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 Aduragbemi Omiyale
Two persons have been apprehended by the Rivers State Police Command in connection with the explosion that affected the Trans Niger Delta Pipeline operated by Shell Petroleum Development Company (SPDC) at the border of Kpor and Bodo communities.
On Monday night, the oil facility was affected by an inferno, which forced Shell to shut it down to prevent further damage.
It was gathered that the first was noticed during a routine night patrol by security operatives, who “promptly alerted SPDC management.”
The company initiated necessary safety protocols, including shutting down the affected pipeline, a statement from the Police Public Relations Officer for Rivers Command, Ms Grace Iringe-Koko, a Superintendent of Police (SP), said on Tuesday.
The police said the swift intervention brought “the situation is now under control, and there is no further threat to residents or the environment.”
According to her, the two accused persons were picked up after the commencement of “a thorough investigation to determine the cause of the fire.”
She said the suspects are answering questions to help the police “uncover any potential act of sabotage,” promising to ensure that perpetrators of criminal activities are identified and brought to justice.
“We urge residents to remain calm and vigilant, assuring them of our unwavering commitment to protecting lives and property. The Command will not relent in its efforts to rid the state of criminal elements and maintain peace and security for all.
“For any useful information regarding this incident or any suspicious activities, members of the public are encouraged to contact the nearest police station,” the statement said.
By Adedapo Adesanya
Cooling inflation in Nigeria could encourage the Central Bank of Nigeria (CBN) to hold interest rate steady again when the Monetary Policy Committee (MPC) meets in May.
On Monday, Nigeria’s annual inflation eased for a second straight month after the National Bureau of Statistics (NBS) overhauled the index for the first time in 16 years in January 2025.
The move was carried out to better reflect the inflation pressures facing households in Africa’s most-populous nation with the base year changed from 2009 to 2024.
According to the NBS, consumer prices rose 23.18 per cent in February by 8.52 per cent from the 31.70 per cent achieved in January 2024.
In the Consumer Price Index (CPI) data, the NBS said last month, the headline inflation slowed due to decline in the average prices of food items like yam tuber, potatoes, soya beans, flour of maize/cornmeal, cassava, bambara beans (dried), etc compared with the prices in the first month of this year.
Nigeria’s economy has grown in the last two quarters in Nigeria by over 2-3 per cent caused by inflation and the weakening of the local currency. This is slower compared to expected outcomes.
However, with further moderation, this could spur policymakers at the apex bank to pause rate hikes for yet another cycle.
The President Bola Tinubu administration is targeting a 15 per cent inflation level.
At its last meeting in February, the MPC held all rates across board with the headline monetary policy rate (MPR) retained at 27.50 per cent.
According to the Governor of the CBN, Mr Yemi Cardoso, the asymmetric corridor was retained around the MPR at +500/-100 basis points and the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBs) at 50.00 per cent and Merchant Banks at 16 per cent. Also, the MPC retained the Liquidity Ratio at 30.00 per cent.
The CBN had hiked interest rates by 875 basis points in the last year as Mr Cardoso favoured inflation targeting tools to fix skyrocketing cost of prices.
Market analysts noted that subsequent ease inflation in March and April could lead to even cuts but argued that pausing the rate will offer succour to businesses who have lamented the consistent hiking on their operations.
By Adedapo Adesanya
There was a 0.15 per cent appreciation at NASD Over-the-Counter (OTC) Securities Exchange on Monday March 17, with the NASD Unlisted Security Index (NSI) increasing by 4.90 points to close at 3,368.64 points, in contrast to last Friday’s 3,363.74 points and the market capitalisation of the bourse rose by N2.83 billion to settle at N1.945 trillion compared with the preceding trading day’s N1.942 trillion.
Okitipupa Plc gained N7.66 during the session to close at N307.66 per unit compared with the preceding session’s N300.00 per unit, FrieslandCampina Wamco Nigeria Plc expanded by 78 Kobo to settle at N39.01 per share versus last Friday’s price of N38.23 per share, and Geo Fluids Plc grew by 6 Kobo to trade at N2.90 per unit, in contrast to the previous trading day’s N2.84 per unit.
On the flip side, Afriland Properties Plc lost N2.01 to close at N21.19 per share compared with its previous rate of N23.20 per share.
Yesterday, the volume of securities traded at the bourse went down by 55.8 per cent to 288,383 units from the 652,237 units recorded last Friday, the value of securities traded by investor depreciated by 45.3per cent to N18.2 million from the N33.1 million quoted at the preceding session, and the number of deals executed at the first session of the week shrank by 27 per cent to 27 deals from 37 deals.
When the market closed for the session, Impresit Bakolori Plc remained the most active stock by value (year-to-date) with a turnover of 533.9 million units worth N520.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 13.0 million units valued at N505.1 million, and Afriland Properties Plc with 17.4 million units sold for N357.0 million.
Also, Impresit Bakolori Plc remained as the most active stock by volume (year-to-date) with 533.9 million units worth N520.9 million, trailed by Industrial and General Insurance (IGI) Plc with 69.9 million units sold for N23.7 million, and Afriland Properties Plc with 17.4 million units valued at N357.0 million.
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