FBN Holdings Grows Profit by 62.7% in Three Months

By Dipo Olowookere

FBN Holdings kicked off the first quarter of this year on a positive note, going by its unaudited earnings for the period ended March 31, 2020.

On Monday, the company released its financial statements to the Nigerian Stock Exchange (NSE), the first lender to do so, especially among its peers.

In the results briefly analysed by Business Post, the firm declared a pre-tax profit N28.7 billion compared with N17.8 billion achieved in the same period of 2019.

It also announced a post-tax profit of N25.7 billion as against N14.5 billion recorded in the first three months of last year, indicating an improvement by 62.7 percent.

FBN Holdings further said it generated N104.9 billion from interest income, lower than N109.5 billion as a result of decline in investment securities (N38.5 billion in Q1’20 versus N42.2 billion in Q1’19) and loans and advances to banks (N2.5 billion versus N10.7 billion).

The company recorded a higher interest expense in the period under review, N44.7 billion as against N37.9 billion, and a net interest income of N60.3 billion in contrast to N71.7 billion recorded in the corresponding quarter of 2019.

The impairment charge for losses stood at N9.7 billion, lower than N13.9 billion in Q1 2019, while the net interest income after impairment charge for losses dropped to N50.6 billion from N57.8 billion.

In the period under consideration, the fee and commission income increased to N25.8 billion from N23.0 billion. The major driver for this rise were growth in electronic banking fees, fund management fees, custodian fees, commission on bonds and guarantees, credit related fees and letters of credit commissions and fees. However, there were decline in the account maintenance fees as well as funds transfer and intermediation fees.

For the fee and commission expense, this flew to N5.0 billion from N3.6 billion, while fewer revenue was generated from foreign exchange income (N2.6 billion in Q1 2020 as against N2.9 billion in Q1 2019).

The firm said it had N13.5 billion from net gains on sale investment securities in the first three months of this year in contrast to N1.6 billion raked in the first three months of last year, while dividend income improved the purse of the organisation with N4.0 billion as against N2.0 billion in the same time of 2019.

It further said in the Q1 earnings that operating income brought in N471.0 million to the coffers of the company, compared with N671.0 million in the corresponding period of last year.

FBN Holdings said while its personnel expenses increased to N24.0 billion from N22.9 billion, its operating expenses grew to N41.9 billion from N38.9 billion, leaving it with an operating profit of N28.7 billion in the first quarter of this year as against N17.8 billion in the first quarter of last year.