The Central Bank of Nigeria’s (CBN) foreign exchange unification enhanced six Tier-1 banks’ profit before tax (PBT) to N1.61 trillion in the first half of (H1) 2023, an increase of 171.45 per cent from N591.47 billion in the corresponding first half of 2022.
The six Tier-1 banks operating in Nigeria, Africa and the global market are United Bank for Africa Plc (UBA), Zenith Bank Plc, Guaranty Trust Holding (GTCO), FBN Holdings, Ecobank Transnational Incorporated (ETI) and Access Holdings Plc).
The apex bank in June announced the unification of foreign exchange and it drove the Naira against the dollar to N756/$ from N465/$ at the beginning of the year.
The banks benefited from the unification of foreign exchange in the period and the impact was reflected in profit generation.
With a reported N403.65 billion PBT in H1 2023, indicating an increase of 370.7 per cent from N85.75 billion in H1 2022, UBA outshone Zenith Bank and GTCO in PBT, becoming the most profitable financial institution in Nigeria in the period under review.
The significant increase in UBA’s PBT is driven by sizeable revaluation gains, arising from the harmonization of currency exchange rates by the Central Bank of Nigeria (CBN).
UBA showed its net trading and foreign exchange gain at N418.3 billion in H1 2023 from N9.15 billion reported in H1 2022.
UBA’s Group Managing Director, Oliver Alawuba in a statement stated, “Whilst the Group recorded strong double-digit growth in revenues and profits from its operations, the result also reflects the effect of sizeable revaluation gains, arising from the harmonization of currency exchange rates in Nigeria. Our reported currency found a new exchange level at about N756 to 1US$ as of 30 June 2023, compared to N465 at the beginning of the year.
“The results again demonstrate the benefits of our long-held diversification strategy across Africa and globally. UBA is a genuinely pan-African business. The growth of our international business, most recently in the UAE, only reinforces this earnings quality.”
In the period under review, Zenith Bank in H1 2023 declared N350.36billlion PBT, an increase of 169.5 per cent from N130.01billion in H1 2022, while GTCO announced N327.4 billion PBT in H1 2023, a growth of 217 per cent from N103.2billion in H1 2022.
FBN Holdings declared N206.26 billion PBT in H1 2023, representing an increase of 214 per cent over N65.7 billion in H1 2022, as Access Holdings posted N150.3 billion PBT in H1 2023 from N108.96billion in H1 2022.
The Group Managing Director, of FBN Holdings, Nnamdi Okonkwo in a statement said, “FBN Holdings continues to deliver strong financial performance despite the complex operating environment, thanks to our reinforced foundations, deep market understanding, strong risk management and execution capabilities.
“On the back of this and in line with our focus of driving further improvement in revenue generation and profitability, the Group delivered strong growth in gross earnings and profit before tax resulting in N656.6 billion and N206.3 billion respectively, for the first half of 2023 financial year.”
In addition, ETI declared N150.31billion PBT in H1 2023 from N108.96billion in H1 20