First Bank grows half-year profit by most in 6yrs

First Bank Nigeria Holdings (FBNH) Plc has posted its highest profit in six years in the first half of 2021 as non-interest income surged.

The tier-one lender grew profit by 6.9 percent to N38 billion in the first half of 2021 compared to N35.6 billion in the same period last year.

First Bank recorded higher profit during the period despite a plunge in interest income because of the surge in non-interest income.

Interest income plunged 20.9 percent to N103.8 billion in H1 2021 from N131 billion in the same period last year.

However, non-interest income surged 48.1 percent to N118.7 billion from N80.1 billion in the periods under review.

“FBN Holdings delivered a resilient performance in the half year, reflective of our focus on strengthening the organisation in recent years. We remain committed to our strategic objective of driving further stability in performance, as well as delivering sustainable growth over the years to come.

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In line with our focus on revenue diversification, we continue to grow our non-interest income as we progressively become a more transaction-led institution and implement innovative and technological driven measures to improve overall efficiency,” U.K. Eke, the Group Managing Director said.

The fall in interest income is reflective of Nigeria’s low-interest rate environment.

Yields on treasury bills slumped 84 percent to N1.48 billion compared to N9.6 billion in the period.

“While these points negatively impacted overall revenue generation, we are confident that FBN Holdings can navigate this challenging operating environment and keep delivering sustained innovative solutions that enrich customer experience as well as deepen financial inclusion,” Eke said.

Further analysis of the report shows that the lender’s Fees and commission income jumped 23.8 percent to N69 billion while Fees and commission expense also rose 30 percent to N11.7 billion.

As a result, net fees and commission income surged 26.2 percent to N57.3 billion compared to N46.7 billion in the same period last year.

The lender’s profit before tax rose by 9.1 percent to N45.2 billion in the first half of 2021 up from N41.1 billion last year.

Operating income hit N222.5 billion, up 5.3 percent compared to N211.4 billion in the same time last year. Operating expenses also grew 9.6 percent to N152.6 billion in the first half compared to N139.2 as at June 2020.

Impairment charges for losses stood at N24.5 billion, down by 20 percent from ₦30.7 billion in the same period last year.