FBN Holdings' half-year profit tripled on financial instruments gains
FBN Holdings more than tripled its net profit in the first half of the year thanks to an unusual increase in financial instruments earnings.
The financial services group posted gains at a time when other lenders are taking advantage of interest rate spikes to boost profits and growth.
Details of its earnings report released on Thursday showed the group recorded a net profit of N187.2 billion, up from N56.6 billion a year ago.
Adesola Adeduntan, CEO of the group's flagship division, First Bank, described the achievement as "the best financial performance in the bank's nearly 130-year history", in a separate document seen by PREMIUM TIMES.
Interest income made up over 58% of revenue, but gains from financial instruments had a significant impact on profitability, as most of the latter was eroded by runaway costs.
Gains from financial instruments at fair value through profit or loss increased twenty-fold to N229.7 billion, helping to mitigate the shock of foreign exchange losses.
Interest income rose 69.3% to N383.3 billion, benefiting from the whirlwind of interest rate hikes in Nigerian businesses, which helped other lenders post record profits.
FBN Holdings, which operates seven subsidiaries covering investment banking, trusteeship, insurance brokerage, merchant banking and asset management, among others, depends on its commercial banking unit FirstBank for about 93% of its revenue.
The group operates in 825 business locations in ten markets inside and outside Africa.
FBN Holdings has set aside 57.6 billion naira to cover a potential credit loss whose chances of repayment have been weakened by recurring defaults, up 165.4% from last year's figure.
A significant pressure point was operating expenses, which fell from N116.8 billion to N151.7 billion due to increased regulatory costs and promotional expenses.
Non-performing loans as a percentage of gross loans fell to 4.3% from 5.4% a year ago, while total assets jumped by more than a third to N14.2 trillion.
“We continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practices to anticipate and creatively deliver products and services that delight the different customer segments we serve,” Group CEO Nnamdi Okonkwo said in the earnings report.
FBN Holdings has returned 65.6% this year and closed with a price-earnings ratio of 4.3x on Thursday ahead of the earnings report.
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FBN Holdings more than tripled its net profit in the first half of the year thanks to an unusual increase in financial instruments earnings.
The financial services group posted gains at a time when other lenders are taking advantage of interest rate spikes to boost profits and growth.
Details of its earnings report released on Thursday showed the group recorded a net profit of N187.2 billion, up from N56.6 billion a year ago.
Adesola Adeduntan, CEO of the group's flagship division, First Bank, described the achievement as "the best financial performance in the bank's nearly 130-year history", in a separate document seen by PREMIUM TIMES.
Interest income made up over 58% of revenue, but gains from financial instruments had a significant impact on profitability, as most of the latter was eroded by runaway costs.
Gains from financial instruments at fair value through profit or loss increased twenty-fold to N229.7 billion, helping to mitigate the shock of foreign exchange losses.
Interest income rose 69.3% to N383.3 billion, benefiting from the whirlwind of interest rate hikes in Nigerian businesses, which helped other lenders post record profits.
FBN Holdings, which operates seven subsidiaries covering investment banking, trusteeship, insurance brokerage, merchant banking and asset management, among others, depends on its commercial banking unit FirstBank for about 93% of its revenue.
The group operates in 825 business locations in ten markets inside and outside Africa.
FBN Holdings has set aside 57.6 billion naira to cover a potential credit loss whose chances of repayment have been weakened by recurring defaults, up 165.4% from last year's figure.
A significant pressure point was operating expenses, which fell from N116.8 billion to N151.7 billion due to increased regulatory costs and promotional expenses.
Non-performing loans as a percentage of gross loans fell to 4.3% from 5.4% a year ago, while total assets jumped by more than a third to N14.2 trillion.
“We continue to focus on customer-centric innovations with strong transactional and digital capabilities supported by sound risk management practices to anticipate and creatively deliver products and services that delight the different customer segments we serve,” Group CEO Nnamdi Okonkwo said in the earnings report.
FBN Holdings has returned 65.6% this year and closed with a price-earnings ratio of 4.3x on Thursday ahead of the earnings report.
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