The combined net interest income of five publicly-quoted commercial banks has declined by N48.69bn in the last one year, according to the financial statements of the lenders analysed by our correspondent.
Specifically, the five banks’ net interest income fell by 11.45 per cent from N425bn in September 2020 to N376bn in the same period of 2021.
The revenue of commercial banks consists of net interest income and non-interest income.
The net-interest income is the spread earned after interest-bearing liabilities are deducted from the revenue generated from a bank’s interest-bearing assets.
Meanwhile, 11 banks reported their earnings for the nine-month period between January and September on the issuers’ portal of the Nigerian Exchange Limited.
The 11 lenders generated N1.2tn in earnings in September this year, compared to N1.11tn made in the corresponding period of last year. This represents a 7.98 per cent increase Year-on-Year.
However, six of the banks recorded increase in their net interest income, while the remaining five witnessed reduction in the net interest income.
According to the financial reports, the lenders which recorded increases are: Access Bank Plc, United Bank for Africa Plc, Unity Bank Plc, Sterling Bank, Wema Bank and Zenith Bank Plc.
The reduction in net interest income was recorded by Guaranty Trust Holding Company Plc, First City Monument Bank, Fidelity Bank Plc, Union Bank Plc and Stanbic Bank. Financial analysts, who spoke with The PUNCH on Saturday, attributed the development to regulatory headwinds among others reasons.
Access Bank Plc’s net interest income rose to N267.73bn in the third quarter of this year from N196.27bn recorded in the corresponding period of last year.
Similarly, UBA grew its net interest income from N36.01bn recorded in September 2020 to N229.27bn in September 2021.
Unity Bank grew its net interest income from N12.67bn recorded last year to N14.63bn this year; Sterling Bank’s net interest income rose from N44.99bn in the Q3 of last year to N47.73bn in the same period of this year; Wema Bank recorded growth in its net interest income from N20.1bn last year to N28.45bn this year; and Zenith Bank grew its net interest income from N225.18bn last September to N234.75bn this September.
However, FCMB’s net interest income dropped from N68.05bn recorded last September to N65.39bn in this September, while Fidelity Bank’s net interest income fell from N75bn in the third quarter of last year to N64.96bn in the corresponding period of this year.
GTCO’s net interest income fell from N189.74bn to N162.94bn within the period under analysis, while Stanbic IBTC also recorded a drop from N56.26bn last year to N54bn this year. Union Bank recorded a drop from N36.01bn last year to N29.08bn this year.
FBN Holdings Plc has yet to release its unaudited financial statements for the nine months ended September 2021 as of the time of filing this report.
Reacting on the reason some of the lenders recorded reduction in their net interest income, the Head, Investment Banking, Coronation Merchant Bank, Suru Daniels, said the interest rate environment in 2021 experienced significant yield volatility, compared to 2020.
Source PUNCH
