FINANCIAL PERFORMANCE -REVIEW
Gross Earnings: The Bank’s gross earnings for its half year report inched higher marginal by 2.77% to N117.374Billion compared with the gross earnings of N114.207 Billion earned as at 30th June, 2018, this growth was as a result of significant appreciation recorded on Trading Revenue and Other Revenue, as they both increased by 10.18% and 9.87% respectively. Trading Revenue growth was driven by fixed income earnings and Other revenue was driven by gain from disposal of financial investment.
Revenue: The Bank’s Core Revenue was able to deliver just a marginal growth of 1.44% , as it posted a revenue of N60.784 Billion for 2019 half year as against N59.924 Billion for 2018 half year, that was majorly driven by Interest Income on loans and advances to Banks, given a 3.27% appreciation.
Total Operating Cost: The clog to the Banks bottom line for the half year period was majorly its total operating cost, as all these cost element did increase; Interest expense, operating expense and Tax expense inched higher by 8.70%, 2.65% and 9.93% respectively. Interest Expense increase was driven by the 77.76% increase recorded on borrowed fund interest payment made by the Bank for its own facilities, while Operating Expense, major outliner was other operating expense that inched up by 10% and the increase on Tax Expense was as a result of carried forward deferred tax now recognized during the current year.
Bottom Line: The decline in the Bank’s PAT is best explained as a function of a declining rate of growth in Revenue line, compared to the increasing pace of growth in the firms operating cost elements, as such the Bank recorded a 15.87% decline in its PAT, as at half year of 2019, the Bank posted PAT of N36.245 Billion, while 2018 half year PAT stood at N43.084 Billion.