There was some cheery news for shareholders of FBN Holdings Plc on Monday when the management presented its half-year report card showing that although there is still much ground to cover in terms of performance by younger competitors, profit before and after tax grew faster than gross earnings for the period ended June 30, 2018.
Gross earnings for the period crawled 1.62% up to N293.31bn from N288.62bn; out of which interest income accounted for N225.4bn, down marginally from N232.38bn in prior half-year; while interest expense climbed 10.94% up from N68.29bn to N75.76bn; leaving net interest income at N149.64bn, down 8.8% from the previous N164.09bn.
Impairment charge for credit loss (loan loss provision) declined by N9.598bn or 15.37% to N52.81bn, from N62.408bn; resulting in net interest income after impairment charge for credit losses of N96.83bn, a slip from the N101.677bn in 2017.
Net insurance income from the group’s insurance subsidiary inched 9.78% up to N6.05bn from N5.51bn; just as fee and commission income for the banking arm increased 13.33% from N36.76bn in the first half of 2017, to N41.662bn.
Electronic banking fees contributed the lion’s share of N14.921bn, compared to N10.597bn; followed by N5.956bn from account maintenance, compared to N4.233bn in 2017; just as other fees and commissions dropped from N7.641bn to N5.067bn. Fee and commission expense (being fees charged by other banks on holders of First Bank of Nigeria ATM cards, who used other banks’ machines while transacting business; and SMS alert related expense) was up 11.95% to N6.61bn, as against N5.91bn.
Net gain on foreign exchange rose to N12.943bn from N5.008bn, a total N8.315bn of this came in the second quarter (April to June) alone; net gains on investment securities jumped to N5.137bn (N4.3bn in Q2 alone, compared to the loss of N168m in the final quarter of the period.
Net losses from financial instruments at face value stood at N1.474bn, compared to the previous N5.954bn gain; personnel expenses jumped to N45.064bn from N42bn; while other operating income remained same as the previous N1.35bn. Total operating expenses for the period at N64.547bn, a drop from N65.347bn in 2017, was driven significantly by the N16.278bn regulatory costs (Asset Management Corporation and Deposit Insurance), up from N16.492bn; followed by maintenance cost of N9.925bn from N9.911bn; while outsourced cost stood at N9.372bn from N7.668bn.
Depreciation and amortization increased to N7.89bn from N7.69bn; operating profit therefore increased 9.65% to N38.85bn from N35.43bn.
Profit before tax stood at N38.85bn from N35.63bn; while after tax profit stood at N33.53bn from N29.49bn, representing a 13.68% notch over the period, representing Earnings Per Share of 91 kobo, slightly better than the previous 81 kobo.
A breakdown of the profit and loss account by segment showed that the commercial banking group contributed the lion’s share of N264.721bn to earnings, followed by N18.482bn by the merchant banking and asset management group (FBNQuest); while the insurance arm pooled N10.074bn.
Similarly, PBT from FirstBank of Nigeria stood at N32.648bn; followed by merchant banking with N4.326bn; and N2.893bn for the insurance business.
The commercial banking arm of the group recorded impairment charge of N52.745bn; compared to just N65m by the FBNQuest.
According to the group’s balance sheet, showed that total assets rose to N5.306tr, compared to N5.236tr at the end of December 2017; with total customer loans and advances for the period sliding to N1.858tr from N2.0tr; just as total liabilities improved from N4.558tr to N4.646tr, helped by a marginal growth in customer deposits at N3.27tr, compared to N3.143bn reported in December 2017.
Shareholders’ funds for the period dropped from N678.192bn last December to N660.204bn.