FBN

FBN Holdings (FBNH) Plc has declared a profit after tax (PAT) of N91.2 billion for the third quarter ended Sept. 30.

The company stated this in its third quarter result released on Thursday in Lagos.

The profit represented a growth of 123.6 per cent when compared with N40.8 billion achieved in the comparative period of 2021.

Also, the company’s profit before tax during the period under review stood at N105.5 billion in contrast with N52.9 billion in the preceding period, an increase of 99.3 per cent.

Its gross earnings rose by 26.6 per cent to N547.2 billion from N432.6 billion in 2021, while interest income  grew by 42.4 per cent to N370.4 billion against N260.1 billion in 2021.

Similarly, net-interest income appreciated by 53.1 per cent to N249.5 billion, higher than N163.0 billion in 2021.

Operating income stood at N406.6 billion from N317.6 billion, while operating expenses increased by 15.2 per cent to N264.3 billion as against N229.5 billion in the corresponding period in 2021.

The Group Managing Director of FBNH, Mr Nnamdi Okonkwo, said the company had delivered enhanced performance in spite of the challenges in the economy.

“FBN Holdings has again in Q3, 2022 delivered a stellar performance, growing sustainable income from our core businesses.

“This is a testament to the success of our focus on carefully growing the business and driving profitability,” Okonkwo said.

He said the company’s gross earnings grew by 26.6 per cent year-on-year to N546.2 billion, while profit before tax doubled year-on-year to N105.5 billion.

“I am particularly delighted by the significant improvement in our credit risk portfolio.

“Specifically, the NPL ratio closed at 4.7 per cent within the regulatory threshold of five per cent, while the coverage ratio increased to 75.1 per cent from 62.2 per cent in full year 2021,” Okonkwo said.

He added that the company would remain committed to value creation to all its stakeholders.

“Value creation remains our overarching objective as we continue to leverage the strengths of our unique brand and heritage to optimise our diverse business portfolio.

“We are confident of making further progress, with the capacity to generate sustainable performance that delivers superior returns to all our stakeholders,” Okonkwo said.

Speaking on the performance, the Chief Executive Officer of First Bank of Nigeria Ltd., (Commercial Banking Group), Dr Adesola Adeduntan, said the commercial banking group performed very well during the review period.

“The performance of the commercial banking group during the period has again shown that the Group is making progress in the pursuit of its ‘Quantum Profitability Leap’ agenda.

“The improved profitability during the period under review further reinforces the Bank’s commitment to its growth aspirations despite the challenging market conditions,” Adeduntan said.

Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of FBN Holdings Plc (FBNH) and its subsidiary, First Bank of Nigeria Ltd. (FBN), ‘B’ from ‘B-’ with a stable outlook.

Fitch also upgraded their Viability Ratings (VR) to ‘b’ from ‘b-‘.

The global rating agency said this in a report that the upgrade of the Long-Term IDRws that of the VRs, reflects the corporate governance irregularities publicly raised by the Central Bank of Nigeria (CBN) in April 2021.

“This include two longstanding related-party exposures, have largely been addressed and therefore risks to capitalisation have receded, helped by strong internal capital generation since the irregularities were raised.

“Fitch has withdrawn FBNH’s and FBN’s Support Ratings and Support Rating Floors as they are no longer relevant to the agency’s coverage, following the publication of its updated Bank Rating Criteria on 12 November 2021, in line with the updated criteria, we have assigned Government Support Ratings (GSR) of ‘no support’ (ns) to both issuers,” it said.

The agency said that FBNH and FBN had not been subject to penalties in relation to irregularities raised by the CBN in April 2021 and no further irregularities had been raised.

“FBN is the third-largest bank in Nigeria, representing 11 per cent of domestic banking-system assets at end-2021. A strong franchise supports a stable funding profile and a low cost of funding.

“Revenue diversification is strong, with non-interest income representing 48 per cent of operating income in 2021.

On material credit concentrations, it said that single-borrower credit concentration was material, with the 20-largest loans representing 157 per cent of Fitch Core Capital (FCC) at the end of the first half of 2022.

The rating agency said, “Oil and gas exposure (30 per cent of net loans at end-2021) is higher than the banking-system average and weighted toward higher-risk upstream and services sub-segments.

