Home Business FBN Holdings Reports 30.9% Increase In PBT To N83.6bn, Crosses N6trn in...

FBN Holdings Reports 30.9% Increase In PBT To N83.6bn, Crosses N6trn in Total Assets

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…proposes N0.38 dividend

FBN Holdings Plc on Monday announced its audited results for the financial year ended 31 December 2019 with profit before tax of N83.6 billion, up 30.9 per cent from N63.9billion reported in 2018.

The group in its results to the Nigerian Stock Exchange (NSE) said profit after tax gained 26.7 per cent to N73.7billion as against N58.2billion reported in 2018.

The financial institution proposed dividend per share of N0.38. From the group income statement, gross earnings closed 2019 at N627.0billion, up 6.7 per cent from N587.4billion reported in 2018.

Increase in gross earnings were driven by a 1.6per cent increase in interest income, despite declining yield environment, and further supported by a 20.6 per cent growth in non-interest income. Interest income and non-interest income contributed 70.6 per cent and 25.4 per cent (Dec 2018: 74.2 per cent and 22.5 per cent) respectively to gross earnings.

As net-interest income gained 7.1 per cent to N290.2billion from N285.3 billion reported in 2018, Non-interest income closed last year at N159.2billion, 20.6 per cent increase over N132.0 billion reported in 2018.

The group’s Operating income gained 7.7 per cent to N449.3 billion from N417.3billion reported in 2018.

Statement of Financial Position showed 11.4 per cent increase in total assets to N6.2trillion in 2019 from  N5.6trillion reported in 2018 as  Customer deposits gained 15.3 per cent to N4 trillion as against N3.5 trillion in 2018.

In addition to financial position, customer loans and advances (net) gained 10.9 per cent to N1.85trillion from N1.67 trillion reported in 2018.

Commenting on the results, the Group Managing Director, UK Eke, said, “We are happy to close the 2019 financial year on positive notes across a number of key metrics giving the Group a clean-slate to accelerate its growth plan as we conclude the 3-year Strategic Planning Cycle which ran from 2017-2019 and commence a new cycle which coincide with the start of a new decade.

“In line with our promise to the market, FBN Holdings closed the year with a30.9 per cent y-o-y increase in profit before tax and delivered its target of a single digit NPL which closed at less than 10 per cent.

Similarly, we successfully overhauled our risk management architecture, strengthened our processes by leveraging technology and institutionalising a strong credit culture across the lending entities.

“These deliberate steps have seen the NPL ratio of our vintage book remained below one per cent.

“In the same vein, we have made significant improvement in our revenue generation capacity with non-interest income benefiting from our market leadership in electronic banking channels.

“It is also noteworthy to highlight that our investments aimed at improving operational efficiencies and enhancing revenue accretion have resulted in higher cost-to-income ratio. The benefits of these investments will be realised in subsequent periods.

The new SPP cycle is focused on strengthening and positioning the various businesses across the Group for sustainable growth over the long-term. As a Group, we are committed to transforming our financial performance to tangible results for the benefit of all stakeholders especially our shareholders through enhanced returns and dividend payment. As a testament of the resolution of the legacy issues and an indication of the future, FirstBank re-commenced dividend upstream to the holding company.

“In conclusion, I would like to emphasise that 2020 promises to be a challenging year. In addition to the growing list of economic challenges both at the global level and locally, the world woke-up to the outbreak of the deadly COVID-19 pandemic which has threatened to bring the global economy to a complete halt.

“Whilst these are early days in the assessment of the likely economic devastation as a result of this virus, there is a sense of unanimity that this event will result in an unprecedented ruin both in terms of global economic growth and disruption to the global supply chain.

“As an institution, we are working hard to minimise its impact on our businesses by activating our business continuity plans thereby preserving the well-being of our employees and other stakeholders.”

The commercial bank subsidiary of FBN Holdings, FirstBank reported profit after tax of N62.7 billion in 2019, up 61.3 per cent from  N38.8 billion reported in 2018.

The commercial bank reported total assets of N5.9 trillion, up 10.7 per cent from N5.3 trillion in 2018.

The Commercial Banking business contributed 88.2 per cent (Dec 2018: 87.8 per cent) to gross earnings of the Group and 85.2 per cent (Dec 2018: 67.4 per cent) to its profit before tax.

Commenting on the results, Chief Executive Officer of FirstBank, Dr. Adesola Adeduntan said:  The Commercial Banking group delivered a solid performance in 2019 with profit before tax increasing by 83.1 per cent despite varying degrees of challenges and volatility in the operating environment.

“As a Bank, 2019 marked the effective completion of the 2017 – 2019 strategic cycle and a key accomplishment during the cycle is the substantial resolution of our non-performing loan portfolio (NPL ratio dropped to 9.7 per cent from 24.3 per cent as of 31 December 2018), thereby positioning the group for accelerated growth in profitability. We recorded significant growth in our Agent banking network with double digit growths in volume and value of transactions processed which further enhanced our leadership position in financial inclusion.

“Overall, we are pleased with the progress that has been made in our digital journey as over 85% of our customer-originated transactions are now processed on digital channels; we will continue to leverage technology to offer superior customer  service and enhance operational efficiency.

“As we commence the execution of a new 2020 – 2022 strategic plan and in line with the realities of providing innovative customer service excellence and generating expected shareholder returns, we reviewed our vision to be Africa’s bank of First Choice to align with our ambition to optimise returns through customer led innovation and discipline execution. Within this context, aggressive customer acquisition and excellence across products/channels/geographies is a priority to enhance revenue streams while we accelerate the drive to reduce overall cost to serve, improve employee productivity, enhance customer experience and maximise operational efficiency.

“Finally, we reiterate our focus on innovation, leveraging digital and emerging technologies to satisfyour customers, differentiate us from competition, drive revenue growth and optimise our business. As we progress with this new cycle, I am highly optimistic that 2020 and beyond will be more rewarding.”

 

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