FBN Holdings’ profit up by 7.8% to N45.8bn in Q3

FBN Holdings Plc on Thursday announced an increase of 7.8 per cent in profit to N45.8 billion in its unaudited results for the nine months ended September 30, 2017.

The group in its unaudited results to Nigerian Stock Exchange (NSE) reported N42.5 billion profit in prior nine month ended September 30, 2016.

From FBN Holdings income statement, gross earnings stood at N439.2 billion, up 5.2per cent year-on-year (y-o-y) from N417.4 billion reported in nine months ended September 30, 2017.

The Holdings in a statement said, Gross earnings grew by 5.2per cent y-o-y to N439.2 billion (Sept 2016: N417.3 billion), driven largely by a 27.8per cent growth in interest income.

“This was partly offset by a 43.5per cent y-o-y decline in non-interest income. Interest income and non-interest income contributed 81.3per cent and 18.7per cent respectively. The growth in interest income to gross earnings was driven by increased investment in securities,” the Holdings explained in a statement.

Net-interest income increased significantly by 25.3 per cent to N254.3 billion from N202.9 billion while Non-interest income moved to N74.0 billion, a drop of 43.5per cent from N131.0 billion reported in nine months of 2016.

The group Impairment charge for credit losses was down by 14.9 per cent to N97.6 billion as against N114.7 billion reported in nine months ended September 30, 2016.

Commenting on the results, the Group Managing Director UK Eke, said: “FBN Holdings has again demonstrated its resilience in revenue generation with a 5.2per cent y-o-y growth in gross earnings to N439.2 billion following a y-o-y increase of 25.2per cent in net interest income to N254.3 billion.

The Group is progressing in building the right structures for sustainable growth through an improved credit culture and risk management; increased technologically driven operational efficiencies; and the introduction of revenue enhancing platforms. The Insurance group sustained its strong performance and we expect to see further growth from the retail, corporate and annuity businesses.

He explained further that, “Similarly, we continue to see strong growth trajectory in the Merchant Banking and Asset Management group. These businesses complement our commercial banking business in our aspiration to becoming the leading financial services institution in Middle Africa.

“We remain confident that the initiatives being implemented across our subsidiaries will further strengthen our business and ultimately reposition the Group for sustainable growth”

FBN Holdings’ Total assets hits N4.9 trillion as at September 30, 2017, up 2.7per cent year-to-date (y-t-d) increase over N4.7 trillion reported in 2016 full year.

The statement said, “Total assets increased by 2.7per cent y-t-d to N4.9 trillion (Dec 2016: N4.7 trillion); this was largely driven by a 7.1per cent y-t-d increase in investment securities to N1.34 trillion (Dec 2016: N1.25 trillion); and a 41.9per cent y-t-d increase in loans to banks to N631.5 billion (Dec 2016: N444.9 billion).

“Earning assets have been further optimised with total interest earning assets growing by 5.7per cent y-t-d to N3.96 trillion from N3.74 trillion in December 2016, representing 81.3per cent of total assets (Dec 2016: 79.0per cent)

Total customer deposits declined by 5.3% y-t-d to N2.9 trillion (Dec 2016: N3.1 trillion) as we focused on growing inexpensive deposit at the right mix. The Group’s deposit base remains overall stable and strong with a growing retail franchise and about 13 million active customer accounts. The decline in domiciliary deposits yt-d can be attributed primarily to the state related remittances made and reported during the half year results.

Similarly, term deposits declined to N841.2 billion (Dec 2016: N842.3 billion). On the other hand, Savings deposits, representing a very stable funding base, has continued to increase to N974.1 billion, up 2.2% y-o-y (Dec 2016: N952.7 billion) reflecting the strength of the franchise and its well-diversified funding base.

Total loans & advances to customers (net) declined by 1.9% y-t-d to N2.0 trillion (Dec 2016: N2.1 trillion) primarily following repayments and write-off of assets that had been fully impaired. This result speaks to the efforts being made to strengthen asset quality in a sustainable manner while cleaning up our legacy asset position. Sectors contributing to growth in the quarter are; manufacturing, agriculture and general

Shareholders’ funds closed at N631.1 billion, up 8.3per cent  y-t-d (Dec 2016: N582.6 billion), benefitting largely from an increase in: retained earnings (up 21.4per cent y-t-d to N196.2 billion (Dec 2016: N161.6 billion)); AFS (up 23.2per cent y-t-d to N33.9 billion (Dec 2016: N27.5 billion)); foreign currency translation reserves (up 13.3% y-t-d to N39.4 billion (Dec 2016: N34.8 billion)); as well as, SSI25 reserve (up 41.4% y-t-d to N8.6 billion (Dec 2016: N6.1 billion).

Capital adequacy ratio for FirstBank (Nigeria) closed at 17.2per cent (Dec 2016: 17.8per cent) 220bps above the regulatory minimum of 15per cent, while the Capital adequacy ratio for FBN Merchant Bank closed at 23.1per cent (Dec 2016: 22.6per cent) above the 10per cent required by regulation for Merchant Banks.