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Exclusive: Wema Bank emerges most profitable in PAT growth in Q1 2022

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Wema Bank records impressive financial performance in 2022 Half-Year Reports

 

Exclusive: Wema Bank emerges most profitable in PAT growth in Q1 2022

 

 

The Nigerian banking sector recorded impressive growth in the first quarter of the year, recording a 23.24% year-on-year increase in real GDP. This is also evidenced by the performance of the twelve commercial banks listed on the Nigerian Exchange (NGX).

 

Wema Bank proved its mettle in the key metrics of total assets growth, customer deposit growth, profit after tax growth, loan book growth, return on average equity and cost to income ratio.

 

According to a special report on the financial performance of quoted Nigerian banks by Nairametrics, some banks have dominated the efficiency, deposit, and profitability metrics, especially newly re-engineered banks like Wema Bank and Unity Bank, among others. They are now two of the top five leading banks in the country.

 

According to data from Nairalytics – the research arm of Nairametrics, the twelve banks reviewed posted an aggregate profit after tax of N275.27 billion in Q1 2022, representing a 14.7% increase compared to N239.95 billion posted in the corresponding period of 2021.

 

The banks were able to record an improved bottom line despite the CBN monetary policy leaning towards a dovish direction, that is, keeping interest rates low. However, the apex bank in its latest MPC meeting has raised the benchmark interest rate from 11.5% to 13%, and banks could be seeing a rise in their interest earnings going forward.

 

For this analysis, the Q1 2022 results of the following banks were tracked: Access Holdings, FBN Holdings, FCMB, Fidelity Bank, Wema Bank GT Holding, Stanbic IBTC, Sterling Bank, Union Bank, UBA, Unity Bank, and Zenith Bank. Ecobank was not considered in the analysis as the bank operates efficiently in other markets besides Nigeria.

 

The key metrics considered in these analyses are total asset growth, loan book growth, profit growth, cost–to–income ratio, and return on average equity.

 

Leading Banks by Profits After Tax (PAT) growth

 

The twelve banks under our radar posted an aggregate profit after tax of N275.27 billion in Q1 2022, which is 14.7% higher than the N239.95 billion recorded in the previous year (Q1 2021).

 

First position – Wema Bank (+119%)

Second position – First Bank (+108%)

Third position – Sterling Bank (+47.9%)

Fourth position – FCMB (+44.6%)

Fifth Position – FBNH: (+33.9%)

Upshots: In terms of net profit, Zenith Bank recorded the highest profit after tax of N58.19 billion. In terms of growth, Wema Bank topped the list with a 119% growth in its bottom line while First Bank recorded a 107.7% growth.

 

 

Leading Banks by cost-to-income ratio performance

The cost-to-income ratio is a key financial metric, which shows a company’s costs as a proportion of its income. It helps to give investors a clear view of how efficiently a bank is being run. Specifically, it shows how much input the bank requires to generate N1 of output.

 

Notably, the lower this ratio, the more profitable, productive, and competitive the bank will be. Here are the banks with the lowest cost-to-income ratio:

 

First position – First Bank (-12.48%)

Second position – FCMB (-6.83%)

Third position – Wema Bank (-5.5%)

Fourth position – Stanbic IBTC (-5.4%)

Fifth Position – Sterling Bank (-2.1%)

Upshots: First Bank recorded the highest decline in its cost-to-income ratio in Q1 2022, dropping from 79.5% recorded in Q1 2021 to 67.03% in the review period. FCMB also saw a decline in its numbers to 72.69%. However, GT Bank currently has the lowest cost-to-income ratio of 42.42% in Q1 2022.

 

Leading Banks by Total Assets growth

The analysis of the combined assets of the 13 listed banks (Ecobank excluded) reveals that the total assets increased by 6.7% from N57.67 trillion recorded as of December 2021 to N61.54 trillion in the review period. The total asset of the listed banks amounts to over 85% of Nigeria’s annual real GDP (2021 estimate).

 

The increase in the total assets of the banks indicates a stronger financial position. All the banks under study recorded an improvement in their total asset base. Below are the leading banks by total assets growth between March 2022 and December 2021.

 

First position – Fidelity Bank (+22.9%)

Second position – Zenith Bank (+18.9%)

Third position – Stanbic IBTC (+13%)

Fourth position – Unity Bank (+9.7%)

Fifth Position – Wema Bank (+7.7%)

Upshots: Fidelity Bank tops the list of best performers in terms of asset growth in the first quarter of 2022 after its total assets increased by 22.9% from N2.89 trillion recorded as of December 2021 to N3.56 trillion by the end of March 2022.

 

Leading Banks by Customer Deposits growth

Customer deposits remain one of the most competitive items in the banking sector since it is from deposits that loans are issued out and other investments are made.

