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FBN Holdings, Nigeria’s second largest bank by assets has announced profit before tax of N56.8 billion for full year 2017, up 147.6 percent from N22.9 billion reported in 2016.
Net income was also up 178.8 percent to N47.8 billion in 2017, from N17.1 billion in 2016.
Gross earnings of N595.4 billion for the financial year ended December 31, 2017 was driven by a 15.9 percent year-on-year (YOY) growth in interest income on the back of enhanced yields and volume growth in investment securities.
The 2017 gross earnings represented a growth of 2.3 percent, compared to N581.8 billion reported in 2016, as compiled from the FBN Holdings audited result released April, 25 2018.
“As evident by the continually improving set of results, the initiatives we have put in place are producing encouraging results ahead of our projections. It is noteworthy to highlight that this progress has not been detrimental to our commitment to cost containment, illustrated by the 7.7 percent YOY increase in OPEX which is significantly below the headline inflation rate of 15.4 percent,” UK Eke, FBNH Group Managing Director said.
The recorded net-interest income increased by 8.9percent to N331.5 billion as against N304.4 billion in 2016, driven by a 15.9 percent increase in interest income to N469.6 billion in 2017 compared to N405.3 billion recorded the previous year.
This was partly offset by a 31.5 percent decline in non-interest income.
Interest income and non-interest income contributed 78.9 percent and 19.0 percent respectively to gross earnings.
“Notwithstanding, we have continued to optimize the balance sheet to ensure our margins are protected despite the increase in interest rates and the constrained lending environment. In view of this, the blended yield on interest earning assets improved to 11.9percent (Dec 2016: 11.7 percent) but overshadowed by the cost of funds resulting in a marginal decline in net-interest margin to 8.4 percent (Dec 2016: 8.8 percent),” the bank said in a statement.
The company also proposed payment of 25 kobo per share cash dividend to shareholders of the company.
The amount for the year ended December 31, 2017 is 5 kobo higher than what was paid in 2016 financial year end of 20 kobo per share.
“This result was also made possible by the successful implementation of our digitisation initiatives, that have allowed us to serve our customers in a more efficient and effective way. It is re-assuring that our dominance in the electronic platform has positioned the Group for a prosperous future and our holding company model is yielding further synergies and increasing cross-selling amongst all the operating companies in the Group,” Eke added.
The bank has continued to strengthen its credit culture and governance, moderated its risk appetite, and redefined target market and consequence management to ensure a robust risk management structure.
As it continues to sustain remediation initiatives, it expects a gradual reduction in Non-Performing Loans (NPL) with a target of a single digit NPL in 2019, in line with its strategic plan. The bank further expects loan growth in the current year with manufacturing, agriculture, trade and retail being the sectors of focus.
The bank reported 1 trillion transactions processed on the *894# Unstructured Supplementary Service Data (USSD) banking channel making it the fastest growing USSD product in the industry.
Also, with over 2 million subscribers, FirstBank’s mobile platform ‘FirstMobile’ achieved the fastest growing mobile banking penetration across Africa, becoming the highest transacting bank on the Interswitch payment platform. As such FirstBank ATMs now account for 37 percent of bills payments on ATM platforms in Nigeria.
FBN Holdings traded at N12.20 per share as at market close Wednesday April 25, 2018 and it has a market capitalization of N437.923 billion , as compiled from Bloomberg data.
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