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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.

Income Statement
• 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)

Key Ratios
• 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%)

Notable Developments
• 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
Income statement
(Nbillion) H1
2018 H1
2017 ∆% Key Ratios % H1
2018 H1
2017
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
(Nbillion) H1
2018 FY
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 :

Commercial Banking
• 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.

Insurance
• 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 –
Conference call
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
Tolulope.o.oluwole@fbnholdings.com

 

 

 

 

 

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.

 

 

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Banking

FIRSTBANK PARTNERS LSETF TO OFFER FUNDING AT ATTRACTIVE INTEREST RATE TO LOW-COST PRIVATE SCHOOLS IN LAGOS STATE

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First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider, has announced its partnership with Lagos State Employment Trust Fund (LSETF) in a matching fund scheme.  The scheme aims to cushion the impact of COVID-19 pandemic on low-cost private schools by ensuring lending at an attractive interest rate.

 

The programme will provide access to finance where participating schools can each be availed up to N5 million as well as capacity development, business and financial advisory. There will be monitoring and evaluation to ensure prompt loan repayment.

 

To enjoy this funding opportunity, applications will be submitted via the LSETF portal for screening while successful applicants will be passed on to FirstBank for the loan appraisal and disbursement process. The loan is meant for working capital and asset finance to enable schools resuscitate their practice, acquire needed materials, upgrade their facilities, as well as pay staff salaries in order to bounce back, especially after the lockdown.

 

This scheme promotes entrepreneurship in Lagos State which is in tandem with the vision of LSETF to create employment and entrepreneurship opportunities for Lagos residents. It has provisions for Micro Enterprises (ME) and Small and Medium Enterprises (SMEs) across all the 57 LCDAs in the 20 LGAs in Lagos State.

 

Sanwo-Olu, the Executive Governor of Lagos State said the N5 billion Education Loan Programme was a precursor to many more human development sector-specific support programmes that would be unveiled by the LSETF on behalf of the State Government next month.

The Governor explained that the intervention was necessary, given the importance of education to building human capital. He said his administration took education as critical building 21st century economy and realising objectives set out in the T.H.E.M.E.S. agenda.

The beneficiaries, Sanwo-Olu said, will have access to single-digit loan facilities to fund the provision of the amenities and services needed to aid learning.

He said: “It is thus heart-warming to have First Bank of Nigeria electing to be our exemplary partner for this intervention. With their support, players in the education sector would be getting the financial support they need to boost learning at a single-digit interest rate.

“I also commend the Board of LSETF and the management for this significant accomplishment. They have helped the Lagos State Government build an institution that has engendered public trust and elevated the hope of small businesses and young people, irrespective of challenges faced.”

According to Dr. Adesola Adeduntan, Chief Executive Officer, First Bank of Nigeria Limited, “at FirstBank we recognise the indelible role played by the education sector in the growth of any economy and this underscores our partnership with Lagos State Government for continuous development of the education services in Lagos State and the nation as a whole. The commitment by the Lagos State Government – including this partnership – to enable schools is quite commendable as this will mitigate the challenges caused by the lockdown on the education sector following the COVID-19 pandemic.”

 

“With the single-digit funding targeted at about 2,000 low-cost private schools in the State, we are delighted at this opportunity to demonstrate our commitment to the development of education in Lagos State, thereby contributing our quota to further the mandate of the Lagos State Government – in partnership with LSETF – on economic growth, enhanced opportunities for employment and bridging societal gaps in education,” he concluded.

 

Commenting on the Eduloan programme, Mrs Bola Adesola, Chairperson, Board of Trustees, Lagos State Employment Trust Fund (LSETF) stated that; “According to the NESG the Education Sector remains a growth area for job creation and a report on job creation by the NBS states that the Education Sector is one of the top 5 sectors that created over 59m jobs in 2019. This fact is buttressed by the data collected by LSETF in previous loan programmes. The objective of the LSETF-FirstEdu loan is to create employment, improve the quality of education for our youth by providing access to affordable finance to low-cost private schools and vocational training centres.

 

“We are confident that this intervention fund, which is complemented by our free professional and institutional support structures, will ensure that the education ecosystem in Lagos State will witness an improvement in the overall learning outcomes for our children, while positively impacting on the Lagos local economy through wealth and job creation.,” she stated.

 

Only recently, FirstBank partnered with the Lagos State government, Robert & John, IBM and Curious Learning with a resolve to enable the education of 1 million Nigerian students through innovative eLearning solutions that will drive sustainable efforts towards improving education for all. As part of the partnership, the Bank donated 20,000 units of e-learning devices to the Lagos State government.

 

These partnerships reinforce FirstBank’s “You First” brand promise of putting not just its customers first but the economy of its host communities.

