Why Access, GTB beat peers to generate most return for shareholders in half-year

Access Bank, Guaranty Trust Bank (GTB) and Zenith Bank returned the most for their shareholders in the first six months of 2021, thanks to a surge in interest income, according to analysis of the financial results of Nigeria’s biggest lenders.

The three tier-one banks utilised the resources of their shareholders to generate higher profits than their peers in the first six months (H1) of this year.

A bank’s return on equity (ROE) measures how its management can use its assets to create wealth for shareholders. It is the amount of net income returned as a percentage of the shareholders’ equity.

While Access Bank topped the chart with 11 percent ROE, GTB and Zenith Bank occupied the second and third spots with 10 percent and 9 percent, respectively.

Breakdown of the ROE data shows that UBA and FBN Holdings came bottom with 5 percent and 8 percent, respectively, (both recorded 7% in 2020).

Access Bank

Analysis of the data gathered from the banks’ financials shows that Access Bank, Nigeria’s biggest lender by asset, grew its ROE to 11 percent from 9 percent in June 2020.

This was on the back of a 32 percent growth in its interest income to N279 billion from N211.9 billion in the periods under review.

The lender made a profit of N86.9 billion, a 42 percent increase compared with N61 billion in the first half of 2020. The bank’s shareholder’s equity stood at N775 billion in H1 2021.

Access Bank’s 11 percent ROE in H1 2021 implied that the lender generated 11 kobo profit for every unit the shareholders’ equity held in the review period.

Citing Access and United Bank for Africa’s (UBA) stronger profit growth relative to other tier-one banks in H1, Ayorinde Akinloye, a research analyst at United Capital plc, says the lenders relied on strong non-interest income generation and control of operating expenses to drive profitability.

“This has supported decent growth in ROE. This is unlike perennial best-in-class ROE banks like Stanbic and GTCO who have had to deal with a decline in profits due to climbing costs and weaker revenue,” Akinloye states.

Out of the three biggest lenders that reported the most ROE in the review period, only Access Bank recorded an increase year-on-year.

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GTB’s second-highest ROE of 10 percent, a decline from 17 percent and 13 percent recorded in the same period of 2019 and 2020, mirrors the 16 percent profit decline to N79 billion from N94.2 billion in the review period. The bank’s interest income fell 18 percent to N126 billion in H1 2021 compared with N153 billion in H1 2020.

The bank’s shareholders’ equity stood at N780 billion in the period compared with N706 billion in the first half of 2020. GTB was mostly known for topping the chart among its tier-peers for returning the most to its shareholders.


Zenith Bank’s 9 percent ROE in the review period was less than the 10 percent reported in the corresponding period of 2020

Zenith Bank’s 9 percent ROE means it generated a profit of 9 kobo for every unit of shareholders’ equity held by the bank during the period.

The ROE decline from 10 percent the previous year also reflects the 6 percent in interest income to N203.9 billion compared with N216 billion in the previous year.

Shareholder’s equity stood at N1.1 trillion in the first half of 201 compared with N988 billion a year before.


UBA’s 8 percent ROE in H1 2021 suggests each shareholder’s equity within the bank generated 8 kobo as profit.

UBA recorded a profit of N60.5 billion compared with N44.4 billion the previous year. The bank’s interest income grew 8 percent to N222 billion from N205 billion in the same period of 2020.

Shareholders’ equity stood at N752 billion compared with N634 billion in H1 2020.


With the lowest ROE among its peers at 5 percent, First Bank’s ROE means that for every unit of shareholder’s equity the bank held, 5 kobo was generated as profit in the period. The lender had an ROE of 7 percent and 6 percent in 2020 and 2019, respectively.

The bank’s profit declined 23 percent to N38 billion in H1 2021 compared with N49.4 billion in the same time last year. Shareholders’ equity stood at N772 billion in the period.

Interest income declined 22 percent to N161 billion compared with N207 billion in 2020.

The performance of the five tier-one lenders in the review period pushed their average ROE to 8.6 percent in the first six months of this year from 9.2 percent reported in the same period of 2020.

Analysts’ comments

“We believe the elevated CRR level moderated the industry’s performance and liquidity position in the period under review, the ROE would have been higher were it not for this,” analysts at Agusto & Co. say.

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