Nigeria’s largest company by assets, Access Holdings Plc, leads the pack with the highest interest income of N497.47 billion in the nine months ending September 30, 2022, among players estimated level 1 of the banking sector. The leading financial services institution also topped in online banking revenue among its peers in the league of Tier 1 banks, which are United Bank for Africa (UBA) Plc, Zenith Bank Plc, FBN Holdings Plc and GTCO. Plc.
Data compiled by THEWILL from their financial statements for the period shows that Access Holdings increased its interest income by 25.9% from N395.13 billion in nine months of 2021 to the current level of N497. .47 billion naira. The rising figures which are also reflected in e-banking fees saw revenue in this window increase by 9.5% from N45.08 billion in the corresponding period to N49.39 billion. The marginal increase placed Access Holdings above its peers in the Distinguished Club.
The African World Bank, United Bank for Africa (UBA) Plc, came second with interest income of N420.33 billion compared to N343.79 billion recorded in the corresponding period (nine months of 2021) , representing growth of 22.3%. The bank’s revenue from online banking channels was N47.95 billion from N45.96, an increase of 24.5%.
Zenith Bank Plc, the largest financial services institution by market size, earned N390.75 billion on interest income in the nine months to September 30, 2022, compared to N308.84 billion in during the previous period. This shows an increase of 26.6 percent. The company’s online banking channels generated significant revenue growth of 50.5%, from N23.99 billion in nine months of 2021 to N36.09 billion in the reporting period.
The giant, FBN Holdings Plc, pooled N370.36 billion from interest income, representing an increase of 42.4% from N260.11 billion in the previous period, while online banking fees fell by 4.9% from N42.02 billion to N39.97 billion. GTCO Plc increased its interest income from N178.30 billion to N204 billion, or 14.5%.
The size of companies’ balance sheets also reflects the trajectory of their online banking interests and profits, with Access Holdings recording N13.41 trillion while Zenith is N11.34 trillion. The assets of FBNH and UBA stand at N9.85 and N9.31 trillion respectively.
Access Holdings has maintained an upward trajectory in credit expansion, apparently in line with the Central Bank of Nigeria’s (CBN) 65% Lending Deposit Rate (LDR) policy. The company is also ahead of its Tier 1 peers with loan and advances to customers of 4.62 trillion naira over nine months ending September 30, 2022, an increase of 11% from 4.16 trillion. naira as of December 31, 2021. Its customer deposit also tops the league of Tier 1 banks: 8.18 trillion naira compared to 6.95 trillion naira in fiscal year 2021.
The THEWILL survey showed that Zenith Bank came second in loans and advances to customers among tier 1 banks, with 3.88 trillion naira, followed by UBA which recorded 3.1 trillion naira. Customer deposits at Zenith Bank stood at N8.1 trillion while UBA posted N7.1 trillion. FBN Holdings recorded loans and advances of N3.59 trillion and customer deposits of N6.6 trillion.
Proshare analysts said that the banking sectors have seen a significant increase in interest income this year with the high interest rate environment, which has helped boost their profits. The CBN’s practical decision to sanction banks that violated the Cash Reserve Ratio (CRR) policy vis-à-vis the minimum loan portfolio must have forced the DMBs to step up their credit expansion policies. “Deposit banks face the dilemma of meeting regulatory requirements and entering risky environments that could burn their fingers. They have no choice but to lend, though,” said Jonah Kalu, financial analyst.
Commenting on the performance of Access Holdings, the National Coordinator of the Pragmatic Shareholders Association of Nigeria (PSAN), Ms. Bisi Bakare, said the exceptional record in interest income was not a surprise given the expansion program aggressive banking inside and outside Nigeria.
She said: “Access Bank, a leader in interest income, is not really surprising because of its strong tentacles inside and outside Nigeria. Access Bank continues to acquire large and small banks and rapidly expand their operations. »
She said the bank and its Tier-1 league peers played to the delight of their shareholders.
The five Tier 1 banks recorded combined loans and advances of N18.81 trillion in the nine months ended September 30, 2022 compared to N14.54 as of December 31, 2021, an increase of 30%. Their combined customer deposits for nine months ending September 30, 2022 were N33.21 trillion, compared to N30 trillion in FY2021, an increase of 10.6%.
Financial year 2021 data from the five Tier 1 banks shows that they had total assets of N44.07 trillion and combined revenues of N33.63 trillion. They paid a total income tax of N145 billion and employed a total of 34,000 salaried workers. Their combined market capitalization stood at 2.56 trillion naira as of December 31, 2021.