quarter ended 31st March 2021, with Profit Before Tax (PBT) rising by 4%
to N61.0 billion, from N58.8 billion recorded in March 2020. This is
despite a very challenging macroeconomic environment aggravated by the
COVID-19 pandemic.
According to the unaudited statement of account presented to the
Nigerian Stock Exchange (NSE) on Friday, 30th April 2021, Profit After
Tax (PAT) also grew by 5% from N50.5 billion in Q1 2020 to N53.1 billion
in Q1 2021.
The profitability was driven by the optimisation of the cost of funds
and improvement in non-interest income. The Bank’s cost of funds reduced
significantly from 2.6% in March 2020 to 1.1% in March 2021. This was
also reflected in interest expense which dropped by 45% from N32.8
billion to N18.0 billion over the same period. Non-interest income
increased by 10% from N46.6 billion to N51.2 billion, driven by growth
in credit-related fees and fees on electronic products.
Non-interest income was boosted by the increase in fees and commission
income, which resulted from the increased volume of transactions across
all the Bank’s channels. Cost of risk dropped from 0.6% in March 2020 to
0.5% in March 2021, which affirms the Bank’s prudent risk management,
even as gross loans increased by 2% from N2.92 trillion to N2.98
trillion in Q1 2021.
The Bank’s robust customer acquisition strategy and the effectiveness of
its electronic platforms and digital channels enabled it to deliver a
N54 billion increment in the savings account balance, which is solely
retail. Customer deposits grew by 6% from N5.34 trillion in December
2020 to N5.68 trillion in March 2021. Transactions on electronic
channels also grew astoundingly as new customers continue to be
attracted to the Bank’s various user-friendly digital platforms.
Going forward in 2021, the Bank expects that the ongoing economic
recovery and improvements in the yield environment will translate into
improved numbers for the Group. This is expected to be supported by
local and international COVID-19 vaccination campaigns, rising commodity
prices, and global economic growth of up to 6%, as estimated by the
International Monetary Fund (IMF). The Group will continue to position
itself to take advantage of positive developments in the domestic and
global economy to deliver improved financial performance and returns to
all its stakeholders.