FBN Holdings Slashes FY21 Dividend Despite Rise in Earnings, Profit

May 26, 2022
FBN Holdings

By Dipo Olowookere

The much-awaited financial statements of FBN Holdings Plc for the 2021 accounting year have been released to the Nigerian Exchange (NGX) Limited after approval from the Central Bank of Nigeria (CBN).

The lender, according to an analysis of the results by Business Post, reported growth in both the top line and bottom line, resulting in the declaration of a dividend of 35 kobo to shareholders, who have longed for this.

According to the company, its board of directors, pursuant to the powers vested in it by the provisions of Section 426 of the Companies and Allied Matters Act (CAMA) 2020, is proposing the payment of N12,563,352,477.00, lower than the N16,152,881,755.95 paid for the 2020 fiscal year.

In the year under review, the firm improved its gross earnings by 28.2 per cent to N757.3 billion from the N590.7 billion it posted in the preceding year.

However, the interest income depleted in the period under review to N369.1 billion from N384.8 billion amid a decline in earnings from investment securities at Fair Value through Other Comprehensive Income (FVOCI), which slumped to N23.1 billion from N84.2 billion.

The interest expense recorded in the year rose to N140.8 billion from N133.2 billion buoyed by deposits from banks and borrowings, bringing the net interest income down to N228.2 billion from N251.6 billion.

But earnings from fee and commission income increased to N140.6 billion from N113.2 billion due to improvement in revenue from credit-related fees, letters of credit commissions and fees, electronic banking fees, account maintenance, and fund management fees as well as other fees and commissions.

Despite the rise in the fee and commission expense to N23.9 billion from N19.5 billion, the net fee and commission income remained robust at N116.6 billion compared with the N93.8 billion recorded in the 2020 reporting year.

FBN Holdings also revealed in the results that it raked in N7.0 billion from foreign exchange income compared with N1.5 billion in FY20, while divided income generated N6.5 billion versus N4.0 billion a year earlier, with other operating income generating N149.4 billion in contrast to the N14.9 billion achieved in 2020.

In the year, personnel expenses gulped N128.8 billion versus N100.6 billion in the previous year due to pay rise as wages and salaries accounted for N116.3 billion compared with N85.5 billion.

Also, the other operating costs skyrocketed to N117.1 billion from N166.1 billion as a result of the increase in regulatory costs, maintenance, advert and corporate promotions, donations and subscriptions, communication, light and power, fines and penalties, among others.

At the close of business on December 31, 2021, FBN Holdings posted a profit before tax of N166.7 billion versus N83.7 billion in FY20, while the profit after tax jumped to N151.1 billion from N89.7 billion.

Dipo Olowookere

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

Mr Olowookere can be reached via [email protected]

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