News Pix: Victoria Nworgu (Face of Amity)
Bad loans, naira volatility and other economic headwinds have made Ecobank International Incorporated, Union Bank Plc, First City Monument Bank Limited, Wema Bank Plc and Fidelity Bank Plc to post a combined 80 per cent decline in their annual profits.
The annual financial statements of the banks posted on the website of the Nigerian Stock Exchange have revealed.
The 2015 financial results of the five banks released in March this year showed that the profit before tax tumbled by 69 per cent to N77.65bn from N131.19bn in 2014.
Similarly, the combined profit after tax of the five banks fell from N107.279bn in 2014 to N59.73bn in 2015, indicating a decline of 79.59 per cent.
The N53.54bn fall in profit was attributed by many of the banks' chief executive officers to high impairment charges on bad loans, foreign exchange volatility and other challenges facing the economy following the significant drop in the nation's oil revenue due to the sharp fall in oil prices.
The economic crisis facing the country has affected the banking industry significantly. Out of the 15 banks quoted on the Nigerian Stock Exchange, 10 have released their 2015 annual financial statements as of the March 31, 2016 regulatory deadline set by the Central Bank of Nigeria for the submission of the statements.
Of the 10 banks that released their results, five posted sharp decline in profits, a major departure from the consistent rise in profits posted by almost all the banks in the country after the 2010 banking crisis.
The reports on the NSE website showed that Ecobank posted a PBT of N40bn in the 2015 financial year; Union Bank, N18.1bn; FCMB, N2.5bn; Fidelity Bank, N14bn; and Wema Bank, N3.046bn.
However, the five other banks that released their 2015 annual reports in March this year outperformed the market, posting increases in both their profit before tax and profit after tax.
This is despite the huge provisions for bad loans that most of them made in the 2015 financial year.
These are Guaranty Trust Bank Plc,
United Bank for Africa Plc,
Access Bank Plc,
Sterling Bank Plc,
and Zenith Bank Plc.
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