Amidst lockdown, banks gave out more loans, recorded increased deposits —Report

DESPITE the lockdown and the adverse effect of the coronavirus on the economy, the banks in Nigeria recorded an increase in loans and advances by +18.94 per cent and customers deposits by +18.84 per cent.

This indicates that despite the lockdown and its negative impact when most bank branches were under lock and key, there was an increase in banking activities as loans and advances as well as customer deposits rose, according to a new report by Proshare research.

“Banking has to work when and where you need it. The best advice and the best service in financial services happens in real-time and is based on customer behaviour, using principles of big data, mobility, and gamification” the report quoted Brett King as having said about situations like this.

According to the report, Nigeria has a peculiar and distinct domestic economy.  Unlike other economies where banks recorded a significant decline in profit in first half (H1) 2020, a sum of the profits of thirteen banks listed on the Nigerian Stock Exchange revealed that there was an increase in gross earnings by +5.18per cent and a mild decline in profit before tax by -1.47 per cent.

Nigerian banks, according to the report, recorded mixed results in profit before tax in H1 2020. Eight Nigerian banks among the 13 banks listed on the Nigeria Stock Exchange recorded an increase in profit before tax while five banks recorded a decline in profit before tax.

The top five banks with the highest profit before tax were Zenith Bank which recorded N114.12 billion,  GT Bank  with N109.71 billion and Access Bank which recorded N74.31 billion.

Other lenders that recorded increased PBT are: Ecobank Transnational Incorporated (ETI) with N64.13 billion, and UBA N57.13 billion, while the three banks with the least profit before tax were Unity Bank N1.12 billion, Wema Bank N1.73 billion, and Sterling Bank  N5.68 billion.

The report further observed that Wema Bank recorded the most significant year-on-year (Y-o-Y) decline of -33.72 per cent in profit before tax (PBT), while FCMB recorded the most significant growth of PBT at +25.51 per cent.

Still on profit, the majority of the banks listed on the Nigeria Stock Exchange (NSE) recorded an increase in their gross earnings in H1 2020. Ten banks among the listed banks on the NSE recorded an increase in their gross earnings while three banks recorded a decline in gross earnings. The top five banks with the highest gross earnings in H1 2020 were Access Bank N396.76 billion, ETI N392 billion, Zenith Bank N346.09 billion, UBA N300.6 billion, and FBNH N296.4 billion.

Access Bank recorded the highest significant increase Y-o-Y of +22.31 per cent in gross earnings while Wema bank recorded the highest decline Y-o-Y of -6.59 per cent in its gross earnings.

All listed banks on the Nigerian stock exchange recorded an increase in deposits from customers in H1 2020 from H1 2019. The top five banks with the highest deposits from customers in H1 2020 were ETI N6.461.50 trillion, Zenith Bank N4.905 trillion, UBA N4.800 trillion, Access Bank N4.667.66 trillion, and FBNH N4.373 trillion. While the three banks with the least customer deposits were Unity Bank N306.47billion, Wema Bank N680.32 billion, and Stanbic IBTC Bank with N769.28 billion.

It noted that Wema Bank recorded the highest growth in deposits from customers which grew by +52.51 per cent. Its deposits from customers increased from N446.09 billion in H1 2019 to N680.32 billion in H1 2020.

On the other hand, ETI recorded the least percentage growth in deposits from customers. Its deposits from customers grew by +10.78 per cent to N6,461.50 billion in H1 2020 from N5,832.54 billion in H1 2019.

Similarly, all banks according to the report, except Sterling Bank recorded an increase in loans and advances to customers. The top three banks with the highest loans to customers in H1 2020 were ETI N3.33 trillion, Access Bank N3 trillion, and Zenith Bank N2.62 trillion. While three banks with the least loans to customers were Unity Bank N131 billion, Wema Bank N337 billion, and Union Bank N582 billion.

Unity Bank recorded the highest percentage increase in loans to customers of +84.51per cent, as its loans to customers rose from N71 billion in H1 2019 to N131 billion in H1 2020.

While Sterling Bank recorded a decline in loans and advances to customers by -1.13 per cent. Its loans and advances declined from N622 billion in H1 2019 to N615 billion in H1 2020.

According to the report, all banks listed on the NSE recorded improvements in their shareholder’s funds except for Unity Bank. The top five banks with the highest shareholders funds were Zenith Bank N988.98 billion,  ETI N742.74 billion, GT Bank  N720.93 billion, FBNH N704.1 billion, and Access Bank N670.36 billion. While the three banks with the least shareholders fund were Unity Bank with negative shareholders’ funds of N-278.64 billion, Wema Bank N55.11 billion, and Sterling Bank N128.7 billion.

 

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