Economic Recession: Nigerian Banks Prosper While Nigerians Groan

The economic recession which further impoverished Nigerians appears to have exempted commercial banks which recorded massive profits in the last financial year.

Nigerian banks prosper as United Bank for Africa (UBA), Access Bank and Zenith Bank have all registered big increases in revenues and profits, while the national economy continues to struggle. UBA’s financial report, which was released on 27 March, revealed a 22% increase in gross earnings from N315bn ($991m) in 2015 to N384bn ($1.2bn) last year.

The bank’s pre-tax profits jumped 32% to N91bn ($286m). The bank has successfully expanded outside of its domestic market, with operations in 19 African countries, plus the UK, US and France, all contributing to the positive financial results. UBA has 11m customers worldwide.

A spokesperson said: “UBA’s subsidiaries outside Nigeria are increasingly gaining market share, reinforcing the strong and impressive subsidiary contribution to the Group, estimated at one-third of profit in 2016, from a quarter in 2015 financial year.”

The contribution of UBA’s non-Nigerian operations have contributed to the 20% rise in the company’s share price in the twelve weeks between 1 January and the announcement of its financial results.

Nigerian banks are now beginning to join those from South Africa, Kenya, Morocco, the UK and France in establishing operations in many different African markets. None as yet, however, can genuinely claim to be Pan-African banks.

 Source: African Business Magazine