INDUSTRY REVIEW: Five best performing Nigerian banks in Q3 2023

The Nigerian banking industry recorded N367.28 billion increase in profit before tax (PBT) in the third quarter of 2023 — which falls between July to September.

According to the analysis of the financial statements of 11 listed banks, the industry grossed N759.20 billion in profit before tax, representing a whopping 93.72 percent year-on-year growth compared to the N391.91 billion posted in the same period in 2022.

The financial statements analysed for this report included Unity Bank, United Bank for Africa (UBA), Ecobank, Zenith Bank, Wema Bank, Sterling Holdings Financial, FBN Holdings, Fidelity Bank, Stanbic IBTC and Guaranty Trust Holdings Company (GTCO).

Following tax deduction, the banking industry was left with N628 billion net profit in Q3 2023, which surpassed the N329.24 billion profit after tax reported last year’s third quarter – indicating an of 90.74 percent or N298.76 billion.

The industry’s impressive earnings report was on the back of the net interest income, which grew by 72.48 percent to close Q3 2023 at N1.23 trillion, outperforming the N714.04 billion grossed in the corresponding period last year.

What you need to know

•The best-performing bank list was determined based on profit before tax growth — moving away from the net interest income previously used in other reports.

•Unity Bank is the only lender that failed to post a profit in Q3 2023 after recording N9.05 billion loss.

•Only four companies, Wema Bank, Fidelity Bank, Access Holdings and Zenith Bank recorded triple-digit growth in PBT in the review period.

•FCMB wasn’t listed among the financial statements analysed because the company didn’t separate its nine-month period earnings report from the third quarter.

Five best-performing Nigerian banks by profit before tax

Wema Bank (+199.89%)

Analysis of the financial statements indicated Wema Bank closed the period as the best-performing bank in Nigeria by profit before tax in Q3 2023 after its PBT rose by 199.89 percent.

•Wema Bank had closed Q3 last year with N3.35 billion PBT, however, in the same period in 2023, the company saw the PBT rise by N6.70 billion or 199.89 percent to N10.05 billion.

•In the same vein, Wema Bank’s profit after tax grew by 201.26 percent in the review period to end the quarter with N8.74 billion, which is N5.84 billion more than the N2.90 billion reported in Q3 2022.

•This was after managing to raise its net interest income by 49.89 percent to N22.87 billion in the third quarter of 2023, from N15.25 billion generated in Q3 2022.

Fidelity Bank (+172.60%)

Fidelity Bank hung on to the second spot in Q3 2023 after notching a 172.60 percent increase in its PBT, which was penned down to N34.65 billion.

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•This is N21.94 billion higher than the N12.71 billion profit before tax Fidelity Bank racked up in the third quarter last year.

•Although following tax deduction, Fidelity Bank’s net profit growth of 155.39 percent fell behind the PBT, with the lender capping Q3 2023 with N29.75 billion – outperforming the N11.65 billion registered in the corresponding period of 2022.

•Another key financial indicator highlighting the firm’s outing in the review period is the net interest income which rose by 140.61 percent after ending Q3 2023 with N87.12 billion, compared to N36.21 billion recorded in the previous year’s third quarter.

Access Holdings (+156.19%)

Access Holdings closed the period as the third-performing company in the banking industry as it rounded off Q3 2023 with 156.19 percent year-on-year growth in its profit before tax.

•The growth translated to N77.31 billion increase in Access Holdings’ profit before tax which winded up the period with N126.81 billion to settle above the N49.5 billion posted in Q3 last year.

•This was enough to sustain the company’s bottom line after tax payment, as net profit stood at N115 billion in the third quarter of 2023 – an increase of 138.29 percent when compared to the N48.26 billion profit retained after tax in the corresponding period in 2022.

•Access Holdings’ bottom line was supported by the 99.60 percent growth in net interest income after the latter drew the curtain at N165.71 billion in Q3 2023, improving on the N83.02 billion reported between July to September last year.

Zenith Bank (+113.20%)

In the fourth position is Zenith Bank with 113.20 percent growth in profit before tax in the review period.

•According to an analysis of the company’s earnings report, Zenith Bank nicked N154.67 billion PBT, which is N82.12 billion above the N72.55 billion the lender closed last year’s Q3.

•Zenith Bank’s profit after tax followed a similar path, rising by 126.37 percent from N62.92 billion netted in Q3 2022 to N142.44 billion in the same period this year.

•The company also reported that it recorded N153.36 billion as net interest income in Q3 2023, surpassing the N98.16 billion scored in the corresponding period 2022 – representing a growth of 56.24 percent.

Ecobank (+87.25%)

Ecobank completed the list, taking the fifth spot after its profit before tax rose by 87.25 percent in the third quarter of 2023.

•In the company’s financial statement, its PBT was N111.85 billion between July to September 2023, exceeding the N59.73 billion registered in Q3 2022 by N52.12 billion.

•Ecobank’s profit after tax also overshot the N40.09 billion turned in the previous year’s Q3 by 93.77 percent, as the lender ended the review period with N77.69 billion.

•One of the drivers of the company’s top line and the bottom line was its net interest income, which recorded 118.24 percent growth at the end of Q3 2023, to cap the period with N231.60 billion, against the N106.12 billion filed in Q3 2022.

Five least performing banks by PBT

Fidelity Bank: (-100%)

Sterling Financial Holdings (+10.44%)

GTCO (+59.17%)

Stanbic IBTC: (+60.43%)

FBN Holdings: (+61.11%)

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