Using several well-known metrics, we track Banking sector performance...

The Nigerian Banking sector is one of the most competitive sectors in the Nigerian economy and perhaps the most profitable. Despite having about 23 deposit money banks in the country, only a dozen are listed on the Nigerian Stock Exchange (NSE).

At Nairametrics, we track Banking sector performance regularly, using several well-known metrics. Most of the data can be found in the financial statements of the banks within our repository of reports. While we track all banks, the following banks are included in our universe of measuring financial performance. They are Access Bank, GT Bank, Fidelity Bank, FCMB, Sterling Bank, FBNH, Union Bank, Zenith Bank, UBA, Stanbic IBTC and Wema Bank.

In this report, we take a cursory look at the performance of listed banks in Nigeria based on six (6) metrics, these include Total Assets, Net Assets, Total Deposits, Profit After Tax, Return on Equity and Return on Total Assets.

1. BEST BANKS BY TOTAL ASSETS
In this case, banking assets include equity plus bank deposits. According to the data, 11 of the listed banks reported a combined total asset of N45.4 trillion as at 2nd quarter of 2020. This represents 7.1% rise from total assets of N42.4trn as at June 2019. Growth in Total Assets is indicative of how strong our financial institutions are, particularly banks.

So, who are the leaders?
1st Position – Access Bank N7.76 trn
2nd Position– Zenith Bank – N7.58 trn
3rd Position – FBNH N7.13 trn
4th Position – UBA N6.78 trn

Upshots: Access Bank has maintained the number one position since 2019 after overtaking Zenith Bank following its merger with Diamond bank. Compared with the previous corresponding year, Zenith assets recorded the highest growth representing 28.50 % from N5.89 trillion to N7.58 trillion, and FBHN also grew its assets by 28%. It is also important to note that the assets of these 4 banks make up more than half the entire total assets in the Banking sector. Suffice to say these are indeed big banks.

2. BEST BY NET ASSETS
Banks’ net assets represent the total equity or shareholders’ funds of all the banks on our list. It includes the bank’s share capital, reserves, and its retained earnings in a period. The net asset is a very strong metric for measuring how strong banks are and it is also used by the CBN in assessing the Banking sector’s ability to withstand credit losses.

We observed that at end Q2 2020, bank net assets rose from N4.1trn at the end of June 2019 to N4.9trn in June 2020. This represents 18.7% rise.

Top 4 by Net Assets
1st Position – Zenith Bank, N998.9 bn
2nd Position – GT Bank, N720.9 bn
3rd Position – FBNH, N704.0 bn
4th Position – Access Bank, N670.3 bn

Upshots: We noticed a sharp rise in Net Assets of both FBNH (26%) and Zenith (20.7%). Year on Year, GT Bank also grew its net assets by 19.6%.

3. BEST BY CUSTOMER DEPOSITS
This is perhaps one of the most competitive banks’ performance metrics to track. The more deposits a bank has the more money it can make. In a country where a lot of cash remains outside the banking system, how well a bank can mobilize deposits from customers shows how well it can compete in a very aggressive market.

Analysis of the data collected showed total banks’ deposits increased from N22.2 trn in the corresponding quarter of 2019 to N27.6 trn in the 2nd quarter 2020. This implies 9.4% increase.

Top banks based on customer deposits
1st Position – Zenith Bank, N4.9 trn
2nd Position – UBA, N4.8 trn
3rd Position – Access Bank, N4.6 trn
4th Position – FBNH. N4.3 trn

Upshots: Compared with corresponding previous quarter, UBA’s total deposits rose sharply 36.75% to N4.8 trn in 2nd quarter 2020. Zenith also increased 29% and FBNH 22% in same period.

4. BEST BY PROFIT AFTER TAX
Corporate Profits are often viewed positively or negatively depending on how you view the impact of capitalism. For banks, it can attract scrutiny if it comes at the expense of small businesses or the wider economy. The banks considered reported total profit after tax of N436.9 bn at end June 2019. This compared to N415.5 billion recorded in June 2020 indicates a 5% decline.

Though banks have often been criticized for reporting fat profits at the expense of the wider economy, it is better off having profitable banks than unprofitable ones. The more profitable banks are (consistently) over time, the more robust they are to support economic growth.

Banks that declared the most profits.
1st Position – Zenith Bank, N103.8 bn.
2nd Position – GT Bank, N94.2 bn
3rd Position – Access Bank, N61 bn.
4th Position – FBNH – N49.4 bn

Upshots – Zenith Bank and GT Bank appear to be in a world of their own as their reported profits are significantly higher than their closest rival. In 2nd quarter 2020, the gap between the profits of both were close; with N103.8 billion in profits for Zenith Bank and N94.2 billion for Zenith Bank.

In terms of the most improved bank based on profitability growth year on year, the winner goes to FBNH Bank with a 55.95% rise in profits to N49.4 billion from N31. billion. In a period where the profits of a majority of the banks dipped, Stanbic IBTC managed to grow its profit 24.7%.

5. BEST BY RETURN ON EQUITY
This is another important metric used in assessing how well a bank has performed in terms of returns to shareholders. We consider this the most important in terms of performance and efficiency. You can post the largest profits but just like any regular investment you want to know what that translates to in terms of return on equity capital.

How have they performed?
1st Position – Stanbic IBTC, 13.4%
2nd Position – GT Bank, 13%
3rd Position – Zenith Bank, 10.5%
4th Position – Access Bank, 9.1%.

Upshots – Compared to the corresponding period in the previous year, Stanbic IBTC (13.7) replaced GTB (16.4) at the top spot. However, Zenith Bank (10.8%) and Access Bank maintained their position, compared to the previous period.

6. BEST BY RETURN ON ASSETS
This measures how well a bank is sweating its assets to generate profits. It is one thing for a bank to have all the assets in its balance sheet but is it providing returns to all providers of capital? We like this metric at Nairametrics because it tells us how well a bank is able to run efficiently using all the resources at its disposal to generate profits for its shareholders.

Best Banks based on ROA
1st Position – GT Bank, 2.1%
2nd Position – Stanbic IBTC 1.4%
3rd Position – Zenith bank, 1.3%
4th Position – Access, 0.7%

Upshots – Just like they impressed with ROE, and only second to Stanbic IBTC, GT Bank is the best bank based in terms of Return on Assets, with 2.1% and Stanbic IBTC, with 1.4%. These ratios show that these banks are well-run. However, compared with the previous corresponding period, the ratios indicated that the ROA of these banks declined.

Although these computations mirror the performance of the banks, the question regarding the overall best bank for the second quarter of 2020 may be judged by readers in line with the information provided in this report.

SOURCE (abridged): https://nairametrics.com/2020/09/08/exclusive-best-bank-in-nigeria-judging-by-the-numbers-2/

DIS ONE LONG

My bank FCMB not ranked on any category...I always knew they weren't well to do

eyizlive:
My bank FCMB not ranked on any category...I always knew they weren't well to do

lol

ZB

Et il me semble que le Banque Zenith est le gagnant!