The board of FBN Holdings Plc, on Thursday presented its unaudited financials for the full year ended December 31, 2023, in line with a pre-listing requirement of the Nigerian Exchange.
Highlights of the result included the 127.4% growth in profit after tax, despite an equally significant 141.9% jump in income tax expense for the period, just as gross earnings soared 88.5% from N805.13bn at the end of the preceding period to N1.517tr. This means that the management achieved a Net Profit Margin (NPM) of 20.16%, which simply means that the management successfully converted 20.16 kobo of every N1.00 to profit during the period, which might very well be its best over the last two decades, and a sign of the improvement in efficient deployment of its capital.
The net profit would have been significantly higher, according to the result, but for the jump in foreign exchange loss for the period from just N22.425bn at the end of 2022, to N350.315bn. Of this amount, a significant N253.65bn loss was recorded in the fourth quarter of 2023 alone.
Of this amount, interest income for the period climbed 66.3%, operating income rose 71.8% and expenses was contained at 46.8%. Total assets improved by 59.7%, with customer loans and advances climbing 68% up; while total liabilities rose by 58.6% of which customer deposits improved by 52.6%.
According to the result submitted to the NGX and which is subject to auditing with possibility of amendments that will produce a final version, gross earnings rose to N1.517tr from N805.13bn (audited) reported in the corresponding full-year of 2022. Of this, the group’s Nigerian operations contributed the lion’s share of N1.225tr, about double previous year’s N667.214bn; while from outside Nigeria came N292.342bn from N136.914bn.
Interest income stood at N917.708bn, compared to the previous N551.937bn, driven by income from customer loans and advances of N600.833bn, from N403.616bn, loans and advances to banks fell from N56.438bn to N45.671bn, while investment in securities contributed N271.204bn from N91.882bn. Interest expense increased from N188.688bn to N387.678bn, with customer deposits accounting for N264.835bn from N117.199bn, and deposits from banks taking up N66.615bn from N22.448bn, and borrowing and others, N56.228bn from N49.041bn, resulting in net interest income of N530.03bn, up from N363.249bn.
There is, however, still need for the management to keep watch on asset quality, as impairment charge for the period soared to N200.44bn from just N68.619bn, leaving net interest income after impairment of N329.59bn, compared to N294.63bn.
Fee and commission income rose from N143.981bn to N204.903bn, driven by electronic banking fees of N66.041bn from N55.099bn; followed by the N40.645bn, up from just N16.022bn at the end of 2022. Earnings from custodian fees for the year was nil, compared to the previous N6.625bn. Commission expense rose from N26.012bn to N33.094bn, resulting in net fee and commission income of N171.809bn, up from N117.969bn.
Net gains on sales of investment securities stood at N41.154bn from N22.425bn; while the net gains from financial instruments at full value made up for the foreign exchange loss incurred, rising from just N38.648bn in 2022 to N681.239bn. Dividend income rose to N6.195bn from N3.166bn; other operating income fell to N16.483bn from N22.404bn; just as personnel expenses stood at N173.889bn from N117.376bn. Depreciation, amortisation and impairment rose from N28.05bn to N34.706bn; other operating expenses jumped to N325.746bn from N218.481bn resulting in operating profit of N361.814bn, compared to just N157.727bn in 2022.
Profit before tax amounted to N362.239bn from N157.902bn, while the income tax of N52.231bn, up from N21.591bn left net profit at N310.008bn from N136.311bn, which translated to earnings per share of N8.56, an improvement over the previous N3.74 each.
A breakdown of the result by operating segments showed that commercial banking remains the group’s cash-cow, accounting for N1.416tr or 92.16% of gross earnings, and N285.378bn or 92.05% of net profit; followed by the Merchant Banking and Asset Management Group, which contributed N96.733bn of earnings and N26.726bn of PAT, while others accounted for N23.83bn of earnings, while reporting N2.096bn loss for the period.
On the balance sheet, total assets summed up to N16.896tr, of which customer loans and advances stood at N6.363tr, up from N10.577tr in the preceding full year; while total liabilities was N15.196tr, up from N9.581tr.
