Economy
Analysis of FBN Holdings FY 2023 and Q1 2024 Results
When Loans Go Bad.
Despite a turbulent decade, FBN Holdings, Nigeria’s oldest financial market lender, has demonstrated remarkable resilience in overcoming odds associated with a legacy institution. It has effectively tackled issues such as board governance recalibrations, high cost-to-income ratios (CIRs), poorly balanced loan asset distribution, large non-performing loans (NPLs), and overweight bank clearing house exposures to lower-tiered deposit-taking institutions. This period of adversity may potentially strengthen the financial group, making it more resilient, better managed, and focused; even as it looks into management resource capacity building and resolution of structural adjustments needed to reposition the bank post-recapitalization.
Recent public information will suggest that while the bank moves to quickly affirm a substantive managing director and set about the task of recapitalization; the work done to date by the previous management will further benefit from a swift resolution of the numbers from a post-CBN-oversight review around balances arising from digital banking operations returns, unreconciled balances, FX-related deposit movements, and standard loan balances review.
Analysts believe the CBN’s payment of Heritage Bank’s debt, as determined, not only signaled a positive outlook for the bank with the reduction of the forbearance balances on FBNH’s books; but strengthened its position as a systemically important bank (SIB).
Speaking anonymously, an insider expressed optimism about the bank’s future, stating, ‘With the Heritage Bank issue resolved, we can now focus on regaining an industry position more consistent with the bank’s age, pedigree, and collective staff expertise.’ This positive outlook should inspire confidence among stakeholders in FBN’s future since the banking arm continues to dominate the group’s operation.
Analysts observed that FirstBank has shown resilience in the face of internal and external difficulties, showing relatively strong financial performances in FY 2023 and Q1 2024. The asset repricing on loans and advances and off-balance sheet asset gains nudged gross earnings forward, thereby cushioning the heavy foreign exchange losses and rising operating expenses. FBNH’s gross earnings and pre-tax profit grew by +95.70% and +126.86% to N1.60trn and N350.59bn in FY 2023, and even higher growth performance was recorded in Q1 2024 (+181.43% and +325.15% for gross earnings and PBT, respectively).
The strong gross earnings and profit growth resulted in improved financial ratios, except for the cost of risk (CoR) and the non-performing loan (NPLR) ratios, reflecting rising funding costs and the deterioration in loan quality. However, the group’s niggling operating headache eased in Q1 2024 as the lender’s cost-to-income ratio (CIR) fell below 50% or below a 5-year average of 60.31%.
The improvement came partly from higher interest and non-interest incomes and sustaining this in 2024 is crucial, considering the forecast direction of macroeconomic indicators and monetary policy. For instance, rising inflation and currency volatility may lead to higher interest rates, a situation usually favourable to banks’ loans & advances and interest-based investments. Analysts believe the group’s improved core financial metrics in FY 2023 should re-establish its tier 1 status in the Proshare Bank Strength Index (PBSI) 2024 and raise its ranking ahead of competitors.
FBNH’s earnings have grown steadily by an average of 41.5% in the past five years, and its price-to-earnings (P/E) ratio sits at 2.74x compared to the industry average of 7.5x. The price-to-book value (PBV) is below 1 at 0.48x. Analysts expect investors to remain cautious about banking stocks while awaiting their recapitalisation strategies and future earnings projections.
Board of Directors
FBNH’s ability to manage post-leadership changes, whilst emerging as an institutional learning advantage, will continue to be tested; The market watches keenly how this recent change is managed.
With four (4) board members resigning, FBNH’s board members dropped to eight in FY 2023 from eleven (11) in FY 2022. However, Holdco appointed two directors (non-executive and independent non-executive directors) in Q1 2024, raising the total number of board members to ten (10). Also, FirstBank appointed two (2) new board members, raising the total number of board members to 14 in Q1 2024.
