FBNH lifts performance bar, grows earnings on improve assets quality

FBN Holdings Plc. is keeping investors optimistic, today announces its unaudited results for the nine months ended 30 September 2019 with profit before tax of N60.029 billion.

This represents a whooping 16.9% increase year on year when compare to N51.3 billion the group made in the comparable period in 2018.

However, on the back of its improved profitability, the group earned N1.84 on its shares in the period. A year ago, it had earned N1.62 per share.

The review of the numbers shows that FBNH records significant cut in amount booked as impairment charge on credit losses.

Equity analysts told MarketForces the 9-month 2019 result reflects deliberate efforts of the management to strengthen FBNH position.

Analysts added that FBNH is on the go to take rightful position with this massive tail off in impairment charges on credit losses which nosedived significantly by 62.6% from N76.2 billion to N28.5 billion.

The group portion of troubled assets measure by non-performing loan ratio metric went down to 12.6% as against 25.9% at the beginning of the year.

At the end of 9-month, the result shows that  net loan and advances to customers currently weigh N1.8 trillion as against N1.7 trillion at the beginning of the year 2019.

In the period, the financial service holding company raised shareholders fund by 14% to N604.9 billion. At the beginning of the year, the holding’s equity was valued at N530.6 billion.

FBNH gross earnings came marginally decline to N439.9 billion from N441.5 billion in the comparable period in 2018.  One off payment made in the course of the year however pushed the group overall cost.

From the beginning of the financial year 2019 till the end of first 9-month period, the group expanded its total assets by 3% from N5.6 trillion to N5.7 trillion.

On year on year comparison, the holdings recorded a 4.6% upsurge in net interest income. Its net income position from interest yielding assets rose to N211.4 billion compare to N221.5 billion at the end of 9-month period in 2018.

MarketForces observes that non-interest income beats most analysts expectations at year on year increase of 6%, from N93.2 billion in 2018 to N98.8 billion at the end of 9-month in financial year 2019.

Meanwhile, FBNH attributes the growth in non-interest related income to growth in electronic banking fees as well as improvements in transaction-led income.

In term of cash flow, the group operating expenses surged at 18.4% from N187.2 billion to N221.7 billion.

At the end of the period, its operating income however pitched at N310.2 billion compare to N314.7 billion that was declared at the end of 9-month in 2018.

Total customers deposits hit N3.7 trillion, which represents a 5.3% increase from N3.5 trillion record level at the beginning of the year.  Compare to 4.5% at the end of 9-month in 2018, cost of risk declined

UK Eke, the Group Managing Director said: “Our performance in the third quarter reflects the growth trajectory over the first nine months of the year, with significant strides made in transforming the Group’s asset quality and diversifying our revenue streams across the board.

Read: https://dmarketforces.com/tier-1-banks-stocks-in-red-as-market-brush-off-earnings-performance/

He stressed that during the third quarter, our NPL declined further as the group approach the end of the curve in the resolution of its legacy portfolio and are confident of further reducing this to fewer than 10% by the end of the current financial year.

“Critically, we have continued to focus on enhancing our risk framework processes enabling an improvement in the quality of our loan book.

“Concurrently, we have also continued our drive towards ensuing long-term operational efficiency, resulting in a one-off cost increase pushing our CIR for the first nine months.

“In terms of our revenue generation, we have delivered further increases in our non-interest income, on the back of growth in electronic banking fees as well as improvements in transaction-led income.

“Overall, we are pleased with the progress we are making on numerous fronts and remain committed to not only enhancing shareholder value but also adhering to the long-standing principles of this great financial institution”, the GMD said.

FBNH lifts performance bar, grows earnings on improve assets quality

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