Largely as a result of recoveries on bad loans which grew by 1155.4 percent, FBN Holdings the parent company of First Bank of Nigeria Plc has reported a 99 percent increase in after-tax profit to N151.08 billion in the Full Year 2021 period.
Profit before tax stood at N166.662 billion as against N83.703 billion in 2020, equally representing 99.11 percent growth.
The profit was boosted by other operating income of N149.416 billion reported during the year as against N14.865 billion posted in 2020, accounting for an increase of 905.15percent.
The other operating income includes other income of N8.467 billion largely comprised of income made by the group from private banking services and gain on disposal of repossessed collateral.
The major boost to both top-line and profit came from a mind-blowing surge in the amount of loan recovered, which ballooned by nearly twelvefold to N141 billion.
FBN Holdings highlighted the recovery of a written-off credit availed to Jide Omokore-backed Atlantic Energy Limited as the principal driver.
Under the leadership of Adesola Adeduntan, the chief executive of First Bank Group, the tier one bank has rapidly reduced the bank’s non-performing loan portfolio in 2021, a development that has been a major boost in the bank’s quest to improve profitability and reinforce its leadership of the financial services industry in Nigeria.
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Adeduntan has driven the bank’s NPL ratio significantly down from double-digit in 2016 to single digit of 6.1 percent in 2021.
Net interest income (after impairment charges) for the period declined by 28 percent to N136.53 billion from N189.79 billion in 2020 while Net fee and commission income rose by 24.3 percent to N116.63 billion from N93.78 billion.
Although there was also an increase in foreign exchange income by 382.47 percent to N7.04 billion from N1.46 billion, net gains/(losses) on the sale of investment securities decreased by 34.91 percent to N31.30 billion from N48.08 billion.
Net gains/(losses) from financial instruments at Fair Value through Profit or Loss (FVTPL) increased by 125.69 percent to N53.66 billion from N23.78 billion and dividend income increased by 63.7 percent to N6.5 billion from N3.98 billion.
However, the value of most of the company’s expenses exceeded its income in 2021 compared to 2020.
The expenses include an increase in personnel expenses by 28.02 percent to N128.77 billion from N100.58 billion, depreciation of parties increased by 7.45 percent to N20.02 billion from N18.63 billion, an increase in operating expenses by 6.68 percent to N177.13 billion from N166.05 billion.
Amortisation of intangible assets also increased by 14.09 percent to N8.25 billion from N7.24 billion while there was a share of loss of associates by 153 percent to N258 million from a profitN482 million in 2020.
Last Wednesday, FBN Holdings said it entered a pact with Access Bank Plc to acquire the latter’s pension unit, Access Pension Fund Custodian for an undisclosed fee in a deal aimed at consolidating the operation of its own pension subsidiary First Pension Custodian Limited.
The financial services group stated in the earnings report its board is proposing a dividend of N0.35 per share for the year, translating to a payout of N12.6 billion. That compares with the N0.45 paid a year earlier, summing up to N16.2 billion.
