The annual downward pressure on naira value against the dollar has taken a toll on Nigeria big lenders’ assets in dollar term, causing them an aggregate loss of N6.32 trillion ($20.65 billion) in asset value since 2014, however with the exception of Access bank, which remained resilient to exchange rate pressures in the last five years.
In naira terms, the big lenders which include Access Bank, Guarantee Trust Bank, United Bank for Africa, First Bank and Zenith bank; have all recorded impressive growth in assets under management during the period under consideration. However, this is not the case in dollar term.
Amongst peers, Access bank recorded an annual average growth rate in asset value by 19 percent, highest amongst peers. However in dollar term, its asset value appreciated annually at an average of 4 percent when adjusted for exchange rate since 2014.
As revealed in the bank’s financial position released for the year ended 2018, asset value appreciated by 135 percent to N4.95 trillion against N2.10 trillion in 2014. However, 94 percent devaluation in Naira within the last 5 years slowed appreciation in Access bank’s asset value to 22 percent in dollar term, recording $16.19 billion in value in 2018.
In contrast to Access Bank’s performance during the period, peers in the industry however suffered loss in value when considered in dollar term.
Our analyses revealed GTB and First bank plc as the biggest hit amongst peers in asset value in the last 5 years. Result showed that both banks suffered decline by 34 percent respectively in asset value since 2014 despite growth by 28 percent in Naira term.
During the period, asset value declined to $8.86 billion from $13.41 billion in 2014 in the case of GTB, while First bank recorded $18.19 billion in asset against $27.39 billion in 2014.
Zenith bank on the other hand saw its asset decline by 25 percent during the period under consideration as asset value in dollar deteriorated to $16.19 billion from $21.59 billion, making the bank seat second on the worst hit chart.
Least hit was UBA, despite significant growth in its asset under management by 76 percent in naira terms, witnessed a decline in asset value by 9 percent to $15.91 billion in 2018 from $17.42 billion in 2014.
Total asset under management recorded for the year ended 2018 of all tier one lenders in the banking industry amounted to N23.06 trillion. This represented an increase by 56 percent from 2014 asset value of N14.76 trillion.
However in dollar term, the aggregate value of these banks depreciated by 19 percent to $75.36 billion in 2018 from $93.10 billion in 2014, with GTB, Zenith and first bank underperforming the industry performance. Meanwhile, Access bank and UBA outperformed the industry in dollar term.
David Ibidapo
