Bank NPLs (6) - Technical Analysis on Banks' NPLs - Gross Earnings

Proshare

Thursday, May 21, 2020/  07:00 AM / by Debtors Africa/ Header Image Credit:  EcoGraphics

 

Proshare Nigeria Pvt. Ltd.


This section evaluates the performance of banks during the period under review. A thorough analysis was done on DMB's gross earnings, profitability, leverage, liquidity, LDR, NPL's and its impact on each banks profitability and credit growth rate. The periods under review was divided into two periods which connotes the reign of different Central Bank Governors;       

 

Gross Earning 

A.1 Access Bank Gross Earnings 2009-2014

Chart 6: Access Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Access Bank, Proshare Research


Access Bank had an upward trending gross earnings from 2009 to 2014. Access Bank highest gross earnings between 2009 and 2014 was N245.22bn recorded in Q4 2014, while its lowest gross earnings of N49.4bn was recorded in Q2 2010, this could be attributed to slow take-off of economic activities in the year.

 

The highest percentage increase in gross earnings of +18.53%, was recorded in Q4 2014 while its lowest percentage increase in gross earnings of +0.19% was recorded Q4 2013, this was as a result of regulatory policies rolled out by the CBN in the period which constrained profits and reduced returns on earnings (see Chart 6)


A.1.1 Access Bank Gross Earnings 2015-2019

Chart 7: Access Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Access Bank, Proshare Research


Access Bank's gross earnings grew by +26.09% in Q4 2019, as its gross earnings increased from N528.75bn in Q4 2018 to N666.7bn in Q4 2019.

 

Access Bank had an upward trending gross earnings between 2015 and 2019. Access Bank's highest gross earnings between 2015 and 2019 was N666.7bn recorded in Q4 2019 while its lowest gross earnings of N80.27bn was recorded in Q1 2016.

 

Access Bank recorded its highest percentage increase in gross earnings of +26.09% in Q4 2019. The percentage increase was driven by mainly by increase in interest income and non-interest income. Interest income drivers include investment securities portfolio and loans and advances to customers. While its lowest percentage increase of +13.12% in gross earnings was recorded in Q4 2016. The low percentage increase was as a result of contraction in the Nigerian economy, low oil prices and depreciation of the Nigerian currency during the period which affected the performance of the bank leading to increased lending rates, increase in operating cost due to inflationary landscape, asset deterioration and access to foreign currency became difficult stifling business productivity (see Chart 7).


A.2 UBA Gross Earnings 2009-2014

Chart 8: UBA Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Access Bank, Proshare Research


UBA's gross earnings was upward trending between 2009 and 2014. UBA highest gross earnings between 2009 and 2014 was N290bn recorded in Q4 2014, while its lowest gross earnings of N49.4bn was recorded in Q2 2010.

 

UBA recorded its highest percentage increase in gross earnings of +18.53% in Q4 2014. Despite the macroeconomic challenges faced by the subsidiaries of the Group, like the plunge in oil prices and tightening of the monetary policies, the Group had the highest gross earning within the period of 2009-2014 in Q4 2014. The increase was driven by strong trading gains and increase in credit related transactions like the e-banking and remittances, improvement in subsidiaries contribution to the group's gross earnings.

 

While the lowest percentage increase of +0.19% in gross earnings was recorded in Q4 2013. This was as a result of macroeconomic challenges, increase in CRR on public sector deposits and cashless policy.

 

UBA recorded a fall in its gross earnings by -28.03% in Q4 2010. The decline in gross earnings could be attributed to macroeconomic challenges faced by the banking industry. Increase in MPR, excess liquidity in the system causing a decline in overnight rates and increase in CRR are possible reasons for the decline in its gross earnings in Q4 2010 (see Chart 8).


A.2.1 UBA Gross Earnings 2015-2019

Chart 9: UBA Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.


UBA's gross earnings grew by +13% in Q4 2019, as its gross earnings increased from N494.65bn in Q4 2018 to N559.81bn in Q4 2019.

 

UBA's gross earnings between 2015 and 2019 was upward trending. UBA's highest gross earnings between 2015 and 2019 was N559.8bn recorded in Q4 2019, while its lowest gross earnings of N74.13bn was recorded in Q1 2016.