Gross Earnings
FBN Holding’s gross earnings have grown by an average of 19% annually. It settled at N1.60trn in FY 2023, rising by +95.70% from N815.16bn in FY 2022. The earnings growth came from interest and non-interest income, narrowed down to investment securities, loans and advances, gains from FVTPL (derivatives), and fees and commission income. Interest income had a higher contribution at 60% relative to 40% from non-interest income, reflecting that core operation drove the income growth. The +153.67% growth in non-interest income to N601.70bn stemmed from net gains from financial instruments at FVTPL (N246.08bn), net gain on sale of investment securities (N34.85bn) and fee and commission income (N226.45bn). The commercial banking segment remained the lead gross earnings driver, contributing 94%, while Merchant bank and asset management contributed 6%
The persistence of naira depreciation and aggressive rate hikes sustained interest and non-interest growth in Q1 2024. The group’s gross earnings grew by +181.43% to N730.30bn in Q1 2024 from N259.50bn in Q1 2023. The growth came from higher investments, loans & advances, fees and commission income, and net gains from financial instruments at FVTPL.
Profitability
FBNH’s strong gross earnings translated to profitability as the profit before tax and post-tax profit grew by +126.86% and +127.92% to N350.59bn and N310.37bn in FY 2023, respectively. The income from sales of investment securities, gains from financial instruments, FVTPL, dividend income, and other operating income cushioned the foreign exchange loss of N332.79bn, personnel expenses growth (+52.58%) and operating expenses growth (+49.59%). In addition, the group earned N66.34bn from digital banking in FY 2023, +20.41% higher than N55.10bn in FY 2023. This shows an improvement in digital penetration and product usage. The substantial profit growth nudged earnings per share to N8.59k in FY 2023 from N3.75k in FY 2022. Analysts expect the aggressive rate hike and naira volatility to sustain profitability performance in most of the 2024 quarters.
The group’s profitability tripled in Q1 2024 despite the foreign exchange loss incurred (N94.79bn) and higher operating expenses (+22.49%). The strong earnings translated to profitability, cushioning operating costs and FX exposure. The group’s pre-tax and post-tax profits rose by +325.15% and +315.78% to N238.53bn and N208.11bn respectively.
Financial Position
The group’s financial position improved in FY 2023. The total assets rose by +60.13% to N16.94trn in FY 2023 from N10.58trn in FY 2022, with a distribution of 50% to loans and advances, 17% to Investment securities, and Cash and balances with the CBN at 15%. Loan advances and investment securities dominating the total assets favour the group, ensuring the continuous inflow of interest income.
The group’s customer deposits rose by +49.68% to N10.66trn, and deposits from banks increased by +70.88% to N1.89trn in FY 2023. The customer’s deposits have a distribution of 28% current, 27% savings deposits, term deposits at 19%, and domiciliary deposits at 26%; the high savings deposits contributed significantly to the +118.04% growth in interest expense. The group’s shareholders’ funds improved by +75.45% to N1.75trn, driven by a +48.09% rise in retained earnings, +531.43% growth in foreign currency translation reserve, and +35.38% in statutory reserve. The sudden spike in foreign currency translation reserves is due to the CBN’s directive on prudent management of revaluation gains.
In Q1 2024, total assets climbed to N21.58trn from N11.09trn in Q1 2023. Increased loans & advances, investment securities, cash and balances with central banks drove the growth. While share capital remained constant, shareholders’ equity rose by +91.44% in Q1 2024 to N1.92trn, driven by a +83.57% rise in retained earnings and foreign currency translation reserve (+1292.46%).
Financial Ratios
FBNH’s key financial ratios improved in FY 2023. Underpinned by improved gross earnings and profitability, return on equity (ROAE) and Average Assets (ROAA) rose to 22.60% and 2.30% in FY 2023 from 14.50% and 1.40% in FY 2022. The net interest margin improved to 6.10% in FY 2023 as the group earned higher interest income over interest expense. The robust earnings scaled down the group’s cost-to-income ratio to 49.10%, implying better cost optimization. However, the heightened risk environment weighed on the cost of risk and nonperforming loan ratio, rising to 3.30% and 4.70%, respectively. The group’s loan-to-deposits ratio increased to 62.20% above the 65% statutory limit, exempting it from discretionary CRR debits.
The group’s financial ratios, especially profitability ratios, stayed positive in Q1 2024, except for the cost of risk and NPL. The return on equity (ROE) and assets (ROA) grew to 45.40% and 4.30%, respectively, with the cost-to-income ratio (CIR) falling to 43.10% from 60.40% in Q1 2023.
