GTCO, UBA TOP OTHERS AS MOST PROFITABLE LENDERS BY ROE IN 2023FY
Other banks with RoE above 30 per cent include: Wema Bank Plc with 39.28 per cent RoE in 2023 from 19.28 per cent in 2022; Zenith Bank with 36.60 per cent RoE in 2023 from 16.80 per cent in 2022
Others are: Access Holdings Plc with 36.20 per cent RoE in 2023 from 13.30 per cent and Stanbic IBTC with 30.60 per cent RoE in 2023 from 20.30 per cent reported in 2022.
Among the investigated banks, Sterling Financial Holdings Company Plc reported the lowest RoE in 2023 financial year at 12.8 per cent from 13.3 per cent declared in 2022.
Sterling Financial Holdings Company recorded a growth of 9.3 per cent in profit before tax to N22.7 billion in 20233 from N20.8 billion in 2022 and a growth of 11.8 per cent in profit after tax to N21.6 billion from N19.3 billion in the previous year, while earnings per share also grew by 11.9 per cent to 75k from N0.67kobo in 2022.
“Nigerian banks have to deal with economic shocks, short credit cycles and persistent problems in the oil sector. They also have to deal with policy actions, policy uncertainty and regulatory risk,” said Vice President Highcap Securities, Mr. David Adnori.
“Nigerian banks compared to other markets operate in a volatile environment,” he added.
Fitch Ratings, had predicted that Nigerian banks’ operating environments could deteriorate in 2022/2023 as adverse global economic conditions feed through to the local economy.
The global rating agency stated that pressures on Nigerian banks’ profitability and asset quality would be higher than initially expected due to high inflation and a potential economic slowdown.
It noted that Nigerian banks are expected to face these headwinds despite higher oil prices.
“We expect interest rates to increase further given accelerating inflation and tighter global financial conditions. This should support the banks’ net interest margins, which have been dented by low rates in recent years,” Fitch said.