Financial Highlights
§ Gross Earnings decreased by 5.5 % to N34.4bn from N36.4bn in Q1 2015
§ Net Interest Income increased by 30.0% to N16.1bn from N12.4bn in Q1 2015
§ Net Operating Income increased by 6.2% to N20.8bn from N19.6bn in Q1 2015
§ Total Expenses increased by 15.7% to N16.0bn from N13.9bn in Q1 2015
§ Profit before Tax declined by 14.6% to N4.0bn from N4.7bn in Q1 2015
§ Profit after Tax declined by 10.5% to N3.6bn from N4.0bn in Q1 2015
§ Net Loans increased by 2.1% to N590.1bn from N578.2bn in 2015 FY
§ Deposits increased by 1.9% to N784.5bn from N769.6bn in 2015 FY
§ Total Equity increased by 1.3% to N187.0bn from N183.5bn in 2015 FY
§ Total Assets increased by 4.0% to N1,284.2bn from N1,231.7bn in 2015 FY
|
N ’million |
Q1 2016 |
Q1 2015 |
VAR |
% VAR |
|
Key Ratios |
Q1 2016 |
2015FY |
VAR |
|
Gross Earnings |
34,356 |
36,364 |
(2,009) |
-5.5% |
|
Earning Assets Yield |
13.2% |
13.8% |
-0.5% |
|
Net Interest Income |
16,104 |
12,388 |
3,716 |
30.0% |
|
Net interest Margin |
7.3% |
6.9% |
0.4% |
|
Net Fee Income |
4,656 |
8,734 |
(4,077) |
-46.7% |
|
Return on Equity |
7.8% |
7.6% |
0.3% |
|
Net Operating Income |
20,796 |
19,587 |
1,209 |
6.2% |
|
Return on Assets |
1.1% |
1.1% |
0.0% |
|
Total Expenses |
(16,031) |
(13,857) |
(2,174) |
15.7% |
|
Cost of Funds |
5.2% |
6.2% |
-1.0% |
|
Impairment Charge |
(739) |
(1,020) |
281 |
-27.5% |
|
Cost Income Ratio |
77.1% |
76.4% |
0.7% |
|
Profit before Tax |
4,025 |
4,710 |
(685) |
-14.6% |
|
Cost of Risk |
0.5% |
1.0% |
-0.5% |
|
Profit after Tax |
3,583 |
4,003 |
(421) |
-10.5% |
|
Loan to Deposit |
75.2% |
75.1% |
0.1% |
|
|
Q1 2016 |
2015 FY |
VAR |
% VAR |
|
Liquidity Ratio |
37.5% |
36.0% |
0.0% |
|
Customer Deposits |
784,549 |
769,636 |
14,913 |
1.9% |
|
CAR |
19.3% |
18.7% |
0.6% |
|
Total Equity |
187,029 |
183,516 |
513 |
1.3% |
|
NPL Ratio |
4.3% |
4.4% |
-0.1% |
|
Net Loans |
590,133 |
578,203 |
11,930 |
2.1% |
|
BVPS (NGN) |
6.4 |
6.3 |
1.8% |
|
Total Assets |
1,284,240 |
1,231,722 |
49,518 |
4.0% |
|
EPS (NGN) |
0.5 |
0.5 |
1.7% |
Please note that the net operating income includes net gains/(losses) from financial instruments.
Our financial performance for the quarter is reflective of the continued slowdown in business activities; due to lower government revenues arising from depressed oil prices, lower interest rate regime and weaker macro-economic environment.
We continued to improve the earnings capacity of our balance sheet (fund based income) despite the decline in fee income. Though gross earnings declined by 5.5% (due to a N4.2 billion drop in our foreign exchange income), net interest income increased by 30.0%, e-banking income by 216% and net operating income by 6.2% respectively.
In line with our focus on balance sheet optimization, we ensured that the reduction in funding costs outpaced the decline on yields on earning assets. This improved our NIM to 7.3% from 6.9% in the 2015FY.
Though operating expenses increased by 15.7% YOY, expense growth was flat when compared with 2015FY quarterly annualized figures and actually declined by 24.1% from Q4 2015.
Our cost of risk remained within our guidance of 1.0% as we saw a decline of our risk asset portfolio in most sectors due to the weaker macro-economic indices, overall loan growth of 2.1% was basically driven by public sector on-lending facilities.
Our NPL ratio declined to 4.3% largely due to the growth in the loan book while our regulatory ratios remained well above the set thresholds, our capital adequacy ratio at 19.3% gives us ample leverage to take advantage of emerging business opportunities.
Total deposits increased by 1.9% and the disciplined execution of our retail strategy continued to deliver strong results as savings deposits grew by 13.4% in the quarter under review.
Our key objectives for the 2016FY remains; redesigning our systems and processes to enhance service delivery, cost optimization initiatives to reduce expenses by 5%, proactive risk management, increased customer adoption/migration to our digital platforms and increasing our retail banking market share.