POLARIS Declares N28bn PAT in 2020 Audited Results

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Monday, April 26, 2021 / 04:02 PM / Polaris Bank Ltd / Header Image Credit: Polaris Bank Ltd 


Polaris Bank Ltd released its 2020 Audited results for the period ended December 31st, 2020.


 Key Highlights

  • Interest Income declined by -18% to N108bn from N132bn in the previous quarter.

  • Profit before tax declined by -19% to N22bn.

  • Profit after tax grew by 7% to N28bn.

  • Net Assets grew by 15% from N87bn to N100bn.


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Polaris Bank Sustains Profit Growth with N28.9bn (PBT) in 2020 financial Year

 

  • Records 4% increase in Profit Before Tax (PBT) Year-on-Year despite challenging business environment
  • ...Assets hit N1.2tr and ROA of 2.4%
  • Performance, indicates management depth and sustainability

Polaris Bank Limited has released its full-year audited financial results for the year ended December 2020 posting a Profit Before Tax (PBT) of N28.9billion. The results which show the Bank's second year performance scorecard after two years of operation, have further consolidated the Bank's position as focused on the path of profitability, growth, and value creation.

 

Details of the results show that its year 2020 performance reflects a 4% Year on Year (YoY) increase in Profit before Tax (PBT). The performance according to the financial statements is driven by the combination of the significant reduction in interest expense due to the Bank's pursuit of low interest-bearing deposits as well as lowering impairment charges on loans and other financial assets. The Bank recorded Return on Asset (ROA) and Return on Equity (ROE) of 2.4% and 29.4% respectively which favorably place the Bank as a key player in the industry. The Bank's Total Assets stood at N1.18trillion, a 3% growth on the previous year while Shareholders Funds grew by N14billion (17%), largely attributable to internally generated profits. The Bank increased its Customer Deposits by N56billion, predominantly low-cost deposits in spite of difficult economic and industry conditions, and increased its gross loan book by N38biilion reflecting the Bank's modest and prudent risk strategy to grow its Portfolio of Quality loans for optimal interest income generation. 

 

Commenting on the Bank's performance, the Managing Director/Chief Executive Officer (MD/CEO) of Polaris Bank Limited, Mr. Innocent C. Ike who took over in the course of the year from Mr. (now Senator) Tokunbo Abiru explained that "Polaris Bank has achieved significant milestones since its inception in September 21, 2018 when we started this journey. We have since grown to earn the confidence of the banking publics, offering quality banking services at the cutting edge of technology". Continuing, he noted, "2020 was arguably the most challenging year that the world has faced in decades owing to the negative impact of COVID-19 on businesses and the economy. Yet, the current result demonstrates the importance of the deployment of appropriate strategies, and effectively validates our recent investment in technology solutions and digitization of our products and processes," he added.

 

He explained that the Bank's subsisting three-year Corporate Transformation Plan has recently been reviewed in line with the changing operating environment and trend dynamism for sustainable value creation. Digital transformation remains one of the potent strategies to strengthen the Bank's balance sheet, control costs, and improve processes while providing clients with wider self-service offerings.

 

 

 

Financial Highlights:

 

Income Statement "in millions"                                              

 

Statement of Comprehensive Income

FY 2020

FY 2019

% CHANGE

Gross Earnings

129,306

150,848

-14%

Interest Income

108,501

133,611

-19%

Interest Expense

    (23,132)

    (45,814)

-50%

Net Interest Income

85,369

87,797

-3%

Other Income

14,945

13,970

7%

Operating Income

100,314

101,767

-1%

Operating Expense

   (62,044)

   (59,812)

4%

Impairment Charge

      (9,399)

    (14,126)

-33%

Profit/ (Loss) Before Tax

28,871

27,829

4%

Tax

        (336)

        (479)

-30%

Profit/ (Loss) After Tax

28,535

27,350

4%

 

 

Statement of Financial Position

STATEMENT OF FINANCIAL POSITION

 

₦' Million

FY 2020

FY 2019

% Change

Total Assets

1,181,167

1,143,266

3%

Net Loans and advances to customers  

204,784

188,740

9%

Investment securities

335,196

576,520

-42%

Deposits from customers

914,323

857,890

7%

Equity

96,899

82,990

17%

 

 

                                     

Appendix A

 

‘In Million

STATEMENT OF FINANCIAL POSITION

FY 2020

FY 2019

Cash and balances with central bank

52,995

26,484

Due from banks and other financial Institutions

57,812

62,076

Financial assets at fair value through profit or loss

43,087

1,264

Loans and advances to customers

204,784

188,738

Investment securities:

335,196

576,517

Prepayment and Other assets

220,056

48,046

Other loans and receivables

210,677

182,594

Right of Use Assets

1,740

3,637

Property, plant and equipment

50,893

51,623

Intangible assets

2,271

180

Assets classified as held for sale

1,656

2,107

TOTAL ASSETS

1,181,167

1,143,266

LIABILITIES

 

 

Due to other financial institutions

0

0

Deposits from customers

914,323

857,885

Lease liabilities

1,335

2,645

Borrowings from Local and Foreign Institution

89,398

100,920

Current income tax payable

597

819

Accruals and Other liabilities

78,615

97,997

Retirement benefit obligation

0

11

TOTAL LIABILITIES

1,084,268

1,060,277

EQUITY

 

 

Share capital

25,000

25,000

Share premium

873,450

873,450

Retained earnings

10,040

4,395

Reorganisation reserve

(848,017)

(848,017)

Other Reserves

36,426

28,161

 

96,899

82,989

TOTAL EQUITY

96,899

82,989

TOTAL LIABILITIES AND EQUITY

1,181,167

1,143,266

 

 

Appendix B

"in Million Naira

FY 2020

FY 2019

Gross Earnings

129,306

150,848

Interest Income on amortized cost financial assets

107,995

131,650

Interest Income on fair value through profit/loss

506

1,961

Interest expense

(23,132)

(45,814)

Net Interest Income

85,369

87,797

Impairment loss on loans and other financial assets

(9,399)

(14,126)

 

75,970

73,671

Net Fee and commission income

5,635

8,536

Net Trading and Foreign Exchange Income

(443)

950

Other operating income

9,753

4,484

Net Operating Income

90,915

87,641

 

 

 

Employee benefit costs

(27,853)

(26,428)

Administration and general expenses

(28,475)

(28,863)

Depreciation and amortisation

(5,716)

(4,521)

Profit before income tax

28,871

27,829

Income tax expense

(336)

(479)

PROFIT FOR THE PERIOD

28,535

27,350

 

 

Appendix C

Ratios in %

FY 2020

FY 2019

% CHANGE

Return on Equity

29.4

33

-11%

Return on Assets

2.4

2.4

0%

Loan to Deposit

55.5

49

13%

Liquidity

45

81

-44%

Capital Adequacy

15.9

13.8

15%

Cost to Income

62

59

5%

Net Interest Margin

9.6

9.8

-2%

Cost of Funds-Deposits

2.5

4.7

-47%

 

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