Jaiz Bank Plc, the non-interest banking financial services provider, expects a strong final quarter earnings delivery to crown its high-speed growth in the 2023 financial year with an after-tax profit in the region of N9 billion.
The final quarter is expected to deliver N12.8 billion in gross earnings – more than 29 percent of the anticipated full-year figure of N44 billion and N2.5 billion in after-tax profit, according to the forecast.
The final quarter profit will top up the bank’s closing third quarter figure of N6.4 billion to N8.9 billion, which will stand 29 percent above the 2022 full-year profit figure of N6.9 billion.
The full-year profit growth will however be a sharp slowdown from the closing third quarter performance when after-tax profit doubled from N3.2 billion to N6.4 billion year-on-year.
This is explained by an outstanding fourth quarter in the preceding year that accounted for N3.6 billion or 52.5 percent of the full-year profit for the year. The forecast final quarter profit therefore represents a sharp drop from the same period in 2022.
Pressure on the bottom line in the final quarter is expected to come from two angles as per the reading of the bank’s forecast.
Total operating costs are expected to increase from N5.5 billion for the third quarter to N6.6 billion in the final quarter to account for 29 percent of the full-year figure.
Also, net credit impairment charges are expected to grow from N963 million for the third quarter to N1 billion in the final quarter.
Jaiz Bank has nevertheless maintained its strong footing on the path of earnings growth, which has run consistently for many years. It grew after-tax profit by 60.5 percent to a peak of N6.9 billion in 2022.
The bank’s 2023 interim saw even growth in earnings across quarters, less volatile cost increases, and elevated profit numbers. An after-tax profit of N2.7 billion realised for the third quarter is outstanding growth of close to three times the corresponding figure of N930 million in the prior financial year.
At the end of the third quarter operations, gross earnings stood at over N31 billion, which were earned from financing and investment transactions. The figure represents an increase of 39 percent over the corresponding gross income of N22.4 billion in 2022.
Net impairment charges were slightly down at N2.9 billion at the end of September 2023, which enhanced net income by 45.5 per cent to over N28 billion.
Pressure on earnings however came from a rise of 60 percent in return to equity investment account holders to N7.5 billion at the end of the review period.
The bank’s share of earnings stood at N20.7 billion, which was topped up by fee and commission income of N1.7 billion plus other income of N246 million to close with a total income of N22.7 billion. The figure represents a strong increase of 42 percent year-on-year.
Total operating expenses moderated at an increase of less than 32 percent year-on-year to below N16 billion at the end of the third quarter of operations.
The favourable cost-income balance yielded a pre-tax profit of N6.7 billion for the nine months of trading – an increase of 73.7 percent year-on-year.
A drop of almost 53 percent in tax expenses to N267 million enabled a near doubling of after-tax profit from about N3.3 billion to N6.4 billion at the end of the third quarter.
The bank earned 18 kobo per share at the end of the period, up from 9 kobo per share in the same period in 2022.
It closed the third quarter operations with total assets of N546 billion built on total liabilities of N314 billion, account holders equity of over N204 billion, and owner’s equity of N28 billion.
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