FBN Holdings Plc recorded gross earnings of N505.2billion, which is a 4.9 per cent rise over the N481.8billion posted in 2014.
According to a statement by the bank, the 2015 growth was driven by a 9.3 per cent year on year growth in interest income to N396.2 billion; supported by growth in increased interest income on loans to customers by 8.2 per cent year on year as well as higher volumes in treasury activities.
The Group also reduced its operating expenses from N236.8 billion in 2014 to N223.6 billion in the year under review.
But the Group recorded a dip in Profit Before Tax (PBT) in the year under review as this went down to N21.5billion from the N94.1billion recorded in 2014. This represents a slide of 77.1 per cent. Similarly, the Profit After Tax (PAT) went down by 82 per cent from N84 billion in 2014 to N15.1 billion in the year under review. Post-tax return on average equity for the year was 2.7 per cent against 16.7 per cent in 2014 and post-tax return on average total assets was 0.4 per cent against 2.0 per cent in 2014, while earnings per share closed at N0.43 against N2.35 in 2014.
The Group’s Net interest income went up by 8.7 per cent to N265.0 billion, from the 2014 figure of N243.9billion. Operating income also moved up from the N356.2billion of 2014 to N364.4 billion in the year under review.
But Non-interest income dipped to N99.4 billion from N112.99 billion of 2014, a slide of 12.0 per cent.
Total assets went down by 4.1 per cent to N4.2 trillion in the year under review from the N4.3 trillion it was in December 2014. Similarly, customer deposits declined by 2.6 per cent to N2.97 trillion, from the 2014 figure of N3.1 trillion just as customer loans and advances also slid by 16.6 per cent from N2.2 trillion in 2014 to N1.8 trillion in the year under review.
However, there was an improvement in First Bank’s liquidity ratio from 44 per cent in 2014 to 58.6 per cent in the year under review. Basel 2 CAR for First Bank Nigeria also moved up from 15.8 per cent in 2014 to 17.1 per cent in 2015 just as Basel 2 CAR for FBN Merchant Bank moved up from 22.5 per cent in 2014 to 24.9 per cent in 2015.
Commenting on the results Mr. U.K. Eke, the Group Managing Director of FBN Holdings, noted that “This has been a very difficult time in the history of our institution. Despite the tough macroeconomic and regulatory backdrop during the year, our underlying business remains strong as reflected in the gross earnings growth of 4.9 per cent to N505.2bn – clearly a leading position in the industry. Furthermore, the Holding company platform has provided support in mitigating the impact of credit losses and the vulnerabilities experienced by our Commercial Banking business.
“In coming periods, our primary focus is to drive efficiency and operational excellence across all operating companies. Key initiatives in achieving this, as we eliminate the value eroding factors and seek to reposition the Group towards a new growth path, include: enhanced focus on moderating risk appetite, risk management practices and culture; disciplined cost containment; asset optimisation; and, synergy realisation. We will be sustaining the drive to improve cross sell initiatives, improve performance and returns from our subsidiaries to provide diversified and sustainable revenue for the Group. Whilst acknowledging the challenges facing the Group, we are committed to achieving our set tasks. Amongst those, one priority stands out above all else – the need to restore shareholder value whilst building long-term sustainability into our businesses.”
In his comments, Dr. Adesola Adeduntan, MD/CEO of FirstBank and its subsidiaries, said: ”FirstBank and its subsidiaries recorded a 2.3 per cent y-o-y increase in gross earnings, which however translated into an 89.2 per cent decline in profit before tax. The soft performance was driven by the high impairment charges resulting from the adverse macro-economic environment.
“Whilst we acknowledge the weaknesses that became apparent in our risk management processes and practices, our focus going forward is to strengthen our risk management processes and practices; to enhance the overall control environment within the bank to aggressively drive down the cost of operations while leveraging existing and future investments in technology to drive customers satisfaction by improving the ease of doing business with the bank. We will also focus our attention on driving better performances from all our subsidiaries in the months ahead. We believe that this will take us in the right direction and help us to achieve sustainable success going forward.”