Moody’s downgrade: Nine top Nigerian banks to post N3.75trn revenue in 2023

  • Profit to drop to N729bn


Uba Group

Financial Derivatives Company Limited has predicted that top nine Nigerian banks will record a drop in revenue and profit due to undue exposure to the Federal Government. Data made available by FDC Limited showed that both revenue and profit of the affected banks will diminish. In all, the nine banks are expected to record a total revenue of about N3.75 trillion and net profit of N729 billion.

Total assets are estimated to stand at N60.75 trillion. Access Bank Plc is estimated to post the biggest revenue of about N907 billion with net profit standing at N137 billion while Asset size, being the largest in the industry, will stand at N13.4 trillion.

Zenith Bank Plc with a total Asset portfolio of N11.3 trillion is expected to deliver a revenue of about N621 billion with profit of N174 Billion. United Bank for Africa Plc is expected to emerge the third largest bank by revenue at N608 billion with an Asset size of N9.3trillion while profit is estimated to be N116 Billion.

FBN Holdings is expected to emerge the fourth largest bank by revenue at N547billion and third largest by Asset at N9.85trillion while profit stands at N91.2billion. GTCO’s revenue is expected at N364billion; profit, 130 Billion and asset size, N5.8trillion. Other banks in the Moody’s basket include FCMB, N200 Billion revenue; PAT, N22.9billion and total assets of N2.9trillion. Sterling Bank is expected to deliver N119.6 billion revenue, N13.4 billion profit and asset base of N1.8trillion.

Union Bank’s revenue will hit N141billion while profit stands at N9.2billiona and asset base, N2.6trillion. Fidelity Bank’s revenue is estimated to stand at N241.8billion while profit and asset size stand at N34.9billion and N3.8trillion respectively. Rationale for downgrade by Moody’s are weak operating environment, depressed oil production, capital outflows, sovereign’s weakened creditworthiness and significant holdings of sovereign debt securities.

The impact of Moody’s downgrade on the banks according to FDC would be the inability of the entities to access foreign loans to drive their business as significant reduction in capital flows to the banks is also expected. FDC noted that the non-performing loans of the banks will increase due to the weak operating environment as dwindling investor confidence in the Nigerian banking system will take its toll on their performance.