FBN Holdings: Significant growth in gross earnings, others thrust milestone profits
By Philemon Adedeji
FBN Holding plc in its unaudited financial results for half year (H1) ended June 30th 2023, delivered a significant increase in key financial ratios that generated outstanding profits, and positioned the oldest bank among Tier-1 financial institutions in the country
In the unaudited results, the group recorded outstanding growth in gross earnings and other parameters that impacted on profit generation in the period.
The group reported remarkable gross earnings of about 82.8 per cent to N656.6 billion in H1 2023 from N359.2 billion reported in H1 2022.
From the released statement, the group Profit Before Tax ( PBT) showed an impressive increase of 213.8 per cent, amounting to N206.3 billion in H1 2023 from N65.7 billion in H1 2022
FBN Holding ‘s Profit After Tax (PAT) reported a substantial growth of 231 per cent, reaching N187.2 billion in H1 2023 from N56.2 billion in H1 2022.
The significant increase in profit reflects the bank’s ability to generate higher earnings while efficiently managing tax liabilities and assets.
Interest Income (II) for H1 2023 recorded a significant increase of 69.3 per cent over H1 2022, reaching N383.3 billion. Conversely, interest expenses rose by 99 per cent to N145.9 billion. The substantial increase in interest income and expenses can be attributed to changes in the company’s lending and borrowing activities.
Net Interest Income (NII), the difference between interest income and interest expenses, witnessed a healthy growth of 55.2 per cent, amounting to N237.3 billion in H1 2023 from N152.9 billion achieved in the comparable period. This suggests improved efficiency in managing interest-earning assets and interest-bearing liabilities.
The group’s Operating Expenses (OPEX) increase by 24.5 per cent from N186 billion in H1 2022 to N231.6 billion in H1 2023
FBN Holdings reported a 26 per cent increase in net fee and commission income, reaching N73.7 billion. This growth indicates an enhanced performance in the bank’s fee-based businesses and services.
Operating profit for H1 2023 surged remarkably by 213 per cent to N206 billion, demonstrating the bank’s successful cost management strategies and revenue growth.
In addition, Earnings Per Share (EPS) witnessed a remarkable surge of 235 per cent to N5.19 in H1 2023 from N1.55 generated in H1 2022, indicating higher returns for shareholders.
STRONG BALANCE SHEET POSITION
In its unaudited results ended June 30th, 2023, the group balance sheet remain resilient and well structure as total assets increased nearly 34 per cent to N14.177 trillion in H1 2023 from N10.578 trillion achieved at the end of December, 31st 2022.
Total Liabilities rose by 48 per cent to N12.7 trillion as of June 30, 2023.
The growth in both assets and liabilities signifies the bank’s expansion and increased financial activities.
Profitability Ratio
Net Interest Margin declined by 6 per cent to 62 per cent, indicating a decrease in the bank’s profitability from interest-earning assets. Net Interest and Commission Margin decreased by 7.0 per cent to 19 per cent, reflecting a decline in profitability from both interest and non-interest revenue sources.
Operating Profit Margin rose from 25 per cent to 54 per cent, showcasing an improvement in the bank’s operational efficiency and profitability.
Net Profit Margin witnessed a significant increase of 24.0 per cent to 49.0 per cent, indicating higher profitability after all expenses.
Return on Average Assets (ROAA) remained stable at 1.00 per cent, reflecting the bank’s ability to generate earnings from its assets as earnings yield experienced a remarkable growth of 20.0 per cent to 29.0 per cent, signifying increased returns for investors relative to the market price, while Price/Earnings (P/E) Ratio declined by 8.0 per cent to 3.0 per cent indicating a decrease in the stock’s price relative to its earnings.
Return on Equity (ROE) witnessed a growth of 8.0 per cent to 15 per cent, representing the bank’s ability to generate returns on shareholders’ equity.
The group customers loan and advances rose marginally by 38.9 per cent to N5.261 trillion in H1 2023 from N3.789 trillion in FY 2023, while Customers deposit stood at N9.042 trillion as of end of June 30th, 2023 from N7.124 trillion in 2022 financial year, reflecting an increase of 26.9 per cent
In conclusion, the group total equity stood at N1.373 trillion in six months of 2023 from N983.7 billion in twelve months of 2022, indicating a marginal increase of 40.1 per cent
Reactions trail impressive H1 2023 result and accounts
The Chief Executive Officer (CEO) of First Bank (Commercial Banking Group), Dr. Adesola Adeduntan said: “In the first half of 2023, FirstBank Group delivered the strongest financial performance in the almost 130 years of the Bank’s history; with solid business momentum, increased revenue, and excellent returns. The result reflects the continued positive impact of our strategy and the tremendous progress that we have made in growing and transforming the Group.
“The result also highlights the resilience of our business model, customer relationships and institutional capabilities. While the uncertainties in the macroeconomic and operating environment persist, I am confident that our purpose-driven strategy remains the right one and that our strong financial performance, alongside our business model and resilient portfolios, position the Group well to continue to provide the required support to our customers as well as create robust and sustainable value to our shareholders.
“Given our extensive and diversified customer base of over 42 million customer accounts, our digital technology-enabled processing capabilities that ensure we process over 12 per cent of industry’s payment volume, our future-proof and cutting-edge digital banking platforms with over 22 million users that enable us to process more than 95 per cent customer-induced transactions on digital channels, the robustness of our balance sheet, and our institutionalised risk management culture and capabilities, we see a resilient franchise today and into the future.”
Also, the Group Managing Director, Nnamdi Okonkwo stated that: “FBNHoldings has continued to deliver a strong financial performance despite the complex operating environment, thanks to our reinforced foundations, deep market understanding, strong risk management and execution capabilities.
“On the back of this and in line with our focus of driving further improvement in revenue generation and profitability, the Group delivered strong growth in gross earnings and profit before tax resulting in N656.6 billion and N206.3 billion respectively, for the first half of 2023 financial year.
“Across our businesses, we continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practises to anticipate and creatively deliver products and services that delight the different customer segments that we serve. Furthermore, we are committed to leveraging technology via digital platforms to enhance operational efficiency.
“Although the current operating environment remains challenging, we are confident of successfully navigating the terrain in our transformation journey to deliver sustainable value to our stakeholders.”
