in Q1 2024 from N120.8 billion in the same period of last year.
Its net interest income increased to N440.7 billion from N191.8 billion while after-tax profit grew by 166 percent to N142.6 billion in the first quarter of 2024 from N53.6 billion
The bank is a multinational pan-African financial services group headquartered in Lagos. It has subsidiaries in 20 African countries and offices in London, Paris, and New York.
Stanbic IBTC Holdings
Stanbic IBTC’s net interest income increased to N76.9 billion in Q1 2024 from N36.4 billion in the same period of last year.
Its interest income rose by 129.7 percent to N115.8 billion from N50.4 billion while after-tax profit to N115.8 billion in Q1’24 from N50.4 billion.
Stanbic IBTC Holdings is a member of the Standard Bank Group. it is a financial service holding company in Nigeria with subsidiaries in Banking, Investment Advisory, Pension Management, and Insurance.
Fidelity Bank
Fidelity Bank’s net interest income increased to N99.6 billion in Q1 2024 from N52.6 billion in the same period of last year.
The bank reported N161.9 billion interest income in Q1, up 88.2 percent from N86 billion in Q1’23 while after-tax profit increased to N31.4 billion, up 101.30 percent from N15.6 billion.
The commercial bank operating in Nigeria, headquartered in Victoria Island, Lagos. It is a licensed commercial bank listed on Nigerian Exchange Limited.
FCMB Group
FCMB’s net interest income increased to N55.4 billion in Q1 2024 from N31.7 billion in the same period of last year.
Its interest income rose by 89.8 percent to N125.4 billion from N66.04 billion while its after-tax profit rose to 209.70 percent to N28.8 billion in Q1’24 from N9.3 billion in Q1’23.
The group has nine subsidiaries divided among three business groups such as commercial and retail banking, investment banking, and asset and wealth management.
Wema Bank
Wema Bank’s net interest income rose to N26.1 billion in Q1 2024 from N14.5 billion in the same period of last year.
The bank’s interest income rose by 105.3 percent to N69.4 billion from N33.8 billion while its after-tax profit increased to N9.4 billion, up 74.1 percent from N5.4 billion.
This is a Nigerian commercial bank licensed by the Central Bank of Nigeria and traded on the Nigerian Exchange Limited.
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