Zenith, GTBank, UBA, 5 Other Banks Earn N3.9tn in Six Months Amid Forex Crisis, Naira Scarcity

• Amid the naira scarcity of early 2023, eight Nigerian banks were able to amass significant profits
• The banks showed strong performances in the first six months of the year with a combined N3.9 trillion earnings
• The half-year success and impressive growth reflects the extent of the resilience of Nigerian banks

During the first half of the 2023 financial period, a total of eight deposit money banks collectively generated approximately N3.9 trillion in gross earnings.

This is according to data obtained from the financial statements of these banks, which were made available on the Nigerian Exchange Limited's official website.

A number of Nigerian banks showed strong performances in the first half of 2023, amid earlier naira scarcity and the Forex crisis which continues to test the sector.

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How the banks earned in H1 2023

Among these banks, Zenith Bank stands out, reporting an impressive 139% increase in gross earnings, rising from N404.8 billion in H1 2022 to N967.3 billion in H1 2023, as indicated in its audited results for the half-year ending on June 30, 2023.

Furthermore, the bank's profit after tax exhibited remarkable growth, surging by 161.84% to reach N291.7 billion by the close of June 2023.

During the first half of the year (H1), GTCO reported a substantial increase in gross earnings, which surged to N672.603 billion compared to N364.306 billion, marking an impressive 85 percent growth.

The bank's audited consolidated and separate financial statements for the first half of the year were filed on both the Nigerian Exchange Group and the London Stock Exchange.

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These statements revealed a notable rise in profit after tax, with figures reaching N280.482 billion in H1 2023, compared to N77.557 billion in the corresponding period of 2022.

United Bank for Africa achieved remarkable financial growth, with its gross earnings surging by 164%, reaching N981.78 billion in June 2023, compared to the N372.36 billion reported in June 2022, as stated in the bank's audited financial report.

Additionally, the bank's profit after tax exhibited a substantial increase, reaching N378.24 billion, representing a remarkable 437.8% growth over the first half of 2022.

The oldest bank in Nigeria, First Bank, reported a substantial increase in gross earnings, with an impressive growth rate of 82.8%.

In the first half of 2023, its gross earnings reached N656.6 billion, compared to N359.2 billion in the corresponding period of 2022.

Furthermore, the bank's profit after tax also showed significant improvement, rising to N174.9 billion in H1 2023, up from N53.3 billion in the previous year.

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Several other leading banks also reported growth in their gross earnings during the first half of the year.

These institutions include Wema Bank, with earnings amounting to N89.09 billion, Fidelity Bank, reporting N247.1 billion, Sterling Holding, reaching N99.06 billion, and FCMB, which recorded N238.2 billion.

Collectively, these eight banks amassed a total of N3.9 trillion in earnings over the initial six months of the year.

A more detailed examination of the banks' financial statements reveals that the robust performance in the first half of the year was primarily influenced by the devaluation of the naira, which occurred shortly after the Central Bank of Nigeria's decision to allow the local currency to float freely.

Why the banks experienced improved earnings/ earnings growth

Speaking on the growth in earnings of the banks, Ifeanyi Ubah, Head of Research at Comercio Partners said that Nigerian banks showed resilience, overcoming some of the early crises.

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He said:

Firstly, Nigeria has a very strong and resilient banking system. Even though the year started with the scarcity of naira which affected most customers, as well as the banks, the banks were able to bounce back after the old naira notes were recirculated.

Also, banks earn a lot of interest loans, trading gains and investments in securities and other financial instruments. Their reports also showed that some of them made a lot of money from foreign exchange (Forex) revaluation gains in this period.

4 banks rake in N774bn Forex gains

In related news, Legit.ng reported that in the initial half of the year, a total of N774.46 billion in foreign exchange (Forex) revaluation gains were reported by four commercial banks.

This was primarily attributed to the exchange rate unification policy implemented by the Central Bank of Nigeria (CBN).

The banks that reported notable Forex revaluation gains during the assessment period include Zenith Bank, Fidelity Bank, United Bank for Africa (UBA) and Guaranty Trust Holding Company (GTCO).

An examination of the financial statements of the four banks for the six months ending on June 30 reveals significant profits resulting from Forex revaluation gains for these banks.

Source: Legit.ng