 

In Q4 2016, it recorded its highest percentage increase in gross earnings of +21.86% despite the macroeconomic challenges faced during the period. For instance, monetary policies remained tight to control exchange rate and inflationary pressures. The percentage increase in gross earnings was driven on the back of increased penetration of digital banking offerings, increase in transaction volumes and increased foreign operations contributions to the Group (see Chart 9).

 

A.3 Zenith Bank Gross Earnings 2009-2014

Chart 10: Zenith Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Zenith Bank, Proshare Research

 

Zenith Bank gross earnings was upward trending between 2009 and 2014.  In Q4 2014, the bank recorded its highest gross earnings of N402.3bn while it recorded its lowest gross earnings of N54.2bn in Q1 2011.

 

It recorded its highest percentage increase of 26.73% in Q4 2011 this was largely due increase in deposits, increase in corporate and retail earnings, increase in interest income and non-interest income, cost curtailing strategies were also adapted by the bank.

 

Its highest decline in gross earnings of -30.58% in Q4 2010 this was as a result of a decline in interest income which was due to low money market rates which happened throughout the major part of the year (see Chart 10).


A.3.1 Zenith Bank Gross Earnings 2015-2019

Chart 11:  Zenith Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Zenith Bank, Proshare Research


Proshare Nigeria Pvt. Ltd.


 Zenith Bank's gross earnings grew by +5.06% in Q4 2019. Its gross earnings increased from N630.34bn in Q4 2018 to N662.25bn in Q4 2019

 

Zenith Bank's gross earnings was upward trending between 2015 and 2019. Its highest gross earnings of N745.2bn was recorded in Q4 2017 while its lowest gross earnings of N99.44bn was recorded in Q1 2016.

 

The highest percentage increase in its gross earnings of +46.69% was recorded in Q4 2017 this was largely due to increase in interest income and non-interest income, the growth in interest income and non-interest income is due to increase in income from investment in government securities.

 

It recorded its highest percentage decline in its gross earnings of -15.41% in Q4 2018 this was largely due to a decline in interest income, the decline interest income was driven by a decline in trading income and a reduction in the loan book (see Chart 11).

 

A.4 ETI Gross Earnings 2009-2014

Chart 12:  ETI Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Zenith Bank, Proshare Research


ETI had an upward trending gross earnings between 2009 and 2014. Its highest gross earnings of N489.25bn was recorded in Q4 2014 while it recorded its lowest gross earnings of N35.83bn in Q1 2011.

 

ETI highest percentage increase in gross earnings of +91.89% was recorded in Q4 2012. The merger between Ecobank and oceanic bank in Nigeria and Ecobank Ghana and The Trust Bank (TTB) reflected positively in the financial position of the Group. Also, its expansive and unique delivery network also yielded good results in its financial position.


Its lowest percentage increase in gross earnings of +14.88% was recorded in Q4 2013. During this period the group faced macroeconomic challenges and also decided to take a conservative decision to take a one-off US$ 165 million provision against certain legacy non-performing assets in Nigeria, this decision taken impacted the Group's financial position (see Chart 12). 

 

A.4.1 ETI Gross Earnings 2015-2019

Chart 13: ETI Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Zenith Bank, Proshare Research


ETI's gross earnings grew by +8.94% in Q4 2019. Its gross earnings increased from N773.3bn in Q4 2018 to N842.5bn 2018.

 

ETI had an upward trending gross earnings between 2015 and 2019. Its highest gross earnings of N842.1bn was recorded in Q4 2019 while it recorded its lowest gross earnings of N131.38bn in Q1 2016.

 

Its highest percentage increase in gross earnings of +22.53% was recorded in Q4 2016. Despite macroeconomic challenges faced by the domestic economy, Francophone West Africa and Anglophone West African regions contributed over 40% revenue to the Group, there was also growth in impairment income which reflected positive to the gross earnings of the Group

 

ETI recorded its lowest percentage increase in gross earnings of +1.27% in Q4 2018.  External headwinds, such as global macroeconomic challenges, US tightening policy and trade protectionism coupled with the slow recovery of the domestic economy all had effect on the gross earnings of the Group (see Chart 13). 

 

A.5 Unity Bank Gross Earnings 2009-2014

Chart 14:  Unity Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Unity Bank, Proshare Research

 

Unity Bank highest gross earnings of N63.49bn was recorded in Q4 2010 while its lowest gross earnings of N14.71bn was recorded in Q1 2013 (see Chart 14).

