The deposit base of five top Deposit Money Banks in Nigeria has increased by N273 billion in the third quarter of 2017.
The banks – Zenith Bank Plc, Stanbic IBTC Plc, United Bank for Africa Plc, Union Bank of Nigeria Plc and Unity Bank Plc – increased their customer deposits from N6.810 trillion as at Q3 2016 to N7.083 trillion by end of Q3 2017.
Zenith Bank’s customer deposit rose from N2.98 trillion as at the end of Q3 2016 to N3.06 trillion by the end of the third quarter of 2017. The bank also increased it Gross Earnings from N380.4 billion to N531.3 billion, a 40 per cent increase, within the period under review.
In the case of UBA, its customer deposit grew from N2.48 trillion in Q3, 2016 to N2.51 trillion by Q3, 2017. While its gross earnings increased from N265.5 billion to N333.9 billion, the bank’s profit before tax also rose by 33.2 per cent, that is, from N58.7 billion to N78.3 billion, within the same period.
Also, its earnings per share and net assets increased by 22.5 per cent and 13.3 per cent, when they rose from N1.42kobo to N1.74kobo and N448.06 billion to N507.6 billion, respectively.
The customer deposit of Stanbic IBTC Plc increased from N561 billion in 2016 to N696.5 billion in 2017. The bank’s drive to grow transactional balances resulted in a 17 per cent growth in current account balances, while savings account balances grew by 16 per cent.
While Union Bank’s customer deposit rose from N757.8 billion as at Q3 2016 to N767.8 billion in 2017, Unity Bank’s deposit also witnessed an increase, from N31.94 billion to N50.42 billion, within the period under review.
The nine-month performances of the financial institutions, according to financial experts and capital market operators, confirmed recent movement of the macroeconomic performance indicators, which were all in positive territories.
The growth in the companies’ fortune also confirmed the expansion in economic activities as reflected in the Central Bank of Nigeria’s Purchasing Managers Index, which has been robust for six consecutive months to September, 2017.
The PMI is an indicator of the economic health of the manufacturing sector. The PMI is also based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A professor of financial economics, Mr. Leo Ukpong, explained that the companies’ performances were commendable in view of the tough operating environment, and that most of the firms were battling with operational cost since the beginning of the year.
He said, “Most of the banks have strategised through their products in saving deposit. Apart from that, with the issue of the Banks Verification Exercise, depositors have been encouraged to deposit their monies with confidence, taking into consideration, the enhanced security gadgets.”
Ukpong also advised the Federal Government to pursue a policy of fiscal consolidation through higher non-oil revenues, to ensure stability in the economic growth generally.
Reacting to the results, the Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, said, “Several Q3 results are impressive and outperformed previous quarters since economic indicators have largely been positive.
“The business environment has become more conducive, especially for banks to recommence import finance and other short-term projects. The agriculture sector will also continue its impressive run since their protection by the CBN,” he said.
The nine-month performances of the financial institutions confirmed recent movement of the macroeconomic performance indicators, which were all in positive territories
WE EXPECT BETTER ROI – INVESTORS
As expected, the shareholders of the banks told The Point that the only way the development could translate into better days, as described by the analysts, was for the companies to pay higher Returns On Investment at the end of the 2017 financial year.
For instance, the National Chairman, Progressive Shareholders Association, Mr. Boniface Okezie, said, “We as shareholders expect good returns on our investment. It is not new that the banks are dominating, due to the ways the economy works. The banks have the money of both the government and the citizens; while the cash in their vaults dictates the direction of the economy. Until our values and our economy change from cash to gold, the banks would continue to be the deciding factors of the economy.”
The National President, Constant Shareholders Association, Mallam Shehu Mikail, attributed the development to the banks’ retail strategy, which he believed boosted several depositors’ confidence in the financial
institutions.
“The companies’ result showed that various managements have adjusted and adapted to the economy, having survived recession and foreign exchange challenges. I pray it should translate into better returns to shareholders at the end of the year. The banking sector is an active sector that shareholders look up to, for consistency and constant payment of dividends,”
he said.
Meanwhile, the Group Managing Director, UBA, Mr. Kennedy Uzoka, assured both depositors and shareholders of the bank of a greater future.
He said, “We would continue to gain momentum in our efforts to increase our customers’ deposit and achieve more diversified earnings, as we strengthen our retail and digital offerings. Our bank remains committed to improving the quality of its
balance sheet.”
The MD, Zenith Bank Plc, Mr. Peter Amangbo, said, “Given the progress we made in the first three quarters of the year, we came into the second half with the objective of remaining focused on our core strategy of serving the full value chain of our customers’ needs, while maintaining high standards of customer service.”