 

The total customer deposits stood at N40.34 trillion, as of the first quarter of the year, representing an 8.7% increase compared to N37.1 trillion recorded as of the previous quarter. The bank leading the charge in terms of value is Access Bank, which accounts for 18.5% of the total share, however, Zenith Bank tops in terms of growth.

 

First position – Zenith Bank (+27.8%)

Second position – Fidelity Bank (+18%)

Third position – Unity Bank (+17.4%)

Fourth position – Wema Bank (+8.8%)

Fifth Position – Access Bank (+7.8%)

Upshots: Zenith Bank recorded the highest growth in customer deposits, followed by Fidelity and Unity Bank with 18% and 17.4% increases respectively. Only Union Bank recorded a customer deposit decline in the first quarter of 2022.

 

Leading Banks by loan book growth

Bank loan is an important metric used in assessing the performance of banks. Notably, loans allow for growth in the overall money supply in an economy and open up competition by lending to new businesses.

 

The interest and fees from the loans form a major part of where banks generate their earnings. According to the analysis, loans to customers increased by 8.3% to N21.71 trillion in Q1 2022 from N20.05 trillion recorded as of December 2021.

 

First position – Fidelity Bank (+28%)

Second position – Zenith Bank (+25%)

Third position – Unit Bank (+11.9%)

Fourth position – UBA (+7.1%)

Fifth Position – Stanbic IBTC (+6.4%)

Upshots: Fidelity Bank led the list of banks with the highest loan book growth in the first quarter of 2022. Specifically, its customer loan increased by 28% to N1.83 trillion from N1.43 trillion recorded as of December 2021.

 

Leading Banks by Return on Equity (ROAE)

The return on equity is an important metric that shows the percentage of profit made on every N1 of the shareholders’ fund. It is used to measure the performance and efficiency of the banks.

 

This metric will show how well banks have maximized any increase in shareholders’ wealth.

 

First position – Access Bank (21.39%)

Second position – UBA (20.4%)

Third position – GT Bank (19.3%)

Fourth position – Zenith Bank (19.2%)

Fifth Position – Wema Bank (15.96%)

Upshots: The aggregate returns on equity for the twelve banks stood at 13.72% as of March 2022. Access Bank led the list with a return on average equity of 21.39% (annualized) in March 2022, closely followed by UBA (20.4%) and GT Bank (19.3%).

 

 

Final Scorecard

Taking the average of the performance of the banks across the six metrics under our radar, we see Zenith Bank on top of the rank, followed by Wema Bank, Stanbic IBTC, First Bank, and Fidelity Bank based on their Q1 2022 numbers.

Exclusive: Wema Bank emerges most profitable in PAT growth in Q1 2022

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Access Bank Win Against Sonny Odogwu’s Estate As  Court Orders him To Pay N26bn Debt

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Access Bank Wins Against Sonny Odogwu

Access Bank Win Against Sonny Odogwu’s Estate As  Court Orders him To Pay N26bn Debt

Access Bank Wins Against Sonny Odogwu

 

Justice Daniel Osiagor of the Federal High Court, Lagos today upheld the N26 billion debt claim by Access Bank PlC against the estate of the late Ide Ahaba of Asaba, Chief Sonny Odogwu.

Osiagor upheld the bank’s claim after dismissing the preliminary objection filed by the estate of the late Chief Sonny Odogwu challenging the claim of the bank adding that a consent judgement had earlier been entered in which parties to the debt agreed on the payment of N12 billion as full and final payment.

 

 

 

 

The defendants in the preliminary objection added that having taking benefit of the consent judgement, the plaintiff can’t turn around and ask the court to set aside same.

However, Access Bank it it’s claim before the court said the said judgement was floored in that it was delivered by a court that lacked jurisdiction to entertain it at the time it was entered as consent judgement.

 

 

 

 

 

The bank through it’s counsel, Kemi Balogun, SAN said the matter having been placed at the bossom of the Court of Appeal , the lower court which entered the consent judgement as the judgement of the court is Functus Officio ( lacked jurisdiction) and that the only court that has the power to adjudicate on such matter at that level is the appellate court.

Justice Osiagor while dismissing the objection of the defendants nullified the consent judgement entered by Justice Rilwan Aikawa which sanctioned the consent judgement on the ground that it lacked jurisdiction to grant such order as it is functus officio of the matter as at the time he granted the order.

 

 

 

 

 

 

 

The judge then affirmed the earlier judgement of justice Saliu Saidu which ordered the defendants to pay it’s outstanding indebtedness of N26 billion.

Justice Osiagor however ruled that the payment must be less all amount earleir paid to the judgement creditor

 

 

 

 

 

 

 

 

The court also award a cost of N200,000 against the defendants’.

It would be recalled that Access Bank Plc and the late Ide Ahaba of Asaba, Chief Sonny Odogwu, entered into a N26 billion loan agreement when he was alive. The late businessman wanted to use the facility to build luxury apartments to be known as Le Meridien Grand Towers in highbrow Ikoyi, Lagos.

