…as GTCO, UBA record outstanding profits
Five of Nigeria’s banks grew their total customer deposits by 17.39 per cent to N19.57 trillion in 2021 from N16.67 trillion in the previous year, according to FY’21 financial statements released by the lenders last week.
The banks are Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), First City Monument Bank (FCMB) and Stanbic IBTC Bank.
New Telegraph’s analysis of the financial statements indicates that Zenith Bank recorded the highest growth in customer deposits as its audited results for the 2021 financial year show that it grew its total customer deposits during the period by 21 per cent to N6.47trillion from the N5.34trillion that the Tier 1 lender reported for 2020.
It was closely followed by UBA, which reported total customer deposits of N6.4 trillion in its audited results for the 2021 financial year compared with the N5.7 trillion the lender recorded for the previous year.
Similarly, GTCO’s audited results for the 2021 financial year show that it grew its total customer deposits to N4.01 trillion last year compared with N3.51trillion in 2020. FCMB’s unaudited result for the 2021 financial year equally reveals that the Tier 2 lender’s total customer deposits increased to N1.56trillion last year from N1.3 trillion in 2020.
Likewise, Stanbic IBTC reported total customer deposits of N1.13 trillion in its unaudited result for the 2021 financial year compared with N819.94billion that the Tier 2 bank reported for the previous year.
Analysts expect that results for the 2021 financial year of other banks will also reflect significant growth in their customer deposits, an indication that contrary to predictions in some quarters, competition from Fintechs has not adversely affected lenders’ ability to attract deposits from customers. In fact, rather than fierce competition from Fintechs leading to a decline in banks’ total customer deposits, it seems to have pushed the lenders into devising innovative deposit mobilisation strategies, including increased use of technology and social media.
Furthermore, experts also attribute the significant growth in lenders’ customer deposits in the last two years to Covid-19, which despite its negative impact on businesses in 2020, accelerated digital payments, enabling banks to step up their use of digital devices to increase deposits.
For instance, commenting on UBA’s FY’21 result, the bank’s Group Managing Director/CEO, Kennedy Uzoka, said: “The year 2021 can best be described as a year of global recovery; economies around the world began to witness early-stage recoveries, as supply chains recover from the devastating disruptions suffered in 2020.
“Consequently, UBA recorded remarkable seven per cent growth in top line to N660 billion, and Profit Before Tax (PBT) of N153.1 billion, up 20.3 per cent from the prior year. Net Loans and advances grew by 7.7 per cent to N2.8 trillion with exposure mostly to resilient economic sectors including oil & gas, agriculture and manufacturing.
Deposit from customers grew 12.2 per cent, crossing the N6 trillion mark, to N6.4trillion.” He further stated: “Looking forward, I am particularly excited about our ongoing Enterprise Transformation Program which is designed to enhance the bank’s process agility, service delivery and customer experience.
We are also making sizeable investments in cutting-edge technology and cyber security, to keep our innovative digital banking offerings above the curve, as we tool and re-tool our human resources to compete and win in a rapidly changing and evolving landscape.
This will ensure the bank continues to achieve respectable top and bottom-line growth through the medium to long term.” Speaking in the same vein on its results, the Group Chief Executive Officer of Guaranty Trust Holding Company, Mr. Segun Agbaje, said: “Our performance reflects the strength of our franchise and underscores our ability to deliver longterm value for our stakeholders in spite of 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.”
He further added: “2021 presented a crucial opportunity as we took strategic steps to reorganise our business and advance our position as a leading financial services company.
With the recent addition of pension fund and wealth management businesses to the Group, we are well on our way to rapidly scale our operations and strengthen our foothold in these key industry segments.
“Our goal is to consolidate our place at the top of Africa’s financial services value chain by leveraging technology to provide endto- end financial solutions to more people and businesses across Africa.”
According to personal statements written by members of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) at their meeting in January, which were posted on the apex bank’s website at the weekend, the country’s banking industry remains resilient and continues to post record growth in assets and deposits despite the impact of the Covid-19 crisis.
As the Deputy Governor, Financial System Stability (DG, FSS )at the CBN, Mrs. Aishah Ahmad, put it in her personal statement: “The financial system maintained its resilience into 2022 as data provided by Bank staff indicated stability in broad soundness indicators and an unprecedented improvement in asset quality, even as credit to the private sector continued to grow.
“Capital adequacy as at December 2021 was robust at 14.53 per cent, 453 basis points above the regulatory minimum of 10 per cent. Industry liquidity was also strong at 41.33 per cent over the same period and supported by significant cash reserve requirement buffers available to provide liquidity backstops should banks require it.