Connect with us

Banking Sector

Despite Forex Headwinds and Other Challenges, FBN Holdings Grows Profit by 1,162% in Q3, 2022

FBN Holdings report a 1,162% jump in profit after tax to N34.666 billion from N2.746 billion attained a year earlier.

Published

on

Nnamdi Okonkwo

Nigeria’s leading financial institution, FBN Holdings Plc reports a 45% jump in interest income from N99.100 billion recorded in the three months through September 30, 2021 (Q3) to N144.011 billion in Q3 2022.

In the bank’s unaudited financial statement obtained by Investors King, interest expense increased by 18.6% to N47.390 billion year-on-year, up from N39.962 billion.

Still, FBN Holdings was able to grow net interest income to N96.621 billion, a 63.3% increase when compared to N59.138 billion recorded in the same period of 2021.

Growth was broad-based as net interest income after impairment charge for losses also improved to N81.621 billion year-on-year. Another 60% growth from N51.013 billion.

While fee and commission income stood at N40.148 billion from N34.689 billion. Net fee and commission income expanded by 14.4% in the period to N32.628 billion.

Despite losing N14.375 billion to forex differential, FBN Holdings was able to broaden net gains on sale investment securities by 8,625% from N52 million achieved in Q3 2021 to N4.537 billion.

Similarly, net gains from financial instruments at FVTPL increased by 47.7% from N7.187 billion to N10.616 billion. Also, other operating income did a turnaround from -N9.076 billion in Q3 2021 to N2.887 billion in the period under review.

Accordingly, operating profit increased by a whopping 401.9% from N7.900 billion in Q3 2021 to N39.655 billion. FBN Holdings realised N114 million as its share of profit from associates to post a profit before tax of N39.769 billion.

The bank paid N5.082 billion as company income tax to report a 1,162% jump in profit after tax to N34.666 billion from N2.746 billion attained a year earlier.

Commenting on the bank’s strong performance, Mr. Nnamdi Okonkwo, the Group Managing Director, FBN Holdings said “FBNHoldings has again in Q3 2022 delivered a stellar performance, growing sustainable income from our core businesses. This is a testament to the success of our focus on carefully growing the business and driving profitability.

“As a result, Gross earnings grew 26.6per cent y-o-y to N546.2 billion, while profit before tax doubled y-o-y to N105.5 billion. I am particularly delighted by the significant improvement in our credit risk portfolio.”

FBN Holdings’ non-performing loan in the quarter stood at 4.7%, below CBN five percent threshold.

“Furthermore, during the period under review, in attestation of the progress made by the Group, Fitch upgraded the credit ratings of FBNHoldings and FirstBank to ‘B’ with a Stable Outlook.

“Value creation remains our overarching objective as we continue to leverage the strengths of our unique brand and heritage to optimise our diverse business portfolio.

He added that, “We are confident of making further progress, with the capacity to generate sustainable performance that delivers superior returns to all our stakeholders.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Continue Reading
Comments

Banking Sector

UBA Announces Final Dividend of N2.30 per Share for FY 2023, Totaling N95.8 Billion

Published

on

UBA House Marina

UBA (United Bank for Africa) shareholders are set to receive dividends as the bank announces a final dividend of N2.30 per share for the fiscal year 2023.

This translated to a total payout of N95.8 billion, more than the N37.6 billion paid out in 2022.

Despite the robust increase in dividend payments, UBA’s dividend payout to profit after tax (PAT) ratio experienced a decline of 6.3 percentage points, dropping from 22.1% in 2022 to 15.8% in 2023.

Shareholders will receive the dividends based on their shareholdings as of the close of business on Friday, May 10, 2024. The payment is scheduled for May 24, 2024.

UBA urges shareholders who have not completed the e-dividend registration process to obtain the E-Dividend Mandate Form to ensure a smooth disbursement process.

The bank’s unclaimed dividends increased to N14.9 billion in 2023, an 18% increase from the previous year.

The bank reported a profit after tax of N607.7 billion, representing a 257% increase from the N170.3 billion recorded in 2022. This increase in profitability includes a net FX revaluation gain of N26.6 billion.

However, it’s worth noting that the Central Bank of Nigeria (CBN) directive prohibits banks from utilizing FX revaluation gains for dividends payment or operational expenses.

Shareholders are advised to complete the e-dividend registration process or contact the registrar, Africa Prudential Plc, for assistance regarding outstanding dividend warrants or share certificates.

Continue Reading

Banking Sector

Fidelity Bank Grows Profit by 131.5% in FY 2023

Published

on

Mrs. Nneka Onyeali-Ikpe, MDCEO of Fidelity Bank Plc

Leading financial institution, Fidelity Bank Plc, has released its 2023 full year Audited Financial Statements, reporting a 131.5% growth in Profit Before Tax to N 124,26 billion.

According to the results, which was issued to the Nigerian Exchange (NGX) today, the bank grew Gross Earnings by 64.9% YoY to N555.83 billion, driven by 81.6% growth in Net interest income which increased from N152.7billion to N277.37 billion. This led to a Profit After Tax of N99.45 billion representing a 112.9% annual growth.

