By Odunewu Segun
Nigeria’s top five banks, Zenith, UBA, GTB, Access and FBN Holdings made a combined N1.4 trillion in interest income for the first 9 months of the 2017, compared to N1.1 trillion in the same period in 2015.
The 2017 9 months results of the five banks, National Daily gathered, also showed a combined earnings of about N451.8 billion from treasury bills and government bonds, compared to N270 billion earned same period in 2016.
In summary, 33% of bank interest income was from Treasury Bills and Government Bonds compared to 25% in the same period in 2016.
FBN Holdings reported that it earned N356 billion in interest income in the first 9 months of the year out of which N120 billion was from income in government securities. The bank earned N74 billion in income from government securities the same period last year representing a N50 billion bump.
UBA also reported an interest income of N238 billion for the same period, of which N82 billion was made from interest earned from treasury bills and bonds. A N19 billion increase from the N63 billion it earned the previous year. A total of N47 billion was earned from treasury bills compared to N20 billion a year earlier. About N35.7 billion was earned from government bonds.
Guaranty Trust Bank (GT Bank) made N75.8 billion from interest in investment securities, of the N248 billion it has made in interest income for. This compares to the N36 billion earned the same period in 2016, while Access Bank reported an interest income of N240 billion, of which N57 billion was made from investment securities, compared to the N32.7 billion reported the same period in 2016.
Zenith, in its financial statement, earned N84 billion as income from treasury bills, and N32 billion as interest on government bonds, of the N361 billion it has earned as interest income so far this year.
This contrasts to the N37.3 billion and N38.4 billion earned in Treasury Bills and FGN Bonds respectively in the same period in 2016. The bank also earned another N34 billion in treasury bills trading income making it the top earner from government securities.
In 2017, Nigerian banks increased purchase of government securities against increasing loans to the private sector.
Government securities have offered yields in excess of 18% for the year as government increases reliance on local borrowing to fund the Federal Budget as well as plug its deficit. Government is now considering borrowing in cheaper foreign currency and reducing its more expensive local debts.