The banking sector is a leading player in Nigeria's economy, and has stayed resilient in the face of several challenges.
This, coupled with the fact that they are currently among Africa's cheapest stocks has magneted investor interest in Nigerian banks. To this end, the public information of listed banks on the Nigerian Exchange were tracked to find the best performers.
The half-year 2021 results of the following banks were understudied: Access Bank, First Bank of Nigeria, FCMB, Fidelity Bank, Guaranty Trust Bank, Jaiz Bank, Stanbic, Sterling Bank, Union Bank, UBA, Wema Bank and Zenith Bank. Ecobank was not considered in this analysis as the bank operates efficiently in other markets besides Nigeria.
The metrics considered in this article are Total Assets, Net Assets, Total Deposits, Profit After Tax, Return on Equity, and Return on Total Assets.
An analysis of the combined assets of the 12 listed banks that have released their half-year results (Ecobank excluded) revealed that the total assets increased by 6.37% from N49.49 trillion recorded as of December 2020 to N52.65 trillion in the review period.
The increase indicates a stronger financial position of the banks. Among the 12 banks listed, the following are the leading banks in descending order
Also, all top 5 banks maintained their positions as the banks with the highest total asset as of the first half of the year. Among these banks, Access Bank had the highest growth of 15.63%% in the first half of the year when compared to their full-year 2020 report.
The net asset is the remainder when all liabilities have been subtracted from the bank’s total asset. It indicates the shareholders’ funds in the banks. Due to the depository nature of commercial banks and the ability of banks to greatly increase their liabilities, the metric is adopted by the CBN in assessing the banking sector’s ability to withstand credit losses.
The combined net asset of all 12 analyzed banks stood at N5.55 trillion with Zenith Bank accounting for 20.6% of the total basket.
The leading banks based on net assets are:
All the banks had significant increases in their net asset in the first half of the year. UBA, however, recorded the highest increase of 3.9% in the period under review.
Customer deposits remain one of the most competitive items in the banking sector. This is because deposits are used to give loans to make profit and make other investments.
The total customer deposits stood at N33.9 trillion, in the first half of the year. The bank leading the charge is UBA which accounts for 18% of the total share.
The leading banks based on Customer Deposits are:
All banks maintained their position when compared to the full year 2020 results. A cursory look at the data shows that Stanbic IBTC recorded the highest increase during the period from N819.9 billion as of December 2020 to N958.37 billion as of June 2021.
Due to the increased capacity seen in the growth of total assets of the banks, the banks delivered a PAT of N441.8 billion. This is 4.1% higher than the aggregate of N424.58 billion recorded in the corresponding period of 2020.
Banks that declared the most profits are:
Zenith Bank accounted for 24.02% of the total PAT generated by the 12 banks. When compared to the full year 2020 results, we have Access Bank displacing GT Bank and UBA for 2nd place as it moved up 2 spots. First Bank also took 5th spot from Stanbic, which generated a PAT of N22.5 billion in the first half of the year.
The return on equity is an important metric that shows the percentage of profit made on every N1 of the shareholders’ fund. It is used to measure the performance and efficiency of the banks.
This metric will show how well banks have maximized any increase in shareholders’ wealth.
The leading banks based on ROE are:
Although this covers half-year performance, compared to the full year of 2020, JAIZBANK leaped 3 positions to take the first spot with 11.47% from GT Bank. Access Bank made an aggressive entry into the list while Stanbic did not make the top 5 like it did in the full year 2020. UBA maintained its 5th position.
This is a measure of a bank's ability to sweat its assets and deliver the highest possible profits. While banks recorded a significant increase in their assets, however, the ROA was lower. The ROA is a better measure of efficiency since it takes into cognition the bank’s usage of customers’ deposits.
Best banks based on ROA are:
Compared to the full year 2020, GT Bank and Jaiz Bank maintained their position. However, ACCESS bank just like in the ROE made an aggressive entry into this list, taking the 3rd spot. Meanwhile, Zenith Bank pushed up to second place from third. Notable decline comes from Stanbic, which dropped 2 spots from second to fourth.
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