Amid macroeconomic challenges, Guaranty Trust Holding Company Plc (GTCO) and 11 other financial institutions listed on the Nigerian Exchange Limited (NGX) generated an estimated N3.81 trillion profit before tax (PBT) in the half year ended June 2024. This represents a 108.2 per cent increase from the N1.83 trillion PBT generated by these 12 financial institutions in H1 2023.

In the period under review, financial institutions operating in Nigeria, and Sub-Saharan African countries were faced with inflationary pressure, and sustained hikes in monetary policy parameters that drained liquidity in the banking system, among other challenges.

However, in the period under review, five banks, including GTCO, Access Holdings Plc, Zenith Bank Plc, Stanbic IBTC Holdings Plc, and Fidelity Bank Plc were the only financial institutions that declared interim dividend payout to shareholders.

The five financial institutions declared N198.35 billion as interim dividends for the half year ended June 30, 2024, about a 131.67 per cent increase from the N85.6 billion declared in the half year ended June 30, 2023.FBN Holdings Plc, Ecobank, Wema Bank Plc, FCMB Group Plc, Sterling Financial Holdings Company Plc, and Jaiz Bank were the financial institutions that did not declare an interim dividend for H1 2024.

THISDAY gathered that GTCO, during the period under review, generated the highest profit before tax, followed by Zenith Bank, Ecobank, and FBN Holdings.

GTCO reported N1.003 trillion profit before tax in H1 2024, about 207 per cent increase from the N327.4 billion it declared in H1 2023, to emerge as the first financial institution to cross the N1 trillion mark in profit generation.

The Group Chief Executive Officer, GTCO, Segun Agbaje, in a statement, said: “We are immensely proud of the progress we have made as a leading financial holding company.

“Despite the uncertainties in the operating environment, our performance in the first half of the year, where we recorded our highest profit to date, is a testament to the resilience and adaptability of our business model.

“We remain optimistic about the future and are committed to leveraging our unique strengths as a thriving financial services ecosystem to create sustainable value for all our stakeholders as we continue to position all our business verticals–Banking, Funds Management, Pension, and Payments–for rapid growth across key markets,” he explained.

While the Zenith Bank reported N727.03 billion PBT in H1 2024, representing a 108 per cent increase from the N350.36 billion the bank reported in H1 2023, Ecobank declared N443.5 billion PBT in H1 2024, representing about 195 per cent increase over the N150.3billion it reported in H1 2023.CEO of Ecobank Group, Jeremy Awori in a statement said: “Our half-year results demonstrate the strength of our diversified business model. Despite facing macroeconomic challenges in some of our operating markets, the company increased its net revenues to $994 million and its profit before tax by five per cent to $324 million.

“Our transformation agenda remains our top priority, with a focus on improving customer experience and driving efficiency and productivity. Despite persistent inflation, we achieved an efficiency ratio of 53.6 per cent.

“We continue to right-size our risk-weighted assets, and our deposits franchise remains strong. Customer deposits rose 13per cent in constant currency to $19 billion, with current and savings accounts (CASA) comprising 81per cent of total deposits. With a loans-to-deposit ratio of 54per cent, we have room to take advantage of credit opportunities that meet our risk appetite if required,” Awori said.According to Awori, the bank’s sole focus remains on enhancing the customer experience and meeting their financial needs.

On its part, FBN Holdings posted N411.99 PBT in H1 2024, an increase of 100.9 per cent from the N205.05 billion reported in H1 2023.Commenting, the Group Managing Director, FBN Holdings, Nnamdi Okonkwo in a statement said: “FBNHoldings has again delivered a strong set of financial results despite the complex macroeconomic and operating environment.

“Our Group’s strong performance over the period is underpinned by our robust institutional capabilities, effective risk management practices, and solid business momentum, and it is a testament to the resilience of our institution.

“Notably, gross earnings and profit before tax grew 118.8 per cent y-o-y and a 100.9 per cent y-o-y to N1,402.5 billion and N412 billion respectively for the first half of the financial year, showing a continuous growth trajectory. These results reflect our ongoing commitment to further improving profitability, enhancing performance, and delivering sustainable value to our stakeholders.

“Despite the macro-economic headwinds, we remain resolute and confident of successfully navigating the terrain towards surpassing stakeholders’ expectations.”

During the period under review, UBA reported N411.99 billion PBT in H1 2024, representing about 0.5 per cent decline from the N403.6 billion in H1 2023, while Access Bank announced N348.9 billion PBT in H1 2024, a growth of 108.2 per cent from the N167.6 billion reported in H1 2023.Fidelity Bank closed the period at N200.87 billion PBT, a significant increase of 163 per cent from the N76.33 billion declared in the corresponding period of 2023, just as Stanbic IBTC Holdings posted N147 billion PBT in H1 2024, about 77 per cent increase from the N82.99billion reported in H1 2023.Furthermore, FCMB Group declared N64.21 billion PBT in H1 2024, about a 68 per cent increase from the N38.23 billion in H1 2023.Similarly, Wema Bank announced N30.57 billion PBT in H1 2024, a growth of 153.47 per cent from the N12.06 billion reported in H1 2023.

Sterling Financial Holdings Company generated N17.35billion PBT in H1 2024, representing a 51 per cent increase from N11.46 billion in H1 2023, just as Jaiz Bank, in H1 2024, announced N11.56 billion PBT, an increase of 194.27 per cent from N3.93 billion reported in H1 2023.Commenting on financial institutions’ performance in H1 2024, Vice President, Highcap Securities Limited, David Adnori attributed the banks’ financial performance to the devaluation of the naira.

He highlighted that most banks have international affiliations, with a significant portion of their assets denominated in dollars, adding that the devaluation led to a substantial increase in their profits.“In the history of banking, hardly any bank has ever declared PBT of up to N400 billion in a half-year period. However, due to the devaluation and the transition from a pegged exchange rate to a freely floating one, banks have experienced a significant spike in their declared profits in the first half of 2024,” he said.

He added that a substantial portion of the increased profitability of these banks was attributed to non-interest income.

The devaluation has affected fees, commissions, off-balance sheet transactions, and other non-interest income sources, which now contribute significantly to the banks’ higher profits, he said.

Investment Banker & Stockbroker, Tajudeen Olayinka said a significant portion of the banks’ recent profit gains came from revaluation gains on their net long US dollar income positions.

Thisday