Commenting on the Bank’s commendable performance, Dr. Nneka Onyeali-Ikpe,OON, MD/CEO of Fidelity Bank Plc said, “We closed the financial year with strong double-digit growth across key income and balance-sheet lines. Our performance in 2023 is an attestation of our capacity to deliver superior returns to shareholders despite the difficulties in our operating environment. Profit before tax grew by 131.5% to N124.3bn from N53.7bn in 2022FY, leading to an increase in Return on Average Equity (RoAE) of 26.5% from 15.6% in 2022FY.”

A review of the financial performance showed that the bank grew Net interest income by 81.6% to N277.4bn driven by a 55.5% increase in interest income, thus reflecting a steady rise in asset yield throughout the year. The average funding cost dropped by 20bps to 4.4% due to increased low-cost funds that grew from 83.6% in 2022FY to 97.4% in 2023. The combination of higher asset yield and lower funding cost led to an increase in Net Interest Margin (NIM) of 8.1% from 6.3% in 2022FY.

Similarly, Total Customer Deposits crossed the N4tn mark as deposits grew by 55.6% from N2.6tn in 2022FY. The increase was driven by 81.1% growth in low-cost funds.

Despite the challenging operating environment, the bank reaffirmed its devotion to helping individuals grow, inspiring businesses to thrive and empowering economies to prosper by increasing Net Loans & Advances to N3.1tn from N2.1tn in 2022FY.

Despite the growth in its loan portfolio, Regulatory Ratios were maintained well above the required thresholds, with liquidity ratio at 45.3% from 39.6% in 2022FY and capital adequacy ratio (CAR) at 16.2% compared to the minimum requirement of 15.0%.

“We recognize the changing dynamics in the Nigerian banking space and the need to monitor and proactively manage evolving risks. The proposed final dividend of 60 kobo per share reflects our commitment to strong value creation and returns to our shareholders,” explained Onyeali-Ikpe.

Fidelity Bank has consistently paid dividend since 2006. With the proposed final dividend of 60 kobo per share, Fidelity Bank would be paying investors a total dividend of 85 kobo per share for the reporting period, a 70.0% increase compared to the 50 kobo per share paid to its shareholders in the previous year.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged customer commercial bank with over 8.3 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

Continue Reading

Banking Sector

Zenith Bank Leads as Restricted Deposits Hit N17.1 Trillion

Published

on

Central Bank of Nigeria (CBN)

Zenith Bank Plc has emerged as a frontrunner among Nigerian banks as restricted deposits grew to N17.1 trillion.

This increase was propelled by Central Bank of Nigeria (CBN) regulations and represents 72.7% growth from the N9.91 trillion recorded in the previous year.

The Central Bank of Nigeria, in its effort to regulate the country’s money supply and manage inflation levels, has maintained the Cash Reserve Ratio (CRR) at 32.5%.

The CRR mandates banks to retain a certain percentage of their customer deposits with the CBN, thereby restricting access to these funds for day-to-day operations.

Zenith Bank, along with nine other major banks including Access Holdings Plc, Guaranty Trust Holdings Company Plc (GTCO), and United Bank for Africa (UBA) Plc, witnessed a substantial increase in their restricted deposits.

This surge underscores the impact of regulatory measures on the banking sector’s liquidity and operational dynamics.

The CBN’s decision to uphold the CRR at 32.5% and subsequently increase it to 45.0% reflects its commitment to curbing inflationary pressures and maintaining financial stability. While these measures aim to regulate money supply and inflation, they also pose challenges for banks and shareholders.

A member of the CBN’s Monetary Policy Committee (MPC), Aku Odinkemelu, emphasized the necessity of tightening monetary policy measures to address inflationary pressures effectively.

However, concerns linger regarding the adverse effects on borrowing costs for businesses and the banking sector’s profitability.

Philip Ikeazor, Director-General of Financial System Stability and MPC member, highlighted the pivotal role of complementary tools such as the CRR in taming inflation and managing liquidity.

Despite apprehensions from stakeholders, the CBN Governor, Mr. Olayemi Cardoso, reiterated the importance of assertive monetary policy measures to achieve the medium-term inflation target.

Zenith Bank’s noteworthy performance in managing restricted deposits underscores its resilience and strategic approach amidst regulatory challenges.

The bank’s 133.8% increase in mandatory reserve deposits with the CBN, reaching N3.9 trillion in 2023, demonstrates its ability to adapt to evolving market conditions.

Access Holdings, UBA, and other major banks also reported substantial growth in their restricted deposits, reflecting the broader impact of CBN policies on the banking sector’s liquidity and profitability.

Despite the surge in restricted deposits, concerns persist among shareholders regarding the profitability and operational constraints faced by banks.

Boniface Okezie, Chairman of the Progressive Shareholders Association of Nigeria (PSAN), advocated for CBN to consider paying interest on mandatory funds collected from banks, thereby enhancing their earnings and supporting the real sector of the economy.

As Nigerian banks navigate the intricacies of regulatory requirements and market dynamics, Zenith Bank’s leadership in managing restricted deposits underscores its resilience and strategic acumen in an evolving financial landscape.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending