Nigeria's Banking Sector Flourishes in the First Half of 2023
Despite facing a challenging economic and regulatory environment, Nigeria's banking sector has demonstrated remarkable resilience and performance in the first half of 2023.
The total profit after tax (PAT) of the top 10 listed banks surged by an astounding 193% year-on-year, skyrocketing from N498 billion in H1 2022 to an impressive N1.4 trillion in H1 2023.
Much of this remarkable profit increase can be attributed to gains reported on foreign exchange balances held by the banks, achieved through various swaps and hedging instruments.
As anticipated, the FUGAZ group, representing Nigeria's five largest banks, contributed a substantial N1.2 trillion in profits, constituting 87% of the total, a notable increase from the 82% recorded in 2022. Additionally, there's a new leader at the top for the first time since 2020.
Here's a breakdown of the top 10 banks' performance:
10. Sterling Bank
- 2022 H1 Profit: N8,013 million
- 2023 H1 Profit: N10,680 million
- Year-over-year Profit Growth: 33.3%
- Retained the 10th position from the previous year.
9. Union Bank of Nigeria (UBN)
- 2022 H1 Profit: N11,711 million
- 2023 H1 Profit: N12,633 million
- Year-over-year Profit Growth: 7.9%
- The bank is undergoing a transition with new ownership.
8. FCMB (First City Monument Bank)
- 2022 H1 Profit: N13,663 million
- 2023 H1 Profit: N35,410 million
- Year-over-year Profit Growth: 159.4%
- Maintained the 8th position from the previous year.
7. Fidelity Bank
- 2022 H1 Profit: N23,307 million
- 2023 H1 Profit: N61,995 million
- Year-over-year Profit Growth: 165.9%
- Held the 7th position from the previous year.
6. Stanbic IBTC
- 2022 H1 Profit: N30,669 million
- 2023 H1 Profit: N67,919 million
- Year-over-year Profit Growth: 121.5%
- Maintained the 6th position.
5. FBNH (FBN Holdings)
- 2022 H1 Profit: N56,602 million
- 2023 H1 Profit: N187,237 million
- Year-over-year Profit Growth: 230.7%
- Held the 5th position, as in the previous year.
4. Access Holdings
- 2022 H1 Profit: N95,486 million
- 2023 H1 Profit: N135,439 million
- Year-over-year Profit Growth: 41.8%
- Dropped two positions from the previous year.
3. GTCO (Guaranty Trust Holdings)
- 2022 H1 Profit: N77,557 million
- 2023 H1 Profit: N280,482 million
- Year-over-year Profit Growth: 261.6%
- Maintained the 3rd position.
2. Zenith Bank
- 2022 H1 Profit: N111,413 million
- 2023 H1 Profit: N291,731 million
- Year-over-year Profit Growth: 161.8%
- Dropped to 2nd position for the first time since 2020.
1. UBA (United Bank for Africa)
- 2022 H1 Profit: N70,334 million
- 2023 H1 Profit: N378,235 million
- Year-over-year Profit Growth: 437.7%
- Tops the chart for the first time with extraordinary profit growth.
UBA not only leads in absolute profits but also in profitability growth. The bank also stands out for its net trading income, raking in over N427 billion in the second half of the year, surpassing its competitors by a significant margin.
The outlook for the banking sector remains positive for the rest of the year. Banks are leveraging their robust capital base, innovative products and services, changes in forex policy, and effective risk management frameworks to create value for shareholders and customers.
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