Valuation
In FY 2023, FBNH’s Price-to-Earnings (P/E) ratio dropped to 2.74x from 3.12x in FY 2022, reflecting higher market attraction relative to the previous year. The P/B ratio slightly increased to 0.48x but remained below 1, signifying that the bank is valued below its book value.
Share Price Movement
After downward fluctuations in Q1 2023, FBNH’s share price rebounded in April 2023, rising from N11.00k on April 27, 2023, to N23.55k on December 29, 2023. Analysts attributed the share price rally in July and beyond to the battle for ownership between Oba Otudeko and Femi Otedola. The share price rally persisted in Q1 2024, rising to a resistant price of N43.95k on March 19, 2024. By the beginning of Q2 2024, the share price began to tank, possibly due to investors’ pessimism about banking stocks, considering concerns about bank recapitalisation and falling earnings per share. The Holdco’s share price finally settled at N22.90k on June 11, 2024, leading to a negative year-to-date (YTD) return of -2.76%.
Peer Analysis: Climbing Along a Steep Ladder
Recapitalisation, consolidation and the emergence of new players in the Nigerian banking industry have shuffled the ranking of banks; some were forced behind as technology-driven ones took the spotlight. The oldest Nigerian bank was not exempted from the reshuffle; the bank slipped from the fourth position in asset size in 2019 to the fifth position in 2022 and has remained in the position, outran by UBA.
In terms of profitability, FirstBank climbed from 7th in 2019 to 4th in 2023 and 3rd by Q1 2024. The rapid growth was driven by the group’s strategic plan despite the corporate governance struggle.
FBNH’s consistently low dividend payout (hovering below N1) has kept the dividend yield behind that of other industry players. The group’s dividend yield slumped to the rear end by 2023, with ten (10) banks ahead of the entity, compared to six (6) banks in 2019.
The banking industry saw gross earnings and profitability climb to record highs, benefitting from MPR increases and naira devaluation. Among the tier 1 banks, Access Holding saw the highest gross earnings at N2.59trn, followed by other two banks with gross earnings above N2trn and FBNH and GTCO with earnings below N2trn at N1.59trn and N1.19trn respectively. The positions were slightly different coming to profitability, with Zenith Bank taking the lead at N795.96bn, ahead of UBA (N757.68bn) and Access Holding (N729.00bn), while FBNH had a more modest figure at N350.59bn behind GTCO. Analysts noted that despite GTCO being behind FBNH in gross earnings, GTCO was more profitable.
The banks’ high earnings caused earnings per share for most banks to grow to double digits except for FBNH, which had a single-digit EPS of N8.59k. Zenith Bank had the highest EPS at N21.55k ahead of Access Holding, implying that Access Holding incurred higher operating costs, eating into its profit relative to Zenith Bank. Nevertheless, Access Holding retained its position as having the largest customer deposit at N15.32trn ahead of UBA and Zenith, while GTCO had the lowest tier 1 bank deposit base size at N7.41trn.
GTCO, however, had the highest net interest margin (NIM), return on equity (ROE), and return on assets (ROA). Also, GTCO was the most cost-efficient financial lender, with a cost-to-income ratio (CIR) of 29.10%, while FBNH was the least efficient with a CIR of 49.08%. The fundamental valuation of the banks showed that GTCO had the highest price-to-book value at 0.96x, but FBNH had the highest price-to-earnings at 2.74x, while Access Holding had the least at 0.39x and 1.39x, respectively. This suggests that GTCO’s market value reflects its underlying book value and earnings more than its rivals.
Despite the high-interest rate environment, GTCO had a 1.80% cost of funds, significantly lower than its peers, with Access Holding having the highest at 4.90%. However, Zenith had the highest Cost of risk at 7.30%, while Access Holding had the lowest at 1.00%. GTCO shows better financial health than its rivals based on comparative financial statistics despite having the country’s top six banks’ lowest gross earnings, profit, and asset size.
