File image of Nigeria Bank.
Once again, Nigerian banks have achieved exceptional profits as a result of recent foreign exchange gains due to the Naira’s depreciation.
According to financial statements from nine prominent banks disclosed by the Nigerian Exchange Limited (NGX), these banks collectively attained a pre-tax profit of N2.292 trillion in just the first nine months of 2023.
Approximately 63.6 percent, which equates to N1.457 trillion, of the profits stemmed from foreign exchange-related transactions. In the corresponding period of 2022, these banks generated a mere N225.416 billion, reflecting an impressive forex profit growth rate of 546.5%.
The N2.292 trillion profit also reflects a remarkable surge of 156.4 percent compared to the N897.717 billion recorded in the corresponding period of the previous year, 9M’22.
The nine banks whose results were reviewed by Financial Vanguard comprise FBN Holdings, Zenith Bank, GTBank Group, UBA, Access Bank, Stanbic IBTC, Wema Bank, Sterling Bank Holdings, Fidelity Bank, and Jaiz Bank.
Several other major banks, including Ecobank Transnational Incorporation (ETI), Union Bank, Polaris Bank, FCMB, Citibank, Standard Chartered Bank, FSDH Merchant Bank, NOVA Merchant Bank, Heritage Bank, Keystone Bank, Providus Bank, and others, are yet to release their figures.
Comparative analysis of profit performance
The profit figures for Tier-1 banks in the 9M’23 are as follows: Zenith Bank secured the top position with N505.0363 billion, followed by UBA with N502.091 billion, GTB took the third spot with N433.203 billion, while Access Bank posted N294.416 billion, and First Bank recorded N270.333 billion.
The profits of Tier-1 banks contributed to 87.5% of the total profitability of the combined nine banks during the reviewed period, with Tier-2 banks accounting for the remaining 12.5%.
Among the Tier-2 banks, those with notably higher profits in the same period include Stanbic IBTC, which led the list with N129.458 billion, followed by Fidelity Bank at N110.992 billion, Wema Bank at N22.117 billion, Sterling Bank at N17.803 billion, and Jaiz Bank at N6.679 billion.
Economic analysts anticipate that when the results of the remaining banks are disclosed, the combined profit is expected to exceed N3.5 trillion.