The Nation Newspaper

Tag: mixed performance

  • Zenith Bank records mixed performance in Q3

    Zenith Bank Plc recorded mixed performance in the third quarter as a considerable profit growth contrasted with similar decline in the top-line.

    Key extracts of the interim report and accounts of Zenith Bank for the period ended September 30, 2018 released yesterday at the Nigerian Stock Exchange (NSE) showed that gross earnings declined by 10.64 per cent while profit after tax grew by 11.6 per cent.

    Zenith Bank’s share price rose marginally by 10 kobo to close at N22.55 per share yesterday at the NSE. Many analysts commended the results, despite the decline in top-line earnings.

    The nine-month report showed that gross earnings declined to N474.61 billion in third quarter 2018 compared with N531.27 billion in third quarter 2017. Profit before tax meanwhile increased by 9.7 per cent from N152.55 billion to N167.31 billion. Profit after tax also improved from N129.24 billion in third quarter 2017 to N144.18 billion in third quarter 2018. Earnings per share followed the net profit growth, rising from N4.11 in third quarter 2017 to N4.58 in third quarter 2018.

    Zenith Bank had distributed N9.42 billion to shareholders as interim dividend for the half-year ended June 30, 2018.  The breakdown of the interim dividend indicated a dividend per share of 30 kobo, 20 per cent above 25 kobo paid as interim dividend for the first half of 2017. The bank had distributed N7.5 billion as interim dividend for the first half of 2017.

    Zenith Bank had distributed N84.8 billion to shareholders as cash dividend for the 2017 business year, representing 33.7 per cent increase on N63.42 billion paid for the 2016 business year. Shareholders received a final dividend per share of N2.45, in addition to an interim dividend of 25 kobo, bringing total dividend per share to N2.70 for the 2017 business year. The bank had distributed N63.42 billion to shareholders for the 2016 business year, representing a dividend per share of N2.02. The increase in dividend payout underlined the improvement in the performance of the bank in 2017.

    Key extracts of the audited report and accounts of Zenith Bank for the year ended December 31, 2017 showed that gross earnings rose by 46.7 per cent from N508 billion in 2016 to N745.19 billion in 2017. Profit before tax increased from N156.75 billion to N203.46 billion. After taxes, net profit rose by 37 per cent to N177.93 billion in 2017 as against N129.65 billion recorded in 2016. Earnings per share thus improved from N4.12 in 2016 to N5.66 in 2017.

     

     

  • Diamond Bank records mixed performance in 2017

    Diamond Bank Plc recorded mixed performance last year with modest growth in the top-line and significant depression in the bottom-line.

    Key extracts of the audited report and accounts of the bank for the year ended December 31, 2017 released at the weekend indicated that gross earnings rose by 2.99 per cent from N184.1 billion in 2016 to N189.6 billion in 2017. However, the bank recorded group loss before tax of N11.5 billion in 2017 as against profit before tax of N3.3 billion in 2016. After taxes, net loss stood at N12.8 billion in 2017 compared with net profit of N2 billion in 2016. Total assets declined from N2.05 trillion in 2016 to N1.71 trillion in 2017. Total liabilities also dropped from N1.82 billion in 2016 to N1.49 billion. Total equity declined to N223.3 billion in 2017 as against N226.7 billion in 2016.

    Diamond Bank Chief Executive Officer, Mr. Uzoma Dozie said the bank recorded a decrease in profit before tax because of higher operating expenses, although investments in technology are starting to drive operational efficiencies.

    According to him, the bank made good progress in executing its technology-led retail banking strategy in 2017 as it increased its market share and drove scale through a combination of technology and expansion of its services across additional platforms.

    He noted that the bank made additional inroads to the unbanked and underbanked populations with the support of its international partners while rapid rollout of products and services for entrepreneurs, and small and medium business owners gained significant traction.

    “At a macro level, the economic environment improved, albeit marginally. Against this backdrop and Nigeria’s broader positive fundamentals, we disposed of some non-core assets to optimise the use of our resources and focus on the significant potential of our domestic market. By taking this action, Diamond Bank is better positioned to accelerate its growth, productivity and profitability in the short to medium term,” Dozie said.

