Four Nigerian banks raked in about N275.559 billion from their foreign subsidiaries in 2021 following sustained expansion drive into other African countries, Europe, and Asia.
According to data tracked by Nairametrics, the foreign subsidiaries of these banks which include UBA Plc, GTCO Plc, Access Holdings Plc and Zenith Bank Plc recorded a pre-tax profit of N275.559 billion in 2021 as against N196.184 billion posted in 2020, representing a growth of 40.46%.
Nigerian banks’ cross-border activities started in 2002, with two banks setting up operations in a few countries in Africa, and increased after the 2004 banking sector consolidation in Nigeria. Following the 2004 increase in minimum capital requirements from N2 billion to N25 billion.
United Bank for Africa (UBA) led the way, with more subsidiaries. Although cross-border expansion of Nigerian banks was temporarily halted by the global financial crisis in 2008–09, it picked up after conditions stabilised following intervention in the banking sector and the strengthening of risk management and supervisory frameworks by the Central Bank of Nigeria.
Nairametrics tracks these top banks with foreign subsidiaries with emphasis on the countries they have operations. However, Nairametrics could not track FBN Holding subsidiaries because it did not publish data of its subsidiaries.
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Below is a compilation of profits announced by these foreign subsidiaries during the full year 2021 gathered from the audited financial statements of the banks.
UBA Plc -N113.539 billion
- Data gathered from the banks’ audited financial statements revealed that UBA, with a presence in 20 African countries which include Ghana, Liberia, Kenya, Uganda, Mali, Tanzania, among others, a pension custodian subsidiary and branch in the United Kingdom generated a pre-tax profit of N113.539 billion from its foreign subsidiaries in 2021 as against N77.844 billion in 2020 representing 45.85%.
- The financials for the full year ended December 2021 filed by the bank at the Nigerian Stock Exchange (NSE) showed that gross earnings rose to N660.2 billion, representing an increase of 7% compared to N616.8 billion recorded in the preceding year.
- Total assets grew by 11% to N8.5 trillion in the year under review, up from N7.7 trillion recorded in 2020, marking the first time the bank’s assets would cross the N8 trillion mark.
- Despite the challenging business environment, UBA’s profit before tax (PBT) was impressive with a 20.3% growth to N153.1 billion, compared to N127.3 billion recorded in the comparative period while profit after tax (PAT) rose grew by 8.7% to N118.7 billion.
- Similarly, net loans grew by 7.7% to N2.8 trillion while customer deposits rose by 12.2% to N6.4 trillion, compared to N5.7 trillion in the corresponding period of 2020. This reflects increased customer confidence, enhanced customer experience, successes from the ongoing business transformation programme and deepening of retail banking franchise, a statement by the bank said.
- In the year under consideration, the bank’s operating income rose by 10% to N443 billion compared to N403 billion in the prior year, whereas operating expenses closed the period at N279 billion.
Access Holding Plc-N74.952 billion
Access Holding Plc’s foreign subsidiaries in Ghana, UK. Gambia, South Africa, Rwanda among others tracked by Nairametrics raked in N74 billion from profit before tax for the financial year ended December 2021 as against N36.195 billion in 2020, accounting for a growth of 107%
Access Bank Plc’s gross earnings for the financial year ended December 31, 2021, rose by 27% year on year (y/y) to N971.9 billion in FY 2021, from N764.7 billion posted in FY 2020, with interest and non-interest income contributing 62% and 38% respectively. Profit before tax (PBT) for the period rose by 40% y/y to N176.7 billion from N125.9 billion posted in FY 2020 while Profit after tax (PAT) also grew by 51% y/y to N160.2bn from N106.0bn in FY 2020. The assets base of the Group remained strong and resilient with Total Assets of N11.7 trillion as at December 2021, a growth of 35% y/y from N8.7 trillion as at FY 2020.
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Customer Deposits totalled N7.0 trillion as at December 2021 from N5.6 trillion in 2020. Net Loans and Advances totaled N4.4 trillion as at December 2021 from N3.6 trillion in 2020. Non-Performing loans (NPL) ratio stood at 4.0% as at December 2021 from 4.3% in 2020.
Herbert Wigwe, the Chief Executive Officer said: “Our diversified business model yielded positive sustainable results, guided by a robust risk management framework, as we grew the business cautiously and recorded sound prudential ratios. This year’s results reinforce our resolve to generate sustainable returns despite challenging market conditions.
GTCO Plc-N54.897 billion
- Data gathered from the banks’ audited financial statements revealed that GTCO Plc, with presence in other countries which include Ghana, Liberia, Kenya, Tanzania, UK, among others generated pre-tax profit of N54.897 billion from its foreign subsidiaries in 2021 as against N40.582 billion in 2020 representing 35.27%.
- Guaranty Trust Holding Company Plc (GTCO) audited consolidated and separate financial statements for the year ended December 31, 2021, to the Nigerian Exchange Group (NGX) and London Stock Exchange (LSE), showed improvements in some growth indicators.
- The group’s balance sheet remained well structured and resilient with total assets and shareholders’ funds closing 2021 at N44 trillion and N883.2 billion, respectively.
- Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 23.8%, while asset quality was sustained with a non-performing loan (NPL) ratio of six per cent based on the international financial reporting standard (IFRS) (6.92% based on the Central Bank of Nigeria’s prudential guidelines).
- Also, the cost of risk improved to 0.5% from 1.2% during the period. The group posted a profit before tax (PBT) of N5 billion, representing a dip of 7% from N238.1 billion recorded in December 2020.
- In the same period, the group’s net loan portfolio increased by 8.4% from N66 trillion recorded the preceding year while deposit liabilities grew by 14.4%, from N3.61trillion to N4.13 trillion.
- Speaking on the results, the Group Chief Executive Officer of Guaranty Trust Holding Company, Segun Agbaje, said: “Our performance reflects the strength of our franchise and underscores our ability to deliver long-term value for our stakeholders despite the challenges in the business environment and shifting economic conditions.
- “As a group, we have continued to explore newer ways to connect with our customers and better our communities by offering greater and more rewarding experiences.
Zenith Bank Plc-N32.171 billion
- Zenith Bank Plc’s foreign subsidiaries in Ghana, UK. Gambia and Sierra Leone subsidiaries tracked by Nairametrics earned N32.171 billion from profit before tax for the financial year ended December 2021 as against N41.563 billion in 2020, accounting for a decline of 22.59%
- Zenith Bank Plc announced a 10% growth in gross earnings for the year ended December 31, 2021, recording N765.6 billion up from N696.5 billion reported in the previous year.
- According to the bank’s audited financial results for the 2021 financial year presented to the Nigeria Exchange Group (NGX), the Group achieved a 10% year-on-year (YoY) growth on the back of 23% YoY growth in non-interest income from N251.7 billion to N309 billion and a 2% YoY growth in interest income from N420.8 billion to N427.6 billion.
- Profit before tax also grew by 10% from N255.9 billion to N280.4 billion in the year. The increase, according to the bank, was due to growth in the top-line and very strong management of the treasury portfolio that increased efficiency, resulting in a drop in interest expense by 12% from N121.1 billion in 2020 to N106.8 billion in the current year. This further led to a 7% increase in net interest income of NGN320.8 billion in 2021 from N299.7 billion in 2020.
- The results also show that customer deposits increased by 21%, growing from N5.34 trillion in the previous year to N6.47 trillion in the current year. The growth in customer deposits came from both corporate and retail customers. Retail deposits grew by N146 billion from N1.72 trillion in 2020 to N1.87 trillion in 2021.