Business

Access Bank Records Impressive Revenue Growth In 2022

Published

7 months ago

May 2, 2023

Editor

Access Holdings Reiterates Commitment to Deepening Disability Inclusion, Hosts Maiden Disability Confidence Training

Access Bank Records Impressive Revenue Growth In 2022

Leading financial institution, Access Bank Plc. (Access Holdings Plc.) has registered the strongest growth in revenue in 10years at almost 42 percent to hit gross income of N1.38 trillion, making it the first banking institution in Nigeria to hit and cross the N1 trillion mark in gross earnings.

The bank’s 10-year record growth in revenue is, however, followed by the first profit drop in five years with after-tax profit down by 5 percent to N152 billion. This reflects a major loss of profit margin from 16.4 percent in 2021 to 9 percent in 2022 – the lowest for the bank in more than a decade.

The bank holding company’s audited financial report for the year ended December 2022, shows that the increase in gross earnings represents as much as N416 billion added to the large revenue pool of the group in the year. However, no part of the increase reached the bottom line.

A disparity in growth between revenue and profit observed at the end of the third quarter (Q3) worsened at full year. Quarterly profit numbers dropped from N48 billion in Q3 to N15 billion in the final quarter – the lowest in the year. At the same time, quarterly revenue rose from N316 billion to N472 billion over the same period.

Total expenses grew ahead of the revenue increase and undermined the ability to convert revenue into profit, leading to the divergence in revenue and profit in the year. The challenge to the bank in the year was located in its lending field where interest expenses and loans loss charges consumed far more than the increase in interest earnings.

While the bank grew interest income by 37.5 percent to N827.5 billion at the end of the year – an increase of N226 billion, interest expenses rose by 55.8 percent to N467.8 billion in the year, claiming over 74 percent of the increase in interest earnings.

Worse than that, is an upsurge in net credit losses that registered a high jump of 137.7 percent in the year, from N83.2 billion in 2021 to N197.8 billion at the end of 2022. Credit losses have swelled for the bank for the fourth straight year, summing up to about N364 billion thrown off revenue in four years to 2022.

The two major cost increases consumed far more than all the increase of N226 billion in interest income in the year and slashed net interest income after loan impairment charges by 25.8 percent to N161.8 billion.

Rapid expansion of the loan book that the bank has seen in the past five years was sustained in 2022 with net customer lending position advancing by a clear N1 trillion to N5.1 trillion at the end of the year. In five years to 2022, the bank’s net loans and advances to customers has jumped more than two and half times from less than N2 trillion in 2018.

The weakness in income net of loan loss expenses was largely remedied by strong gains in non-interest income, which was led by net gains in financial instruments that multiplied more than six times from N44.8 billion in 2021 to N281.3 billion at the end of 2022.

Also, net gains on hedging jumped from a slight loss to close at N19.7 billion over the same period. Fee and commission income equally grew by 24.3 percent to N197.6 billion in the year.

The gains in non-interest earnings were supported by a relative slowdown in operating expenses – which helped to temper the impact of the drop in net income on the bottom line. At N502.4 billion, total operating expenses grew by 35.4 percent, which is below the 42 percent increase in gross earnings.

The moderation enabled a decline in operating cost margin from 38.2 percent in 2021 to 36.2 percent at the end of 2022. This means the bank used a lower operating cost to generate the naira of its revenue in 2022 than in the prior financial year as well as any time in more than a decade.

The cost saving from operating expenses and the improvements in non-interest income provided the upside force that bridged the 25.8 percent drop in net income to achieve a moderate decline of 5 percent in after-tax profit in the year.

Highlights of the bank’s first quarter (Q1) earnings performance in the current financial year, show that the disparity between the growths in interest income and expenses is persisting but with a slowdown in credit losses, profit for the quarter has stretched out to N71.6 billion.

The directors have announced a final cash dividend of N1.30 per share, having paid an interim cash dividend of N20 kobo per share in the course of the financial year.