    He explained that Diamond Bank reviewed ownership of non-core assets to focus on the significant opportunities in Nigeria, particularly in retail banking, which led to the divestment from the bank business in West Africa, with that in United Kingdom set to follow.

    He pointed out that in order to restore its technology-led retail banking strategy, the bank successfully delivered new initiatives, by building additional ecosystems and the expansion of customer services across different platforms, including DreamVille platform – the first Nigerian gamification portal for banking aimed at improving financial literacy and participation among youths.

    “Although more work is to be done, particularly in relation to our oil and gas exposure, overall the quality of the loan book has improved. This will remain a key area of focus over the next 12 months. Looking ahead, I am optimistic that due to the actions we have taken as well as an improving economy, Diamond Bank will continue to make good progress and achieve greater profitability,” Dozie said.

     

  • Analysts predict mixed performance as investors await Q3 earnings

    Large Nigerian banks are expected to post reasonable and steady earnings but most fast moving consumer goods companies and several other financial companies could remain under pressure from sluggish top-line and rising operating expenses in the third quarter.

    As nine-month earnings reports of quoted companies started to trickle in, analysts at FBN Capital said there would be little surprises from the earnings.

    Analysts noted that banks have guided to a slower second half as a reflection of the impact of the worsening macro environment and as such, earnings and margins in the industry will emerge stable.

    Analysts said banks’ profit before provisions and operating expenses, a proxy for revenue growth, might slow down from an average of 18.4 per cent year-on-year in second quarter of 2015 to 13.0 per cent year-on-year in third quarter.

    The preview pointed out that a major contributor to the revenue growth slowdown is the muted loan growth expectations for the sector. After delivering slightly over 25 per cent per annum over the last two years in average loan growth, the previewed banks are expected to post nine per cent loan growth in 2015, much of that having already been achieved in first half.

    “We expect margins to remain stable. Non-interest income continues to be squeezed by the impact of regulatory headwinds. The significant narrowing of growth from the revenue to the profit before tax line is explained by our expectations that asset quality in particular will worsen in second half; it has been defiantly resilience across the board, with most banks reporting non-performing loans (NPL) ratios below five per cent in first half. All the banks we cover guide to their NPL ratios being below five per cent by the end of the year. We believe this guidance is optimistic. However, we do not foresee a meltdown scenario with NPL ratios shooting up to 10 per cent in the near term,” FBN Capital stated.

    The preview noted that while the near term outlook is subdued, there is a good expectation that there would be a growing bifurcation between the larger banks and the tier 2 banks, with the larger banks expected to post decent third quarter results, with profit before tax growth averaging 18 per cent.

    According to analysts, the third quarter results would confirm the position that scale advantages are helping larger banks to gain market share.

    In the non-financial fast-moving consumer goods (FMCG) sector, analysts said the subdued trends witnessed in the first half would persist into the second half of the year as the challenges faced by the consumer companies are not expected to cease in the near term.

    Militating factors against the FMCG stocks included headwinds such as weak demand on the back of a squeeze on household wallets, foreign exchange pressures and insecurity in the North-East. The Naira has depreciated by around 22 per cent against US dollar over the last 12 months.

    Manufacturing firms are however expected to draw on softer raw material prices including sugar, barley palm oil and maize to mitigate macroeconomic headwinds.

    The report indicated that while FMCGs’ third quarter reports may be generally low, many companies including UAC of Nigeria and Unilever Nigeria could record strong bottom-line performance. Analysts generally expected FMCGs’ average third quarter sales and EPS growth of around four per cent and 19 per cent year-on-year.

    According to analysts, Unilever Nigeria and UAC of Nigeria (UACN) are expected to record average growth of 69 per cent in profit before tax in the third quarter. While Unilever Nigeria’s profit before tax growth estimate is primarily due to base effects as operating expenses levels were significant in 2014, UACN’s profit before tax growth forecast is on back of expected improved operating efficiencies and rental income from its investment in UPDC REIT, a new income line in 2015.

