Report: Fidelity Others Missing as UBA, Access, GTCO, Zenith Retain Tier One Ranking


Headline: Proshare Bank Strength Index 2023 Reflects Steadfast Standing of Leading Banks

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In the latest Proshare Bank Strength Index (PBSI) for 2023, it was highlighted that four tier one banks and financial holding companies maintained their prominent positions within the industry. Notably, Access Bank, Guaranty Trust Company, Zenith Bank, and the United Bank of Africa (UBA) retained their tier one rankings, underscoring their continued robust performance in the sector.

Conversely, Stanbic IBTC and Fidelity Bank experienced a downgrade from tier I to tier II. The PBSI’s assessment methodology delineated that entities surpassing the 50th percentile were placed within Tier 1, while those falling below this threshold were classified as Tier II and III, respectively.

The report also signaled the ascension of Ecobank Transnational Incorporated to the Tier 1 ranking for the 2023 PBSI, having previously held a Tier II ranking in 2021/2022. The PBSI’s inaugural “Tier 1 Banking Report” focused on pivotal metrics such as Asset Quality, Profitability, and Liquidity, while expanding its scope to include efficiency ratios, risk management, and digital income, incorporating various vital indicators such as Assets, Gross earnings, Capital Adequacy Ratio (CAR), Loans Deposit Ratio (LDR), Cost to Income-Ratio (CIR), Cost of Risk (CoR), Net Interest Margin (NIM), Non-Performing Loans Ratio (NPLR), Digital Income to Gross Earnings Ratio, and Independent Non-Executive Directors (INED) to Board Ratio.

The report emphasized the need for adaptability in navigating future disruptions, as echoed by discussions with chief financial officers, urging a transition from rigid frameworks to more flexible structures conducive to enhanced internal collaboration and operational fluidity.

Acknowledging the evolving dynamics in the Nigerian banking sector, the report underscored the importance of customer retention strategies and the creation of innovative market spaces facilitated by the growing influence of AI-driven fintech services.

While recognizing potential challenges for some entities, the report maintained an optimistic outlook for the continued prosperity of many Tier 1 banks, reflecting their resilience and adaptability to the market’s demands.

The comprehensive evaluation encompassed the full-year 2022 performance of banks and financial Holdcos, incorporating the half-year 2023 results, providing a comprehensive and timely understanding of the industry landscape. The report’s six sections highlighted various key areas, including the impact of the 2023 Silicon Valley Bank crisis on global banking, Nigerian banks’ operations, revised 2021 PBSI and bank classifications, the financial risk profile of Tier 1 and Tier 2 banks, the emergence of tech foundries and digital income in the Nigerian banking industry, and recommendations for regulators.

Gbenga Samson
Gbenga Samson
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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