- PUNCH LINE
By Segun Lawal
FBN HOLDINGS PLC. REPORTS GROSS
FBN Holdings Plc. (“FBNH” or “FBNHoldings” or the “Group”) today announces its unaudited results for the six months ended 30 June 2018.
• Gross earnings of N293.3 billion, up 1.6% year-on-year (y-o-y) (Jun 2017: N288.8 billion)
• Net-interest income of N149.6 billion, down 8.8% y-o-y (Jun 2017: N164.1 billion)
• Non-interest income of N61.3 billion, up 21.4% y-o-y (Jun 2017: N50.5 billion)
• Operating income of N210.9 billion, down 1.6% y-o-y (Jun 2017: N214.4 billion)
• Impairment charge for credit losses of N52.8 billion, down 15.4% y-o-y (Jun 2017: N62.4 billion)
• Operating expenses of N119.3 billion, up 2.3% y-o-y (Jun 2017: N116.6 billion)
• Profit before tax of N38.9 billion, up 9.1% y-o-y (Jun 2017: N35.6 billion)
• Profit after tax N33.5 billion, up 13.7% y-o-y (Jun 2017: N29.5 billion)
Statement of Financial Position
• Total assets of N5.3 trillion, up 1.3% year-to-date (y-t-d) (Dec 2017: N5.2 trillion)
• Customer deposits of N3.3 trillion, up 4.1% y-t-d (Dec 2017: N3.1 trillion)
• Customer loans and advances (net) of N1.9 trillion, down 7.1% y-t-d (Dec 2017: N2.0 trillion)
• Post-tax return on average equity of 10.0% (Jun 2017: 9.9%) ,
• Post-tax return on average assets of 1.3% (Jun 2017: 1.2%)
• Net-interest margin of 7.1% (Jun 2017: 8.5%)
• Cost to income ratio of 56.5% (Jun 2017: 54.4%)
• NPL ratio of 20.8% (Jun 2017: 22.0%)
• 55.0% liquidity ratio (FirstBank (Nigeria)) (Jun 2017: 50.4%; Dec 2017: 51.1%)
• 18.1% Basel 2 capital adequacy ratio (FirstBank (Nigeria)) (Jun 2017: 17.6%, Dec 2017: 17.7%)
• 12.6% Basel 2 CAR (FBNQuest Merchant Bank) (Jun 2017: 26.7%, Dec 2017: 15.7%)
• FirstBank indicated its intention to call the 8.25% US$300million FBN Finance Company B.V. Subordinated callable note due in 2020
• FirstBank opened a digital laboratory as part of its strategy to drive innovation in the digital banking space
• FirstBank commissions a strong initiative to implement enterprise-wide Customer Relationship Management solution to drive service excellence and improve customer experience
Selected Financial Summary
2017 ∆% Key Ratios % H1
Gross earnings 293.3 288.8 1.6 Post-tax return on average equity 10.0 9.9
Interest income 225.4 232.4 -3.0 Post-tax return on average assets 1.3 1.2
Net-interest income 149.6 164.1 -8.8 Earnings yield 10.7 12.1
Non-interest income 61.3 50.5 21.4 Net-interest margin 7.1 8.5
Operating Income 210.9 214.4 -1.6 Cost of funds 3.5 3.5
Impairment charge for credit losses 52.8 62.4 -15.4 Cost to income 56.5 54.4
Operating expenses 119.3 116.6 2.3 Gross loans to deposits 67.0 74.5
Profit before tax 38.9 35.6 9.1 Liquidity (FirstBank(Nigeria)) 55.0 50.4
Profit after tax 33.5 29.5 13.7 Capital adequacy (FirstBank (Nigeria)) 18.1 17.6
Basic EPS (kobo) 187 164 13.7 Capital adequacy
(FBN Merchant Bank)11 12.6 26.7
Statement of Financial Position NPL/Gross Loans 20.8 22.0
2017 ∆% NPL coverage 82.3 52.7
Total assets 5,306.5 5,236.5 1.3 PPOP /impairment charge (times) 1.7 1.6
Customer loans & advances (Net) 1,858.2 2,001.2 -7.1 Cost of risk 4.7 5.4
Customer deposits 3,270.7 3,143.3 4.1 Leverage (times) 8.1 8.0
Non-performing loans 455.8 520.0 -12.4 BVPS 18.4 17.0
Shareholders’ funds 660.2 678.2 -2.7
Commenting on the results, UK Eke, the Group Managing Director said:
“FBNHoldings continues to make steady progress towards delivering on its strategic targets. This has been demonstrated with a 13.7% y-o-y increase in profit after tax, 21.4% y-o-y growth in non-interest and 15.4% y-o-y decline in impairment charge. Clearly, the Group is on its way to delivering its promises on asset quality, enhancing revenue generating capacity through non-interest income and driving further efficiencies.”
