FBN Holdings Plc reports Gross Earnings of N288.8 bn for 6 months Ended 30 June’17

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  • * HY ENDED JUNE 2017 GROUP NET INTEREST INCOME 164.08 BILLION NAIRA VERSUS 126.05 BILLION NAIRA YEAR AGO
  • * HY ENDED JUNE 2017 GROUP PROFIT BEFORE INCOME TAX OF 35.63 BILLION NAIRA VERSUS 45.89 BILLION NAIRA YEAR AGO

FBN Holdings Plc. (“FBNH” or “FBNHoldings” or the “Group”) today announces its unaudited results for the six months ended 30 June 2017.
Income Statement
 Gross earnings of N288.8 billion, up 7.8% year-on-year (y-o-y) (Jun 2016: N267.9 billion)
 Net-interest income of N164.1 billion, up 30.2% y-o-y (Jun 2016: N126.1 billion)
 Non-interest income of N50.5 billion, down 46.3% y-o-y (Jun 2016: N94.1 billion)
 Operating income of N214.4 billion, down 2.6% y-o-y (Jun 2016: N220.1 billion)
 Impairment charge for credit losses of N62.4 billion, down by 10.7% y-o-y (Jun 2016: N69.9 billion)
 Operating expenses of N116.6 billion, up 11.8% y-o-y (Jun 2016: N104.3 billion)
 Profit before tax of N35.6 billion, down 22.4% y-o-y (Jun 2016: N45.9 billion)
 Profit after tax N29.5 billion, down 17.8% y-o-y (Jun 2016: N35.9 billion)
Statement of Financial Position
 Total assets of N4.9 trillion, up 3.0% year-to-date (y-t-d) (Dec 2016: N4.7 trillion)
 Customer deposits of N3.0 trillion, down 3.5% y-t-d (Dec 2016: N3.1 trillion)
 Customer loans and advances (net) of N2.0 trillion, down 4.1% y-t-d (Dec 2016: N2.1 trillion)
Key Ratio
 Post-tax return on average equity of 9.9% (Jun 2016: 12.0%)1
 Post-tax return on average assets of 1.2% (Jun 2016: 1.6%)1
 Net-interest margin of 8.5% (Jun 2016: 7.2%)1
 Cost to income ratio of 54.4% (Jun 2016: 47.4%2)
 NPL ratio3 of 22.0% (Jun 2016: 22.8%, Dec 2016: 24.4%)
 50.4% liquidity ratio (FirstBank (Nigeria) (Jun 2016: 55.9%, Dec 2016: 52.7%)
 17.6% Basel 2 CAR4 (FirstBank (Nigeria) (Jun 2016: 15.4%, Dec 2016: 17.8%)
 26.7% Basel 2 CAR (FBN Merchant Bank) (Jun 2016: 27.9%, Dec 2016: 22.6%)
Notable Developments
 Leadership appointments across the Group:
o FirstBank and subsidiaries:
 Abdullahi Ibrahim appointed Executive Director, Retail Banking (North), effective 27 April, 2017
o FBNQuest:
 Ike Onyia appointed Managing Director/Chief Executive Officer of FBN Capital Asset Management Ltd, effective 22 March, 2017
o FBN Insurance Brokers Limited:
 Ibidapo Olumide appointed Managing Director/ Chief Executive Officer, effective 09 May, 2017 1 Post-tax return on

FBN Holdings Plc on Thursday announced its unaudited results for the six months ended 30 June 2017 with gross earnings of N288.8 billion, up 7.8% year-on-year (y-o-y) from N267.9 billion in H12016.

Highlights of the result showed Net-interest income of N164.1 billion, up 30.2% y-o-y (Jun 2016: N126.1 billion); Non-interest income of N50.5 billion, down 46.3% y-o-y (Jun 2016: N94.1 billion); Operating income of N214.4 billion, down 2.6% y-o-y (Jun 2016: N220.1 billion); Impairment charge for credit losses of N62.4 billion, down by 10.7% y-o-y (Jun 2016: N69.9 billion); Operating expenses of N116.6 billion, up 11.8% y-o-y (Jun 2016: N104.3 billion); Profit before tax of N35.6 billion, down 22.4% y-o-y (Jun 2016: N45.9 billion); Profit after tax N29.5 billion, down 17.8% y-o-y (Jun 2016: N35.9 billion)

Highlights of the statement of financial position indlude Total assets of N4.9 trillion, up 3.0% year-to-date (y-t-d) (Dec 2016: N4.7 trillion); Customer deposits of N3.0 trillion, down 3.5% y-t-d (Dec 2016: N3.1 trillion); Customer loans and advances (net) of N2.0 trillion, down 4.1% y-t-d (Dec 2016: N2.1 trillion)

The Key Ratio of the group showed Post-tax return on average equity of 9.9% (Jun 2016: 12.0%); Post-tax return on average assets of 1.2% (Jun 2016: 1.6%); Net-interest margin of 8.5% (Jun 2016: 7.2%); Cost to income ratio of 54.4% (Jun 2016: 47.4%2); NPL ratio3 of 22.0% (Jun 2016: 22.8%, Dec 2016: 24.4%); 50.4% liquidity ratio (FirstBank (Nigeria) (Jun 2016: 55.9%, Dec 2016: 52.7%); 17.6% Basel 2 CAR4 (FirstBank (Nigeria) (Jun 2016: 15.4%, Dec 2016: 17.8%); 26.7% Basel 2 CAR (FBN Merchant Bank) (Jun 2016: 27.9%, Dec 2016: 22.6%)

Commenting on the results, UK Eke, MFR, the Group Managing Director said: “FBNHoldings has again demonstrated its strong revenue generating capacity in the current economic environment reporting gross earnings of N288.8 billion – up 7.8% y-o-y. In line with our strategic focus on improving asset quality; cost optimisation; and, enhancing revenue generation, we are beginning to see improvement across a number of metrics associated with these initiatives.

“Our focus on enhancing the quality of our loan book is reflected in a decline in non-performing loans, a reduction in our impairment charge following improvement in the asset quality outlook, and we will continue to prioritise this area through the rest of this year. Similarly, consistent improvement in the efficiency ratio is testament to the efficacy of our cost optimisation initiatives, though these results have been partly offset by the currency devaluation and high inflationary environment.

“Overall, we have seen strong growth trajectory in our Merchant Banking & Asset Management and the Insurance Group. These businesses complement our Commercial Banking franchise and represent new frontiers for our Group, firmly supporting our aspiration of becoming a leading financial services institution in Middle Africa. We remain committed to maximising returns to our shareholders as well as creating sustainable value.”

Similarly, Dr. Adesola Adeduntan, the MD/CEO of FirstBank and subsidiaries in his comment said: “The Commercial Banking group proved its overall earning capacity with a 6.9% y-o-y increase in gross earnings to N260.9 billion mainly driven by our core business operations with stronger margins. At the same time, we intensified our credit resolution efforts resulting in the improvement of the asset quality position with the reduction in NPLs from 25.7% in the last quarter to 21.8% at the Commercial Banking group. We are optimistic about further improvement in asset quality and the general quality of the loan book.

“In the next half of the year, we will be driving enhanced revenue generation, efficiencies and profitability towards an overall improved performance, while remaining focused on sustaining the portfolio management efforts.”

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