 

A.5.1 Unity Bank Gross Earnings 2015-2019

Chart 15:  Unity Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Unity Bank, Proshare Research


Unity Bank highest gross earnings of N65.03bn was recorded in Q3 2017 while its lowest gross earnings of N8.79bn was recorded in Q1 2018 (see Chart 15). 

 

A.6 Wema Bank Gross Earnings 2009-2014

Chart 16:  Wema Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Wema Bank, Proshare Research

 

Wema Bank recorded its highest gross earnings of N21.8bn in Q4 2010 while it recorded its lowest profit of N6.6bn in Q1 2012 (see Chart 16).

 

A.6.1 Wema Bank Gross Earnings 2015-2019

Chart 17:  Wema Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Wema Bank, Proshare Research

 

Wema Bank Gross earnings grew by +32% in Q4 2019. Its gross earnings increased from N94.9bn in Q4 2019 from N71.5bn in Q4 2018.

 

Wema Bank recorded its highest gross earnings of N94.90bn in Q4 2019 while it recorded its lowest gross earnings of N15.28bn in Q1 2017. During the period the highest percentage increase in gross earnings of +32.66% was recorded in Q4 2019 while the lowest percentage increase in gross earnings of +9.59% was recorded in Q4 2018 (see Chart 17).

 

A.7 UBN Gross Earnings 2009-2014

Chart 18: UBN Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, UBN, Proshare Research

 

UBN recorded its highest gross earnings of N135.9bn in Q4 2014 while it recorded its lowest gross earnings of N26.03bn in Q1 2014. UBN recorded both percentage increase and decline in its gross earnings during the period under review.

 

UBN recorded its highest percentage increase in gross earnings of +39.68% in Q4 2012 while it recorded its highest percentage decline in its gross earnings of -38.08% in Q4 2011 (see Chart 18).

 

A.7.1 UBN Gross Earnings 2015-2019

Chart 19: UBN Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, UBN, Proshare Research

 

UBN gross earnings grew by +14.45% in Q4 2019. Its gross earnings increased to N166.55bn in Q4 2019 from N145.52bn in Q4 2018.

 

UBN recorded its highest gross earnings of N166.54bn in Q4 2019, while it recorded its lowest gross earnings of N27.28bn in Q1 2016. UBN recorded both percentage increase and decline in gross earnings during the year under review.

 

It recorded its highest percentage increase in gross earnings of +29.43% in Q4 2017. While it recorded its highest percentage decline in gross earnings of -11.19% in Q4 2018 (see Chart 19).

 

A.8 FCMB Gross Earnings 2009-2014

Chart 20: FCMB Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, FCMB, Proshare Research


FCMB recorded its highest gross earnings of N148.64bn in Q4 2014 while it recorded its lowest gross earnings of N14.44bn in Q1 2010. FCMB recorded both percentage increase and decrease in gross earnings during the period under review.

 

FCMB recorded its highest percentage increase in gross earnings of +45.32% in Q4 2012. While it recorded a decline in its profit by -13.79% in Q4 2010 (see Chart 20).

 

A.8.1 FCMB Gross Earnings 2015-2019

Chart 21: FCMB Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, FCMB, Proshare Research

 

FCMB gross earnings grew by +2.25% in Q4 2019. It recorded an increase in its gross earnings to N181.2bn in Q4 2019 from N177.2bn in Q4 2018.

 

FCMB recorded its highest gross earnings of N181.24bn in Q4 2019 while it recorded its lowest gross earnings of N34.36bn in Q1 2016. FCMB recorded both percentage increase and decrease in its gross earnings during the period under review.

 

Its highest percentage increase in gross earnings of +15.63% was recorded in Q4 2016, while it recorded a decline in its gross earnings by -3.67% in Q4 2017 (see Chart 21).

 

A.9 Fidelity Bank Gross Earnings 2009-2014

Chart 22: Fidelity Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.


Source: NSE, Fidelity Bank, Proshare Research

 

Fidelity Bank recorded its highest gross earnings of N132.4bn in Q4 2014 while it recorded its lowest gross earnings of N28.93bn in Q2 2011. It recorded both positive and negative changes in gross earnings during the period under review.

 

It recorded its highest percentage increase in gross earnings of +68.59% in Q4 2012 while it recorded a percentage decline in gross earnings of -22.45% in Q4 2010 (see Chart 22).

