Nigeria’s largest company by assets, Access Holdings Plc, leads the pack with the highest interest income of N497.47 billion in nine months ending September 30, 2022, among the esteemed Tier-1 players in the banking sector. The foremost financial service institution also came tops in revenue from e-banking among its peers in the league of Tier-1 banks, which are United Bank for Africa (UBA) Plc, Zenith Bank Plc, FBN Holdings Plc and GTCO Plc.
Data compiled by THEWILL from their financial statements for the period show that Access Holdings grew its interest income by 25.9 percent from N395.13 billion in nine months of 2021 to the current level of N497.47 billion. The rising numbers which also reflected in the e-banking fees saw revenue from this window rise by 9.5 percent from N45.08 billion in the corresponding period to N49.39 billion. The marginal increase placed Access Holdings above its peers in the distinguished club.
Africa’s Global Bank, United Bank for Africa (UBA) Plc came second with interest income of N420.33 billion as against N343.79 billion posted in the corresponding period (nine months of 2021) representing a growth of 22.3 percent. The bank’s revenue from e-banking channels was N47.95 billion from N45.96, or 24.5 percent rise.
Zenith Bank Plc, the largest financial services institution by market size, earned N390.75 billion from interest income during the nine months to September 30, 2022 as against N308.84 billion in the preceding period. This shows an increase of 26.6 percent. The firm’s e-banking channels generated a significant revenue growth of 50.5 percent from N23.99 billion in nine months of 2021 to N36.09 billion in the review period.
The behemoth, FBN Holdings Plc, pooled N370.36 billion from interest income representing 42.4 percent increase compared with N260.11 billion in the preceding period, while e-banking fee dipped by 4.9 percent from N42.02 billion to N39.97 billion. GTCO Plc grew its interest income from N178.30 billion to N204 billion or 14.5 percent.
The companies’ balance sheet size also reflected their interest and e-banking earnings trajectory with Access Holdings recording 13.41 trillion while Zenith’s is N11.34 billion. FBNH and UBA assets are N9.85 and N9.31 trillion respectively.
Access Holdings has maintained a rising trajectory in credit expansion apparently in compliance with the 65 percent loan deposit ratio (LDR) policy of the Central Bank of Nigeria (CBN). The company is also ahead of its Tier-1 peers with N4.62 trillion loan and advances to customers in nine months ending September 30, 2022 – an 11 percent increase from N4.16 trillion as of December 31, 2021. Its Customer deposit also tops the league of Tier-1 banks: N8.18 trillion from N6.95 trillion in FY 2021.
THEWILL investigation showed that Zenith Bank came second in loan and advances to customers among the Tier-1 banks, with N3.88 trillion followed by UBA which recorded N3.1 trillion. Zenith Bank’s customer deposits was N8.1 trillion while UBA posted N7.1 trillion. FBN Holdings posted loans and advances of N3.59 trillion and customer deposits of N6.6 trillion.
Analysts at Proshare said the banking sectors have seen a significant rise in interest income this year with the high-interest rate environment, which helped to widen their profit. The practical move by CBN to sanction banks that violated the cash reserves ratio (CRR) policy vis-à-vis minimum lending portfolio must have forced the DMBs to intensify their credit expansion policies. “The deposit money banks are faced with the dilemma of satisfying the regulatory requirements and stepping into risk environments that could burn their fingers. They have no option than to lend, all the same,” said Jonah Kalu, a financial analyst.
Commenting on the Access Holdings performance, National Co-ordinator, Pragmatic Shareholders Association of Nigeria (PSAN), Ms Bisi Bakare, said the outstanding record in interest income was not a surprise given the bank’s aggressive expansion programme within and outside Nigeria.
She said, “Access Bank leading in interest income is not really surprising because of their strong tentacles within and outside Nigeria. Access Bank keeps acquiring big and small banks and expanding their operations rapidly.”
She said the bank and its peers in the Tier-1 league have performed to the delight of their shareholders.
The five Tier-1 banks recorded a combined loans and advances of N18.81 trillion in the nine months ended September 30, 2022 against N14.54 as of December 31, 2021, representing an increase of 30 percent. Their combined customer deposits for nine months ending September 30, 2022 was N33,21 trillion compared with 30 trillion in FY 2021, representing a 10.6 percent rise.
Data from the five Tier-1 banks’ FY 2021 show they recorded a total assets of N44.07 trillion and combined revenue of N33.63 billion. They paid a total income tax of N145 billion and employed a total of 34,000 pay-rolled workers. Their combined market capitalisation stood at N2.56 trillion as of December 31, 2021.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
