Fakoyejo OlalekanBetween January to December 2022, the Nigerian banking industry post double-digit growth of 26.92 per cent year-on-year, with the sector generating a combined N5.43 trillion in total revenue from 11 commercial banks.
In the banking industry, there are 13 publicly listed commercial banks, but as of the time of filing this report, First Bank of Nigeria (FBN) Holdings was yet to release its Annual Financial Statements for 2022 and the United Bank for Africa (UBA) didn’t disclose its Gross earnings for the review period.
Regardless, the 11 financials reviewed by Prime Business Africa showed that the banking sector’s balance sheet remains healthy, as the sector squeezed out 26.31 per cent growth in gross earnings last year, to exceed the N4.28 trillion posted in 2021.
The financials reviewed similar height was attained in the Net Interest Income of the banking sector, with the analysis pointing at a 21 per cent increase, as Net Interest Income hovered above N2.39 trillion in 2022, to best the N1.97 trillion they pocket the preceding year.
The growth in the aforementioned supports the statement by the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, that the financial industry in Nigeria is not burdened by the insolvency fears in the United States and European countries.
Emefiele’s assurance was proven by the banks through the industry’s bottom line which grew 11.43 per cent year-on-year, reeling out N1.10 trillion Profit after tax, in contrast to the N988.96 billion net profit the banks pulled the previous year.
Best five performing banks in Nigeria
Amid this impressive earnings result, Prime Business Africa pinpointed the creditors that had the best contribution to the industry’s performance through the growth of each bank’s Net Interest Income.
- Net Interest Income is the balance from the subtraction of interest payments from earnings on lending activities. A bank earns revenue from interest-bearing assets such as commercial and personal loans and investments in securities, amongst others, but pays interest on deposits – the difference is Net Interest Income.
- The outcome of this ranking is the result of the review of 11 financial statements of Zenith Bank, Ecobank, Unity Bank, Guaranty Trust Holding Company (GTCO), Stanbic IBTC, Sterling Bank, Union Bank of Nigeria (UBN), Fidelity Bank, First City Monument Bank (FCMB), UBA and Wema Bank.
The best-performing banks were ranked based on their Net Interest Income growth.
Fidelity Bank – (+)60.94%
Last year closed with Fidelity Bank being the best-performing commercial bank in Nigeria, after the firm’s Net Interest Income grew by N57.81 billion or 61 per cent year-on-year, according to Prime Business Africa analysis.
- Fidelity Bank ends 2022 with N152.69 billion Net Interest Income. This is a significant improvement when compared to the N94.87 billion the lender reported during the corresponding period in 2021.
- The company also grew its Gross earnings by 34.40 per cent, after generating N337.05 billion in 2022. The total turnover for last year surpassed the N250.77 billion Fidelity Bank netted during the same period a year before.
- At the end of 2022, Fidelity Bank posted N46.72 billion Profit after tax, which is an increase of 102.34 per cent, considering the financial institution closed 2021 with N23.10 billion net profit.
Stanbic IBTC – (+)50.08%
Stanbic IBTC grabbed the second spot with a 50.08 per cent increase in its Net Interest Income that closed 2022 with N113.11 billion, well above the N75.37 billion the creditor reported the year before.
- Similarly, Stanbic IBTC also reported that the company’s Gross earnings between January to December is N287.53 billion, against the N206.64 billion the firm posted for the financial year of 2021. This is 39.15 per cent year-on-year growth.
- In the same vein, the financial institution saw 41.86 per cent growth in its bottom line, as Net profit for the 12 months period of 2022 is N80.81 billion, in contrast to the N56.96 billion Stanbic IBTC posted as Profit after tax in 2021.
Wema Bank – (+)36%
The third best-performing commercial bank in 2022 is Wema Bank, considering the firm recorded a 36 per cent rise in its Net Interest Income to end last year with N54.22 billion, against the N39.87 billion posted in 2021.
- This performance lifted Wema Bank’s Gross earnings for the period in review, with the creditor reporting N132.30 billion, which outperformed the N94.63 billion posted in 2021 by 41.30 per cent.
- Furthermore, Wema Bank generated N11.35 billion in Profit after tax last year, recording 27.17 per cent year-on-year growth, as the lender had closed the year before with N8.92 billion.
FCMB – (+)34.19%
FCMB made it into the fourth spot on the list after the company’s Net Interest Income jumped 34.19 per cent to N121.99 billion in 2022, up from the N90.91 billion posted during the corresponding period in 2021.
- This was on the back of FCMB’s Gross earnings recording 33.47 per cent growth in the review period, rising from N212.01 billion generated in 2021 to N282.98 billion in 2022.
- FCMB capped 2022 performance with N31.12 billion Profit after tax. This is N10.21 billion more or 48.82 per cent growth when compared to the N20.91 billion net profit reported for the year before.
Union Bank – (+)34.01%
Union Bank completed the top five best-performing commercial banks in 2022, ranking closely behind FCMB after its Net Interest Income grew by 34.01 per cent. Union Bank’s Net Interest Income for 2022 was put at N59.59 billion, indicating the firm surpassed the N44.46 billion posted the year before.
- Also, Union Bank saw a 17.97 per cent year-on-year increase in its Gross earnings, which ended last year’s operation with N209.12 billion, above the N177.26 billion the lender recorded in 2021.
- In the bottom line, Union Bank recorded 131.62 per cent growth, considering its net profit for 2022 is N39.18 billion, topping the N16.91 billion posted in the preceding year.
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