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10 Banks Gather N4.2tn Profit Despite High Interest Rate

Published

Monday, November 4, 2024 at 05:13 PM

Written by Franca Ozini Abaianyanri

10 Banks Gather N4.2tn Profit Despite High Interest Rate

Quarterly financial reports released to newsmen on Monday, 4^th of November, 2024, show that 10 money banks in Nigeria gathered about N4.20tn between January to September this year.

The financial institutions involved include Tier-1 banks like Zenith Bank, Guaranty Trust Holding Company, AccessCorp, United Bank for Africa and FBN Holdings, Stanbic IBTC Holdings, Sterling Bank, Ecobank, Wema Bank and Jaiz Bank.

Nigerian Exchange Limited saw their profit for the period move by 102.81 per cent to N4.20tn from N2.07tn recorded at the end of the third quarter in 2023.

The increase in the profits of the banks is coming amidst high interest rate environment, due to the Central Bank of Nigeria announced increased benchmark interest rate at each of its five Monetary Policy Meetings held this year.

The Nigerian Apex bank has increased the rate from 18.75 per cent at the start of the year to 27.25 per cent with the aim to rein in inflation and strengthen the devalued naira.

Also, the current money bank status is as a result of the fixed-income securities, mainly taken up by banks.

This is coming from lenders that released their financial statements for the period ended September to the NGX showed that interest income was a major driver of the surge in profits.

For the past two weeks, the country’s four largest banks by market value — GTCO, Zenith Bank, UBA and FBN Holdings; all reported that net interest income had more than doubled.

Access Bank which is the largest bank by assets, had a net interest income rise by 116.65 per cent to N844.84bn from N389.96bn as of the previous year.

Out of the 10 lenders reviewed, GTCO reported the highest amount of profit at N1.09tn, which is about a 195 per cent increase from its September 2023 figure.

Meanwhile, Zenith Bank made a profit after tax of N827.28bn, almost double the N434.17bn made in the previous year.

FBNHoldings also saw its profit rise to N533.88bn from N236.42bn. UBA’s profit hit N525.31bn; Ecobank reported a profit after tax worth N491.88bn; and Access Bank came with a N457.75bn profit.

On their part, Stanbic IBTC Holdings reported N182.87bn from N109.249bn; Sterling Financial Holding Company and Wema Bank recorded double and triple profits of N27.45bn and N52.73bn, respectively.

A non-interest bank, Jaiz Bank indicated that its profit after tax jumped by 182.39 per cent to N18.11bn from N6.41bn, while the banks reap the benefits of a high-interest rate environment, the Organized Private Sector is lamenting the effect of the sustained hike on their activities.

Members of the Organized Private Sector expressed fears that the interest rate hike may worsen bad loans in Deposit Money Banks after the MPC announced the fifth rate hike for the year.

While speaking, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said it was unfortunate that the increase was coming when manufacturers in the real sector were still struggling with the high cost of going about with business activities among many other challenges.

“This will definitely push up further the cost of doing business and ultimately, the cost of goods and services. The manufacturing sector may contract more as fund liquidity and profitability will surely reduce’’

“The banks or financial institutions may witness more bad debts as many lenders may find it difficult to live up to their loan obligations. This will result in banks being averse to lending to the real sector.”

Edited By: Chinedu Eze

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10 Banks Gather N4.2tn Profit Despite High Interest Rate

Quarterly financial reports released to newsmen on Monday, 4th of November, 2024, show that 10 money banks in Nigeria gathered about N4.20tn between January to September this year.

The financial institutions involved include Tier-1 banks like Zenith Bank, Guaranty Trust Holding Company, AccessCorp, United Bank for Africa and FBN Holdings, Stanbic IBTC Holdings, Sterling Bank, Ecobank, Wema Bank and Jaiz Bank.

Nigerian Exchange Limited saw their profit for the period move by 102.81 per cent to N4.20tn from N2.07tn recorded at the end of the third quarter in 2023.

The increase in the profits of the banks is coming amidst high interest rate environment, due to the Central Bank of Nigeria announced increased benchmark interest rate at each of its five Monetary Policy Meetings held this year.

The Nigerian Apex bank has increased the rate from 18.75 per cent at the start of the year to 27.25 per cent with the aim to rein in inflation and strengthen the devalued naira.

Also, the current money bank status is as a result of the fixed-income securities, mainly taken up by banks.

This is coming from lenders that released their financial statements for the period ended September to the NGX showed that interest income was a major driver of the surge in profits.

For the past two weeks, the country’s four largest banks by market value — GTCO, Zenith Bank, UBA and FBN Holdings; all reported that net interest income had more than doubled.

Access Bank which is the largest bank by assets, had a net interest income rise by 116.65 per cent to N844.84bn from N389.96bn as of the previous year.

Out of the 10 lenders reviewed, GTCO reported the highest amount of profit at N1.09tn, which is about a 195 per cent increase from its September 2023 figure.

Meanwhile, Zenith Bank made a profit after tax of N827.28bn, almost double the N434.17bn made in the previous year.

FBNHoldings also saw its profit rise to N533.88bn from N236.42bn. UBA’s profit hit N525.31bn; Ecobank reported a profit after tax worth N491.88bn; and Access Bank came with a N457.75bn profit.

On their part, Stanbic IBTC Holdings reported N182.87bn from N109.249bn; Sterling Financial Holding Company and Wema Bank recorded double and triple profits of N27.45bn and N52.73bn, respectively.

A non-interest bank, Jaiz Bank indicated that its profit after tax jumped by 182.39 per cent to N18.11bn from N6.41bn, while the banks reap the benefits of a high-interest rate environment, the Organized Private Sector is lamenting the effect of the sustained hike on their activities.

Members of the Organized Private Sector expressed fears that the interest rate hike may worsen bad loans in Deposit Money Banks after the MPC announced the fifth rate hike for the year.

“This will definitely push up further the cost of doing business and ultimately, the cost of goods and services. The manufacturing sector may contract more as fund liquidity and profitability will surely reduce’’

“The banks or financial institutions may witness more bad debts as many lenders may find it difficult to live up to their loan obligations. This will result in banks being averse to lending to the real sector.”

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Quarterly financial reports released to newsmen on Monday, 4^th of November, 2024, show that 10 money banks in Nigeria gathered about N4.20tn between January to September this year.