UBA, Zenith 2 Other Nigerian Banks Record Over N1 Trillion Profit in 6 Months
- Four Nigerian banks have reported stellar financial performances in the first six months of 2023
- The banks include Zenith Bank, United Bank for Africa (UBA), FBN Holdings, and Guaranty Trust Holding Company (GTCO)
- Most of the banks surveyed recorded bumper profits, thanks to foreign currency revaluation gains
Four of Nigeria’s biggest banks listed on the Nigerian Exchange(NGX) have collectively reported profit after tax of N1.13 trillion in the first half of 2023.
This represents a 260 percent year-on-year increase when compared to to N315.9 billion reported by the banks same period of 2022.
Source: Facebook
The banks to have made impressive profit include FBN Holdings, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA) and Zenith Bank.
The massive profit is thanks to the gains from exchange rate revaluation.
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What is foreign exchange revaluation gain
Foreign currency revaluation gain represents net gain on the revaluation of foreign currency-denominated assets and liabilities held in the non-trading.
This also includes the effective portion of the gains on the derivatives designated in the fair value hedge of the foreign currency risk.
Breakdown of the banks profit
The banks surveyed, UBA posted the largest after-tax profit, totaling N378.2 billion in the first half of 2023.
This marks a significant increase of 437.8 percent compared to the N70.33 billion reported by the bank during the same period in 2022.
Zenith Bank Plc reported a profit before tax of N291.7 billion, a substantial increase from N111.4 billion, reflecting a growth of 169 percent to N350.4 billion in profit before tax.
GTCO's after-tax profit surged to N280.48 billion from N77.56 billion, with its profit before tax amounting to N327.4 billion compared to N103.3 billion in 2022.
Meanwhile, FBN Holdings reported a remarkable 231.1 percent growth in its after-tax profit, reaching N187.2 billion from N56.5 billion.
Expert provides insight
Reacting to the banks' strong performance, Tajudeen Ibrahim, director of research and strategy analyst at Chapel Hill Denham, said the gains are only unsustainable.
According to him, naira exchange gains are temporary and will not continue forever.
His words:
"Once the initial impact diminishes, Nigerian banks will return to their core business of lending."
Access Bank, GTCo, Zenith, and UBA pay shareholders highest dividends
Meanwhile, in another report, Legit.ng reported that Nigeria's Stock market investors had bumper harvests from their investments.
United Bank for Africa (UBA), Guarantee Trust Holdings, Zenith Bank, and Access Bank Holdings paid N236.43 billion dividend payout in 2022.
While Zenith Bank and GTCo recorded the most attractive dividend-paying stocks in the banking industry.
Source: Legit.ng
