First Bank Holdings surmounts regulatory headwinds as FY13 gross revenues spike

First Bank Nigeria Holdings Plc (FBNH), owners of First Bank Nigeria Limited, recorded gross earnings of N395.9 billion for the year ended December 31, 2013, up 7.0% year-on-year against N370.2 billion in 2012.

Net interest income also experienced increase of N230.1 billion, up 1.5% from N226.6 billion in 2012, while non-interest income of N67.0 billion was 9.3 percent down from N73.9 billion in 2012, according to a statement from the bank.

Profit before tax (PBT) was down by 2.8 percent year-on-year to N91.34 billion compared with N93.92 billion FY12.
“The prevalent theme over the course of 2013 was one of moderate economic growth within the context of significant regulatory changes in our sector”, according to Bello Maccido, chief executive officer of FBN Holdings.

“Our financial performance was impacted largely due to revised banking charges, whilst the increase in the cash reserve ratio (CRR) impacted our overall performance as reflected through FirstBank, our flagship subsidiary”.

Operating expense in the review period reduced by 4 percent to N185 billion from 193.5 billion in FY13. The huge operating or negatively operating expense was driven by 50.6 percent in regulatory costs to N24.9 billion, the company statement says.
Net interest income was up by 1.5% year-on-year to N230.1 billion compared with N226.6 billion as at 2012FY.

“The retail banking business continues to be the major driver of low cost deposits, while the recently implemented value chain management framework within the institutional and public sector banking businesses ensures higher retention of deposits”, according to the chief executive officer of the bank, Bisi Onasanya.

Continuing, he said, “The strategic drive for 2013 focused on improving the overall customer experience, expanding our service offerings to meet with the ever-growing needs of our customers”.

Deposits to customers surged by 22.3 percent y/y to N2.9 trillion in FY13 as against N2.4 trillion as at 2012 FY, while loans to customers also surged by 14.8 percent y/y to N1.8 trillion in FY13 from N1.5 trillion as at FY12.

Loans to deposits in the review period remained flat at 62 percent which means the bank is highly inclined about lending.
Net interest margin, a measure of profitability and efficiency, slowed to 8 percent in FY13 from 8.8 percent in 2012, while cost to income ratio declined to 62.5 percent in 2013 from 64.3 percent in 2012.