First Bank grows 9-month profit by most in 5 years

After a decline in 2018, First Bank Nigeria Holdings ( FBNH) Plc, the parent company of the Nigeria’s oldest bank, turned the corner as its 2019 nine- month profit recorded the fastest pace of growth within the last half-decade.

The big lender on Monday announced that it made N51.84 billion in profit, up 15.3 percent yearon- year from the same period in 2018, after profit in the third quarter of 2019 surged 76.1 percent from the previous year.

The result was despite a decline in gross earnings which was weighed on by a slowdown in net interest income as FBNH was helped by growth in its non- interest income and lower impairment provision.

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The gross earnings which grew 7.1 percent year-on-year in the third quarter of this year were not enough to prevent a 0.4 percent dip in 9- month gross earning which stood at N439.85 billion.

This followed a 10 percent decline year-on-year in net interest income in the third quarter which dragged net interest income in the 9- month period by 4.6 percent from its corresponding 2018 value.

On the other hand, non- interest income surged 47.9 percent supporting a six percent growth year- on- year to N98.77 billion in the three quarters of 2019 combined.

Operating income of the bank fell 1.4 percent to N310.21 billion in the nine months of 2019 while operating expenses of the bank rose 18.4 percent to N221.74 billion.

The cost- to- income ratio of the bank as at the end of September is at 71.5 percent compared to 63.4 percent at the end of 2018 business year.

In the 9-month period provision for impairment declined by 62.6 percent to N28.5 percent which saw the bank’s profit before tax increase to N60 billion, 16.9 percent more than it had noted in the same period of 2018.

The value of the company’s stock remained unchanged at N5.30 per share after the close of business on the Nigerian Stock Exchange (NSE) on Monday. The stock has lost one-third of market value since the start of this year.

Meanwhile, analysts at Lagos- based Chapel Hill Denham rate FBNH as a “BUY” with a target price at N6.91, which is an upside of 30 percent to Monday’s closing price.