Loans decline by 17% as Zenith, GTB, Stanbic IBTC make N115 bn PAT in Q1

by | April 22, 2018 1:57 am



The investing public has started to have a glimpse of the performance of the listed companies on the Nigerian Stock Exchange in the first quarter of 2018 following the release of the first quarter unaudited interim financial statements by listed companies. Nine companies have so far released their interim unaudited financial statements for the period and they are Zenith Bank, GTB and Stanbic IBTC Holdings.

Others are Guinea Insurance, United Capital, Unilever, African Prudential, Transcorp Hotels and Forte Oil. The combined profit after tax (PAT) of the nine companies amounted to N122.99 billion and Zenith, GTB and Stanbic IBTC, with a combined N114.8 billion accounted for 93 percent of the first quarter profit after tax so far announced.
Zenith Bank announced gross earnings to the tune of N169.19 billion for the period, representing 15 percent increase over N147.74 billion made same period in 2017. Net interest income was up by 36 percent to N95.9 billion up from N70.6 billion same period in 2017. At N47.08 billion, its PAT for the period rose by 26 percent to N37.5 billion as at the end of the first quarter of 2017.
On the contrary, GTB’s net interest income fell by 10 percent to N59.7 billion as at the end of the first quarter 2018 compared with N66.1 billion realised as at the end of March 2017. This had an effect on its profit after tax which rose marginally by 8 percent to N44.7 billion as against N41.5 billion made in March 2017.
Stanbic IBTC Holdings made N57.4 billion as gross earnings in the first quarter of 2018, representing 22 percent increase over N47.02 billion made in same period in 2017. Profit after tax for the period rose by 44 percent from N16.1 billion in March 2017 to N23.1 billion in March 2018.
However, the three banks recorded a decrease in loans and advances to the customers within the period. Zenith Bank’s loans and advances declined the most by 25 percent from N2.35 trillion in Q1 2017 to N1.76 trillion in Q1 2018. That was not the case in 2017 when the bank’s loans and advances rose by 22 percent to N2.35 trillion at the end of the first quarter of 2017 as against N1.93 trillion as at the end of the first quarter of 2016.

 

Index Market Returns in First Quarter 2018 (March 2018) Market Returns April 20,2018 Market Returns April 21,     2017
All Share Index(ASI) 8.53% 6.72% -6.27%
NSE Premium Index 15.06% 16.02% -5.78%
NSE Main Board Index 4.71% 4.14% -5.61%
NSE ASeM Index -9.09% -11.11% 0.49%
NSE 30 Index 7.30% 5.39% -5.61%
NSE Banking Index 9.49% 8.12% -2.26%
NSE Insurance Index 8.41% 6.25% -1.73%
NSE Consumer Goods Index 0.21% -2.40% -13.50%
NSE Oil/Gas Index 4.90% 6.69% -4.91%
NSE Lotus Islamic Index 5.41% 3.29% -7.61%
NSE Industrial Index 10.96% 9.97% 2.17%
NSE Pension Index 14.84% 15.16% 1.17%
Market Capitalisation 10.17% 8.33% -5.74%

 

GTB and Stanbic IBTC Holdings’ loans and advances fell by 7 percent each. At the end the period, GTB granted N1.35 billion loans and advances compared with N1.45 trillion lent to customers in similar period in 2017. Similarly, at N354.7 billion Stanbic IBTC Holdings’ loans and advances were lower by 7 percent when compared with N381.7 billion granted to different calibres of their customers in Q1 2017. This comes to a decrease of 17 percent in loans and advances for the three banks in Q1 2018 compared with Q1 2017.

On why the loans and advances of banks fell amidst rising profitability, Saheed Bashir, senior analyst at Meristem Securities attributed the development to the sluggish first quarter disease, improving loans quality and high non-performing loans in 2017.
“The first quarter of the year is always sluggish as most economic activities would not have picked up. Again, the rising crude oil prices at the international market have made banks to reclassify some of the loans regarded as bad last year. In that situation, you don’t expect banks to give out a lot of loans to customers”, Bashir said.
“Only three banks have released their Q1 results, we have to wait for more banks to make their results available before we can analyse the trends in their results”, Rasak Abiola, head, investors’ relations at the United Bank for Africa, said.
Unilever posted stellar performance in revenue and profit after tax growth. First quarter revenue rose by 16.4 percent to N25.8 billion from N22.2 billion same period in 2017. Profit after tax for the period increased by a record 81 percent from N1.6 billion in March 2017 to N2.9 billion as at the end of March 2018. This is attributed to stable FX regime, rising aggregate demand, among others.
“Manufacturing companies have easy access to foreign exchange now when compared with the situation in the first quarter of 2017. Aggregate demand is improving and prices of manufactured products have remained relatively stable, and all these are responsible for the increasing revenues of the manufacturers in the country”, Abiola added.
Forte Oil realised N39.8 billion as gross earnings which translated to an increase of 20.6 percent over N33 billion made in similar period in 2017. Profit after tax was up by 57 percent from N1.9 billion same period last year to N2.96 billion as at the end of March 2018.
“The rising oil prices at the international market will impact positively on the financials of oil and gas firms in 2018”, Bashir added.
African Prudential gross earnings were up by 49.3 percent from N641.5 million as at the end of the first quarter last year to N957.8 million in March 2018. Profit after tax rose by 22 percent to N460.9 million from N377.7 million by March 2017.
Transcorp Hotels saw it gross earnings rise by 27.7 percent to N3.82 billion up from N2.99 billion in same period in 2017. Profit after tax rose by 53 percent to N593.6 million from N388.4 million same period last year.
United Capital made N2.2 billion in the first quarter of 2018 as gross revenue representing 4.2 percent over N2.11 billion in the first quarter of 2017. Profit after tax rose by just 7 percent from N1.17 billion made at the end of the first quarter 2017 to N1.25 billion realised in similar period in 2018.
Guinea Insurance’s gross premium written for the first quarter of 2018 rose to N281.6 million from N270.9 million in same period in 2017. It made a profit after tax of N1.29 million as against a loss after tax of N46 million in Q1 2017.
When trading ended last week Friday, Zenith Bank’s share price has appreciated to the tune of 5.3 percent year to date. GTB share price has also recorded appreciation by 10.1 percent year to date; Stanbic IBTC, 18.1 percent; Unilever, 29.3 percent; among others.

 

TELIAT SULE

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