VFD Group, a Lagos-based financial services company, saw its biggest profit in at least four years largely driven by efficient balance sheet management, improved treasury, increased income-generating activity and effective deployment of cost optimisation strategy across the Group.
The company’s profit after tax (PAT) grew 415 percent year-on-year to N1.75 billion from the N 340 million recorded in the corresponding quarter of 2018, according to its third-quarter financial report. This is the highest since it started publishing its financials.
In the review quarter, VFD Group reported a 144 percent jump in gross earnings from N1.43 billion a year ago to N3.48 billion in Q3 2019. This is was as a result of the growth in interest income by 199percent YoY to N1.55 billion and non-interest income by 113percent YoY to N1.93 billion, the report stated.
“The 199 percent growth in Interest Income stemmed from the surge in revenue from loan & advances, interest on treasury bills and Placement,” the company’s Q3 2019 financial report signed Nonso Okpala, the MD/CEO of VFD read.
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Analysis of the group’s 9-month financial report revealed that its expenditure increased by 95 percent. Its total expenses increased from N648 million in Q’3 2018 to N1.27 billion.
Incorporated in July 2009 as financial services focused proprietary investment company, VFD group reported asset growth by 93.06 percent Year-to-Date due to growth on cash and cash equivalent.
The total cash and cash equivalent rose from N1.13 billion in FY 2018 to N2.70 billion in Q3 2019, a 138percent growth rate. The Group maintained a good return with the annualized Return on Asset and Return on Equity at 7percent and 43percent in Q3 2019 from 3percent and 36percent in FY 2018.
One of the key achievements of the Group in the period under review was the reported progress in its Regional Banking License Application. It said in its Q3’19 financials that it successful deposited the minimum required capital of N10 billion for the licence.
Further analysis of the Group’s financials revealed that its net interest margin rose 400bps from 3percent in FY 2018 to 7perctn in Q3 2019 due to the increase seen in net interest income.
“Sound treasury management impacted positively on asset quality as the Earnings Yield rose from 8percent in FY 2018 to 10percent in Q3 2019. Funding Cost dropped to 9percent due to significant growth in Earning Asset within the period under review,” the report read.
The company which creates value by working within Nigeria’s informal financial sector to create innovative products and solutions has the following subsidiaries: VFD Microfinance Bank, VFD Bridge Ltd, Everdon Bureau de Change, Anchoria Asset Management, and Dynasty Real Estate.
According to the Group, its strategic focus for Q4 2019 includes Public launch of Boardroom Apartments, the inaugural product of the hospitality arm of its Real Estate subsidiary.
“It is a boutique guest house located in Lekki and has been designed to host both corporate and individual guests,” the report stated.
The Group has plans to finalize the investment in already identified OFI (Other Financial Institution) to achieve the objective of gaining a foothold in every sector of the financial services industry.
It also stated that in the remaining quarter of this year, it will complete the acquisition of an identified brokerage firm which is also in fulfilment of the objective stated above.
“Finalise the process of obtaining regulatory approval for a banking license, re-evaluate the status of VFD Group Plc as a financial focused investment firm to become a full-fledged investment firm. Continuous enhancement of the Asset Management subsidiary’s mutual funds,” it said.