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Banking

Heritage Bank’s MD calls for more impactful role in banking to aid speedy economic recovery

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In the quest to aid speedy economic recovery and impactful service delivery to stakeholders caused by macro-economic headwinds and Covid-19, banking sector’s players have been charged to maximize the opportunities by re-strategizing its roles that will address emerging risks.

The MD/CEO of Heritage Bank Plc, Ifie Sekibo made the call during the 47th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN) with the theme “Elevating Internal Audit’s Role in the Face of Emerging Risks and Opportunities” held virtually on Microsoft Team’s platform, which was organized and hosted by the Heritage Bank, at the weekend.

Sekibo who was represented by his Executive Director, Jude Monye, whilst addressing internal auditors of banks, inquired from the bankers on the readiness of the Internal Audit function to lend the necessary support in exploiting and maximising the opportunities without impairing their independence.

He, however noted that with the rapid changing developments forced by the pandemic sweep across globe that have upended organisations in every sector of the economy, banking inclusive; internal auditors would notice that their modus operandi are outdated.

To this end, he stated that this was the most auspicious time for Chief Audit Executives to rethink how they perform various aspects of their audit assignments.

Sekibo suggested that auditors must “become versed in cybersecurity, artificial intelligence, data analytics, fraud management, regulatory pronouncements, forensics etc and having equipped himself, present balanced, objective audit reports to Executive Management while striking the right balance between the assurance and consulting responsibilities.”

He further hinted, “Embracing new processes and tools to modernize and maximize the audit function helps not only with the perception of internal audit’s value, but also the reality of its contributions. Opportunities to evaluate include virtual auditing, electronic workflow management, and distance team-building and development.”

According to him, it becomes imperative for audit teams to embrace change, harness it and use this season to strategize on what internal audit can be in the future, whist noting that only Chief Audit Executives that maximize the opportunity to refresh and reposition will make their role more relevant and impactful for stakeholders.

Meanwhile, he commended auditors for their contributions to the industry including inputs made in shaping policy directions by regulators and the fight against fraud and other financial crimes which helped in no small measure in deepening confidence of the banking public.

In the same vein, the Chairman of ACAEBIN, Yinka Tiamiyu, reiterated the need for internal auditors to maximize opportunities of the current challenges facing the industry, as each day brings new developments that directly influence the likelihood and potential impact of banking future.

According to him, there are challenges on our part as Bankers in meeting up with the needs of our customers and the general public, and we must ensure that such challenges are surmounted.

He stressed on the need for regular annual audit plan to be reviewed quarterly to address current events that have significant impacts on the business, whilst ensuring that the key players continuously provide banking services to customers in a convenient and safer way.

“On our part, the need for improvement in service delivery and safety of customer’s funds as we digitalized our product offerings are concerns facing the industry, as such we must not relent in our efforts to get strong authentication mechanisms as we make our services more convenient and easier for Customers.  Banks should strive to find solution to the problems associated with identity theft as we pursue digital products and inclusive banking. This is to ensure that customers are happy with us and complaints minimized,” Tiamiyu urged internal auditors of banks.

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Banking

FBN Holdings posts 56.65% growth in profit in 6 months

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By Chinyere Joel-Nwokeoma

FBN Holdings Plc on Wednesday announced Profit After Tax (PAT) of N49.5 billion for the six months that ended June 30.

The PAT represented an increase 56.65 per cent when compared with N31.6 billion achieved in the corresponding period of 2019.

Profit Before Tax (PBT) grew by 14.36 per cent to N41.4 billion from N36.2 billion posted in the comparative period of 2019.

FBN Holdings unaudited results released by the company by the Nigerian Stock Exchange (NSE) show that gross earnings stood at N296.4 billion from N280.3 billion in 2019, an increase of 5.74 per cent.

Also, its total assets stood at N7.1 trillion, an increase of 14.9 per cent against N6.2 trillion achieved in December 2019.

Its customer deposits rose to N4.4 trillion compared with N4. 0 trillion in December 2019.

Commenting on the results, Mr Urum Kalu Eke, FBN Holdings Group Managing Director, said they reconfirmed its consistent focus on enhanced shareholder value.

“The H1 (first half) 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 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,” said.

Eke said that FBN Holdings successfully divested from the underwriting (insurance) businesses to focus on 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, FBN Holdings injected Tier 1 capital into FirstBank, effectively increasing its capital adequacy ration 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 toward enhanced performance,” he said.

Also commenting, Dr Adesola Adeduntan, FirstBank Chief Executive Officer, said the commercial banking group, during the period, increased its gross earnings and PBT.

“Over the period, the commercial banking group increased its year-on-year growth in gross earnings and PBT by 6.1 per cent and 9.2 per cent respectively, despite the economic shutdown 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,” Adeduntan said.

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