In 2024, Nigeria’s prime banks reaped the advantages of a risky however worthwhile macroeconomic setting, with 9 listed banks- Entry Holdings, FCMB, Constancy, First Holdco, GTCO, Stanbic IBTC, UBA, Wema Bank and Zenith, posting a mixed revenue after tax (PAT) of N4.786 trillion.
This marked a 53.34% improve from N3.121 trillion in 2023.
However beneath the floor of booming earnings lies a extra intriguing story.
The banks’ Worth-Added Statements (VAS), a much less scrutinized however insightful part of their financials, revealed that the full wealth generated stood at a staggering N8.871 trillion, up 66.3% from N5.335 trillion within the earlier yr.
The Worth-Added Assertion (VAS) categorized how the wealth was distributed amongst key stakeholders: governments, workers, suppliers of capital, shareholders, and retained earnings for future use.
Authorities emerges as the highest exterior beneficiary
The Worth-Added Statements reveal that the federal government emerged as the largest exterior beneficiary, eclipsing shareholders by a large margin.
- Whereas some banks didn’t explicitly state dividend payouts of their VAS, a evaluation of their monetary statements reveals that authorities tax collections totaled N1.166 trillion, a 111.4% improve over the earlier yr.
- In distinction, shareholders acquired N951.4 billion in dividends, up 87% from 2023.
- That stated, you will need to be aware that their strategy to sharing this wealth different broadly among the many stakeholders.
Under is a breakdown of how every bank disbursed its generated worth:
Zenith Bank
In 2024, Zenith Bank stood out as probably the most worthwhile Nigerian bank, posting N1.032 trillion in revenue after tax, the best amongst its friends.
The bank additionally generated a considerable N1.583 trillion in worth added throughout the yr.
- Of this, N294 billion was paid to the federal government by way of taxes and levies, the best amongst all of the banks analyzed, marking a 147% improve from the earlier yr.
- The Worth-Added Assertion signifies that N1.085 trillion was retained by the bank. This determine contains revenue for the yr, statutory reserves, small-scale business allocations, and non-controlling pursuits.
- A evaluation of the Bank’s monetary statements additional reveals that shareholders acquired N196.676 billion in whole dividends (Interim and closing).
Whereas this represents a notable enchancment, the federal government nonetheless walked away with a considerably bigger share of the bank’s wealth.
GTCO:
GTCO recorded a revenue after tax of N1.018 trillion in 2024, the second highest amongst Nigerian banks.
Additionally, its worth added stood at N1.410 trillion.
- Out of this, N248.443 billion was paid to the federal government in taxes and associated levies, a large 257% improve from the prior yr.
- Shareholders acquired N236.332 billion in dividends, which, though substantial, is about 5% lower than the worth acquired by the federal government.
This made the federal government one of many greatest exterior beneficiaries of the bank’s wealth in 2024 and additional aligns with the broader pattern.
Entry Holdings:
Entry Holdings led all banks with the best value-added of N1.622 trillion in 2024, a 48% improve from the earlier yr, and with a revenue after tax of N642.216 billion.
The bank paid N224.802 billion to the federal government (14% of worth added) and N261 billion to suppliers of finance (16%).
Shareholders acquired N125.299 billion in dividends, about 68% larger than in 2023, however nonetheless considerably lower than what the federal government acquired, reinforcing the broader pattern of the state benefiting greater than fairness traders from bank efficiency in 2024.
First Holdco:
First Holdco generated a strong N1.593 trillion in worth added, practically double its 2023 determine, and posted a revenue after tax of N663.490 billion.
The federal government acquired N132.977 billion, up 179% year-on-year, whereas workers obtained N308.5 billion (about 19%).
Nevertheless, shareholders acquired simply N25.127 billion, which is about 5 instances lower than the quantity paid to the federal government, highlighting a big disparity in worth distribution.
Fidelity Bank:
Fidelity Bank posted a revenue after tax of N278.106 billion, representing a 179% improve from 2023, and N508.743 billion in worth added.
The federal government emerged as the highest exterior beneficiary, receiving N95.454 billion (18.76% of worth added), a large surge from N4.170 billion the earlier yr.
As compared, shareholders obtained N89.965 billion, a big 231% improve year-on-year, however nonetheless barely lower than what went to the federal government.
Stanbic IBTC:
Stanbic IBTC worth added stood at N408.586 billion in 2024. From this, the federal government acquired N78.485 billion, marking a 143% improve from the earlier yr.
Staff have been the best beneficiaries, receiving N86.681 billion (21% of worth added), which was additionally larger than the federal government’s share.
Shareholders, nonetheless, acquired the least, N64.758 billion, suggesting they bore the brunt of the distribution.
FCMB:
FCMB reported a 21% decline in revenue after tax to N73.337 billion however created N205.074 billion in worth added a 24% improve from 2023.
The federal government acquired N38.558 billion, accounting for 18.8% of the worth added, whereas shareholders acquired N21.783 billion.
Though this represents a 120% improve from 2023, it nonetheless falls considerably under what was paid to the federal government, reinforcing the pattern the place public coffers benefited greater than fairness traders.
UBA:
UBA, a number one Tier-1 bank, delivered a powerful revenue after tax of N766.568 billion in 2024. Its worth added stood at N1.384 trillion, marking a 23% improve from 2023.
About 75% (N1.032 trillion) of this wealth was retained for asset alternative, enterprise enlargement, and non-controlling pursuits.
Based on the monetary statements, shareholders acquired N170.997 billion, which is considerably larger than the N37.158 billion paid to the federal government, making UBA one of many few banks the place shareholders gained greater than the general public purse.
Wema Bank:
Wema Bank noticed a 139.74% improve in revenue, reaching N86.280 billion in 2024. Its worth added surged to N156.718 billion, up 105% from 2023.
The bank paid N16.235 billion in taxes to the federal government, a 111.5% improve, representing 10.36% of its worth added.
Nevertheless, the monetary statements present that shareholders are set to obtain N21.430 billion, which is larger than the quantity paid to the federal government, positioning Wema Bank among the many few the place shareholders emerged extra favored than the general public treasury.
General, whereas Nigerian banks paid out a file N951 billion to shareholders in 2024, a powerful 87% improve from the earlier yr, the federal government nonetheless emerged as the largest beneficiary, receiving a complete of N1.166 trillion in taxes, up 111.39% year-on-year.
This implies the federal government earned over N200 billion greater than shareholders from the banking sector’s 2024 efficiency, highlighting a rising shift in worth distribution towards public coffers.
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