FBNH Sees Fresh Valuation Surge After Earnings Beat
Tier-1 banking heavyweight FBN Holdings Plc has reunited with the big gangs in the stock market as the financial services company’s market valuation surged past N1 trillion.
Several listed companies’ stocks set new records in the local bourse, boosted by sentiments rather than corporate earnings performance. At the close of the trading session on Friday, the market placed N1.005 trillion on FBNH, up by 9.8% over the week.
The financial services boutique had plunged below 10-digit market cap group on the Nigerian Exchange following risk-off sentiment on banking stocks.
FBNH’s share was traded at N28, gaining 9.8% over the week from N25.50. In its fourth quarter earnings release, FBNH said earnings per share rose by more than 128% to N8.56 from N3.75 in 2022.
The group earnings push was supported mainly by a 10.8 times growth in net gains from investment securities, further supported by growth in interest earned on investment securities and loans and advances to customers.
Interest income grew by 66.3%, reflecting improved income from expanded loans and advances, and investment securities due to the high yield environment.
Analysts said the notable rise in income from loans and advances to customers was due to a combination of revalued foreign currency denominated assets and robust risk asset creation.
Notably, non-interest income expanded markedly by 149.6% to N566.99 billion, primarily triggered by the increased gains from investment securities which effectively offset the net foreign exchange revaluation losses.
In its latest scorecard, the financial services group’s foreign exchange losses surged 401.9x year on year to N375.88 billion – in contrast to large gains posted by Tier-1 banks.
Its 2023 results saw impairment charges rising significantly due to the devaluation impact on foreign currency impairments, up 192.1% year on year to N200.4 billion compared with N68.6 billion in 2022.
Overall, FBHN Plc.’s profit printed strong in the financial year 2023 with pretax profit expanding by a substantial 129.4% to N362.24 billion. Details from FBNH’s results showed that the company’s profit after tax surged by 127.4% year on year to N310.01 billion, despite the increased income tax expense. #FBNH Sees Fresh Valuation Surge After Earnings Beat