Closing Thoughts
FBNH’s positive financial numbers would suggest that the internal governance challenges it experienced had a modest impact on its financial performance in FY 2023 and Q1 2024. To make this sustainable, analysts believe that it is important that the group resolves and tightens its governance architecture to prevent spillover effects in investors’ perceptions and consequently market valuation. We however do not believe that this will have a significant impact on its capital-raising efforts.
Based on FBNH’s banking license, the group intends to raise an additional N300bn in Tier 1 equity (CET 1) either through a public offer or a private placement. Although the capital raise plan is subject to shareholder approval, market intelligence suggests the group is more than capable of raising these sums from existing shareholders and select entities; and might not therefore proceed with the public offer. This is however subject to the Holdco’s reading of the recapitalization end-game of competitors; the opportunities related to funding size and actions taken around M&A’s (for which preliminary intel suggests the Holdco would not be involved in merger talks or contemplate a license adjustment).
First Bank’s future starts anew after the industry adjudged the successful tenure of the Adesola Adeduntan era. Our analysts anticipate HoldCo’s more hands-on involvement in the bank’s strategic direction in this new dispensation.
By Aduragbemi Omiyale
One of the leading local energy firms, Oando Plc, delivered an impressive financial performance in the first six months of 2026, according to details of its results filed to the Nigerian Exchange (NGX) Limited.
Between January and June 2026, revenue surged by 20 per cent to N2.1 trillion from N1.7 trillion in the same period of 2025, driven by growth in the Exploration & Production and Trading segments of the business.
Also, the net profit grew by 8 per cent year-on-year to N68.6 billion from N63.3 billion, supported by improved operating profits and tax credits.
It was observed that the organisation deepened its domestic gas monetisation portfolio with the commencement of long-term gas supply of 11.2 MMscfd to the newly commissioned 60 MW Bayelsa Independent Power Plant.
“The first half of 2026 marks an important inflexion point in Oando’s journey. Over the past two years, our priority has been to successfully integrate one of the most significant upstream acquisitions in Africa and unlock the full value of our expanded portfolio. The progress achieved during the period demonstrates that we are now delivering the operational and financial outcomes expected from that transformation,” the chief executive of Oando, Mr Adewale Tinubu, stated.
Commenting further on the results, Mr Tinubu said, “Operational efficiency underpinned our performance during the period as we strengthened asset integrity, improved facility reliability and reinforced security across our operating areas, resulting in average facility uptime of 92 per cent while reducing production operating costs by 18 per cent to $16.83 per boe.”
“Our development programme also gathered significant momentum during the period as we successfully drilled and completed two land development wells, with an additional land well currently being drilled, while mobilising a second drilling rig to accelerate activity across our operated portfolio.
“In parallel, we continued an extensive programme of rig-less well interventions designed to restore production, sustain plateau output and mitigate natural field decline. Together, these activities increased average production to 42,789 boepd, representing 16 per cent year-on-year growth.
“This translated into a stronger financial performance, with revenue increasing by 20 per cent to N2.1 trillion, while the business generated N179.5 billion in operating cash, improving liquidity. Profit after tax also increased by 8 per cent to N68.6 billion, reflecting the overall improvement in operating performance during the period,” he pointed out.
The Oando chief also said, “Looking ahead in 2026, our priorities remain firmly centred on completing our seven-well drilling programme and portfolio-wide well intervention campaign while delivering production of circa 50,000 boepd.
“Beyond 2026, our identified inventory of 62 development wells, supported by 55 planned well interventions, provides a clear pathway towards our medium-term production ambition of approximately 100,000 boepd.
“Furthermore, we shall execute an intensive fundraising and balance sheet restructuring programme to optimise our capital structure, strengthen our financial position, improve working capital, enhance financial flexibility and ensure the business is appropriately funded to accelerate growth and maximise long-term shareholder value.
“We have built a resilient operating platform and established a clear roadmap for growth. Our focus is now on translating our significant opportunities into higher production, a stronger balance sheet and superior long-term returns for our shareholders.”
By Adedapo Adesanya
Africa-focused fintech company PalmPay has joined the ranks of unicorn startups after attaining a valuation of more than $1 billion, as the digital payment platform prepares for a potential initial public offering (IPO) in Hong Kong.
