The Declined was a result of bad loans, naira volatility and other economic headwinds with N53.54bn fall in profit which many of the banks’ chief executive officers attributed to high impairment charges on bad loans, foreign exchange volatility and other challenges facing the economy following the significant drop in the nation’s oil revenue due to the sharp fall in oil prices.
Here are the banks:
Ecobank International Incorporated,
Union Bank Plc,
First City Monument Bank Limited,
Wema Bank Plc and
Fidelity Bank Plc
The annual financial statements of the banks posted on the website of the Nigerian Stock Exchange showed a combined 80 per cent decline in their annual profits.
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Most banks would experience a decline in profit because of TSA, and this year will be worse. Before TSA, these banks had custody of government funds which they lent back to the government at huge interests (typically 15%). With TSA, those funds are no longer available to the MDBs (the money deposit banks), so their profits are bound to fall.
ReplyDeleteTSA took off in September 2015, so the fall in profit is largely due to the last quarter of 2015. The impact on the whole of 2016 performance will be huge.
Waawu. Thanks for the explanation. I hope Buhari continues to be firm and hard hearted so that Nigeria can be great again.
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