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The increase in customer confidence, improved profit margins, and robust performance in core banking activities during this period suggest that Polaris Bank is poised for a remarkable performance in 2024.
According to management accounts for the eight-month period ending August 31, 2024, Polaris Bank is set to significantly exceed all key performance indicators established for the year ending December 31, 2023.
With an average profit per transaction markedly higher than the previous year, the bank's bottom-line performance reflects a consistent improvement in its core banking operations, even amidst a challenging business environment.
The overall positive outlook for the bank reinforces the growing confidence in and success of its new management team, led by Mr. Kayode Lawal.
The establishment of a complete board for the bank two weeks ago was interpreted by industry analysts as a strong affirmation of the significant progress made under the new management by the Central Bank of Nigeria (CBN).
For the eight-month period ending in August 2024, the pre-tax profit margin reached 10.62 percent, a notable increase from the 6.61 percent reported for the entire year of 2023, reflecting an improvement of approximately four percentage points. The net interest income margin was approximately 52.6 percent in August 2024, compared to 52.1 percent in December 2023. The pre-tax return on total assets for this period rose to 1.22 percent, up from 0.63 percent for the full year of 2023. Additionally, the pre-tax return on equity was recorded at 21.44 percent in August 2024, a significant increase from 13.15 percent in December 2023.
Profit before tax for the first eight months of this year reached N16.733 billion, representing a 28.4 percent increase over the N13.033 billion reported for the full year of 2023. The bank’s net profit for 2023 was N10.91 billion.
Key highlights from the management accounts and report for the period ending August 2024 revealed gross earnings of N157.59 billion, with interest income amounting to N137.15 billion. The net Interest income was recorded at N72.18 billion, while non-interest income totaled N20.44 billion, leading to a net operating income of N78.17 billion.
With total operating expenses at N61.43 billion, the pre-tax profit surged to N16.733 billion, positioning the bank for its strongest profit performance in recent years.
Significant balance sheet metrics also highlighted the increasing brand recognition and market penetration, as the bank maintained its reputation as a preferred choice for small and medium enterprises. Customer deposits reached N1.663 trillion, and total equity exceeded the previous year’s performance, standing at N115.86 billion in August 2024 compared to N99.13 billion for the full year of 2023. Total assets also surpassed the previous full-year figures, amounting to N2.060 trillion by August 2024, compared to N2.058 trillion at the end of 2023.
Polaris Bank’s Managing Director, Mr. Kayode Lawal, shared that the recent results highlight the early achievements of their strategic initiatives designed to enhance the bank’s standing in the industry.
He emphasized that Polaris Bank is on track to maintain its growth while staying true to its commitment to people-centric values.
“We’re in a much stronger position now to build on our initial successes and provide outstanding value to our stakeholders,” Lawal mentioned.
He also noted that the increasing brand recognition indicates that the banking community continues to see Polaris Bank as a trustworthy place for their deposits and a dependable partner for their businesses.
The audited financial report for the year ending December 31, 2023, revealed gross earnings of N197.04 billion, with interest income at N144.68 billion and net non-interest income of N44.9 billion. The non-interest income was significantly boosted by net trading and unrealized foreign exchange income, which reached N32.24 billion for the year. Operating income was reported at N97.19 billion, while operating expenses totaled N84.15 billion, resulting in a pre-tax profit of N13.033 billion. After accounting for taxes, the net profit was N10.91 billion, translating to earnings per share of 44 kobo.
A look at the loan disbursements over the first eight months of the year showed an increase, with the bank maintaining a strong emphasis on small and medium enterprises (SMEs). The loan portfolio continues to reflect the core values of Polaris Bank, focusing on impact-driven banking that prioritizes retail banking, SMEs, equal opportunities, youth, healthcare, education, family, and the environment, among other areas.
Polaris Bank, a participant in the United Nations Environment Programme Finance Initiative (UNEP FI), views its operations as a dual commitment to sustainable profitability and social responsibility. The bank aims to support individuals, particularly Nigerians, in achieving personal fulfillment and security. UNEP FI’s mission is to engage the private and global financial sectors to foster a financial ecosystem that benefits both people and the planet while generating positive outcomes.
In the last eight months, Polaris Bank has disbursed approximately N60 billion in new loans to small and medium-sized enterprises (SMEs) and around N17 billion in personal loans. Notably, despite challenging macroeconomic conditions, the bank has continued to back SMEs. By August 2024, invoice financing reached N22.17 billion, surpassing the N21.12 billion allocated for the entire year of 2023. Business loans also increased to N23.8 billion by August 2024, on track to exceed the N35.21 billion disbursed throughout 2023.
The bank remains committed to supporting key social impact areas, including education, health, and the environment. The structure of its loan offerings highlights how Polaris Bank has become a vital enabler for businesses and households in Nigeria.
Through its cash flow-lending product, the Polaris Business Loan, the bank provides both existing and new SME clients with quick access to funds for stock replacement, equipment financing, working capital, and business expansion, facilitating growth and sustainability. SMEs that secure these loans are also eligible for complimentary, customized capacity-building training sessions offered periodically by the Polaris Business Advisory Academy.
Additionally, Polaris Bank plays a significant role as a funding sponsor and partner for various impactful empowerment initiatives, such as the Lagos State Employment Trust Fund (LSETF), through which it extends multi-million naira loans to artisans in Lagos State.
Lagos State’s informal economy, which includes artisans, is estimated to employ around six million individuals, representing approximately 75% of the state’s total labor force of eight million. The state is believed to account for about three-quarters of the informal workforce in Nigeria. Despite its significant potential, the informal economy faces numerous challenges, particularly the lack of access to financial resources. To address this issue, the Lagos State Employment Trust Fund (LSETF) was established under the Lagos State Employment Trust Fund Law of 2016, aimed at providing financial assistance to residents for job creation, wealth generation, and combating unemployment.
The bank has introduced the ’Polaris Education Loan,’ which allocates a specific credit line to assist private school owners. This loan product allows both new and existing private primary, secondary, and tertiary institutions to access funding of up to N100 million to fulfill various financial requirements. Over the past 20 months, approximately N2 billion has been disbursed through this initiative.
As Nigeria’s education sector plays a crucial role in the country’s revitalization, this credit line is part of the bank’s commitment to supporting the essential educational landscape, helping schools achieve their objectives and growth targets. The loan facility enables private school operators to cover a range of administrative expenses, including salary payments, rent, laboratory equipment purchases, school buses, furniture, library books, and renovation or expansion projects. Customers can receive their loans within 24 hours. This offering is complemented by the Polaris Salary Advance, which provides a rapid financial solution for teachers and staff to manage various expenses such as household bills, healthcare costs, repairs, unexpected travel, and relocation expenses.
Polaris Bank offers a Health Sector Loan specifically tailored to address the financial requirements of healthcare providers in Nigeria, particularly small and medium-sized enterprises (SMEs) within various health sub-sectors. This includes hospitals, dental and optometry clinics, pharmacies, medical laboratories, and diagnostic centers.
The Health Sector Loan provides numerous advantages for SMEs, such as customized funding solutions, payment options for fee collections, financial advisory services, capacity-building programs, and dedicated relationship management.
The loan can be structured as either an overdraft or a term loan with flexible tenors, catering to specific funding needs like working capital for inventory purchases, term loans for rent, renovations, expansions, and the acquisition of operational equipment such as vehicles, generators, air conditioners, and refrigerators. This product is accessible to both existing and new clients aiming to expand their operations in the healthcare sector.
With its award-winning digital lending platform, VULTe digital bank, the trend of digital lending is on the rise, having disbursed approximately N10 billion in the last eight months, with projections to exceed the N12.8 billion total recorded for all of 2023.
The ongoing expansion of digital lending highlights the user-friendly nature of VULTe. According to KPMG’s Digital Channels ScoreCard Report, titled “Leveraging Superior User Experience (UX) on Digital Channels to Drive Retail Banking Growth in Nigeria,” five key metrics were identified to evaluate digital relevance: digital onboarding, payments and transfers, digital lending, self-service, and customer care.
A comprehensive digital banking platform that offers swift, convenient, and dependable solutions for various banking needs. VULTe stands out with features such as QR payments, seamless account opening, and instant requests for loans and debit cards, all accessible without customers needing to leave their homes, offices, or any location. This platform is not limited to customers of Polaris Bank; non-customers can also download the app and take advantage of its banking services. Additionally, VULTe offers API Banking, enabling merchants and businesses to integrate its services with essential business systems, facilitating a range of functionalities including risk assessments, bank statement requests, lien accounts, direct debits, and more.
Industry experts anticipate that the recent establishment of a complete board, featuring a robust management team with diverse expertise, will foster growth and improve the operational efficiency of Polaris Bank.
Analysts have noted that the consistent enhancements in operational performance and stable management reflect the bank’s readiness to maintain a prominent position as a preferred digital lender in the post-recapitalization banking landscape.
The formation of the full board by the Central Bank of Nigeria (CBN) signifies regulatory approval of the significant yet understated accomplishments of the management team led by Kayode Lawal, as well as an endorsement of the bank’s future prospects.
The board consists of ten members, chaired by Dr. Kassim Gidado. Other non-executive directors include Dr. Akwa Okon, Mallam Umar Ambursa, Mrs. Ayaba Ayo-Joseph, Mrs. Subulade Giwa-Amu, and Dr. Christopher Onosode.
The newly appointed non-executive directors will support the executive management team, which includes Mr. Kayode Lawal as Managing Director, Mr. Chris Ofikulu as Executive Director of Retail and Commercial, Mrs. Abimbola Ozomah as Executive Director of Corporate & Investment Banking, and Sharafadeen Muhammed as Executive Director of Operations.
Lawal is a highly experienced professional with more than 30 years in the banking sector. Before joining Polaris Bank, he had a notable career at Sterling Bank Plc, where he served as Executive Director overseeing Corporate & Investment Banking. His dedication to excellence and leadership in the banking field has been evident throughout his professional journey.
He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and an Associate Member of the Chartered Institute of Taxation of Nigeria (CITN). Furthermore, he has enhanced his expertise through executive education at esteemed institutions, including Lagos Business School, the University of Oxford, Columbia University Graduate School of Business, and the Massachusetts Institute of Technology.
Gidado, the newly appointed board chairman, is an academic with over 35 years of experience in engineering, project management, and strategic development.
He offers a wealth of knowledge and a forward-thinking vision to the bank’s board. His distinguished roles include Group Managing Director and Chief of Staff at MAG Group Limited, where he oversaw a diverse range of companies across 35 countries. His vast experience in public-private partnerships and infrastructure development will significantly contribute to the advancement of Polaris Bank.
Throughout his career, he has provided counsel to governments and industry leaders on various strategic and policy matters related to procurement, infrastructure development, and security. Recently, he led the creation of the North-East Stabilisation and Development Master Plan (NESDMP) for the North-East Development Commission, producing a document that prepares the Commission for the execution of the NESDMP through to 2030.
Gidado, a respected community leader, serves as the Wazirin Jam’are in the Jam’are Local Government area of Bauchi State. His rich academic, public service, and professional experience will offer essential guidance as he takes on the position of Board Chairman.