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 rose by 2.30 per cent, spurring the NASD Security Index (NSI) to close higher by 96.61 points to 4,296.34 points from 4,199.73 points, and raising the market capitalisation by N57.99 billion to N2.578 trillion from N2.521 trillion.
The market was up yesterday despite a lower activity level, as the volume of securities traded slumped by 94.7 per cent to 1.3 million units from the previous 23.9 million units. The value of securities slipped by 57.2 per cent to N29.2 million from the preceding session’s N68.2 million, while the number of deals executed by market participants increased by 6.7 per cent to 32 deals from the 30 deals carried out on Thursday.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion in trades, and Central Securities Clearing System (CSCS) Plc with 70.8 million units traded for N4.9 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for 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.
During the trading day, there were three price gainers and two price losers, led by Afriland Properties Plc, which shed N1.48 to sell at N15.17 per share compared with the previous session’s N16.65 per share, and Food Concepts Plc, which slid by 7 Kobo to close at N2.69 per unit versus N2.76 per unit.
Conversely, FrieslandCampina Wamco Nigeria Plc improved its value by N9.50 to trade at N150.00 per share compared with Thursday’s closing price of N140.50 per share, CSCS Plc went up by N7.95 to N89.65 per unit from N81.70 per unit, and 11 Plc soared by N6.94 to N206.95 per share from N200.01 per share.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited lost its footing by 0.07 per cent on Friday as a result of renewed profit-taking by investors.
The fall happened after Thomas Wyatt and Guinness Nigeria led other price losers group comprising 27 stocks at the market yesterday due to selling pressure.
Thomas Wyatt Nigeria shed 10.00 per cent to quote at N2.70, Guinness Nigeria drowned by 9.99 per cent to close at N329.00, Ikeja Hotel slipped by 9.96 per cent to N42.50, Zichis shed 9.94 per cent to trade at N26.37, and McNichols depreciated by 9.91 per cent to N5.00.
On the flip side, International Breweries gained 9.92 per cent to finish at N13.30, NEM Insurance appreciated by 9.61 per cent to N27.95, Jaiz Bank grew by 6.36 per cent to N9.20, UPDC expanded by 6.33 per cent to N4.20, and Livestock Feeds increased by 6.32 per cent to N9.25.
Business Post reports that investor sentiment remained bullish despite the loss recorded during the session, as there were 27 price decliners and 30 price advancers, representing a positive market breadth index.
Yesterday, market participants transacted 441.3 million equities for N19.4 billion in 44,938 deals compared with the 1.7 billion equities worth N112.0 billion traded in 44,780 deals a day earlier. This showed that the trading volume contracted by 74.04 per cent, the trading value declined by 82.68 per cent, and an uptick in the number of deals by 0.35 per cent.
Access Holdings led the activity chart on Friday after selling 40.2 million shares valued at N1.0 billion, Sterling Holdco traded 30.3 million stocks worth N228.8 million, Fidelity Bank sold 26.3 million equities for N505.6 million, Zenith Bank transacted 22.3 million shares valued at N2.5 billion, and First Holdco exchanged 19.0 million stocks worth N1.3 billion.
During the last trading session of the week, the consumer goods sector rose by 0.49 per cent, the insurance counter increased by 0.06 per cent, and the industrial goods index closed flat, while the banking and energy indices lost 0.78 per cent and 0.52 per cent, respectively.
As a result, the All-Share Index (ASI) shrank by 159.97 points to 243,798.76 points from 243,958.73 points, and the market capitalisation moderated by N103 billion to N156.445 trillion from N156.548 trillion.
By Adedapo Adesanya
The Naira performed poorly against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, July 10, losing N1.19 or 0.09 per cent to close at N1,379.62/$1, in contrast to Thursday’s exchange rate of N1,378.43/$1.
It also depreciated against the Pound Sterling in the official market during the trading session by N3.80 to trade at N1,850.62/£1 compared with the previous day’s N1,846.82/£1, but gained 43 Kobo on the Euro to sell at N1,575.66/€1 versus the preceding day’s N1,576.09/€1.
At the GTBank FX desk, the Naira weakened against the Dollar yesterday by N1 to quote at N1,386/$1 compared with the previous session’s N1,835/$1, and maintained stability in the black market at N1.400/$1.
Data showed that interbank FX turnover fell by about 10 per cent on Friday to $71.044 million from $78.708 million the previous day. Also, interbank forex market deals reduced to 87 from 106 trades executed at the window on Thursday.
The total forex inflows into the Nigerian foreign exchange market have been fluctuating, with about $1 billion in total inflows reported last week.
Total FX inflows settled at $0.99 billion last week, according to the research subsidiary of Coronation Merchant Bank, with Foreign Portfolio Investors (FPIs) accounting for the largest share at 35.81 per cent, or $0.35 billion.
Exporters accounted for 28.72 per cent or $0.28 billion, while the CBN contributed 11.15 per cent or $0.11 billion. Non-Bank Corporations also made up a notable 10.92 per cent of total inflows, reflecting continued support from both market-driven and official sources.
In the cryptocurrency market, Bitcoin rose above $64,100, retesting the price level that rejected it on Monday, with a clean break above, opening the path toward the June 15 high of $67,250. It gained 0.3 per cent to sell at $64,114.16.
Ethereum (ETH) appreciated by 1.6 per cent to $1,798.81, Dogecoin (DOGE) grew by 0.6 per cent to $0.0742, Binance Coin (BNB) added 0.6 per cent to sell for $576.47, Cardano (ADA) also grew by 0.6 per cent to $0.1674, and Ripple (XRP) jumped by 0.4 per cent to $1.10.
But Solana (SOL) lost 1.1 per cent to settle at $77.95, and TRON (TRX) declined by 0.2 per cent to $0.3296, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
