) Plc suffered a drop of almost N37 billion in interest earnings from core lending operations in 2021, which pushed profit down to N175 billion – the lowest profit figure in four years.
The impact of the drop in interest earnings cut its way through to the bottom line, slashing after tax profit by 13 percent from over N201 billion in 2020 – the first profit drop for the bank in more than a decade.The challenge was that cost of funds failed to go down with interest income in the year. Interest expenses were only slightly down to close at a little over N46 billion at the end of the year.
This is a positive change of direction from a huge increase of 300 percent in loan impairment expenses in the preceding financial year. The indication is an improvement in the overall credit quality standard of the bank despite the increase in the bank’s net lending position. Non-interest income provided a much compensatory growth of 17 percent to close the year at N181 billion. This jerked up the contribution of non-interest revenue to gross earnings from 31 percent in 2020 to 40 percent in 2021 – the highest margin in four years.The improvement in non-interest income was driven by fee and commission earnings, which grew by 39.4 percent to N74 billion at the end of the year. Other income also rose by 10 percent to N84.4 billion in the year.