THERE are strong evidences that investors, customers and industry stakeholders are having renewed interest in two Nigerian Banks despite the ravaging effects of Coronavirus (COVID-19) on the country’s operating environment.
Nigerian Tribune analysis finds that the two tier-1 banks namely: Guaranty Trust Bank (GTB) and Zenith Bank are evidently leading other lenders in major performance indicators.
For instance, among 11 banks tracked by Nigerian Tribune in terms of Dividend payout from banks quoted on the Nigerian Stock Exchange (NSE), GTB and Zenith Bank will delight their respective shareholders with N2.50 kobo each in 2020.
Zenith Bank announced this as early as February 21, 2020 while GTB announced its own on March 2, 2020.
There are other banks that made the list. On March 5, Stanbic IBTC announced a dividend payout of N2.00k and by March 2, 2020, UBA announced a dividend of N0.80k, while Access Bank announced N0.40k on March 6, followed by First Bank of Nigeria Holdings (FBNH) with a dividend of N0.38k.
Also, Union Bank with N0.25k dividend this year announced on April 13, was trailed by Fidelity Bank on March 23, with dividend of N0.20k and FCMB with dividend of N0.14k.
Wema Bank and Sterling Bank announced their respective dividend payout of N0.04k and N0.03k on April 23 and 26 respectively.
In the same vein, the two lenders came top among the 13 foremost financial institutions with record Profit After Tax (PAT) in their 2019 financial reports made available to the Nigerian Stock Exchange (NSE).
A breakdown of these reports showed that while Zenith Bank broke the record with N208.8billion PAT as at December 2019, GTB followed with N196.8 billion, just as Ecobank Nigeria came third with N99.5 billion.
In a descending order, Access with N97.5 billion took fourth position, followed by United Bank for Africa (UBA) with N89.1 billion PAT and StanbicIBTC which recorded N75.0 billion.
Others are: FBN with N73.7 billion; Fidelity Bank N28.4 billion; Union Bank N24.4 billion; FCMB N17.3 billion; Sterling Bank N10.6 billion; Wema Bank N5.2 billion and Jaiz Bank with N1.8 billion PAT.
Similarly, in terms of Market Capitalisation (MC), among top 10 Banks on the NSE tracked by Nigerian Tribune as at April 17, 2020, GTB came tops with N612.2 billion, followed by Zenith Bank at N470.9 billion and Stanbic IBTC with MC of N288.9 billion.
Access bank took fourth position again with MC of N238.2 billion followed by UBA with N205.2 billion and Union bank with N192.2 billion in Market Capitalisation.
Others are: First bank N168.7 billion; Ecobank N91.7 billion; Fidelity bank N59.1 billion and Sterling bank with N38.9 billion MC.
Despite the challenging environment and the bank’s loan impairment charges which soared by 88 per cent from N651 million in 2019 to N1.223 billion in 2020, Guaranty Trust Bank (GTBank) Plc, recorded revenue of N112.865 billion, which was an increase of 2.3 per cent above the N110.328 billion recorded in the corresponding Q1 of 2019.
This is contained in its unaudited financial results for the first quarter (Q1) ended March 31, 2020.
Profit before tax (PBT) grew by 2.1 per cent from N57 billion to N58.2 billion, while profit after tax (PAT) increased from N49.303 billion to N50.069 billion in 2020.
A further look at the performance showed that the bank’s loan book grew by 8.0 per cent from N1.502 trillion as at December 2019 to N1.622 trillion in March 2020, while customers’ deposits increased by 9.3 per cent to N2.768 trillion from N2.533 trillion in the same period.
Commenting on the results, the Managing Director/CEO of GTBank Plc, Mr Segun Agbaje, said “These are very difficult and uncertain times, not just for the financial services sector and the economy as a whole, but also for hundreds of millions of people around the world whose lives and livelihoods have been put at risk by the COVID-19 pandemic.”
Zenith Bank Plc in its unaudited results for the first quarter ended March 31, 2020, posted a three per cent rise in profit before tax to N58.7 billion.
The Group’s profit before tax also improved 3per cent from N57.3 billion in the prior-year period to N58.8 billion in March 2020.
The above performance is a follow up from its financial results for the year ended December 31, 2019.
Zenith Bank became the first Nigerian Bank to cross the N200 billion mark in the 2019 annual report.
AriseTV Analyst, Mr Chika Mbonu, stressed this while analyzing the company’s performance in a program monitored in Lagos.
Mbonu, who is a former bank chief executive and presently Managing Director, KSBC Advisory Partners Limited, added: “It is impressive.
He added: “The major growth you would find is in the non-interest line which grew by 29 per cent, which was driven by the more than 100 per cent growth in electronic banking fees.
“Zenith held its fees and expenses very low and therefore the profit before tax improved by five per cent and they managed their taxes well to grow by eight per cent.”
“Another is the return on asset which came in at 3.4 per cent, from 3.3 last year. Also, in terms of cost to income ratio, last year, they came in N49.3 and now it moderated to N48.8. So, from all the parameters Zenith came in very well.
“One other ratio that is very important is the non-performing loans (NPLs) ratio. In Nigeria, CBN has said that banks NPLs should not be more than five per cent and Zenith Bank came in at 4.3 per cent, which they pushed down from 4.98 last year.
“So, from the parameters, they have done very well. They have grown in size, profitability, and indeed they have become the first bank in Nigeria to cross the N200 billion profit after tax threshold. This is a very good result considering the headwinds banks faced in 2019,” he added.
The bank has continued to gain customer acceptance, with customer deposits increasing by five per cent, from N4.26 trillion in December 2019, to N4.46 trillion in the current period.
Other independent analysts did not overlook the two banks as CSL Stockbrokers
Limited, a member of the Nigerian Stock Exchange said it maintains buy recommendation on Zenith Bank Plc.
According to the firm, “though we expect Income will be impacted in the first half of the year due to the COVID-19 restrictions and have revised down our estimates accordingly, we expect this to be minimally offset by growth in some electronic banking lines.
“We maintain a buy recommendation on the stock and a revised price target of N30.85/s from N36.37/s previously.”
Little wonder the two lenders last week, attracted the attention of the foremost American credit rating agency, Fitch Ratings. Fitch cannot but look at the National scale ratings of the lenders in order to appropriately rank the issuers’ risks in the Nigerian market, designed to help local investors differentiate risk.
The agency revised the National Long-Term and Short-Term Ratings of Guaranty Trust Bank Plc and Zenith Bank Plc to ‘AA(nga)’ and ‘AA-(nga)’; ‘F1+(nga)’ from ‘F1(nga)’ respectively.
This is against GTB’s initial rating of A+ for National Long-term rating and F1 for National Short-term rating, and then Zenith Bank’s initial rating of A+ for National Long term rating and F1 for National short term rating.
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