UBA and Zenith Bank have joined Access Corporation in the N20 trillion club (20TC) in terms of total assets.
The three financial institutions are now the only ones with a total asset based exceeding N20 trillion (~$20 billion) as of December 2023.
Access Bank leads the pack as the largest financial institution in the country, boasting a total asset base of N26.66 trillion.
Following closely, UBA secures the second spot with an asset base of approximately N20.65 trillion, while Zenith Bank also makes its mark with a total asset of about N20.36 trillion.
Recommended reading: Full year 2023: UBA gross earnings rises by 143% YoY
What the data says
According to the banks’ financial statements reviewed by Nairametrics, UBA recorded the highest total assets growth, surging by a staggering 90.2% from N10.9 trillion in 2022 YE to N20.7 trillion as of 2023 Year End (YE).
- Similarly, Access Corporation experienced significant growth in total assets to reach N26.7 trillion as of 2023 YE from N14.9 trillion in 2022, marking a 77.9% increase.
- Likewise, Zenith Bank saw a it’s own total assets grow by 65.8%, reaching N20.4 trillion as of 2023 YE from N12.4 trillion as of 2022.
- The growth witnessed in the 20TC banks reflects their strong performance in 2023. Access Corporation notably surged, with its Profit After Tax (PAT) soaring by a remarkable 300% Year-on-Year (YoY) to N612.4 billion.
- UBA also demonstrated impressive growth, with its PAT reaching N607 billion, marking a substantial 257% YoY increase. Additionally, Zenith Bank achieved its highest-ever PAT of N679.9 billion, showcasing a remarkable 202.3% YoY growth.
- The growth recorded by the three banks was largely influenced by the massive gains in forex revaluations as well as income from fx derivatives.
The banks have in recent years also led in expanding outside Nigeria to hold several operating subsidiaries outside the country. Access and UBA lead the charge when it comes to their spread outside Nigeria.
In the meanwhile, Nairametrics expects FBNH to join the trio by the second quarter of this year when they post their Q1 profits and their 2023 FY results.
The bank is also expected to raise up to N300 billion in fresh capital ahead of the central bank’s recapitalization deadlines.
Significance of Total Asset Base
The importance of a bank’s total asset base cannot be overstated. It serves as a critical measure of the bank’s size, stability, and its ability to fund various operations, including lending, investment, and other financial services.
- For customers, the size of a bank’s assets can be reassuring, indicating the institution’s capacity to safeguard deposits and meet withdrawal demands.
- For investors, it signals the bank’s growth prospects and financial health, often translating into confidence in the bank’s stock.
- The collective ascent of Access Bank, UBA, and Zenith Bank to the 20TC highlights a broader trend of sustained growth in financial strength within Nigeria’s banking sector in the last 20 years.
This strength is crucial not only for fulfilling the economy’s domestic requirements, such as financing infrastructure projects and supporting small and medium-sized enterprises (SMEs), but also for positioning Nigeria as a financial hub in Africa.
Their Journeys and What lays ahead
However, the journey doesn’t conclude here. As these banks persist in their growth trajectory, they encounter the challenge of navigating the intricacies of a swiftly evolving financial landscape.
- This entails adapting to digital transformations, mitigating cybersecurity threats, fulfilling the continuously evolving demands of a diverse customer base, and shaping the narrative towards a $1 trillion economy as envisioned by the Federal Government.
- In addition, with great size comes great responsibility, especially with the recapitalization raise requirement
- These banks now bear a more significant role in propelling sustainable banking practices, fostering financial inclusion, perpetuating improvements in Corporate Governance standards, and contributing to the economic development of Nigeria and Africa as a whole.