The board of FBN Holdings Plc, parent company of Nigeria’s oldest surviving First Bank of Nigeria Limited, on Thursday presented its unaudited financials for the half-year ended June 30, 2023 with profit after tax soaring by N112.987bn or 468.15%.
The balance sheet equally very impressive growth at N14.176tr, from N10.577tr, driven by the bank’s N5.24tr customer loans, from N3.789tr reported at the end of December 31, 2022. Total liabilities for the period leaped to N12.798tr, up from N9.581tr, boosted by the group’s N9.012tr deposits, an improvement over the N7.12tr.
A review of the result showed that the performance would have been way better if the management successfully kept its risk assets in check as shown in the 290.89% growth in impairment charges for loan loss. The situation was worsened by the N101.443bn foreign exchange loss, compared to the previous N10.764bn gain; the impact of which was mitigated by the net gain from sale of financial instruments at face value which stood at N231.793bn, against the N3.524bn reported in the preceding half-year.
FBN Holdings, which is filing its financials early for the first time in many years, reported N657.369bn in gross earnings. interest income of N203.678bn, an improvement from N116.905bn in the preceding half-year; could however not rein in on interest expense which stood at N78.193bn, more than double the previous N36.789bn; leaving net interest income at N125.483bn, which was better than the N80.116bn reported in the first two quarters of last year. Impairment charge for losses rose from N10.42bn to N40.731bn; while net interest income after impairment charge for losses amounted to N84.752bn, from N69.696bn.
Fee and commission income improved from N36.983bn to N45.984bn, helped by the N16.138bn in electronic banking fees, which dropped from N25.537bn; expense rose slower from N5.936bn to N7.576bn, resulting in net fee and commission income of N38.408bn, up from N31.047bn.
Net gains on sale investment securities stood at N9.972bn from N7.819bn; dividend income fell to N2.614bn from N4.456bn; personnel expenses climbed from N29.692bn to N33.924bn; depreciation, amortization and impairment increased marginally to N7.482bn from N6.632bn. Other operating expenses amounted to N78.983bn compared to N57.454bn; resulting in operating profits of N149.981bn, up from N29.287bn.
Profit before tax jumped up from N29.205bn to N150.156bn; income tax expense increased from N5.045bn to N13.005bn; leaving a profit after tax of N137.151bn, up from just N24.16bn; translating to a juicy N5.19 Earnings Per Share, compared to just N1.55 in the corresponding period of last year. Shareholders’ funds, therefore, grew from N995.741bn at the end of last year, to N1.378tr.
A breakdown of the performance by segments showed that commercial banking group pooled N607.731bn in total revenue, impairment charge therefrom stood at N50.822bn; following which N174.806bn was reported net profit; the merchant banking and asset management group followed from afar with N46.536bn in revenue, impairment chage of N6.806bn; and net profit of N11.67bn.