Banking

How Nigerian banks performed first half of 2022

Experts analysis revealed that Wema Bank, First Bank and Stanbic IBTC stood out as the best performing banks in the first six months of 2022.

The Key metrics considered in this analysis are total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

Despite surge in operational cost due to hike in prices of energy, the banking sector grew by 20.06% year-on-year in real terms in Q2 2022, while it grew by 25.43% in the previous quarter.

The banking sector while reviewing the country’s Gross Domestic Product also accounted for 3.2% of the country’s GDP with an estimated value of N2.32 trillion (2021 annual estimate).

AMBusiness reported that the 13 banking raking good numbers despite economic headwinds, listed on the Nigerian Exchange recorded ₦501.1 billion profit after tax in the half of 2022.

Following their stellar performance recorded in the first six months of 2021, Nairametrics had compiled a list of best performing banks, using several variables.

Leading banks by total asset growth:

Access, Zenith, and First Bank recorded the highest asset value in the first six months of 2021, however, the position changed in terms of growth rate.

Below are the leading banks by total assets growth between December 2021 and June 2022.

First position – Stanbic IBTC (+14.8%)

Second position – Wema Bank (+13%)

Third position – Access Bank (+12.5%)

Fourth position – Fidelity Bank (+12.3%)

Fifth position – Jaiz Bank (+12.1%).

Leading banks by customer deposits growth:

Deposits by customers in the thirteen banks increased by 9% in the first half of the year to stand at N41.61 trillion from N38.17 trillion recorded as of December 2021.

Below are the lists of banks with the highest customer deposits in the year under review.

First position – Wema Bank (+30.2%)

Second position – Fidelity Bank (+13.1%)

Third position – Unity Bank (+12.8%)

Fourth position – Access Bank (+12.7%)

Fifth position – Zenith Bank (+10.5%)

Leading Banks by loan book growth:

Twelve banks loan books (Jaiz Bank excluded) reported that their customer loans grew by 8.7% to stand at N22.53 trillion as of June 2022 from N20.73 trillion recorded as of the beginning of the year.

As of the period under review, Access Bank recorded the highest customer loans at N4.62 trillion, followed by Zenith Bank and First Bank with N3.49 trillion and N3.38 trillion respectively.

First position – Unity Bank (+23%)

Second position – Wema Bank (+19.9%)

Third position – First Bank (+17.3%)

Fourth position – Stanbic IBTC Bank (+15.4%)

Fifth position – Fidelity Bank (+15.3%).

Leading banks by profit after tax (PAT) growth:

In terms of profit after tax, Zenith, Access, and GT Bank led the list of banks with the highest profit, meanwhile, below is the ranking in terms of profit growth.

First position – FCMB (+80.8%)

Second position – Wema Bank (+48.7%)

Third position – First Bank (+48.6%)

Fourth position – Sterling Bank (+40.8%)

Fifth position – Stanbic IBTC (+36%).

Leading banks by the cost-to-income ratio:

The cost-to-income ratio is a key financial metric, which shows a company’s costs as a proportion of its income. It helps to give investors a clear view of how efficiently a bank is being run. Specifically, it shows how much input the bank requires to generate N1 of output.

Here are the banks with the lowest cost-to-income ratio:

First position – Stanbic IBTC (-10.4%)

Second position – FCMB (-10.2%)

Third position – First Bank (-8.6%)

Fourth position – Zenith Bank (-2.6%)

Fifth position – Sterling Bank (-2.3%).

Leading banks by return on average equity (ROAE):

The return on equity is also an important metric that shows the percentage of profit made on every N1 of the shareholders’ fund. It is used to measure the performance and efficiency of the banks.

This metric will show how well banks have maximized any increase in shareholders’ wealth.

First position – FCMB (+45%)

Second position – Stanbic IBTC (+3.81%)

Third position – Wema Bank (+3.14%)

Fourth position – First Bank (+2.91%)

Fifth position – Sterling Bank (+2.44%).

Taking into cognisance the above listed stellar performance of these banks in relation to key metrics, Wema Bank, Stanbic IBTC, and First Bank led the list as the best performing banks in the first half of 2022.

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