Oceanic Bank Attributes Cost Efficiency To Prudence

Oceanic Bank International Plc has attributed its cost efficiency to the managerial prudence of its management. The bank’s management in 2006 was lauded for its ability to drastically reduce its operating costs as against what obtains in the industry.

With the bank’s recently released results, it is obvious it is poised to maintain its standing among the most cost efficient banks in the country following its impressive profit before tax for the nine months ended June 30, 2007.

The bank made a pre-tax profit of N16.18 billion on gross earnings of N45.66 billion in the period. This is 53 per cent better than the N10.61 billion it returned on gross earnings of N29.33 billion in the same period last year. During its financial year ended September 30, 2006, Oceanic Bank similarly achieved profit before taxation of N11.61 billion on gross earnings of N44.68 billion. This compared with N7.26 billion pre-tax from N22.30 billion in 2005.

In terms of cost efficiency, the bank has maintained a consistency for keeping its operating costs low, evidently among the best in the industry. Oceanic Bank is said to have the second lowest Cost to Income Ratio among the top seven banks in the country, according to a 2006 analysis.

The third quarter pretax profit just released represent 35 per cent of the bank’s gross earnings. This means that Oceanic Bank earned a profit, though unaudited, of 35 kobo in every N1 of transaction done. The bank thus maintained its trend of cost efficiency from its operations. A cursory review shows that in the corresponding period a year ago, it also earned 35 kobo as the N10.61 billion gross profits constituted 36 per cent of gross earnings.

This is also the trend seen from the audited annual results for the past few years. For the financial year ended September 30, 2006, the profit before tax of N11.61 billion was 25 per cent of the gross earnings of N44.68 billion. This ratio compared with N7.26 billion which was 29 per cent of the gross earnings of N24.30 billion in 2005. The managing director and chief executive of Oceanic Bank, Dr. (Mrs.) Cecilia Ibru, ascribed the bank’s impressive nine months result to the strict adherence to its core values.

The bank’s core values are summarized in an acronym known as TEAMS, which stands for Transparency, Equal Opportunity, Accountability, Merit and Service Excellence.

Speaking in Lagos following the release of the third quarter figures, she particularly singled out the bank’s practice of Transparency and Accountability for the result. She noted that Oceanic Bank has once again justified its reputation as one of the most cost-efficient banks in the country.

Shareholders of Oceanic Bank International Bank Plc surely have good things to look out for in the current financial year as the bank grossed N46 billion in earnings for the third quarter ended on June 30, 2007. This was 55 per cent increase over the N29.4 billion earned in the corresponding period of 2006. While the bank’s gross earnings grew by 55 per cent, its profit before tax (PBT) rose by 53 per cent, from N10.6 billion to N16.2 billion.

In the same vein, the bank’s profit after tax (PAT) rose by 54 per cent to N13.4 billion percent as against the preceding year’s N8.7 billion. The bank had forecast a profit before tax of N18.9 billion for 2007 financial year and a profit after tax of N14.7 billion, during its recently concluded public offer.

The third quarter result has further consolidated Oceanic Bank’s position as a first rate financial institution buoyed by its aggressive business penetration strategy and efficient cost management. With the recently released results, market analysts believed the bank’s vision of becoming the most profitable bank in the country before 2010 is quite on course and evidently promising. The financial analyst lauded the bank’s contribution to the nation’s economic development, while maintaining that Oceanic Bank is capable of surpassing analysts’ forecast in its year-end result.

The bank’s profile has continued to rise both on the local level and the international level. It has recently been rated among the top 1000 banks in the world and has also received positive rating from renowned rating agencies. A very significant strategy of the bank is its determination to further expand its service offerings and revenue rolling out new business offices and initiatives.