Business

ZENITH BANK SIGNS MOU WITH CFA INSTITUTE TO BOOST FINANCIAL EXPERTISE

Published

3 hours ago

December 1, 2023

Editor

ZENITH BANK SIGNS MOU WITH CFA INSTITUTE TO BOOST FINANCIAL EXPERTISE

Zenith Bank Plc has signed a Memorandum of Understanding (MoU) with the Chartered Financial Analyst (CFA) Institute to promote efforts and activities that support the formation, training, and updating of human capital in finance and investment for the overall development of the Nigerian financial services sector. The MoU, was signed by the Group Managing Director/CEO of Zenith Bank Plc, Dr. Ebenezer Onyeagwu; the President/CEO of the CFA Institute, Margaret Franklin; and the President of CFA Society Nigeria, Ibukun Oyedeji on Tuesday, November 28, 2023.
Speaking at the MoU signing ceremony, the Group Managing Director/CEO of Zenith Bank Plc, Dr. Ebenezer Onyeagwu commended the CFA Institute and the CFA Society, Nigeria for their laudable programmes in developing finance and investment professionals in Nigeria. According to him, your Women in Investment Management Initiative, CFA Institute Research Challenge, CFA Society Nigeria Ethics Challenge and University Affiliation Program are very laudable, and Zenith Bank will continue to partner with the CFA Institute and the CFA Society Nigeria to ensure that young finance and investment professionals get the needed support for their career development. In his words, “As a good corporate citizen, Zenith Bank remains committed to furthering the economic, cultural and social development of the society. As such, we continue to support projects and initiatives that have long-term social and economic benefits for our various publics and stakeholders. Partnering with the CFA Institute and the CFA Society Nigeria is therefore a demonstration of our commitment to building professional excellence in the finance services industry in Nigeria”.
At the CFA Institute Africa Investment Conference, during the ‘Journey to the Top: A Discourse with CEOs’ segment, Dr. Onyeagwu inspired future finance and investment professionals to uphold the highest standards of integrity. He stressed the importance of making difficult yet high-quality decisions, building robust networks, and dedicating themselves to hard work for career success. In his words, “as upcoming professionals, the opportunities are immense for you. Africa doesn’t get bigger than Nigeria. There is scarcity of the right kind of people that have the talent, that have the character and the leadership to provide leadership in organizations. Make a decision to be one of those, make a decision to be different. You must be driven by your passion; you must delay gratification. In Zenith what is driving us is the strive for excellence. It is not about who you are and where you come from. We have the best class of talents you can think of anywhere in the world.” He assured the young finance and investment professionals that Zenith Bank will offer immediate employment opportunity to CFA Charter Holders and those who qualify as Chartered Accountants.
Also speaking on the MoU, the President/CEO, CFA Institute, Margaret Franklin reiterated the Institute’s commitment to the professional development of students and upcoming professionals. In her words, “there are many things that we do for students, we invest heavily in students and why is that? Because they are our future. The mission of the CFA Institute is to lead the investment industry with the highest standards of ethics, education and professional excellence for the ultimate benefit of society and that starts with our CFA programme”. She commended Zenith Bank for its continued support to the CFA Society Nigeria and sponsorship of the CFA Institute Research Challenge over the years. She also commended the bank for being one of the top employers of CFA members in the country. She expressed her admiration of the culture of excellence in Zenith Bank. Also speaking at the MoU signing ceremony, the President of CFA Society Nigeria, Ibukun Oyedeji commended Zenith Bank for its partnership with CFA Society Nigeria and its commitment to the development of young finance professionals in the country.
The the CFA Institute Africa Investment Conference is being hosted by the CFA Institute and CFA Societies from Ghana, East Africa, South Africa and Mauritius. The conference has representatives from over 20 universities in Nigeria (members of their investment clubs being supported by CFA Society).

