First Bank of Nigeria Holdings Plc, on Thursday, announced 7.8 per cent increase in gross profit in its unaudited result and accounts for half year ended June 30, 2017 (H1).
The Holdings’ financial institution reported N288.8 billion in H1 2017, as against N267.9b in H1 2016.
The increase in gross earnings was driven essentially by a 37.3 per cent growth in interest income, which was partly offsets by a 46.3 per cent decline in non-interest income.
Notably, the Group’s Net-interest income rose up by 30.2 per cent to N164.1b, from N126.1b in H1 2016, while Impairment charge for credit losses closed the period under review at N62.4 billion, 10.7 per cent below N69.9 billion reported in H1 2016.
With operating expenses gaining about 11.8 per cent to N116.6b from N104.3b, Profit Before Tax, PBT, closed the half year of 2017 at N35.6b, as against N45.9b recorded in prior half year of 2016.
Commenting on the results, in a statement by the bank, the Group Managing Director, FBN Holdings Plc, UK Eke, said: “FBNHoldings has again demonstrated its strong revenue generating capacity in the current economic environment reporting gross earnings of N288.8b – up 7.8 per cent.
He said, “In line with our strategic focus on improving asset quality; cost optimisation; and, enhancing revenue generation, we are beginning to see improvement across a number of metrics associated with these initiatives.
“Our focus on enhancing the quality of our loan book is reflected in a decline in non-performing loans, a reduction in our impairment charge following improvement in the asset quality outlook, and we will continue to prioritise this area through the rest of this year.”
He said, “Similarly, consistent improvement in the efficiency ratio is testament to the efficacy of our cost optimisation initiatives, though these results have been partly offset by the currency devaluation and high inflationary environment.”.
According to him, “Overall, we have seen strong growth trajectory in our Merchant Banking & Asset Management and the Insurance Group. These businesses complement our Commercial Banking franchise and represent new frontiers for our Group, firmly supporting our aspiration of becoming a leading financial services institution in Middle Africa. We remain committed to maximising returns to our shareholders as well as creating sustainable value.”
The group’s Cost-to-income ratio closed period under review at 54.4 per cent, from 47.42 per cent.
The financial institution said: “Though within our guidance, the higher ratio in the current period reflects a normalised performance from the one-off foreign exchange revaluation gains of the previous period. We remain optimistic on further efficiencies in our business following the implementation of a number of initiatives within the Group.”
The group’s Total assets thus increased by three per cent to N4.9 trillion, as against N4.7 tr recorded in full year of 2016; this was essentially driven by an increase in investment securities and other treasury activities.
The breakdown of total assets showed that investment securities increased by 1.3 per cent to N1.26 tr in H1 2017, from N1.25 tr in 2016, while loans to banks grew to N731.2b, a growth of 64.4 per cent from N444.9b recorded at year end.
Total customer deposits declined by 3.5 per cent to N3 tr in H1 2017, from N3.1 tr in 2016 full year as the group focuses on ensuring an appropriate deposit mix at an optimum price.
The financial institution explained that, “The group’s domiciliary deposits declined to N468.9 billion from N564.7b, following State related remittances, which have now been completed.
The bank says, “Savings deposit representing 32.4per cent of total deposit grew by 1.9 per cent to N971.1b from N952.7b in 2016; reflecting the strength of our retail franchise and the ability to keep attracting a well-diversified funding base despite the difficult but improving market condition.”
Total loans & advances to customers (net) declined marginally by 4.1 per cent to N2.0tr, compared with N2.1tr in 2016.
According to the bank, this was driven by repayments, portfolio rebalancing and write-off of assets that have been fully impaired, as the Group remains focused and deliberate in growing good quality risk assets supported by our revamped risk management framework.
The sectors that contributed to the decrease in loans were essentially in oil and gas, manufacturing, public sector and general.
