By Babajide Okeowo
Following the release of the third-quarter results of twelve commercial banks in Nigeria to the Nigerian Stock Exchange, the released result and compiled by ThisDay showed that the banks earned a combined profit of N677.149 billion for the period that ended on September 30, 2020.
This represented an increase of N43.581 billion or seven percent as against the results reported by the banks in the comparable period of 2019.
The banks are GT Bank Plc, Zenith Bank Plc, Access Bank Plc, Fidelity Bank Plc, FCMB, FBN Holdings, Union Bank of Nigeria Plc, United Bank for Africa Plc, Stanbic IBTC, Wema Bank, Unity Bank, and Sterling Bank Plc.
It showed that in the period under review, while Access Bank Plc recorded 16 percent growth in its profit after tax (PAT) to N102.3 billion, compared with the N88.4 billion recorded in the first nine months of 2019; Fidelity Bank’s profit after tax rose by seven percent from N19 billion to N20.4 billion in the period under review and FCMB posted a profit after tax of N13.903 billion, compared with the N10.791 billion recorded in the comparable period of 2019.
Also, while FBN Holdings Plc reported a growth of 31.7 percent in its profit after tax of N68.256 billion, up from N51.747 billion in the corresponding period of 2019; Guaranty Trust Bank’s profit after tax also stood at N142.283 billion compared with N146.989 billion in 2019, and Union Bank realized profit after tax of N15.9 billion, slightly higher than the N15.5 billion it garnered in the comparable period of 2019.
In addition, while Zenith Bank’s profit after tax grew by 5.7 percent to N159.315 billion from N150.723 billion in 2019, the United Bank for Africa reported a profit after tax of N77.132 billion at the end of September 2020, as against the N81.6 billion recorded in the comparative period of 2019; Stanbic IBTC realized a profit of N66.163 billion in the period under review, as against the N55.552 billion the bank recorded in the first nine months of 2019; while Wema Bank’s profit after-tax was N2.644 billion as of September 30, 2019, compared with the N4.089 billion it made in 2019.
Also, while Sterling Bank’s profit after tax was N7.369 billion as of September 30, 2020, as against the N7.579 billion in the comparative period of 2019; Unity Bank’s profit after tax climbed to N1.574 billion as of September 30, up from the N1.482 billion it made in the comparative period of 2019.
This development is an improvement from the grim realities provided by the economic meltdown caused by the COVID-19 pandemic.
Recall that one of the global rating agencies, Standard and Poor’s (S&P), recently predicted that the COVID-19 pandemic will significantly hurt banks in Nigeria and some other African countries.
It listed risks that banks on the continent would face to include the prolonged effect of the pandemic on their economies; the likely rise in debt, and a likelihood of default by debtors, among others.
For Nigeria, it stated that the pace of recovery of the banking sector would be affected by the slow growth of the country’s GDP, depreciation of the local currency, and volatile oil prices.
It, however, noted that the pandemic has accelerated banks’ digitalization and could trigger another round of restructuring and consolidation.
“Short-term support to banks and borrowers leaves longer-term overhangs. The anticipated surge in leverage leads to higher corporate insolvencies.
The property sector is more severely hurt than expected. Ultralow interest rates are squeezing banks’ net interest margins, increasingly making weak profitability a structural problem for many banking sectors, particularly in Europe and Japan.
Banks need to take strategic measures as the pain will worsen. Those able to make structural changes, including cost-cutting and digitalization, will suffer less,” S&P had stated.