FBN Holdings has released its unaudited results for the first half of 2020, posting a 14.3 per cent profit before tax of N41.4 billion which is an improvement when compared to N36.2 billion recorded in the half year ended June 30, 2019. Its total assets also rose to N7.1 trillion.
Despite the global COVID-19 pandemic and lockdown of the economy, the financial conglomerate in the first six months of the year recorded a gross earnings of N296.4 billion, a 5.8 per cent improvement compared to N280.3 billion recorded in the comparable period of 2019.
Although its net-interest income had declined slightly to N131.3 billion, operating income had risen N211.4 billion, up by 7.7 per cent compared to N196.3 billion recorded in H1, 2019 buoyed by a 46.8 per cent improvement in interest income which raked in N80.1 billion in the first six months of the year.
Total assets of the financial conglomerate had risen by 14.9 per cent year to date from N6.2 trillion which it was as at December 31, 2019 to N7.1 trillion, as customer deposits swelled by 8.8 per cent to N4.4 trillion, from N4 trillion as at the end of the 2019 financial year.
Key indices of the financial conglomerate had shown a cost to income ratio of 65.8 per cent, post-tax return on average equity of 14.5 per cent, post-tax return on average assets of 1.5 per cent, net interest margin of 6.8 per cent, non-performing loan ratio of 8.8 per cent and a 16.5 per cent Basel 2 Capital Adequacy Ratio.
Commenting on the results, the Group managing director of FBN Holdings, UK Eke, said “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the H1 results demonstrate our resilience and capacity to deliver on long-term ambitions.
“The 56.3 per cent y-o-y growth in profit after tax for the period is a testament to the strength of our organisation to continually deliver exceptional services to our customers in these unprecedented times. We have been able to achieve this feat by leveraging our agent banking network, innovative e-banking capabilities, and operational efficiency utilising technology.
“During the quarter, we successfully divested from the underwriting (insurance) businesses to focus on our banking operations. We are confident this will enhance greater value to our stakeholders and strengthen the Group’s resolve to consolidate its leadership of the banking sector.
“Following the divestment, FBNHoldings injected Tier 1 capital into FirstBank, effectively increasing its CAR to 16.5 per cent. This provides a comfortable buffer against regulatory requirements with the potential to support any emerging business opportunities.
“Looking ahead, we remain cautious, but we are confident that our business is fundamentally strong to withstand any future challenge towards enhanced performance”.
On his part, the chief executive officer of FirstBank and its subsidiaries, Dr Adesola Adeduntan, said, “Over the period, the commercial banking group increased its y-o-y growth in gross earnings and profit before tax by 6.1 and 9.2 per cents respectively, despite the economic shutdown during the quarter and varying degrees of challenges in the operating environment.
“Notwithstanding, we have continued to provide services to our customers with minimal disruption in a safe environment, supported by seamless transactions through our increasing agent banking network and digital platforms (FirstMobile and USSD). Furthermore, continuous focus on operational efficiency remains a priority, as improvement in non-performing loan ratio has further been sustained.
“As the economy reopens gradually, in Nigeria and other key markets as in the rest of the world, we are adopting a pragmatic approach with optimism on propelling our performance for enhanced profitability through customer led innovation and disciplined execution.”
FBN Holdings had in the period under review, completed the sale of 65 per cent of its ownership in FBN Insurance Limited to Sanlam Emerging Markets Limited, effective June 1, 2020 and it had injected additional Tier 1 capital into FirstBank boosting Capital Adequacy Ratio to 16.5 per cent.
The commercial banking arm of the financial conglomerate had maintained its strong retail franchise and wide coverage as its Firstmonie Agent banking network grew to over 59,000. Gross earnings of the commercial banking business had risen by 6.1 per cent to N278.7 billion as its profit after tax rose by 21.9 per cent compared what it made in the first half of 2019.
PAT in H1 2020 for the commercial banking business of FBN Holdings was N32.6 billion as against N26.7 billion which it made in 2019 as total assets rose to N6.8 trillion.