     

  • GTBank records mixed performance in first quarter

    Guaranty Trust Bank (GTBank) Plc recorded modest growth in gross earnings in the first quarter but its bottom-line was suppressed by relatively higher interest and operating expenses.

    First quarter report of GTBank for the period ended March 31, 2014 showed that while gross earnings rose by 6.0 per cent, profit before tax slipped marginally by 2.0 per cent. Net profit after tax however inched up by 2.0 per cent.

    The performance of the bank across the profit and loss accounts and the balance sheet was tight with slight increases in key balance sheet items. Deposits rose by 3.0 per cent while loans and advances inched up by one per cent. Net assets rose by 6.0 per cent.

    Gross earnings stood at N67.58 billion in first quarter 2014 as against N63.86 billion in comparable period of 2013. Profit before tax dipped from N28.49 billion to N28.01 billion. Profit after tax inched up from N22.56 billion to N23.11 billion. Earnings per share thus increased by similar ratio from 80 kobo to 81 kobo.

    Customer deposits rose from N1.44 trillion in first quarter 2013 to N1.49 trillion in first quarter 2014. Loans and advances increased marginally from N1.01 trillion to N1.02 trillion. Net assets rose by 6.0 per cent from N332.35 billion to N352.89 billion.

    GTBank on Monday distributed N42.67 billion as final cash dividends to shareholders for the 2013 business year, representing a dividend per share of N1.45. The bank had paid interim dividend of N7.36 billion, implying a dividend per share of 25 kobo. The total dividend for 2013 stood at N50 billion, representing N1.70 per share.

    Key extracts of the audited report and accounts of GTBank for the year ended December 31, 2013 showed modest growths in the top-line and bottom-line. Gross earnings rose by 9.0 per cent from N223.06 billion in 2012 to N242.67 billion in 2013. Profit before tax inched up by 4.0 per cent from N103.03 billion to N107.09 billion in 2013. Profit after tax also rose marginally by 4.0 per cent from N86.69 billion to N90.02 billion in 2013. Earnings per share thus improved slightly from N3.06 to N3.17 per share.

    The report showed that the bank recorded 28.6 per cent growth in loan book from N783.91 billion in 2012 to N1.01 trillion in 2013 while customer’s deposits grew by 24.3 per cent from N1.15 trillion in 2012 to N1.43 trillion in 2013. Total balance sheet size closed 2013 in excess of N2 trillion while shareholders’ equity increased by 17.9 per cent from N281.83 billion in 2012 to N332.35 billion in 2013.

    GTBank also maintained top position in the industry with pre-tax return of equity of 34.9 per cent and pre-tax return on asset of 5.6 per cent. Risk management framework in the bank emerged stronger as non-performing loans ratio decreased to 3.58 per cent in 2013 from 3.75 per cent in 2012.

    Chairman, Guaranty Trust Bank (GTBank) Plc, Mr. Egbert Imomoh, said the bank expected to consolidate its growth in 2014.

    According to him, GTBank will take advantage of all emerging opportunities and remain focused on improving its customer experiences and creativity to improve on its performance in the period ahead.

    Imomoh said 2014 will be another phase in the bank’s journey to be the foremost financial institution in Africa.

    According to him, the bank would continue to seek innovative ways of growing its business while staying the course and working hard to maintain its reputation.

    “We are poised to take advantage of all opportunities that will arise during g the course of the year and are committed to maintain our position as the bank of choice for discerning customers in all economies we operate in,” Imomoh said.

    Managing director, Guaranty Trust Bank (GTBank) Plc, Mr. Segun Agbaje said the commitment of the bank is to continue to grow its business in a manner that is beneficial to all stakeholders.

    He noted that the bank made appreciable progress in 2013 in spite of the competitors, which were offering basically the same services as the bank and the peculiarities of the operating environment.

    “With our performance, we will maintain our commitment to maximizing shareholder value with a dividend payout of N1.70 per share, an increase of 10 per cent over N1.55 paid in2012 and share price appreciation of 17 per cent in 2013,” Agbaje said.