Economy
FBN Holdings to Improve Operating Model for More Efficiencies
By Dipo Olowookere
The management of FBN Holdings Plc says its strategic focus in 2022 is revenue generation through digital channels and retail product offerings.
Reacting to the performance of the company in the 2021 financial year, the team stated that efforts would be made to further drive “our synergy potential as well as continue to improve our operating model to deliver more efficiencies.”
Last year, the organisation grew its gross revenue by 28.2 per cent to N757.3 billion, with profit before tax up by 99.1 per cent to N166.7 billion and the loans and advances growing by 30.0 per cent to N2.9 trillion.
In addition, the total assets appreciated by 16.2 per cent to N8.9 trillion, reaffirming its commitment to driving revenue and profitability as it completes the balance sheet clean-up.
A thorough analysis showed that the interest income remained challenged given the moderated interest rate environment negatively impacting yields; as a result, interest income declined 4.1 per cent to N369.0 billion from N384.8 billion in 2022.
To mitigate the effect of the low-interest rate on investment securities and revenue generation, the firm remained deliberate with its intensified deposit mobilization and funding strategy to support enhanced loan growth at optimised rates leading to a 5.7 per cent increase in interest expense to N140.8 billion from N133.2 billion a year earlier.
Conversely, non-interest revenue grew by 96.1 per cent to N364.6 billion from N185.9 billion on the back of increased fees and commission income, treasury activities and other operating income.
Additionally, and in line with its focus on further enhancing revenue generation capacity, First Pension Custodian Limited, a subsidiary of FBN Holdings’ flagship subsidiary, First Bank of Nigeria Limited, entered into a definitive agreement with Access Bank Plc for the planned acquisition of the entire share capital of Access Pension Fund Custodian Limited held by Access Bank Plc.
The idea behind this move is to boost its market share in the industry, aid revenue diversification and support annuity income as FBN Holdings plan to create quality loans with a focus on retail lending driven by technology as we continue to grow non-interest income to further diversify revenue.
In 2021, the company operated in a challenging operating environment that was pressured by high inflation and currency devaluation, the effect of which increased operating expenses by 14.2 per cent to N334.2 billion from N292.5 billion).
However, this 14.2 per cent is below the inflation level of 15.6 per cent in the previous year whilst regulatory costs also rose during the period, up 23.2 per cent y-o-y.
Despite the inflationary push factors, operating income grew 35.5 per cent to N592.8 billion from N437.6 billion, resulting in an improvement in cost to income ratio to 56.4 per cent from 66.8 per cent.
It was observed that in the year, deposits from customers increased by 19.5 per cent y-o-y to N5.9 trillion from N4.9 trillion, reaffirming its strong market access and robust funding base.
In the year, total assets grew by 16.2 per cent y-o-y to N8.9 trillion from N7.7 trillion driven by a 30.0 per cent y-o-y increase in customer loans and 26.3 per cent increase y-o-y in investment securities. Cash and balances with central banks, loans to banks & customers and investment securities constituted 87.2 per cent of total assets compared with 83.4 per cent of the preceding year.
The firm, while reacting to the figures, stated that, “As a financial service holding company, driving synergies remains a critical part of our strategy and has been integrated into every aspect of our delivery model.
“We pride ourselves in the uniqueness of our diversified portfolio and the collaborative ecosystem that we have built around our lines of business, our customers, and the unique value proposition that we deliver.
“We are also increasingly leveraging technology – artificial intelligence, robotics, and other next-generation technological advancements, to deepen collaboration and further drive operational efficiency across the group.”
“Following years of strategic restructuring of the Bank’s balance sheet and operations, the commercial banking business is beginning to transition into a sustained growth phase delivering performance commensurate to the size of our business and capabilities of our people. Profit before tax is up 77.9 per cent, gross earnings 30.3 per cent, total assets 15.9 per cent and customer deposits up 19.5 per cent.
“We continue to record progress in Asset Quality and Risk Management stemming from our retooled and strengthened risk management architecture.
“On the back of this, non-performing loan ratio further declined to 6.1 per cent from 7.7 per cent while coverage ratio improved to 62.2 per cent from 48.0 per cent.
“With a cleaner balance sheet and resilient earnings-generating capacity, First Bank (Nigeria) was able to accrete capital buffers from organic earnings. Hence, despite the increase in loans and advances, Capital Adequacy Ratio (CAR) remained steady, marginally increasing to 17.4 per cent versus 17.0 per cent in 2020,” it added.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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