Banks’ Assets Rise to N39.0651tn

Obinna Chima

The total assets of 11 commercial banks listed on the Nigerian Stock Exchange (NSE) stood at N39.065 trillion as at the end of December 2018, compared with the N34.898 trillion in the comparable period of 2017.

The compilation of the recently released results for the year ended December 31, 2018, by THISDAY, showed that the combined total assets grew by N4.167 trillion or 11 per cent in the year under review.

The banks are Zenith Bank Plc, Access Bank Plc, Guaranty Trust Bank Plc (GTBank), United Bank for Africa Plc (UBA), FBN Holdings Plc, Fidelity Bank Plc, FCMB Group, Ecobank Transnational Incorporated, Sterling Bank, Union Bank of Nigeria Plc, and Wema Bank Plc.

This amount is expected to rise further as recently released first quarter of Access Bank Plc, Zenith Bank and GTBank showed higher figures.
Also, the computation did not capture total assets of Suntrust Bank, Keystone Bank, Heritage Bank, Polaris Bank, Providus Bank, Citibank and Standard Chartered Bank as they are not listed on the NSE.

According to the results, while ETI posted total assets of N8.224 trillion as at December 2018, compared with the N6.865 trillion it reported in the comparable period of 2017; Zenith Bank recorded total assets of N5.956 trillion as of December 2018, higher than the N5.595 trillion it was the previous year; GTBank recorded N3.287 trillion total assets as of December 2018, up from N3.551 trillion the previous year and Access Bank’s total assets stood at N4.954 trillion at the end of 2018, higher than N4.102 trillion reported the previous year.

It is worthy to note that following its business combination with the Defunct Diamond Bank, Access Bank’s total assets jumped to N6.427 trillion at the end of the first quarter of 2019, its recently released results showed.

Furthermore, while Fidelity Bank’s total assets climbed to N1.719 trillion at the end of 2018, from N1.379 trillion the previous year; Union Bank posted total assets of N1.455 trillion as at December 2018; Sterling Bank recorded N1.103 trillion and Wema Bank’s total assets stood at N488 billion at the end of 2018.

The Central Bank of Nigeria (CBN) recently disclosed that the Capital Adequacy Ratio (CAR) of commercial banks improved from the 10.79 per cent as at August 2018, to 15.26 per cent as of December 2018.
CBN’s Deputy Governor, Financial System Stability Directorate, Mrs. Aishah Ahmad, had revealed this. According to her, the marginal improvement in non-performing loans (NPLs) ratio was also expected to strengthen further.

CAR is a measurement of a bank’s available capital expressed as a percentage of its risk-weighted credit exposures.
The CBN requires that banks with international subsidiaries maintain CAR of 15 per cent, while banks without international subsidiaries maintain CAR of 10 per cent.

But the minimum requirement for the systemically important banks is 16 per cent. The central bank also plan to introduce new capital rules in the second quarter of 2019 that would be stricter about what sort of funding qualifies as capital.
The rules, which will align the banking industry with the international accord known as Basel III, also require lenders to create buffers that should help them in the case of a crisis.

Notwithstanding the robust liquidity levels, Ahmad expressed dissatisfaction that credit to private sector has remained lower than required to support business investment and long-term growth.
Growth in lending portfolios is particularly important to diversify banks’ asset portfolios away from energy-related assets as earlier mentioned, she stressed.
She urged banks to be fully committed to de-risking their portfolios through new lending to small and medium scale enterprises (SMEs) and previously overlooked, but high potential sectors such as services and creative industries.