 

A.9.1 Fidelity Bank Gross Earnings 2015-2019

Chart 23: Fidelity Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, Fidelity Bank, Proshare Research

 

Fidelity Bank gross earnings grew by +14.11% in Q4 2019. Its gross earnings increased from N188.88bn in Q4 2018 to N215.5bn in Q4 2019.

 

Fidelity bank recorded its highest gross earnings of N215.51bn in Q4 2019 while it recorded its lowest gross earnings of N34.36bn in Q1 2016.

 

Its highest percentage increase in gross earnings of +18.34% was recorded in Q4 2017 while it recorded its lowest percentage increase in gross earnings of +3.49% in Q4 2016 (see Chart 23).

 

A.10 GT Bank Gross Earnings 2010-2014

Chart 24: GT Bank Gross Earnings (N'mn) 2010-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, GT Bank, Proshare Research

 

GTBank recorded its highest gross earnings of N278.52bn in Q4 2012 while its lowest gross earnings of N43.12bn in Q1 2011.

 

It recorded its highest percentage increase in its gross earnings of +22.68% in Q4 2011, this was driven by a combination of favourable macroeconomic environment, not only in Nigeria but all economies where the bank operates and superior service quality.

 

It recorded its lowest percentage increase in gross earnings of +9.34% in Q4 2013. Restrictive monetary policies by the CBN to contain inflationary pressures and increase in CRR for public sector funds affected the financial position of the bank (see Chart 24).

 

A.10.1 GT Bank Gross Earnings 2015-2019

Chart 25: GT Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.

Source: NSE, GT Bank, Proshare Research


GTBank recorded a growth in gross earnings of +0.14% in Q4 2019. Its gross earnings increased from N434.7bn in Q4 2018 to N435.30bn in Q4 2019.

 

GTBank recorded its highest gross earnings of N435.3bn in Q4 2019 while it recorded its lowest gross earnings of N79.01bn in Q1 2015.

 

Its highest percentage increase in gross earnings of +37.36% was recorded in Q4 2016, in spite of macroeconomic challenges faced by the banking industry and stiff competition posed by the attractive yield on treasury bills (double-digits).

 

While it recorded its lowest percentage increase in gross earnings of +0.14% in Q4 2019, this was a result of weak oil revenues and slowdown in capital flows from foreign investors which reduced the supply of exchange rate. (See Chart 25). 

 

A.11 Stanbic IBTC Bank Gross Earnings 2010-2014

Chart 26: Stanbic IBTC Bank Gross Earnings (N'mn) 2010-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Stanbic IBTC Bank, Proshare Research

 

Stanbic IBTC Bank had an upward trending gross earnings between 2010 and 2014. Its highest gross earnings recorded was N130.65bn in Q4 2014 while its lowest gross earnings of N14.38bn was recorded in Q1 2010.

 

Stanbic IBTC Bank recorded its highest percentage increase in gross earnings of +36.29% in Q4 2012 while its lowest percentage increase in gross earnings of +18.78% was recorded in Q4 2011 (see Chart 26) 

 

A.11.1 Stanbic IBTC Bank Gross Earnings 2015-2019

Chart 27: Stanbic IBTC Bank Gross Earnings (N'mn) 2015-2019

 

Stanbic IBTC recorded N233.80bn in gross earnings against N222.36bn recorded in 2018, gross earnings grew by 5.15%.

Proshare Nigeria Pvt. Ltd.

Source: NSE, Stanbic IBTC Bank, Proshare Research

 

Stanbic IBTC Bank had an upward trending gross earnings between 2015 and 2019. Its highest gross earnings recorded was N233.80bn in Q4 2018 while its lowest gross earnings of 33.73bn was recorded in Q1 2015.

 

Its highest percentage increase in gross earnings of +35.81% was recorded in Q4 2017. While its lowest percentage increase in gross earnings of +4.67% was recorded in Q4 2018 (see Chart 27).

 

A.12 Sterling Bank Gross Earnings 2009-2014

Chart 28: Sterling Bank Gross Earnings (N'mn) 2009-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, Sterling Bank, Proshare Research

 

Sterling Bank had an upward trending gross earnings between 2009 and 2014. Sterling bank recorded its highest gross earnings of N103.68bn in Q4 2014 while it recorded its lowest gross earnings of N8.28bn in Q1 2010.

