Financial Highlights
- Gross Earnings decreased by 5.5 % to N34.4bn from N36.4bn in Q1 2015
- Net Interest Income increased by 30.0% to N16.1bn from N12.4bn in Q1 2015
- Net Operating Income increased by 6.2% to N20.8bn from N19.6bn in Q1 2015
- Total Expenses increased by 15.7% to N16.0bn from N13.9bn in Q1 2015
- Profit before Tax declined by 14.6% to N4.0bn from N4.7bn in Q1 2015
- Profit after Tax declined by 10.5% to N3.6bn from N4.0bn in Q1 2015
- Net Loans increased by 2.1% to N590.1bn from N578.2bn in 2015 FY
- Deposits increased by 1.9% to N784.5bn from N769.6bn in 2015 FY
- Total Equity increased by 1.3% to N187.0bn from N183.5bn in 2015 FY
- Total Assets increased by 4.0% to N1,284.2bn from N1,231.7bn in 2015 FY
Our financial performance for the quarter is reflective of the continued slowdown in business activities; due to lower government revenues arising from depressed oil prices, lower interest rate regime and weaker macro-economic environment.
We continued to improve the earnings capacity of our balance sheet (fund based income) despite the decline in fee income. Though gross earnings declined by 5.5% (due to a N4.2 billion drop in our foreign exchange income), net interest income increased by 30.0%, e-banking income by 216% and net operating income by 6.2% respectively.
In line with our focus on balance sheet optimization, we ensured that the reduction in funding costs outpaced the decline on yields on earning assets. This improved our NIM to 7.3% from 6.9% in the 2015FY.
Though operating expenses increased by 15.7% YOY, expense growth was flat when compared with 2015FY quarterly annualized figures and actually declined by 24.1% from Q4 2015.
Our cost of risk remained within our guidance of 1.0% as we saw a decline of our risk asset portfolio in most sectors due to the weaker macro-economic indices, overall loan growth of 2.1% was basically driven by public sector on-lending facilities.
Our NPL ratio declined to 4.3% largely due to the growth in the loan book while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19.3% gives us ample leverage to take advantage of emerging business opportunities.
Total deposits increased by 1.9% and the disciplined execution of our retail strategy continued to deliver strong results as savings deposits grew by 13.4% in the quarter under review.
Our key objectives for the 2016FY remains; redesigning our systems and processes to enhance service delivery, cost optimization initiatives to reduce expenses by 5%, proactive risk management, increased customer adoption/migration to our digital platforms and increasing our retail banking market share.