As we ramp up initiatives to grow interest income, we remain focused on the implementation of key initiatives across our subsidiaries and further strengthen our businesses towards delivering sustainable performance as well as optimising returns to our shareholders.”
Business Groups :
• Gross earnings of N264.7 billion, up 1.4% y-o-y (Jun 2017: N261.0 billion)
• Net interest income of N140.8 billion, down 9.8% y-o-y (Jun 2017: N156.0 billion)
• Non-interest income of N49.6 billion, up 28.5% y-o-y (Jun 2017: N38.6 billion)
• Operating expenses of N105.3 billion, up 0.9% y-o-y (Jun 2017: N104.4 billion)
• Profit before tax of N32.3 billion, up 16.2% y-o-y (Jun 2017: N27.8 billion)
• Profit after tax of N28.3 billion, up 22.7% y-o-y (Jun 2017: N23.0 billion)
• Total assets of N5.1 trillion, up 0.9% y-t-d (Dec 2017: N5.0 trillion)
• Customers’ loans and advances (net) of N1.9 trillion, down 7.2% y-t-d (Dec 2017: N2.0 trillion)
• Customers’ deposits of N3.2 trillion, up 3.5% y-t-d (Dec 2017: N3.1 trillion)
The Commercial Banking business contributed 90.2% (Jun 2017: 90.3%) to the Group’s gross earnings and 84.0% (Jun 2017: 78.3%) to the Group’s profit before tax.
Commenting on the results Dr. Adesola Adeduntan, the MD/CEO of FirstBank and its Subsidiaries said:
“The Commercial Banking Group reported a relatively strong set of results and I am pleased to report consistent improvement towards our strategic objectives. This is reflected in a strong 28.5% y-o-y increase in non-interest income, 15.5% y-o-y reduction in the impairment charge and a marginal increase of 0.9% y-o-y in operating expenses, despite the high inflationary environment. It is clear that our efforts to enhance our revenue generating capabilities, strengthen the risk management and control environment as well as to optimise efficiencies within our business are paying off.”
“We remain focused on maximizing the potential of our business, innovating to expand access to new markets and increasing the contribution of our international subsidiaries, using technology as a key enabler. We expect further improvements in the coming periods, from growth in the quality and yields of the loan book to enhanced remediation efforts, service delivery excellence and the risk and control environment. I am confident in the capacity of our business to deliver the expected results.”
Merchant Banking & Asset Management (MBAM) / FBNQuest
• Gross earnings of N18.5 billion, down 2.8% y-o-y (Jun 2017: N19.0 billion)
• Profit before tax of N3.7 billion, down 38.1% y-o-y (Jun 2017: N6.0 billion)
• Total assets of N220.8 billion, up 1.8% y-t-d (Dec 2017: N216.9 billion)
The Merchant Banking and Asset Management business contributed 6.3% (Jun 2017: 6.6%) to the Group’s gross earnings and 11.1% (Jun 2017: 17.5%) to the Group’s profit before tax.
• Gross earnings of N10.1 billion, up 24.6% y-o-y (Jun 2017: N8.1 billion)
• Profit before tax of N3.4 billion, up 43.6% y-o-y (Jun 2017: N2.4 billion)
• Total assets of N63.8 billion, up 25.0% y-t-d (Dec 2017: N51.1 billion)
The insurance business contributed 3.2% (Jun 2017: 2.8%) to gross earnings of the Group and 7.4% (Jun 2017: 6.5%) to profit before tax.
– ENDS –
FBNHoldings will host a question and answer teleconference call with analysts and investors on the unaudited results for the six months 30 June 2018 on Monday 30 July 2018 at 3:00pm UK / 3:00pm Lagos / 10:00am New York / 4:00pm Johannesburg & Cape Town.
