Despite Covid-19 and its impact on the economy, the 6 largest Nigerian commercial banks listed on the local financial market have generally shown rising profitability. But behind this performance hide some disparities.

The 6 largest Nigerian banking groups by stock market value achieved a consolidated net profit of 601.5 billion naira ($1.58 billion) in the first 9 months of the year, Ecofin has learned data communicated to investors.

Taken in local currency, this represents an increase of 5.43% compared to the result for the same period in 2019. Even converted into dollars, and despite the decline in the Nigerian currency, this is only a decrease of 0, 25%

The perception in dollars of the bottom line of banks listed on the Nigerian Stock Exchange is significant because of the many foreign investors who are present in their share capital. Two factors relating to covid-19 marked the performance of these companies.

On the one hand, there is the increase in depreciation on certain loans. The confinement has forced banks to consider a greater volume of risk of default by their customers. Thus, these impairments were 162.9 billion naira, up 143.8% compared to those of the same period in 2019.

The profitability of these banks was therefore supported by overall resilience in interest income, which only fell by 2.5%. Also, thanks to a 10% drop in interest expenses, net income from economy lending activities stood at 1004 billion naira, up 2.52%.

In addition, income from fees and commissions that remained stable enabled the banking operating income of the banks studied to increase by 1.9%. Finally, the 10% increase in exceptional income such as capital gains on investment products supported the growth in net profit.

Zenith Bank leads the banks analyzed, with a net profit of N159.3 billion. It was supported by solid capital gains on its investments which reached N90 billion.

Guaranty Trust Bank came second with a net profit of N142.2 billion. But this net result is down 3.2% compared to that of the same period in 2019.

The best performance was achieved by Stanbic Bank, the subsidiary of South African Standard Bank. Its profit is up 19%. The worst performer of this group of banks is that of United Bank for Africa, with a net profit down 6%.