Nigerian banks' performance for 2013 shows winners and laggards

The year 2013 was turbulent for Nigerian banks as most had their growth slowed by regulatory headwinds caused by the Central Bank of Nigeria (CBN) continued tightening stance, Businessday reports..

The newspaper in its analytical report that some have been very nimble to respond and weather the storm of the aforementioned hike in cash reserve requirements and regulation that reduced fees and commissions, as both top- and bottom-line level performance grew, while others were hit as profits shrank.

It went ahead to x-ray their of operational efficiency and returns to shareholders and rank them based on those criteria.

Guaranty Trust Bank (GTBank) emerged as the most efficient and profitable bank in terms of translating top-line performance to bottom-line growth. It also outperformed others in giving returns to owners of the business.

GTBank recorded net margin of 37 percent, while ROaE and ROaA were 29 percent and 5 percent, respectively. Standard Chartered Bank came next with net margin of 34 percent, while ROaE and ROaA were 28 percent and 4 percent, respectively.

Others that recorded double-digit growth in net margin and returns are Zenith Bank, Access Bank, UBA, Diamond Bank, FCMB, Stanbic IBTC, Skye Bank, and FBN.

The laggards are Ecobank, Wema Bank, Unity Bank, Sterling Bank, Union Bank, and Fidelity Bank, as they battle with huge operating and loan loss expenses.

With regards to the aforementioned, Unity Bank had its profits eaten by huge operating loan loss expense, which culminated in a loss of N33.64 billion at year end 2013.

Our top picks, based on the results and stellar return on equity for shareholders are GTBank, UBA, Diamond Bank, and Zenith Bank.