According to a report by Bloomberg on Tuesday, citing people familiar with the matter, the Hong Kong-headquartered company is in advanced discussions to raise about $200 million in a new funding round that would cement its unicorn status and support its next phase of expansion.
The planned fundraising comes as PalmPay accelerates its growth strategy across Africa and Asia, while positioning itself for a public listing that could become one of the most significant fintech IPOs involving an Africa-focused company in recent years.
PalmPay’s move follows a period of rapid growth in Nigeria, where it has become one of the country’s largest digital financial services providers. Alongside OPay and Moniepoint, the company forms the trio that dominates Nigeria’s retail digital payments and agency banking market, a segment driven by millions of point-of-sale (POS) transactions processed daily.
With PalmPay’s latest valuation milestone, all three leading Nigerian fintechs have now achieved unicorn status. While OPay has previously disclosed plans to pursue a listing in the United States, Moniepoint has remained focused on expanding its banking and business services without publicly indicating IPO ambitions.
Founded in 2019 after securing a Mobile Money Operator (MMO) licence from the Central Bank of Nigeria (CBN), PalmPay has built one of the country’s fastest-growing fintech ecosystems. The company says it now serves more than 35 million registered users and over 600,000 merchants, supported by an extensive network of more than 500,000 mobile money agents nationwide.
The platform offers a broad suite of financial services, including peer-to-peer transfers, bill payments, airtime purchases, savings, credit products, merchant payment solutions and agency banking services. PalmPay says it processes as many as 15 million transactions daily, reflecting the increasing adoption of digital payments across Nigeria.
Beyond its home market, the fintech has expanded into Tanzania, Ghana, and Bangladesh, underscoring its ambition to become a leading emerging-market digital bank. Industry analysts view the expansion as part of a broader strategy to diversify revenue streams while replicating its Nigerian success in other underbanked markets.
PalmPay has attracted backing from prominent global investors, including Taiwanese semiconductor manufacturer MediaTek and smartphone maker Transsion Holdings, whose Tecno, Infinix and itel brands command significant market share across Africa. Their support has helped PalmPay leverage smartphone penetration to drive financial inclusion through mobile-first banking services.
As part of efforts to strengthen its leadership ahead of its next growth phase, PalmPay recently appointed Mr Samuel Oluyemi as Chief Operating Officer (COO) for its Nigerian business. Mr Oluyemi joined the company after more than two decades at the Nigeria Inter-Bank Settlement System (NIBSS), where he played key roles in developing the country’s digital payments infrastructure.
If completed, the fundraising and eventual Hong Kong listing would further underscore growing international investor confidence in African fintech companies despite a more cautious global venture capital environment. The proceeds are expected to support PalmPay’s geographical expansion, deepen its product offerings, invest in technology infrastructure and strengthen its competitive position in Africa’s rapidly evolving digital financial services industry.
By Adedapo Adesanya
Market bellwethers, Central Securities Clearing System (CSCS) Plc and FrieslandCampina Wamco Nigeria Plc, lifted the NASD Over-the-Counter (OTC) Securities Exchange by 2.08 per cent on Monday, August 3.
CSCS Plc, the Nigerian securities depository company, gained N10.00 to close at N112.00 per share compared with the previous session’s N102.00 per share, and FrieslandCampina Wamco Nigeria Plc advanced by N4.71 to quote at N152.64 per unit versus last Friday’s N147.93 per unit.
As a result, the NASD Security Index (NSI) added 92.14 points to finish at 4,523.85 points compared with the preceding session’s 4,431.71 points, and the market capitalisation appreciated by N55.31 billion to N2.715 trillion from N2.659 trillion.
Business Post reports that the price of MRS Oil Plc crashed during the trading day by N12.00 to N120.00 per share from N132.00 per share, and UBN Property Plc dipped by 3 Kobo to N1.90 per unit from N1.93 per unit.
Trading data showed that the volume of securities exchanged rose by 113.1 per cent to 1.5 million units from 690,990 units, and the number of deals climbed by 19.2 per cent to 31 deals from 26 deals, while the value of securities slid by 13.1 per cent to N65.2 million from N75.0 million.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 76.8 million units traded for N5.5 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
