UBA, Zenith, 2 Other Banks Generate N8trn Revenue In 2023, Gain N3.5trn In FX

LEADING Nigerian banks Access Holdings, Zenith, United Bank for Africa, and Guaranty Trust Holding Company Plc together recorded gross earnings of nearly N7.99 trillion in 2023, marking a noteworthy milestone in their business.

Compared to their 2022 performance, which came to N1.3 trillion, this amount represents a significant 248 percent rise.

Significant profits in foreign exchange (FX) revaluation, estimated at N3.5 trillion, were primarily responsible for the revenue spike.

Speaking about the remarkable performance fueled by these gains, Victor Chiazor, Head of Research at FSL Securities, warned investors to concentrate on key business sectors like interest income and fees for sustainable revenue development in 2024.

He declared, “Going forward, we do not expect the naira to weaken significantly as witnessed in 2023, which would mean that such revaluation gains would not be reported.”

He also emphasized how regulatory actions meant to lessen dollar demand and boost market stability would likely improve foreign exchange liquidity.

Paul Uzum, Head Equity at Planet Capital, confirmed Chiazor's remarks, pointing out that the significant depreciation of the Naira in the preceding year had an impact on the 2023 performance.

Uzum added that while he expects some residual foreign exchange gains in Q12024, he advises against projecting performance levels that are comparable in the future.

While another expert, investment banker Tajudeen Olayinka, admitted that the economy was changing between the banks' 2023 financial closure and the results announcement, he forecasted a slowdown in 2024 performance in comparison to the remarkable improvements observed.

Zenith Bank came in second with N2.13 trillion, up 125.4 percent, and UBA came in third with N2.08 trillion, up 143 percent with N2.2 trillion in foreign exchange gains.

Guaranty Trust Holding Company came in last with N1.18 trillion, showing a growth rate of 120.03 percent in addition to benefits from revaluation of N449.3 billion.

Although 2023 was a notable year for these banks, industry observers advise caution in light of the anticipated of a normalized foreign exchange situation in 2024, placing a premium on sustainable development methods as opposed to remarkable one-time gains.