I know its 5 months into the financial year which some may consider late for figuring out which bank was the most profitable. However, as some banks didn’t get to publish their Annual Report till after the first quarter of the year, one may consider this review still on time. Back to the gist.
One of the benefits of the uniform reporting system for Nigerian Banks is that it is now easier to compare the performance of one bank against another in numerous ways. It is now easy to compare deposits, income, expenses, staff strength, profit taxes etc. Just about any factor that differentiate one bank from the other. As you may well know, this guides investment decisions especially as every banks seeks to position itself as a financial power house. One of such metrics off course is profitability and as mentioned GTB came up tops.
Its pretty easy to deduce from the above that GTB’s results in terms of profitability was driven by very efficient cost management. This has resulted in them beating their peers despite trailing the likes of First Banks and Zenith Bank in terms of Revenue. The strong earnings is reflected in their earnings per share which was higher than the other four.
| GTB | Zenith Bank | Access Bank | First Bank | UBA Group | |
| EARNINGS PER SHARE | N 1.70 | N 1.41 | N 0.88 | N 1.37 | |
| RETRUN ON EQUITY | 23.7% | 12.2% | 9.0% | 13.2% | |
| PAT | 49,887 | 44,189 | 15,829 | 44,785 | (10,474) |
GTB also topped the others on returns on equity as the bank posted a very impressive ROE of 23.7%. This is almost double their closest rivals First Bank and Zenith Bank respectively. It is important to note that in addition to high operating cost, significant write offs by Zenith, First Bank and off course UBA contributed to their dismal returns on shareholders equity when compared to GTB. The downside however, in all of this is that GTB despite its position as a major brand has not been able to leverage on that to attract more revenue trailing mostly behind the likes of Zenith in First Banks by 56m and over 100m respectively. It must also be noted that GTB is a bank that has grown organically sticking to models that do not necessarily ensure aggressive returns but rather consistent growth margins that is well within their ability. They have grown Net Operating Income by over 112% cumulatively over the last 5 years or so. If you are looking to invest in a sound Nigerian Bank with consistent earning growth then this may well be the bank for you. This off course is based on historicals which may seem as wide off the mark as it may be on point depending on which way the new management swings.
