At least six of Nigeria’s largest banks increased their profits by 214% to N2.06 trillion in the fiscal year ending September 2023, compared to N656.15 billion in the same period in 2022 despite the economic headwinds of its operating environment.
The Punch reported that when comparing the financial accounts submitted to the Nigerian Exchange Limited, the earnings of the financial institutions increased by N1.4 trillion during the period under scrutiny.
Access Holdings Plc, Zenith Bank International, United Bank for Africa, Guaranty Trust Holding Company Plc, FBN Holdings, and Stanbic IBTC Holdings are among the banks that are under review.
According to the study, all banks saw triple-digit increases in profits. Zenith Bank led the way, with its total comprehensive income rising by 412.55 percent to N647.74 billion from N126.37 billion over the time. UBA came in second, with its profit increasing by 287.18 percent to N109.25 billion.
GTCO’s profit increased by 181.87% to N367.41 billion from N130.35 billion, FBN Holdings’ profit increased by 159% to N236.50 billion, and Stanbic IBTC’s profit increased by 97.36% to N109.25 billion.
Out of the six lenders, Access Holdings experienced the least percentage growth, rising from N136.91 billion to N250.44 billion as of Q3, 2022, or 82.92%.
Following the Central Bank of Nigeria’s mid-June harmonization of the currency market’s segments, financial institutions have been reporting encouraging results.
In September, the Apex Bank directed commercial banks to refrain from using their gains from foreign exchange revaluation for dividends and operating expenses, as the real sector was negatively impacted by rising borrowing costs and foreign exchange losses, while banks had positive returns.
The CBN stated in a letter dated September 11, 2023, signed by the Director, Banking Division Department, Haruna Mustafa, that it had evaluated the effects of the recent change in the FX rate regime on the banking system and determined that it could have a significant impact on the Naira values of banks’ foreign currency assets and liabilities.
At the end of the 2022 fiscal year, the banks’ asset worth increased by 43.57 percent to N83.55 trillion from N58.19 trillion, primarily due to a rise in their loan books over the course of the nine-month period.
A former president and chairman of council of the Chartered Institute of Bankers of Nigeria, Professor Segun Ajibola, responded to the bank’s increase in assets by pointing out that banks can help stimulate the economy even though the effects of their lending may not be felt right away.
An economic analyst based in Lagos, Moses Ojo, stated that banking operations will probably not be impacted by the country’s macroeconomic conditions.
He declared, “Lending is a bank’s primary business and its source of revenue. Banks are still reasonably liquid, thus the current macroeconomic challenges facing the whole country have little effect on their capacity to lend.