“Improved Asset Quality: FBN’s impaired loans (Stage 3 loans under IFRS 9) ratio has declined significantly to 5.6 per cent at the end of the first half of 2022 from a peak of 25 per cent at end-2018 as a result of sizeable write-offs, successful restructurings and recoveries and, more recently, the flattering effect of strong loan growth.”

It also said that FBNH delivers healthy profitability, as indicated by an operating return on risk-weighted assets (RWAs) averaging 2.6 per cent over the past four years (four per cent in 2021, underpinned by large recoveries on a previously written-off loan).

Fitch noted that earnings benefit from a low cost of funding and strong non-interest income but were constrained by a high cost-to-income ratio which was 74 per cent in 2021 and significant loan impairment charges (LICs) in recent years.

It also said that improved capitalisation, creditworthiness, more stable funding profile were key positive indices considered in its assessment.

“The rating upgrade of FirstBank and its holding company could, however, be affected by a sovereign downgrade as the bank “does not meet Fitch’s criteria to be rated above the sovereign”.

“An increase in the impaired loan ratio to significantly above 10 per cent that results in markedly weaker performance and very thin buffers over regulatory capital requirements or a sharp decline in the FCC ratio without clear prospects to restore capital would pressure the VRs,” Fitch said.

The First Bank of Nigeria (FBN) Holdings Plc has announced its unaudited results for the half year ended June 30, 2022 with a gross earnings of N359.2 billion.

The company stated this in a statement on Friday in Lagos.

The gross earnings indicated an increase of 22.4 per cent when compared with N293.4 billion recorded in the preceding period of 2021.

It also recorded a profit before tax of N65.7 billion from N45.2 billion achieved in the corresponding period of 2021, an increase of 45.3 per cent.

The company’s profit for the period stood at N56.5 billion against N38.1 billion posted in the comparative period of 2021, representing an increase of 48 per cent.

Commenting on the result, the Group Managing Director, Mr Nnamdi Okonkwo, said that the company demonstrated resilient performance despite the challenging operating environment.

“FBNHoldings continues to demonstrate resilient performance despite the challenging operating environment with an impressive improvement in revenue and profitability.

“For the half year 2022, gross earnings and profit before tax grew by 22 per cent y-o-y and 45 per cent y-o-y to N359.2 billion and N65.7 billion respectively.

“Furthermore, we continue to see good progress across our performance metrics, which remain in line with our focus on driving sustainable growth.

“The Group remains committed in its transformation drive, which has resulted in stronger balance sheet and better asset quality with non-performing loans closing at 5.4 per cent at H1 2022.

“Similarly, risk management capability remains robust across the Group supporting the drive for enhanced earnings for sustainable capital accretion,” Okonkwo said.

He said that the company would continue to deliver sustainable value to its stakeholders.

“Our strategic intent remains unchanged in optimising opportunities that drive growth in revenue, profitability, capital accretion and overall operational efficiency that delivers sustainable value to our stakeholders,” Okonkwo said.

Also speaking, Dr Adesola Adeduntan, the Chief Executive Officer of First Bank of Nigeria Ltd., said that the commercial banking group remained focus on executing key initiatives to position the Group for improved profitability in FY2022, amidst a challenging operating and dynamic regulatory environment in H1 2022.

“Our half-year results further reinforced our drive toward our ‘Quantum Profitability Leap’ agenda. Our gross earnings are up 22.6 per cent y-o-y to N338.5 billion and net interest income up 49.3 per cent y-o-y to N152.9 billion, respectively.

“On the back of the impressive growth recorded in our top line, our profit before tax recorded a strong growth of 40 per cent y-o-y to N60 billion.

“Profit after tax also grew by 42.3 per cent y-o-y to N53.3 billion as the bank continues to reap the dividends of the successful restructuring of its balance sheet and revamping of our risk management architecture.

“We continue to record progress in driving down our non-performing loan ratio which now stands at 5.4 per cent at the end of H1 and we are on target to bring it within regulatory limit of five per cent by end of FY 2022,’’ he said.

Adeduntan expressed the confidence that the current momentum of generating impressive returns from the quality risk assets portfolio already created would be sustained.

“We will continue to strengthen our dominant digital banking capabilities in providing best-in-class services to all segments of our customers across all our footprints in sub-Sahara Africa and beyond,” he said.