Top 10 banks by profit in 2018

Zenith, Access and GTBank in the lead

Profit performance by Nigerian banks improved generally in 2018.That was despite a sustaining inability to grow revenue during the year. Profit growth was powered by loan recoveries, which led to considerable reductions in net credit impairment expenses industry wide. Some banks on the loan recovery top list recorded net write backs of previous credit losses, leading to the biggest profit increases in years.


The inability to grow revenue reflects continuing weakness in interest income – the main earning line of banks. The few banks that were able to improve revenue did so with enhanced non-interest earnings.


Profit improvements happened generally through cost cutting and this was led by loan recovery-induced major reductions in net impairment expenses on financial assets. The bigger the cuts in credit losses, the stronger the profit performance that banks attained in the year.


Interest expenses maintained the general industry trend of growing ahead of interest income. Net interest income therefore continued to decline, a pointer that all is not well with the core banking business of lending and investing.Banks have, for several years now, been relying on cost cutting to improve profit and that again was the general operating story for the industry in 2018.


Zenith Bank is Nigeria’s leading bank by profit volume with an after tax profit of over N193 billion at the end of the 2018 financial year. The bank has held the number one position since 2017. It recorded a profit growth of 11% in the year,a slowdown from over 34% in the preceding year. Profit growth decelerated on account of a 15% drop in revenue in 2018.


The bank’s management engaged drastic cost cutting in the year that saved more money for the bank than the drop in gross earnings. The biggest cost cutting shappened in respect of loan impairment expenses and interest cost. It was a white flag up for the bank’s management in 2018 for snatching resources from creditors and bad borrowers to build wealth for shareholders.


Guaranty Trust Bank defended its 2ndposition on the banking industry ranking by profit at the end of 2018. The bank closed the year with an after tax profit of about N185 billion – a year-on-year increase of close to 10%, slowing down sharply from 28% growth in 2017.


The bank was unable to improve revenue reasonably in the year due to a drop in interest income and the profit improvement was built by cutting cost. This came mainly by a 60% drop in loan impairment expenses. The bank’s management extracted increased profit margin per naira of revenue in the year, taking profit margin to a new peak at over 42%.


Access Bank moved one step ahead to stand as the 3rd biggest profit generating bank in Nigeria in 2018. It closed the financial year with an after tax profit of N95 billion – one of the banking industry’s top record profit advances of 58%. It is for the bank a compensating performance for a 15% profit drop it suffered in 2017.


Access Bank is one of the few operators that were able to improve gross earnings in the year at an impressive record of 15%. That strength was further reinforced by a 57% cut in loan loss charges as well as a 55% drop in tax expenses. The banks’ management faced the challenge of rising interest expenses that consumed over 54% of interest income in 2018.


Vacating its 3rd position in the prior year, UBA steps down to the 4th on the ranking with profit flat at under N79 billion for the 2018 financial year. Profit slowed down sharply for the second year for the bank from 12% in 2017 to 1% in 2018 – the slowest profit improvement on the top 10 profit league.


The room for profit growth was sealed by a major slowdown in revenue and rapid increase in interest expenses. An escape route that prevented a profit drop in the year was loan recoveries that worked out a net write back position. Loan recoveries enabled management to cut loan loss expenses by more than 86% in 2018. That brought credit loss expenses lower than the bank has recorded in the past four years.


Stanbic IBTC Bank takes the 5th spot, a position it retains for the second year. The bank closed the 2018 financial year with an after tax profit of over N74 billion, representing another top industry growth record of 54%. The bank had closed the preceding year with a profit advance of about 88%.


Rapid growth over the past three years has seen the bank in a profit region where it is closing ranks with UBA. Should the momentum be maintained in the current year, UBA’s ability to defend the 4th position on the table might be in question. In line with the industry trend, Stanbic IBTC built its profit from cost saving on loan loss expenses.It shifted position from a net loan impairment loss in the prior year to a net write back in 2018.


FBN Holdings maintains the 6thposition on the top 10 profit league for the second year. It grew after tax profit by a top record of58% to close at nearly N60 billion at the end of 2018. This is one of the top profit advances recorded in the banking industry in the year. It is also another major profit advance for the bank after tripling profit in 2017.


The bank lost significant profit capacity in 2015 and 2016 in the heat of major increases in loan loss expenses. Over the past five years, FBN Holdings has recorded over N600 billion in credit loss expenses, which undermined profit performance considerably. Profit recovery equally follows major drops in the loan impairment charges over the past two years by 33% in 2017 and 43% in 2018.


Fidelity Bank retains the 7th position with an after tax profit of roughly N23 billion for its 2018 operations.That represents a 29% growth in the year, up on a 225% profit leap in 2017. The bank’s management faced the challenge of slowing revenue growth in the year and took steps to squeeze costs to extract an increased profit margin per naira of gross earnings.


The biggest cost saving for the bank came from a 63% drop in credit impairment expenses, during the year. The cost savings enabled management to meet cost increases in the other main expense lines and still improve profit margin.


Union Bank still maintains its 8th position on the ranking with a closing after tax profit of N18 billion in 2018.It lifted profit by 39% profit in the year, which compensated for a decline it recorded in 2017. The profit improvement happened despite a drop of 11% in gross earnings, which was led by interest income.


In line with the industry trend, loan recoveries changed the bank’s operating story from a possible drop in profit to the strong growth recorded. The bank shifted from a net loan loss expense of over N25 billion in 2017 to a net write back of over N3 billion in 2018.


FCMB retains the 9th spot on the ranking with an after tax profit of slightly below N15 billion at the end of the 2018 financial year. The bank closed the year with an industry leading profit growth record of 74%, making up for a 40% profit fall it suffered in 2017. Revenue growth remained tight for the bank and the profit performance was powered by a 38% drop in loan impairment expenses in the year.


Sterling Bank closes the top 10 big profit earners’ table retaining its 10th place with an after tax profit of N9 billion. The bank has sustained profit improvement for the second year, having grown the bottom line by 55% in 2017.It reported a moderate improvement in revenue in 2018, which it reinforced with a 52% drop in credit loss expenses to build profit.



Top 10 Banks by Profit

BANK 2018Nb % Change
Zenith Bank 193.42 11.30
Guaranty Trust Bank 184.64 9.96
Access Bank 94.98 58.06
United Bank for Africa 78.61 1.37
Stanbic IBTC Bank 74.44 53.87
FBN Holdings 59.67 58.23
Fidelity Bank 22.93 29.04
Union Bank 18.09 39.05
FCMB 14.97 73.87
Sterling Bank 9.22 15.25