Nigerian banks record growth in HY1 2023 unaudited report
By Ibidunni Banjoko
Nigerian banks have released their unaudited report for the six months period that ended June 30, 2023. The report shows growth in the banking sector, despite the challenges in the economic environment.
According to figures obtained from the Nigerian Exchange Limited (NGX), FCMB Group has recorded a 148 percent growth in profit before tax to N38.2 billion for the half year ended June 30th, H1’23 from N15.4 billion in the corresponding period of 2022, H1’22.
The results showed that various divisions achieved robust earnings growth as follows: Banking Group 185.5%, Consumer Finance 10.3%, Investment Management 53.3%, and Investment Banking 54.3%.
In addition, FCMB Group’s gross revenue grew by 88.7% to N238.2 billion for June 2023, as against N126.2 billion for the same period in the previous year. The growth was driven by a 51.9% increase in interest income and a 216.9% increase in non-interest income.
Customer confidence in FCMB Group remained strong, as deposits rose by 45.3% year-on-year to N2.38 trillion at the end of June, up from N1.64 trillion in the corresponding period of 2022, whilst Loans and advances also grew by 37.4% to N1.54 trillion, compared to N1.12 trillion in the previous period.
The Group’s Assets Under Management (AUM) recorded an increase of 23.6% year-on-year to N910.3 billion at the end of June 2023, up from N736.4 billion at the end of June 2022.
Commenting on the half-year financial results, Mr Ladi Balogun, the Group Chief Executive of FCMB Group, said: “We continue to leverage our unique Group structure to build a technology-driven ecosystem that fosters inclusive and sustainable growth in the communities we serve. This strategy enables us to deliver robust performance despite the challenging domestic and global environment. Barring unforeseen circumstances, this trend will be sustained and accompanied by improving efficiencies arising from greater scale and ongoing digitization.”
FBN Holdings Plc also declared N206.3 billion profit before tax (PBT) in its unaudited half-year (H1) that ended June 30, 2023, which was a new record high for the oldest financial institution in Nigeria.
The PBT recorded was about 213.8 percent higher, when compared with the N65.7 billion declared by the parent company of First Bank in the first half of 2022.
FBN Holdings in 2022 full year result and accounts declared N157.7billion PBT and in 2021, it announced N166.7billion PBT.
Key factors that contributed to the outstanding increase in the FBN Holdings PBT and profit after tax figures included: N656.5billion gross earnings reported in H1 2023, an increase of 83 percent from N359.2billion reported in H1 2022, and N257.9billion non-interest income in H1 2023, a growth of about 113.8 percent from N120.6billion in H1 2022.
The group’s balance sheet position improved significantly, as total assets crossed the N14 trillion mark as of June 30, 2023.
FBN Holdings declared N14.18 trillion in total assets as of June 30, 2023, an increase of 34 percent, from the N10.58 trillion reported in the 2022 full year.
The increase in total assets was driven by N5.26 trillion customer loans and advances (Net) as of June 30, 2023, an increase of 39 percent from N3.79trillion and N9.04 trillion customer deposits as of June 30, 2023, a growth of about 27 percent from N7.21trillion reported in 2022FY.
Group Managing Director, FBN Holdings, Mr. Nnamdi Okonkwo, said in a statement, “FBN Holdings has continued to deliver a strong financial performance despite the complex operating environment, thanks to our reinforced foundations, deep market understanding, strong risk management, and execution capabilities.
“On the back of this and in line with our focus of driving further improvement in revenue generation and profitability, the group delivered strong growth in gross earnings and profit before tax, resulting in N656.6 billion and N206.3 billion, respectively, for the first half of 2023 financial year.”
Okonkwo added, “Across our businesses, we continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practices to anticipate and creatively deliver products and services that delight the different customer segments that we serve. Furthermore, we are committed to leveraging technology via digital platforms to enhance operational efficiency.
“Although the current operating environment remains challenging, we are confident of successfully navigating the terrain in our transformation journey to deliver sustainable value to our stakeholders.”
Further checks revealed that First Bank of Nigeria Limited, the commercial bank subsidiary of the group, declared a profit before tax of N188.8 billion in H1 2023, up 214.6 percent from N60billion reported in H1 2022, while profit after tax hit N174.9 billion in H1 2023, an increase of 228.3 percent from N53.3 billion in H1 2022.
Commenting on the results, Chief Executive Officer of First Bank, Dr. Adesola Adeduntan, in a statement, said, “In the first half of 2023, First Bank Group delivered the strongest financial performance in the almost 130 years of the Bank’s history; with solid business momentum, increased revenue, and excellent returns. The result reflects the continued positive impact of our strategy and the tremendous progress that we have made in growing and transforming the Group. The result also highlights the resilience of our business model, customer relationships, and institutional capabilities.
“While the uncertainties in the macroeconomic and operating environment persist, I am confident that our purpose-driven strategy remains the right one and that our strong financial performance, alongside our business model and resilient portfolios, positions the Group well to continue to provide the required support to our customers as well as create robust and sustainable value to our shareholders.
