FBN Holdings Grows Profit by 125% to N526 Billion

FBN Holdings Grows Profit by 125% to N526 Billion

FBN Holdings Plc profit has increased by about 125% year on year to N526 billion in 12 months, according to details from its financials submitted on the Nigerian Exchange, from N234.1 billion. The financial services group bolstered earnings performance amidst economic headwinds.

The results significantly reflect higher earnings on loans and interest earnings asset repricing, with support from improved non-interest related income. But there still appears to be pressure on asset quality given that its loan loss expenses increased more than double.

In its unaudited 9M-2024 financial statement, FBN Holdings Plc pretax profit reached an all-time high level of N610 billion, which was 128% above N267.9 billion recorded in the equivalent period in 2023.

The significant improvement in earnings performance in the period occurred on the back of a surge in interest-earning assets amidst a high interest rate environment, which triggered loan repricing in the banking sectors. 

Details from its financials showed that gross earnings increased by 136.6% year on year to settle at N2.218 trillion at the end of 9m-2024 from N937.5 billion 12 months ago. The financial services company’s gross earnings growth was bolstered by higher interest income and non-interest revenue, according to details from its financial scorecard.

Interest income surged by 164.6% year on year to N1.633 trillion from N617 billion in 2023 as banks repriced interest yielding assets after a series of monetary policy rate hikes. FBN Holdings interest expenses surged by 214.3% from N241.5 billion to N759.1 billion in 12 months.

According to details from the result, the bank’s net interest income came stronger year on year, settling at N873.9 billion, up by 132.7% year on year from N375.5 billion in the comparable period in 2023.

Supporting the bank’s overall performance, non-interest revenue (NIR) rose by 82.5% year on year to N584.7 billion from N320.5 billion. This was lifted trading gains and net fee & commission income, respectively.

FBN Holdings reported N551.76 in net gains from financial instruments at fair value through profit or loss. These gains accounted for 94.4% of the total non-interest income and offset the N226.73 billion in foreign exchange loss, resulting in an operating income of N1.46 trillion. CardinalStone Limited said.

In the period, operating expenses (OPEX) surged by 94.8% year on year from N347.50 billion to N676.8 billion at the end of 9M-2024. Analysts noted that more than 89% year-on-year increase in AMCON levy, a significant spike of +118.0% surge in maintenance, and advertising & corporate promotions, which rose by 121.9%, were the major drivers for FBN Holdings higher operating expenses.

In the period, impairment charges on loans also grew strongly, reflecting the group’s weak asset quality. FBN Holdings loan loss expenses doubled by 111.5% to N171.39 billion at the end of the 9th month of the financial year 2024.

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