BY Mike 'Uzor
Banks encountered a difficult operating year in 2015 in which revenue growth slowed down generally in the industry. Most of the banking industry leaders by revenue retained their membership of the top 10 league in 2015 but major upsets were recorded in the year. Access Bank beat them all by revenue growth margin and consequently moved up double steps on the ranking of Nigeria’s largest banks by gross earnings.
Though a few of the members of the group were yet to post their operating results for the 2015 full year by press time, their third quarter positions give convincing expectations of their positions on the ranking. The industry leaders by revenue are also the same members of the top 10 league by the size of the balance sheet.
The strength in converting assets into revenue is the key determinant of who moves up or down on the ranking by revenue volume. Banks that lost their positions on the table did so due to weakness in non-interest income.
FBN Holdings maintained leadership of the banking industry by gross earnings in the 2015 financial year. It closed the year with gross earnings of N505.2 billion, an increase of 5.1% from the 2014 position. This shows a sharp slowdown from its leading growth of 21.4% in gross earnings in the preceding year. The bank’s figure still leaves a wide margin of about N73 billion ahead of its closest rival, leaving high prospects for the bank’s continued leadership of the industry by revenue for yet a while into the future.
Zenith Bank retained its 2nd position on the top 10 ranking by gross earnings at the end of 2015 with gross earnings of N432.54 billion. This is an increase of 7.2% over the 2014 figure but a sharp slowdown from the growth rate of 14.8% it recorded in the preceding year. The slowdown came from a decline of 6.1% in non-interest income in 2015, which grew by over 39% in 2014. It is however ahead of the next bank on the revenue ranking by a wide margin of about N95 billion.
Access Bank is the game changer on the banking industry earnings league in 2015. It disrupted the long held standing arrangement on the top 10 earnings table in the year. The bank took a double jump from its 5th place on the table at the end of 2014 to now become the third largest revenue earner in the Nigerian banking industry.
The bank closed the 2015 financial year with a trend breaking leap of 37.6% in gross earnings to N337.41 billion. This is the highest revenue growth so far reported in the banking industry in the year. The bank has maintained strong growth in revenue for the second year, accelerating from 18.5% in 2014 against the general earnings deceleration in the banking industry in 2015.
United Bank for Africa stepped down from the 3rd position on the table in 2014 to the 4th on the ranking with a gross income of N314.83 billion at the end of 2015. It recorded an improvement of 9.8% in gross earnings in 2015, about the same margin it grew in 2014. It was ahead of Access Bank on gross earnings with about N45 billion in 2014 but now trails with about N23 billion.
Guaranty Trust Bank was displaced accordingly from the 4th to the 5th position on the ranking with gross earnings of N301.85 billion at the end of 2015. Its earnings growth rate decelerated from 14.8% in 2014 to 8.4% in 2015. A drop of over one-half in other income caused a decline in non-interest income, which moderated an impressive growth in interest income in the year. It stood ahead of Access Bank on gross earnings by over N33 billion in 2014 but now stands below by close to N36 billion.
Diamond Bank was yet to post its operating results for 2015 at press time but it is expected to retain its 6th place on the industry top earners’ table. At the end of third quarter, its gross earnings of N156.54 billion though a moderate growth of 3.3% year-on-year, still gave it the 6th spot on the top earners’ league. It had grown gross income by 15% in 2014 but a sharp slowdown is expected for the bank at the end of 2015. Even with a flat growth, it will still maintain a wide margin ahead of the next bank on the table.
Skye Bank was yet to issue its full year report at time of writing but the bank looks quite good to step into the 7th position from its 8th place in the preceding year. The bank showed an impressive growth of 33.1% in gross income at the end of the third quarter. Its gross earnings of N129.24 billion at the end of the third quarter was already ahead of FCMB’s corresponding figure of N109.29 billion. With our estimated gross income of over N170 billion for Skye Bank at full year, we expect the lead to be maintained.
First City Monument Bank (FCMB) is expected to step down to the 8th position on the table when Skye Bank’s expected position is confirmed. FCMB closed the 2015 trading with a gross income of N152.51 billion, a modest increase of 2.6% and a sharp slowdown from a growth of 13.5% in the preceding year. Its drawback came from a drop of 69% in other income.
Taking the 9th seat among the 10 largest revenue earners in the banking sector is Fidelity Bank, which displaces Union Bank and moves up from the 10th position in the preceding year. It closed last year’s operations with gross earnings of N146.89 billion. This is an improvement of 7.9% in the year, which is a gain of momentum from an increase of 4.3% in 2014.
Stanbic IBTC Bank looks good to enter the top 10 earnings league at the end of 2015, having been beaten to it by Union Bank in 2014. Its full year report is yet to be issued at press time, but it looks likely to send Union Bank out of the top 10 earners’ league. Union bank suffered a drop of 13.8% in gross earnings to N117.21 billion at the end of 2015 while Stanbic IBTC is expected to grow revenue by 7.6% to about N141 billion in 2015. At N104.42 billion, it was already ahead of Union Bank by close to N20 billion at the end of the third quarter.
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