…Africa’s share of foreign profit highest

Leading tier-one deposit money banks in the country generated more profit from their foreign operations in 2023, bolstered by the significant profit that came from subsidiaries in other African countries, an analysis of their profit after tax by geographical locations has revealed.

In 2023, Zenith Bank, United Bank for Africa (UBA) and Guaranty Trust Bank (GTB) realised N477.45 billion as profit after tax from the rest of Africa and the world, representing an increase of 307 percent over N117.19 billion made in the previous year.

The profit after tax from their foreign operations, accounted for 23.8 percent of their total 2023 profit in contrast to 18.8 percent in 2022.

The three banks, with international banking licences realised N2.01 trillion profit after tax in 2023, supported by high interest rate regime which was implemented to curtail inflation, and exchange rate devaluation following the floating of the naira. In 2022, the three banks realised N624.93 billion as profit after tax.

From the combined profit after tax of the three deposit money banks, GTB raked in N539.64 billion in 2023, of which N423.83 billion was generated through its branches in Nigeria; its subsidiaries in other African countries generated N105.64 billion while its subsidiaries outside of Africa generated N10.16 billion.

In 2022, GTB made N143.95 billion as profit after tax from its Nigerian operations; N26.45 billion in Africa, while a loss after tax of N1.58 billion was made from its operations outside of the African continent.

GTB has subsidiaries in the United Kingdom, Ghana, Kenya, Sierra Leone, Rwanda and the Gambia.

United Bank for Africa realised N273.48 billion profit from its foreign operations, up by 195 percent from N92.62 billion in 2022. From the profit, N185.30 billion profit was made through its subsidiaries across the African continent while N88.18 billion was made from other subsidiaries outside of Africa.

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In the previous year, UBA made N71.67 billion from its African subsidiaries, implying the 2023 performance was an improvement of 159 percent of the previous year’s profit. The bank also generated N20.95 billion profit from its subsidiaries outside of the African continent.

Zenith Bank’s foreign subsidiaries realised just N88.17 billion profit in 2023, compared to a loss after tax of N296 million in 2022. Its subsidiaries across the African continent made N51.18 billion profit in 2023 compared to a loss after tax of N16.55 billion in 2022. The other subsidiaries outside of the African continent generated N36.99 billion profit in 2023, an increase of 127 percent over N16.26 billion made in the year before.

In all, Zenith Bank generated N691.03 billion profit in 2023, with N602.86 billion of it made by its branches across Nigeria. This compares to N239.44 billion profit the bank made in 2022.

UBA, through all its operating units in Nigeria and elsewhere in 2023 realised N777.08 billion profit after tax, with N503.6 billion of the total profit made within Nigeria. In the previous year, the bank made a total of N216.68 billion, indicating the 2023 level of profitability was better than the previous year by 259 percent.

Guaranty Trust Bank Limited made N539.64 billion overall, out of which N423.83 billion was generated by its branches across Nigeria. In 2022, the bank generated N168.82 billion as profit after tax, with N143.95 billion the portion its Nigerian operating unit realised from the overall profit of the tier-one bank.

The three banks are among the Nigerian banks that have been mandated by the apex bank in the country to raise their capital to N500 billion each, for banks of their status with international banking licenses.

It should be recalled that the Central Bank of Nigeria, penultimate week, directed banks in the country to raise their paid-up share capital and premium share up to N500 billion for banks that hold international banking licences.

In our earlier findings, The Nigerian Observer reported that to meet this deadline, GTB would have to raise additional N361.81 billion; UBA, N384.19 billion while Zenith Bank will have to raise N229.75 billion.