 

 

 

 

 

 

 

In line with global best practices, the bank demanded for collateral security.

Thus Odogwu mortgaged prime properties in Lagos, Abuja, Dubai, and Los Angeles to Access Bank in return for the facility. After the death of the businessman, the mortgaged properties eventually become a subject of litigation

 

 

 

 

 

 

 

 

 

Trouble started when the estate of the late Chief Odogwu, reacted angrily to a move by Access Bank to take over the uncompleted property due to the non performance of the loan.

The defendants’ went to town with a statement that the property was not part of the consent agreement reached by both parties, and registered as a judgment of Federal High Court, Lagos. The release signed by the estate lawyer, Chief Anthony Idigbe SAN was published by various media platforms on Tuesday.

 

 

 

 

 

 

 

 

Reacting to the statement, Access Bank said that the Ikoyi property was not the only one that fell within the purview of the November 3, 2015 Federal High Court judgment that ordered the bank to take over the properties used it as collateral in lieu of the N26 billion loan facility.

Other properties include Berendo Property located in Los Angeles, State of California, United States of America, Unit No: FN428, The Fairmont Palm Residence (North), Dubai, United Arab Emirates, Asokoro Shopping weMall, Abuja, 1 Happy Home Street, Kirikiri, Lagos, properties located at Kingsway and Lawrence Roads, Ikoyi Lagos.

 

 

 

 

 

 

 

Access bank also stated that it is is the successor in title to Diamond Bank Plc following its merger with Diamond Bank Plc.2

The crux of the matter was that former Diamond Bank PlC granted facilities to the Judgment Debtors for the construction of a property to be known as Le Meridien Grand Towers located and lying at 31-35 Ikoyi Crescent, Lagos and registered as No. 17 at page 17 in volume 100 at the Federal Lands Registry, Ikoyi, Lagos. The property is mortgaged to the bank as collateral for the facilities.

 

 

 

 

 

 

 

 

However, litigation that ensued over the inability of company, Robert Dyson & Diket Limited to liquidate the facility, Access Bank secured a Judgment in the sum of N26,229,943,035.22 consequent upon a Federal High Court judgment in Suit No. FHC/L/CS/1633/2014 delivered on 3rd November 2015 against Robert Dyson & Diket Limited & 2 Ors (the Judgment Debtors) in relation to the Project Finance for development of a seven-star hotel and residences (“the Project”).

Following the Judgment, Robert Dyson entered an Appeal against the said judgment and a motion staying the execution of same in APPEAL NO: CA/L/1151/2015 – ROBERT DYSON & DIKET LIMITED & 2 ORS. V. DIAMOND BANK PLC & 3 ORS.

 

 

 

 

 

 

 

The Judgment Debtors also filed a Counter-Claim against the Access Bank in the State High Court: SUIT NO: LD/1666CMW/2016 – LEADWAY CAPITAL & TRUSTS LIMITED V. DIAMOND BANK PLC & 2 ORS.

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FirstBank Branch, Head office, not Sealed

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FirstBank

FirstBank Branch, Head office, not Sealed

FirstBank

 

Our attention has been drawn to the news reports online with the conflicting claims that FirstBank branch or/head office has been sealed.

 

Please be informed that the referenced story is a misrepresentation of the facts and misleading. Neither our branch nor head office was sealed. On the 4th of August, 2022, there was an unlawful enforcement at the Bank’s Coomassie House Branch of a garnishee order issued by a Federal High Court sitting in Abuja which order the Bank is still challenging in court.

 

 

 

 

While the Bank has taken appropriate legal steps to deal with the situation, we wish to reassure our customers of unhindered banking services and unique customer experience in all our branches and through our numerous alternative channels.

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RE: Online Publication on Purported Sale of Polaris Bank

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Polaris Bank

RE: Online Publication on Purported Sale of Polaris Bank

Polaris Bank

Our attention has been drawn to an online report on the purported sale of Polaris Bank Limited.

This publication is speculative, deliberately intended to create panic and should be disregarded by the banking public.

 

 

 

Stakeholders may recall the regulatory intervention in the erstwhile Skye Bank by the CBN and the subsequent injection of capital via the Asset Management Corporation of Nigeria (AMCON) through a bridge bank process, which birthed Polaris Bank in 2018. The bank has since stabilized its operations following the intervention; improving its balance sheet, customer base and profitability.

Whilst the intention has always been to return the bank to private ownership, such a sale would occur following regulatory approvals with formal notification to all relevant stakeholders. The Bank is committed to ensuring timely communication to the public in such an event.

 

 

 

 

 

The Board and Management hereby reassure its customers, staff and the general public that Polaris Bank remains a stable, strong and credible financial institution, positioned to deliver sustainable value to all its stakeholders.

Signed
Management

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