• Friday, September 29, 2023
businessday logo


9M 2019: FBN Holding grows PBT by 17% to N60bn

FBN Holdings, Ecobank to exit MSCI frontier markets index

Nigeria’s tier one lender, FBN Holdings has recorded a 17percent increase in Profit before Tax (PBT) to N60billion in the first nine month of 2019 from N51.3 billion in the corresponding period last year.

In 9M 2019, Profit after tax increased by 15.3percent to N51.8 billion from N44.9 billion recorded in first nine month of 2018 while Total assets increased by 3 percent to N5.7 trillion from N5.6 trillion recorded in December 2018.

FBN Holding’s Group Managing Director UK Eke said the company’s performance in the third quarter reflects the growth trajectory over the first nine months of the year, with significant strides made in transforming the Group’s asset quality and diversifying revenue streams across the board.

FBN holding’s non-performing loan ratio reduced to 12.6 percent from 25.9 percent recorded all through 2018.
“As we approach the end of the curve in the resolution of our legacy portfolio, we are confident of further reducing NPLs to under 10 percent by the end of the current financial year,” UK Eke said in a statement sent to BusinessDay.

UK Eke noted that FBN Holding’s will continued its drive towards ensuring long-term operational efficiency, resulting in a one-off cost increase pushing its Cost to Income Ratio (CIR) for the first nine months.

“In terms of our revenue generation, we have delivered further increases in our non-interest income, on the back of growth in electronic banking fees as well as improvements in transaction-led income,” Eke noted.

FBN Holding’s post-tax return on average equity which refers to the performance of a company over a financial year grew to 12. 2percent in 9M 2019 from 8.7 percent recorded in the corresponding period last year while Post-tax return on average assets which is a financial ratio that measures the profitability of a company in relation to the average shareholders’ equity grew to 1.2 percent from 1.1 percent recorded same period last year.

Customer deposits increased by 5.3 percent to N3.7 trillion in nine-month 2019 from N3.5 trillion recorded in year to date December 2018 while customer loan and advances increases by 8.1 percent from N1.7 trillion recorded in year to date December 2018 to N1.8 trillion in 9M 2019.

FBN holding’s commercial bank recorded a 18.6 percent surge in profit before tax of N50 billion compared to N42.3 billion recorded in the same period last year while Profit after tax grew by 14.7 percent within the same period to N44.4 billion. Total assets also grew by 2.1 percent to N5.42trillion compared to N5.30 trillion recorded in the full year 2018.

“We have continued to improve our asset quality while further enhancing the group risk management and controls. These deliberate steps continue to yield positive results with the NPL ratio further declining to 12.4percent and impairment charges significantly decreasing by 63.0percent y-o-y,” Adesola Adeduntan, the Chief Executive Officer of FirstBank and Subsidiaries said.

Adeduntan noted that the company is in the final phase of addressing the legacy asset quality challenges and achieving its guidance of a single digit NPL ratio by the end of the year.

“Furthermore, operational efficiency remains a key focus as we address all structural issues. With this in focus, we remain confident in our abilities to improve this metric going forward. In addition, our international subsidiaries have continued to contribute positively to our overall performance as we keep optimising the capacity of the Group to support stronger future earnings,” Adeduntan said.

During the same period, Firstmonie Agent Banking network grew to over 35,500 with increasing agent capabilities and customer acquisition while over N2 trillion transactions are now processed on the Firstmonie agent network, a development which has further deepened the retail franchise, banking penetration and financial inclusion.

Analysis by BusinessDay revealed the Merchant Banking and Asset Management business contributed 5.9 percent in nine-month 2019 to the Group’s gross earnings and 9.0percent to the Group’s profit before tax within the same period.

Also, FBN Holding’s Insurance Gross earnings increased by 38.9 percent to N6.2 billion while profit after tax and total assets increased by 38.9 percent and 34.4 percent to N6.2 billion and N102.9 billion respectively.

Analysis by BusinessDay revealed the insurance business contributed 5.1 percent to gross earnings of the Group in nine-month 2019 and 9.4 percent to profit before tax within the same period.