FBNHoldings grows profit by 7.8% to N55.4b in nine months

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By Folarin Emmanuel, Abuja

FBN Holdings Plc on Thursday announced its unaudited results for the nine months ended 30 September 2017 with gross earnings of N439.2 billion, up 5.2% year-on-year  (Sept 2016: N417.4 billion).

The highlights of the results showed net-interest income of N254.3 billion, up 25.3%  (Sept 2016: N202.9 billion); Non-interest income of N74.0 billion, down 43.5% y-o-y (Sept 2016: N131.0 billion); Operating income of N328.1 billion, down 1.7% (Sept 2016: N333.9 billion); Impairment charge for credit losses of N97.6 billion, down by 14.9% (Sept 2016: N114.7 billion); Operating expenses of N175.3 billion, up 8.4%  (Sept 2016: N161.8 billion); Profit before tax of N55.4 billion, down 3.5%  (Sept 2016: N57.5 billion); Profit after tax N45.8 billion, up 7.8%  (Sept 2016: N42.5 billion).

The results showed the financial position of the group to have Total assets of N4.9 trillion, up 2.7% year-to-date (y-t-d) (Dec 2016: N4.7 trillion); Customer deposits of N3.0 trillion, down 5.3% y-t-d (Dec 2016: N3.1 trillion); and Customer loans and advances (net) of N2.0 trillion, down 1.9% y-t-d (Dec 2016: N2.1 trillion).

The key ratios revealed by the results include Post-tax return on average equity of 10.1% (Sept 2016: 9.4%); Post-tax return on average assets of 1.3% (Sept 2016: 1.2%); Net-interest margin of 8.8% (Sept 2016: 7.5%); Cost to income ratio of 53.4% (Sept 2016: 48.4%); NPL ratio of 20.1% (Sept 2016: 24.9%, Dec 2016: 24.4%); 47.4% liquidity ratio (FirstBank (Nigeria) (Sept 2016: 54.3%, Dec 2016: 52.7%); 17.2% Basel 2 CAR (FirstBank (Nigeria) (Sept 2016: 15.4%, Dec 2016: 17.8%); 23.1% Basel 2 CAR (FBN Merchant Bank) (Sept 2016: 28.9%, Dec 2016: 22.6%).

In his comment on the results, UK Eke, MFR, the Group Managing Director said: “FBNHoldings has again demonstrated its resilience in revenue generation with a 5.2% y-o-y growth in gross earnings to N439.2 billion following a y-o-y increase of 25.2% in net interest income to N254.3 billion. The Group is progressing in building the right structures for sustainable growth through an improved credit culture and risk management; increased technologically driven operational efficiencies; and the introduction of revenue enhancing platforms.

“The Insurance group sustained its strong performance and we expect to see further growth from the retail, corporate and annuity businesses. Similarly, we continue to see strong growth trajectory in the Merchant Banking and Asset Management group. These businesses complement our commercial banking business in our aspiration to becoming the leading financial services institution in Middle Africa.

“We remain confident that the initiatives being implemented across our subsidiaries will further strengthen our business and ultimately reposition the Group for sustainable growth”

Commenting on the results, Adesola Adeduntan, the Managing Director and Chief Executive Officer of FirstBank and subsidiaries said: “On the back of a stronger balance sheet and despite the challenging but improving economic environment, the commercial banking group delivered a 4.5% y-o-y growth in gross earnings – a testament to its resilient revenue generation capabilities.

“To further support future revenue generation and in line with our strategic imperatives to reposition the commercial banking business, we are expanding our digital banking initiatives and transforming our business model to increase customer acquisition and retention, providing a renewed customer experience. To improve profitability in a sustainable way, the Group is increasingly optimising its cost base, leveraging on technology. In addition, good progress is being made in strengthening the credit processes end to end and improving the quality of the loan book while resolving the legacy assets.

The group during the period effected some leadership changes which include Seye Kosoko appointed as Company Secretary, FBN Holdings Plc, subject to regulatory approval, as Tijjani Borodo retires; Tosin Adewuyi, appointed Executive Director, Business Development, FBNBank UK; Babatunde Mimiko appointed, Executive Director, FBNGeneral Insurance; Ekpe Ukpabio appointed, Executive Director, FBN Insurance Ltd; Folake Ani-Mumuney, Bode Opadokun and Seye Kosoko, all appointed Non-Executive Directors of FBN Insurance Brokers Ltd, subject to regulatory approval.

Also FirstBank acquired the balance of 25% equity holdings in FBNBank DRC Ltd during the period, making it a wholly owned subsidiary; FirstBank mobile platform achieved the fastest growing mobile banking penetration across Africa, becoming the highest card transacting bank on the Interswitch payment platform; FirstBank card issuance reached 10 million cards, making FirstBank the first in the Nigerian Banking industry and the second in Africa to achieve this milestone; FBN Merchant Bank acquires FBN Capital Asset Management and FBN Securities from FBN Capital Limited.

 

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