 

It recorded both percentage increase and decrease in gross earnings during the period under review. It recorded its highest percentage increase in gross earnings of +52.43% in Q4 2012 while it recorded its highest percentage decline in gross earnings of -26.49% in Q4 2010 (see Chart 28).

 

A.12.1 Sterling Bank Gross Earnings 2015-2019

Chart 29: Sterling Bank Gross Earnings (N'mn) 2015-2019

Proshare Nigeria Pvt. Ltd.


Source: NSE, Sterling Bank, Proshare Research

 

Sterling Bank recorded a decline in its gross earnings by -1.29% in Q4 2019. Its gross earnings declined to N150.2bn in Q4 2019 from N152.16bn in Q4 2018.

 

Sterling Bank had upward trending gross earnings between 2015 and 2019. Sterling Bank recorded its highest gross earnings of N152.16bn in Q4 2018 while it recorded its lowest gross earnings of N25.5bn in Q1 2016.

 

Proshare Nigeria Pvt. Ltd.+19.79% in Q4 2017 while a decline in percentage change in gross earnings of -1.29% was recorded in Q4 2019 (see Chart 29).

 

A.13 FBNH Gross Earnings (N'mn) 2010-2014

Chart 30: FBNH Gross Earnings (N'mn) 2010-2014

Proshare Nigeria Pvt. Ltd.

Source: NSE, FBNH, Proshare Research


FBNH had an upward trending gross earnings between 2010 and 2014. Its highest gross earnings recorded was N481.77bn in Q4 2014 while its lowest gross earnings of N62.4bn was recorded in Q1 2010.

 

The highest percentage increase in gross earnings of +128.48% was recorded in Q4 2011. Despite the changes that the banking industry faced between Q4 2010-Q4 2011, like the cashless policy, AMCON's re-capitalization of five banks which led to the increase in capital adequacy ratio (CAR) from 13% to 17.12%, First bank of Nigeria Holdings recorded its highest percentage increase in its gross earnings of +128.48% in Q4 2011 which was driven by cost-effective and error free operations.

 

Its lowest percentage increase in gross earnings of +10.29% was recorded in Q4 2013, this as a result of the difficult operating environment in the year under review which reflected negatively on the financial performance of the bank, policies rolled out by the CBN also affected the performance, such as the increase in CRR on public sector fund, increase in interest on savings accounts and removal of ATM fees (see Chart 30).

 

A.13.1 FBNH Gross Earnings (N'mn) 2015-2018

 

Chart 31: FBNH Gross Earnings (N'mn) 2015-2018

Proshare Nigeria Pvt. Ltd.

Source: NSE, FBNH, Proshare Research

 

FBNH recorded a growth in its gross earnings by +7.46% in Q4 2019. Its gross earnings rose to N627bn in Q4 2019 from N583.47bn in Q4 2018.

 

FBNH had an upward trending gross earnings between 2015 and 2018. Its highest gross earnings recorded was N595.19bn in Q4 2017 while its lowest gross earnings of N99.47bn was recorded in Q1 2013.

 

It recorded both percentage increase and decline in gross earnings during the period under review. It recorded its highest increase in gross earnings of +15.17% in Q4 2016, this was driven by increase in interest income and year-on-year growth in non-interest income. While it recorded a percentage decline of -2.01% in gross earnings in Q4 2018, this was as a result of a decline in interest income on the back of a decrease in the loan book as well as the depressed yield environment (see Chart 31).

 

Proshare Nigeria Pvt. Ltd.


Related Reports (PDF)

1.      Download the Full PDF Report - Debtors Africa, May 13, 2020

2.     Executive Summary PDF - Proshare, May 14, 2020

3.     AMCON and Financial Services Debt Burden in Nigeria - Aug 17, 2018


Proshare Nigeria Pvt. Ltd.


Related News

1.      AMCON and Financial Services Debt Burden in Nigeria - Aug 17, 2018

2.     Bank NPLs (DR 1) - The Case for a New Industry Approach 

3.     Bank NPLs (2) - The Banking Industry and Its NPL Position

4.     Bank NPLs (3) - The State of NPLs

5.     Debtors Africa Launches Searchable Digital Database of Recalcitrant and Delinquent Debtors

6.     Bank NPLs (4) - A Short History of Recovery Efforts - A Time Series Analysis

7.     Bank NPLs (5) - How Banks Fared In 2018; Holding Up Against IFRS9 Tropical Winds


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP