They told the News Agency of Nigeria (NAN) in separate interviews in Lagos that the increase in the Cash Reserve Ratio (CRR) by CBN would impact negatively on banks’ earnings.
NAN reports that CRR is a monetary policy tool used to set the minimum deposits commercial
banks must hold as reserves rather than lend out.
The CBN, in February, raised the CRR on public sector funds to 75 per cent from 50 per cent.
By this many thought commercial banks will no longer be as profitable as they used to.
Alhaji Rasheed Yussuf, the Managing Director, Trust Yields Investment Ltd., Lagos, said that the result was beyond market watchers’ expectations.
Yusuf said the result would drastically reduce uncertainties in banking stocks caused by the tight monetary policies.
He said that stockbrokers had been under intense pressure due to the upward review of CRR and other developments in the foreign exchange market.
Mr Boniface Okezie, President, Progressive Shareholders Association of Nigeria, said the result was a welcome development.
Okezie said that the shareholders were impressed by the dividend proposed by the bank against all the odds.
He also commended the bank for sustaining high dividend over the years.
Alhaji Gbadebo Olatokunbo, founding member, Nigeria Shareholders Solidarity Association, said that the result had proved market analysts wrong that CRR review would affect the banks’ profitability.
Olatokunbo said that the result was encouraging and would boost investors’ confidence in the capital market.
He advised the bank to sustain the tempo in the years ahead.
NAN reports that the bank for the year ended Dec. 31, 2013 posted gross earnings of N351.47 billion as against N307.08 billion achieved in 2012.
The growth represented 14.46 per cent over that of 2012.
It also declared a profit after tax of N97.32 billion during the period under review against the N100.68 billion posted in 2012.
The bank proposed a dividend of N54.94 billion in contrast to the N50.23 billion declared in 2012.
The dividend proposed translated to N1.75 per share against the N1.60 declared in 2012.
NAN reports the payment of the proposed dividend, if approved by the shareholders on April 2, will be paid on April 4. (NAN)