Business

Fidelity Bank Plc Signs the UN Principles for Responsible Banking

Published

11 hours ago

December 1, 2023

Editor

Fidelity Bank Plc Signs the UN Principles for Responsible Banking

30 Nov. 2023, Lagos, Nigeria – Fidelity Bank Plc has become an official signatory of the UN Principles for Responsible Banking (PRB) – a single framework for a sustainable banking industry developed through a collaboration between banks worldwide and the United Nations Environment Programme Finance Initiative (UNEP FI).

The Principles are the leading framework for ensuring that banks’ strategy and practice align with the vision society has set out for its future in the UN Sustainable Development Goals and the Paris Climate Agreement. Banks who have signed the Principles commit to be ambitious in their sustainability strategies, working to mainstream and embed sustainability into the heart of their business, while allowing them to remain at the cutting-edge of sustainable finance.

Under the Principles, signatory banks identify and measure the environmental and social impact resulting from their business activities, set and implement targets where they have the most significant impact, and regularly report publicly on their progress. The Principles provide a framework for banks to systematically understand the risks and seize the opportunities arising from the transition to more sustainable economies.

“As long-time signatories to UNEPFI, signing onto the PRB is the next step to show our commitment to sustainability. Sustainability is central to our corporate strategy as a bank and joining the Principles further affirms our determination to increasing our positive impacts in all aspects of sustainability. The PRB aligns with our sustainability principles and the bank is delighted to join the global community of signatories championing sustainable development around the world”, commented Dr Nneka Onyeali-Ikpe,OON, Managing Director/Chief Executive Officer, Fidelity Bank Plc.

Signatories to the Principles take on a leadership role, demonstrating how banking products, services and relationships can support and accelerate the changes necessary to achieve shared prosperity for both current and future generations, building a positive future for both people and planet. These banks also join the world’s largest global banking community focused on sustainable finance, sharing best-practice, and working together on practical guidance and pioneering tools of benefit to the entire industry.

This is a journey of unprecedented scale and scope at a time when such ambition is urgently needed to address the major planetary crises of climate change, nature loss, pollution and social issues. Together, these collective efforts will ensure that profitability goes hand in hand with a sense of purpose.

Business

FCMB’s profits surged by 108% in the first nine months of 2023.

Published

2 days ago

November 29, 2023

Editor

FCMB’s profits surged by 108% in the first nine months of 2023.

FCMB Group Plc posted a pre-tax profit of N55.1 billion in the nine months ending September 2023, marking a year-on-year growth of 108% from the corresponding period in 2022.

During Q3 2023, the group achieved a pre-tax profit of N16.9 billion, representing 52.7% year-on-year growth from the same quarter in 2022.

In the nine months, the group achieved a profit after tax of N49.15 billion, representing a YoY growth of 114.4% from the corresponding period in 2022.

Key Highlights: Q3 2023 vs. Q3 2022

Net interest income: N48.16 billion, +46.42% YoY
Net fee and commission income: N9.26 billion, -8.94% YoY.
Net trading income: N1.12 billion, -54.05% YoY.
Net impairment losses on financial instruments: N9.91 billion, +23.72% YoY
Personnel expenses: N12.85 billion, +52.56% YoY
General and administrative expenses: N16.11 billion, +33.23% YoY
Profit before taxation: N16.91 billion, +52.68% YoY
Profit for the period: N13.74 billion, +48.44% YoY.
Total assets: N3.88 trillion, +30.03% YTD
Return on Equity: 15.13% (Q3 2023)
Insights

FCMB Group’s financial performance in the nine months of 2023 is reflective of the remarkable performances Nigerian banks have put up within the same period. However, the group’s return on equity of 15.1% ranks it low among the banks.

Year-on-year, the group’s loan position increased by 34.3% to N1.19 trillion within the nine months, while its customer deposits grew by 39.1% year-on-year to N2.53 trillion within the same period.