The teleconference call facility can be accessed by dialing:
+234 1 277 2430 (Nigeria); 0800 358 6377 or +44 (0)330 336 9128 (United Kingdom); +1 888 599 8686 or +1 323 994 2093 (United States); and 0800 998 654 or +27 11 844 6054 (South Africa).
and then entering the following confirmation code: 8528539#
Participants are advised to register for the call at least five minutes before the start of the call. For those who are unable to listen to the live call, a recording will be posted on the Company’s website. Replay facilities are also available for a week after the call by dialing:
0808 101 1153 or +44 20 7660 0134 (United Kingdom); +1 719 457 0820 or +1 888 203 1112 (United States); 0800 980 995 or +27 11 062 3065 (South Africa)
and then entering the following code: 8528539#
An investor presentation will be available ahead of the call on the FBNHoldings website.
Click here to access the presentation.
The document below is also available on our website https://www.fbnholdings.com/investor-relations/
• H1 2018 financial statements (unaudited) Click here
For further information please contact:
Tolulope Oluwole (Head, Investor Relations) +234 1 905 2720
FBN Holdings Plc.
FBN Holdings Plc.
FBN Holdings Plc.
– Notes to Editors –
FBN Holdings Plc. (ISIN: NGFBNH000009) is the most diversified financial services group in Nigeria. FBN Holdings Plc. was incorporated in Nigeria on 14 October 2010, following the business reorganisation of the FirstBank Group into a holding company structure. The Company was listed on the Nigerian Stock Exchange under the ‘Other Financial services’ sector on 26 November 2012 and now has in issue and fully paid-up share capital of 35,895,292,792 ordinary shares of 50 kobo each (N17,947,646,396). More information can be found on our website www.fbnholdings.com.
The subsidiaries of FBNHoldings offer a broad range of products and services across commercial banking in 10 countries (Lagos, Nigeria; London, United Kingdom; Paris, France; Beijing, China; Kinshasa, Democratic Republic of Congo, Accra, Ghana; Banjul, Gambia, Conakry, Guinea, Freetown, Sierra Leone and Dakar, Senegal), merchant banking and asset management as well as insurance. The Group, with about 8,679 staff, has 889 business locations (615 local branches, 143 QSPs and agencies for FirstBank (Nigeria) and 131 (local and international) subsidiary locations). FBN Holdings Plc. is structured essentially under three business groups, namely: Commercial Banking, Merchant Banking and Asset Management as well as Insurance.
Commercial Banking comprises First Bank of Nigeria Limited, FBNBank (UK), FBNBank DRC , bank subsidiaries in West Africa , a representative office in Beijing, a branch office in Paris as well as First Pension Fund Custodian. This group provides both individual and corporate clients/ customers with financial intermediation services. This business segment includes the group’s local, international and representative offices with operations in 10 countries offering commercial banking services.
Merchant Banking & Asset Management comprises FBNQuest Merchant Bank group and FBNQuest Capital group. Both FBNQuest Merchant Bank Limited and FBNQuest Capital Limited are wholly owned by the holding company. The FBN Merchant Bank group comprises FBN Merchant Bank and its subsidiaries FBN Securities Limited and FBN Capital Asset Management Limited. The FBN Capital group comprises FBN Capital Limited and its subsidiaries FBN Trustees Limited, FBN Funds Limited and FBN Capital Partners Limited. The group creates value by providing advice, finance, trading, investing and securing services to large institutions (corporations and government agencies) and individuals.
Insurance comprises FBN Insurance Limited and FBN General Insurance Limited (both owned by FBNHoldings 65% and Sanlam 35%) as well as FBN Insurance Brokers (100% owned subsidiary). The business group offers Life and General insurance services as well as insurance brokerage services.
Cautionary note regarding forward looking statements
This release contains forward-looking statements which reflect management’s expectations regarding the Group’s future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as “anticipate”, “believe”, “expects”, “intend”, “estimate”, “project”, “target”, “risks”, “goals” and similar terms and phrases have been used to identify the forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to the Group’s management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. Forward-looking statements therefore speak only as of the date they are made.
FBNHoldings cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain risks or factors, reference should be made to the Group’s continuous disclosure materials filed from time to time with the Nigerian Stock Exchange. The Group disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.