The numbers are out and Nigerian banking is firing on all cylinders: “Nigerian banks recorded a combined pre-tax profit of N1.58 trillion in Q1 2024, marking a 263% year-on-year increase compared to N436 billion in Q1 2023, with GTCO posting the highest profit in Nigeria banking history for the quarter…Top performers in Q1 2024 included Zenith Bank (N320.2 billion pre-tax profit), FBN Holdings (N238.5 billion), Access Holdings (N202.7 billion), and UBA (N156.3 billion)…”, notes Nairametrics.

Congratulations folks and well done. Nigerian bankers are the hardest working professionals in our nation. If everyone has the same level of productivity they have, Nigeria would have been a bigger Singapore. Period.

Yes, it is an industry where excuses are not tolerated, and the workers understand that loud and clear. Those days, I used to board diesel trucks from Apapa to Victoria Island to ensure diesel was delivered to Diamond Bank’s headquarters. I used to go to the VI NEPA office at 1am begging them to keep light on the Diamond Bank line. I worked for 3 years including on Christmas Day, Easter Day, etc without a vacation.  

But I enjoyed it because they elevated your spirit to see a mission which if you drop the ball, that mission could be imperiled. Go to night shift, sleep and the next day, the branches will not open because “system is down”. Why? The entry level engineers in the HQs did not complete the tasking end of day runs on time. Sleep twice, you are out!

So, when you look at these numbers, put everything in context: they’re coming from an industry which works and has figured out how to capture value (read my Harvard piece on capturing value here). 

GTBank’s GTCO has one of the finest genes; it has an industry-leading cost-to-income ratio, averaged over a decade, and that continues to show on its profitability. I am also happy to note that the elephant is dancing well despite the recent paralysis. So, guys, enjoy the party.

Now your question – why are banks breaking profit records when companies are closing and the economy struggling? 

My response: It is not the banking sector’s fault that the Central Bank of Nigeria (CBN) is increasing the prime rate which forces banks to hike interest rates on their customers. It is also not the banking sector’s fault that Nigeria floated its currency which delivers higher value for their foreign currency denominated financial instruments. So, if you visit your bank and the interest rate has gone up, do not curse the bank, ask the apex bank because those rates are partly driven by the central bank policy.

Now, he is defending the banks to protect his friends. That is not fair to a village boy; I hope you can take time and master how banks design their processes and playbooks to capture value in Nigeria.

Nvidia, a leading semiconductor company, is on the brink of surpassing Apple to become the world’s second-most valuable company, according to Reuters’ analysis.

This shift stems from the growing influence of artificial intelligence (AI) technologies on the market. Nvidia’s high-end chips, essential for virtually all AI applications such as OpenAI’s ChatGPT, have significantly boosted the company’s valuation, nearly tripling its worth over the past year to $2.68 trillion.

Nvidia’s rapid ascent in the stock market can be attributed to its strategic alignment with major technological trends. Starting with gaming demand, followed by the cryptocurrency boom, and now the AI surge, Nvidia has consistently matched innovation with market demand. This has resulted in explosive growth for the company.

“It is certainly notable because Apple has been so dominant for so long, especially on the growth and innovation front. Recently though, Apple’s innovation curve seems to have flattened, showing slower future growth,” said Brian Mulberry, client portfolio manager at Zacks Investment Management.

“On the other hand, Nvidia has been able to catch wave upon wave of growth. Beginning with gaming demand, then crypto and now AI, they have been able to perfectly match innovation with demand and that equals explosive growth,” he added.

In contrast, Apple has faced significant challenges. The tech giant, which ceded its No. 1 spot to Microsoft earlier this year, is grappling with weak demand for its iPhones and stiff competition in China. Apple’s valuation currently stands at $2.92 trillion, but the company’s innovation trajectory has slowed, impacting its growth prospects.

Nvidia’s influence on the stock market has been profound. The company is heavily weighted on the S&P 500 and the Nasdaq, playing a crucial role in driving U.S. stocks to record highs. It accounted for more than a third of the S&P 500’s gains this year, underscoring its pivotal role in the market.

Nvidia also set a record by becoming the fastest company to grow from $1 trillion to $2 trillion in 2024, outpacing giants like Amazon, Google-parent Alphabet, and Saudi Aramco. This rapid growth is fueled by Nvidia’s consistent ability to exceed Wall Street’s expectations for revenue and profit. The demand for its graphic processors has far outstripped supply as major tech companies race to integrate AI into their systems.

Despite the surge in its stock price, Nvidia’s forward earnings valuation has fallen, trading at 37 times forward earnings compared to 48 times a year ago, according to LSEG data. This indicates a sharp increase in analysts’ earnings estimates, reflecting strong confidence in Nvidia’s future performance.

Nvidia’s popularity extends to the derivatives market as well. The GraniteShares 2x Long NVDA Daily ETF, which tracks twice the daily percentage change in Nvidia, is the largest single-stock ETF. The fund recently clocked $1 billion in daily turnover for the first time ahead of Nvidia’s results, and its total net assets hit a record $2.82 billion this week, according to Lipper data.

Options traders are similarly bullish. Nvidia’s volumes, particularly for call options, have picked up in recent sessions following the surge in its stock price. Thursday marked the fifth straight session where more than a million Nvidia call options changed hands, the longest such streak in the stock’s history, according to a Reuters analysis of Trade Alert data.

Nvidia’s trajectory highlights the transformative impact of AI on the tech industry. The company’s ability to innovate and meet market demands positions it well to continue its upward momentum. As AI applications become more pervasive, Nvidia’s high-end chips will remain in high demand, ensuring sustained growth and market dominance.

Meanwhile, Apple faces the challenge of reinvigorating its innovation pipeline and navigating a highly competitive market. The company’s ability to adapt and innovate will be critical in maintaining its position among the world’s top companies.