21st July, 2023
FBN Holdings Plc said it has recorded a profit before tax of N206 billion for the first half of 2023 financial year, a big jump from the N65 billion recorded at same period last year.
The holding company said this in its unaudited financial results released to the Nigerian Exchange on Thursday in Lagos.
Gross earnings also jumped to N656.6 billion in the first six months.
The company’s unaudited numbers for the first half of the year, showed strong growth in both Interest and Non-Interest Income, according to an analysis by City Securities Limited.
Interest Income was up 69.3% y/y driven by growth in Interest Income on both Investment Securities and Loans. Net Loans to customers were up 38.9% (including the impact of devaluation) in H1 2023 compared with December 2022. Earnings yield improved significantly to 9.4% in H1 2023 from 7.5% in H1 2022.
Interest Expense on the other hand, also grew significantly, up 98.7% y/y resulting in an uptick in cost of funds to 2.9% in H1 2023 from 1.9% in H1 2022.
Customer Deposits were up 26.9% in H 1 2023 compared with the FY 2022 position. Overall, Net Interest Income grew strongly, up 55.2% y/y and 12.2% q/q, driving NIMs up to 5.8% in H1 2023 compared with 5.1% in H1 2022. In line with our prognosis, yields continue to grow faster than funding costs with the rising rate environment.
Net Fee and Commission Income also grew strongly, up 26.3% y/y and 8.8% q/q.
Major drivers of the y/y growth were strong growth in electronic banking fees (up
33.2% y/y) and growth in letters of credit commissions and fees (up 28.1%), growth in
custodian fees (up 40.5%y/y), and growth in credited related fees (up 28.4% y/y).
Other Income (Foreign Exchange Income, Net Gains on Investment Securities, Net Gains or Loss on Financial Instruments held at FVTPL, Dividend Income, Other Operating Income) increased by 195.9% y/y and 297.5% q/q (Q2 2023 compared with Q1 2023).
The group reported fair value gains of N234.4bn in H1 2023 but the impact on profit was moderated by a foreign exchange loss of N98.4bn in H1 2023.
Pre-tax profit grew strongly, up 213.8% y/y to N206.3bn while Net profit was up 231.1% y/y to N187.2bn bringing H1 2023 annualized ROAE to 31.5% compared with 12.8% for H1 2022.
It was the best result posted by the holding company, since it was listed on the Stock Exchange.
Commenting on the results, the Group Managing Director, FBN Holdings, Mr Nnamdi Okonkwo, said, “FBNHoldings has continued to deliver a strong financial performance despite the complex operating environment.
“Thanks to our reinforced foundations, deep market understanding, strong risk management and execution capabilities.
“On the back of this and in line with our focus of driving further improvement in revenue generation and profitability, the group delivered strong growth in gross earnings and profit before tax resulting in N656.6 billion and N206.3 billion, respectively, for the first half of 2023 financial year.
“Across our businesses, we continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practices to anticipate and creatively deliver products and services that delight the different customer segments that we serve.
Dr Adesola Adeduntan, Chief Executive Officer of FirstBank (Commercial Banking Group), also said, “in the first half of 2023, FirstBank Group delivered the strongest financial performance in the almost 130 years of the bank’s history; with solid business momentum, increased revenue, and excellent returns.
“The result reflects the continued positive impact of our strategy and the tremendous progress that we have made in growing and transforming the group.
“The result also highlights the resilience of our business model, customer relationships and institutional capabilities.’’