“Given our extensive and diversified customer base of over 42 million customer accounts, our digital technology-enabled processing capabilities that ensure we process over 12 percent of the industry’s payment volume, our future-proof and cutting-edge digital banking platforms with over 22 million users that enable us to process more than 95 percent of customer-induced transactions on digital channels, the robustness of our balance sheet, and our institutionalised risk management culture and capabilities, we see a resilient franchise today and into the future.”
In the same vein, Wema Bank has achieved improved performance in its unaudited results for the half year ended 30th June 2023.
According to a statement from the bank, the improved performance includes gross earnings of 89.09bn, a y/y increase of 49 percent (H1 2022: 59.59bn).
Interest Income also went up 53 percent y/y to 76.11bn (H1 2022:49.75bn); Non-Interest Income up 32 percent y/y to 12.98bn (H1 2022: 9.85bn); Profit before Tax (PBT) was 12.05bn a y/y increase of 97 percent over the 6.13bn reported in H1 2022 and Profit after Tax (PAT) increased y/y by 97 percent to 10.48bn (5.30bn in H1 2022).
The bank grew its deposit year to date by 19 percent as of H1 2023 to 1,392.85bn from 1,165.93bn reported in FY 2022. Loans and Advances also grew by 20 percent to 627.01bn in H1 2023 from 521.43bn in FY, 2022.
Commenting on the result, Mr. Moruf Oseni, the Managing Director/Chief Executive Officer of the bank, said: “Our H1 2023 results saw significant upsides with profit before and after tax growing strongly by about 97 percent. The management team at Wema Bank is focused on driving the execution of our current corporate strategy. Our embrace of technology is helping us deliver seamless best-in-class services while offering compelling value propositions to customers. Hence, we are seeing record-breaking returns across the board. Finally, we continue to see improvements in our corporate, commercial, and retail businesses as evidenced by our strong loan growth.”
Oseni said with the improved stability in the operating environment, the bank’s earlier approved rights issuance will be commencing this 3rd quarter of 2023.
“It has been a good half-year performance for Wema Bank with gross earnings growing by 49 percent year on year and earnings per share at 163.0 kobo. In addition, our cost-to-income ratio at 72.71 percent has witnessed significant improvement from the previous period. We have also succeeded in making Wema Bank an integral part of the Fintech ecosystem in Nigeria with our ubiquitous Fintech infrastructure support play,” Oseni added.
Ecobank Group 2023 second-quarter results show a 63% increase in pre-tax profits to N92.52 billion. The increase in second-quarter profits helped its half-year profit before tax to rise by 38% to N150.31 billion compared to N108.96 billion same period last year.
In the highlights from the Q2 Earnings: Interest Income for the quarter was N238.67 billion compared to N161.09 billion in the corresponding quarter of 2022. Fees and Commission Income gained 25% to N71.01 billion from N56.73 billion recorded in the same period last year.
Other Operating Income increased significantly by 262% to N13.07 billion from N3.61 billion reported last year. Pre-tax profit for the quarter increased to N92.52 billion from N56.89 billion profit in Q2 2022.
Impairment charges on loans and advances declined by 34% to N17.93 billion from N27.02 billion. Loans and advances to customers increased by 58% to N8.03 trillion.
Deposits from customers for the half year ended 30th June 2023 increased to N14.71 trillion as against N9.60 trillion recorded as of 31st December 2022. Earnings Per Share increased to N3.19 from N2.20 .
Commenting on the half-year financial statement, Jeremy Awori the CEO of Ecobank Group, said: “Our results for the first six months of 2023 demonstrate the benefits of our diversified business model, resilient balance sheet and our commitment to serving our customers”.
“Profit before tax increased by 18% to $308 million and by 67% if you exclude foreign currency translation effects. Net revenues were up 14% to $1,037 million, or 38% in constant currency, and we delivered a return on tangible equity of 27%”.
“We achieved these results despite continued challenging macroeconomic conditions in the second quarter, with significant weaknesses in African currencies, high consumer prices, and tepid economic growth.”
He continued: “We have made meaningful progress in formulating our strategic roadmap, which will provide the blueprint for our Growth, Transformation and Returns agenda. Over the last few months, as I engaged with our customers, colleague Ecobankers, and other stakeholders, my confidence in our growth opportunities has been reaffirmed”.
“We see opportunities to build stronger and better customer relationships in our businesses, forge strategic partnerships and be the go-to Payments bank, leveraging our superior platforms. In addition, we will take forward our transformation and growth agenda for our corporate, commercial and consumer banking businesses. Notably, achieving our goals will require even more discipline in execution, proactive risk management, and focus on delivering for our customers.”
Furthermore, the prudent management of our balance sheet and capital remains a priority. We will also continue investing in our best-in-class technology, retaining and attracting talent while reinforcing the right culture”
“Finally, I am proud of Ecobank’s contributions across the African communities in which we operate, and equally proud of the good work Ecobankers do for our customers daily,” Awori concluded.
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