Zenith, UBA, GTB, 2 other banks report N3.3 trillion profit after tax in 2024

• Zenith, United Bank for Africa, Guaranty Trust Bank, and two other banks reported combined N3.3 trillion profit after tax in 2024
• The banks’ final dividend shares in 2024 also increased compared to those declared in 2023
• Economists, however, said banks’ reported profits don’t reflect economic growth

For the 2024 financial year, some of Nigeria’s largest banks, including Zenith Bank, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), Stanbic IBTC, and Fidelity Bank, reported a combined profit after tax (PAT) of N3.317 trillion.

This is according to an analysis of the banks’ 2024 audited financial statements posted on the Nigerian Exchange Group (NGX) platform.

The banks’ profit comes amid Nigeria’s harsh economy, pressured by soaring inflation, declining consumer purchasing power, and naira depreciation.

The profit after tax of Tier-1 lender, Zenith Bank, increased by 52.5 per cent from the previous year’s N676.9 billion to N1.03 trillion in 2024.

UBA’s profit after tax increased by 26.14 per cent year-on-year from N607.7 billion in 2023 to N766.6 billion in 2024.

For GTCO, the parent company of Guaranty Trust Bank (GTB), its profit after tax soared by 88.4 per cent from N539.6 billion in 2023 to N1.017 trillion in 2024.

Stanbic IBTC Holdings Plc recorded a 60.23 per cent increase in post-tax profit to N225.3 billion in 2024, and Fidelity Bank’s profit soared by 179.63 per cent to N278.1 billion in 2024.

Banks’ final dividend shares increased

Following the increase in reported gross earnings by the banks in the 2024 financial year, their final dividend per share also increased.

As part of its earnings, GTCO announced a final dividend of N7.03 per share, which brought the total dividend for the 2024 financial year to N8.03 per share, up from the N3.20 per share paid in 2023.

Zenith proposed a final dividend of N4.00 per share in addition to the N1.00 per share interim dividend, which amounted to N5.00 per share.

This saw the dividend payout of Zenith Bank’s chairman and founder, Jim Ovia, increase to N25.4 billion for his total 5,082,800,739 shares in the bank, comprising 3,552,949.395 direct shares and 1,529,851,344 indirect shares

UBA proposed a total dividend of N5.00 per share, while Fidelity Bank proposed a final dividend of N2.10 per ordinary share, and Stanbic IBTC proposed a final dividend of N3.00 against N2.20 paid in 2023.

Banks’ reported profits don’t reflect economic growth – Economists

Despite the increased reported banks’ profits in the 2024 financial year, a former Zenith Bank Chief Economist, Marcel Okeke, and developmental economist, Ilias Aliyu, said the profits do not translate to real economic growth.

Okeke attributed this to the devaluation of the naira following the floating of the currency in mid-2023, which has benefited the banks while other sectors of the economy continue to struggle.

“The devaluation of the naira has significantly impacted banks. Many of them hold dollar-denominated assets, which, when converted to naira, contributed to their reported gains. However, this does not necessarily reflect real economic growth,” Okeke said.

Aliyu argued that bank profits do not reflect in per capita income or improved standard of living because the real sector, which contributes to economic growth through job creation, struggles with higher operating costs.

“It is a strong contradiction that banks are making record profits while businesses are shutting down and Nigerians struggle with high inflation.

“In South Africa, the financial sector significantly contributes to GDP growth, but here, banking profits are not reflected in per capita income or improved living standards,” Aliyu argued.

UBA, Fidelity, Wema, 3 other banks pay N205.6 billion as windfall tax in 2024

Meanwhile, TheRadar earlier reported that six banks, including Zenith, United Bank for Africa, Fidelity, Wema, Stanbic IBTC, and Guaranty Trust Bank, have paid about N205.6 billion as windfall tax in the 2024 financial year.

The windfall tax is a 70 per cent levy introduced in the Finance (Amendment) Act 2023 on profits generated from foreign exchange (FX) transactions conducted by Deposit Money Banks (DMBs) between 2023 and 2025 due to the impact of the currency floating by the Central Bank of Nigeria (CBN).