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Short-term loans, others push banks’ assets to N58.51tn

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Massive investments in short-term financing and other prudent measures have made the assets of 10 key commercial banks to grow by N8.09tn (a 16.06 per cent increase) to N58.51tn in one year, reports have revealed.

Specifically, the combined asset of the 10 selected lenders grew from N50.42tn in September 2020 to N58.51tn in September 2021, according to an analysis of the financial result of the banks for third quarter ended September 30, 2021.

The banks under review are Access Bank Plc, Guaranty Trust Plc, Stanbic IBTC, Sterling Bank, Wema Bank Zenith Bank Plc, Union Bank Plc, United Bank for Africa Plc, First Bank of Nigeria Limited, and Ecobank Nigeria.

According to the analysis, Access Bank has the largest asset base (N10.4tn), while Wema Bank has the smallest asset base (N1.09tn).

Access Bank grew its asset base by N2.47tn from N7.93tn to N2.47tn during the period under review.

GTCO also raised its asset by N570.09m from N4.57tn to N5.14tn during the same period.

Stanbic IBTC, which had an asset base of N2.58tn in September, last year grew same by N170.49m to N2.75tn in the same period of this year.

Sterling Bank also raised its asset base from N1.31tn in the third quarter of 2020 to N1.55tn this year, indicating a growth of N243.25m.

Also, Wema Bank which had an asset base of N863.64bn in 2021 grew same by N221.13m to N1.09tn in 2021.

Zenith Bank had an asset base of N8.48tn as at September 31, 2020, but grew same by N270.32m to N8.75tn by September 31, 2021.

United Bank for Africa had an asset base of N7.06tn as at September 31, 2020, but grew same by N1.29tn to N8.35tn by September 31, 2021.

Union Bank, which had an asset base of N2.24tn in September last year, raised same by N325.8bn to N2.56tn by the third quarter of this year.

First Bank of Nigeria had an asset base of N7.13tn as at June 30, 2020, but grew it by N893.36bn to N8.02tn by June 30, 2021. Our correspondent could not immediately access First Bank’s data for the third quarter of this year, hence the use of the lender’s result for last year.

 Ecobank which had an asset base of N7.93tn as at June 30, 2020, grew same by N2.29tn to N10.23tn in the third quarter of this year.

Reacting to the development, a professor of Economics and Public Policy at the University of Uyo and the Chairman of the Foundation for Economic Research and Training, Prof. Akpan Ekpo, said, “Even though there was a pandemic last year, the banks didn’t stopped investing. Don’t forget that a lot of the money the government was giving out was through the banks, so the banks were still in good shape despite the pandemic.

“The pandemic didn’t really affect bank activities. Presently, the economy is not doing well, yet banks are declaring profits. This is so because even during the pandemic, banks were financing short-term investments. That is why their assets are going up. “

Another economist and senior lecturer at the Pan Atlantic University, Dr Olalekan Aworinde, while commenting on the development, “Banks have fixed assets and current assets. We have to consider which of the assets are growing; both assets are good.

“The growth could be from their current assets, probably they gave out a lot of loans. I don’t think the pandemic impacted on their current assets. But this growth could be as a result of the appreciation of their fixed assets in terms of building and lands. And the current interest rate might be of benefit to them also.”

 

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