For the first time in years, directors of FBN Holdings presented its audited financials for the year ended December 31, 2020, almost within the 90-day regulatory band allowed by the Nigerian Stock Exchange for submission of the full-year score-cards by listed companies.
Highlights of the results included, among others, a flat growth in gross earnings for the period, a drop in interest earnings, even as the management successfully cut interest expense, resulting ultimately to the 21.81% growth in profit after tax, from the board has recommended a dividend per share of 45 kobo, from the earnings per share of N2.50. The dividend is payable electronically to shareholders whose names appear of the register of members at the close of business on April 20, 2021, which is also the qualification date. Register of shareholders will be closed for this purpose from April 21 to 22; following which payment is on April 28, 2021.
There was equally an improvement on the balance sheet, with total assets becoming 23.95% more robust at N7.689tr, compared to N6.203tr in the prior year, with customer loans and advances increasing by 19.7% from N1.852tr to N2.217tr. Total liabilities also climbed to N6.923tr, up by 24.91% from N5.542tr reported in the corresponding period of 2019; of which customer deposits represented N4.894tr, compared to N4.019tr, representing a growth of 21.76%. Also, shareholders’ funds for the period under review, improved by 15.74% from N661.125bn at the end of previous year to N765.171bn.
According to the result, gross earnings slipped from N590bn to N579.4bn, the bulk of which was the N538.737bn from the commercial banking group, compared wit6h N553.291bn; followed by N38.625bn, as against N35.443bn from the merchant banking and asset management group, while ‘others’ contributed N2.065bn, up from N1.651bn. By geography, the group earned N494.76bn from its Nigerian business, up from N506.296bn; while N84.667bn was derived from its operations outside of Nigeria, compared to the previous N84.089bn.
Of the gross earnings, interest income declined from N431.934bn to N384.798bn, with commercial banking again accounting for the lion’s share of N364.766bn; ahead of N18.94bn from merchant banking; while interest expense dropped from N152.342bn to N133.183bn, of which commercial banking took N120.247bn. This resulted in net interest income of N251.615bn, a decline also when compared with the N279.592bn reported in the preceding year. A breakdown of the interest income showed that N241.027bn was derived from customer loans and advances, from N245.589bn; just as interest paid on deposit from customers stood at N90.609bn from N111.217bn.
Impairment charges for loan losses remained high at N50.596bn, a drop from N51.093bn, resulting in net interest income after impairment charge for losses stood at N201.019bn, as against the previous year’s N228.499bn. Commercial was responsible for N49.307bn, leaving MBAM with N1.287bn
Fee and commission income however improved from N103.381bn to N113.222bn, boosted by electronic banking fees of N48.68bn, up from N48.033bn, letters of credit commission and fees grew from N6.382bn to N11.894bn, while account maintenance contributed N12.804bn from N13.268bn, and N9.604bn earned as credit related; fee and commission expense dropped mildly also from N20.483bn to N19.446bn; leaving a net fee and commission income of N93.776bn, an improvement over the N82.898bn of prior year.
Foreign exchange income dipped from N9.54bn to N1.46bn; with the numbers receiving a boost from the significant growth in net gains on sale of investment securities from N17.493bn to N48.078bn; just as net gains from financial instruments rose from N20.562bn to N23.775bn. Dividend income fell to N3.983bn from N4.368bn; other operating income fetched N3.631bn from N3.021bn.
Personnel expenses rose from N95.873bn to N100.584bn; depreciation of property and equipment increased to N18.634bn from N16.401bn; just as other operating expenses dropped from N172.711bn to N166.045bn; resulting in an operating profit of N83.221bn, compared to the previous year’s N75.199bn. Profit before tax rose from N75.286bn to N83.703bn; income tax expense of N8.111bn, from N9.242bn, resulted in a profit from continuing operations of N75.592bn from N66.044bn. Profit for the year from discontinued operations for the period rose from N7.621bn to N14.138bn, bringing profit for the year to N89.73bn, up from N73.665bn.