FBN Holdings Grows Profit by 127%, Slashes Dividend amidst Huge FX Loss
FBN Holdings Plc has finally released its audited financial statement for 2023 after a prolonged delay. Details showed that the financial services group earnings surged year on year on twin advantage of naira devaluation impacts on foreign currency loans and high interest rate environment.
A review of FBN Holdings’ audited report revealed that the company’s profit at the end of the 2023 financial year was N310.37 billion, up 127.9% from N136.173 billion in 2022. Growth in non-interest related income sources and net interest income propelled the group’s net profit performance higher.
FBN Holdings’ top line performance was significantly enhanced by stronger net interest income. Details from the audited financials revealed that net interest income surged by more than 51% year on year to about N549 billion in 2023 from N363.249 billion in the comparable period in 2022. >>> Interest Rate on Nigerian Treasury Bill Spikes to 21.45%
The strong increase in interest income, which ended up at N960.328 billion after rising by roughly 74% annually from N551.937 billion in 2022, was the source of the boost. However, group interest costs increased more quickly than expected, rising 118% year on year to N411.415 billion in 2023 from N188.688 billion in 2022, indicating funding constraints.
Non-interest revenue, meanwhile, strengthened the group’s financial performance. FBN Holdings ncome from net fee and commission rose by about 64% to N193.198 billion from N117.969 billion. Major drivers include growth in electronic banking fees, strong growth in letters of credit commissions and fees and strong growth in funds transfer & intermediation fees.
A large foreign exchange loss was recorded by FBN Holdings, a move that stood out in sharp contrast to the earnings reports of its closest banking competitors. The group reported N332.787 billion in foreign exchange losses in 2023 as opposed to over N32 billion in gains in 2022, according to the audited report.
Key components of its overall operating expenses increased year on year in the period, according to its audited financial report. Personnel costs advanced as inflation pressures continued in Nigeria, while its operating expenses spiked significantly to about N342 billion from less than N229 billion in 2022.
The group registeted a pretax profit which surged by more than 127% year on year to N350.593 billion in financial year 2023 from N154.540 billion in 2022. The group’s net profit reduced due to income tax and the loss susatined from discontinued operations in 2023.
FBNH’s net profit settled at N310.370 billion, 127.92 % year on year above N136.173 billion the group delivered in 2022. The management proposed a final dividend of N0.40, 20% lower than the 0.50 paid last year, implying a dividend yield of 1.77%. FBN Holdings Shrinks Amidst Hanging Earnings Reports
