Access, GTB, Zenith Record N120bn Impairment Charges

  • Access, GTB, Zenith Record N120bn Impairment Charges

Access Bank Plc, Guaranty Trust Bank (GTBank) Plc and Zenith Bank Plc, the three banks, which have so far released their audited results for the full year ended December 31, 2016, have made higher provision for loan losses, reflecting the challenging operating environment.

The banks recorded total loans and advances of N5.687 trillion as at December 31, 2016, showing an increase of 20 percent compared to N4.727 trillion in 2015. However, the combined loss provisions jumped by 183 per cent from N42.297 billion in 2015 to N119.59 billion in 2016.

GTBank led the pack with the highest impairment charges of N65.29 billion in 2016, indicating a surge of 426 per cent from N12.4 billion recorded in 2015. GTBank’s loans and advances stood at N1.589 trillion, implying that the loan provision for loss is 4.1 percent.

Zenith Bank Plc followed with impairment charges of N32.35 billion, up by 106 per cent from N15.673 billion in 2015. With a loan book of N2.289 trillion, the provision shows 1.4 per cent.

Access Bank Plc, which ended the year with a loan book of N1.809 trillion, made provision of N21.952 billion for loan loss, indicating 1.2 per cent and 54 per cent higher than the N14.224 billion impairment charges recorded in 2015.

Although the banks ended the year with higher impairment charges, they also closed the year with higher profitability.

GTBank grew its profit after tax by 32 per cent from N99.4 billion in 2015 to N132 billion. Zenith Bank Plc’s PAT stood at N129.65 billion, indicating a growth of 22.7 per cent above N105.66 billion in 2015. Access Bank grew its PAT by 8.5 per cent to N71.4 billion, from N65.9 billion in 2015.

Commenting on the results, Group Managing Director/Chief Executive Officer, Herbert Wigwe had said: “The full year 2016 results demonstrate the effective execution of our strategy underpinned by a robust risk management framework. With strong business fundamentals, our position in the top tier was further consolidated in the industry.”

While acknowledging the macroeconomic environment in 2017, Wigwe assured that “our objective of delivering sustainable shareholder value remains unchanged. We will also continue to maintain our proactive and disciplined risk management practices and leadership in sustainability initiatives, whilst positioning ourselves strategically to take the lead in the markets we play.”

On his part, the Managing Director/CEO of Guaranty Trust Bank Plc, Mr. Segun Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth. We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices.”

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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