FBNHolding positions to sustain profitability
First Bank Nigeria Holdings (FBNH) Plc has released its half year 2024 financial result, showing that gross earnings grew by 118.40 per cent to settle at N1.4 trillion.
The earnings grew by N759 billion compared to the N641.0 billion recorded in the corresponding period of 2023.
The top-line growth was driven by increases in its Interest Income and non-Interest Income, which grew by 155.4 per cent and 71.0 per cent y-o-y, respectively.
The company result showed that overall profitability improved as Profit Before Tax (PBT) grew by 100.9 per cent y-o-y to N412.0 billion and Profit After Tax (PAT) up by 93.7 per cent y-o-y to N360.3 billion.
As a result, the Group’s Earnings per share (EPS) grew 94.7 per cent y-o-y from N5.19 kobo in the first half of 2023 to N10.11 kobo at the end of June 2024.
The FBNH’s interest income expanded from N371.1 billion in 2023 to N947.7 billion due to the 182.7 per cent y-o-y increase in interest earned on investment securities which stood at N307.0 billion in first half of 2024 from N108.6 billion reported the same period 2023, given the elevated interest rate environment in the country.
The company result showed that the 131.8 per cent y-o-y growth in interest earned from loans and advances to customers spurred the advancement in interest income, as this is on account of the 42.4 per cent y-o-y growth in the Bank’s loan book to customers, which settled at N9.1 trillion in the period under review.
The Group’s Earnings Yield climbed to 14.1 per cent in the first half of 2023 growing by 500 basis points from 9.1 per cent in first half of 2023.
On efficiency, the result indicated that operating expenses grew by 95.0 per cent y-o-y from N228.5 billion in first half of 2023 to N445.7 billion in 2024, buoyed by the nation’s heightened inflationary pressures and deteriorating macroeconomic conditions. Personnel expenses and depreciation rose by 110.0 per cent y-o-y and y-o-y and 111.3 per cent y-o-y to N134.42 billion and N30.5 billion, respectively.
FBNH’s total assets expanded by 38.3 per cent from N16.9 trillion in full year result of 2023 to N23.4 trillion at the end of June 2024, supported primarily by loan book growth.
The Group’s total loans and advances went up by 45.6 per cent from N8.4 trillion recorded in 2023 financial year to N12.2 trillion in the first half of 2024.
As a result, the Loan-to-Deposit Ratio (LDR) improved by 138 basis points to 68.9 per cent which is well above the Central Bank’s regulatory minimum of 65.0 per cent.
Further analysis showed that going forward it expected that the company will sustain expansion in its top line growth, following growth in interest and non-interest incomes. It is also anticipate that the elevated interest rate environment will keep supporting higher income earned on interest-bearing assets.
