FBN delivers 213% growth in PBT to N206bn in H1 2023

By Cynthia Ezekwe.

FBN Holdings Plc (FBNH) recorded a stellar performance in its profit before tax which balooned 213.1 per cent  year-on-year to N206.26 billion in the first half (H1)  of 2023.
The financial services group made this known in its recently published unaudited consolidated financial statements for the period ended June 30, 2023.
According to FBN, Return on Average Equity (ROAE), which is  a financial ratio that measures the performance of a company based on its average shareholders’ equity outstanding, settled at  31.5 per cent, a significant increase against 12.8 per cent recorded in the first half of 2023.
Also, return on average assets (ROAA) of the financial company, which  is an indicator used to assess the profitability of a firm’s assets, surged to 3.0  per cent, against 1.2 per cent recorded in H1 2023.
The banking institution achieved a remarkable  growth in its Earnings Per Share (EPS) as it increased by 234.8 per share year-on-year  to N5.19 per share compared to  N1.55 per share recorded in the first half of 2022
The company noted that its  group  earnings growth in the period was supported by the increase across the funded which stood at 69.3 per cent year-on-year,  and non-funded which settled at 114.0 per cent  income lines.
The holdco’s  interest income rose by 69.3 per cent   to N383.29 billion, partly reflecting the elevated yield environment as the group’s earnings yield settled at 9.4 per cent,  relative to 7.5 per cent it recorded  in  H1 2022.
Noatably, FBN recorded higher income from investment securities which advanced by 127.5 per cent  year on year. Also, loans and  advances to banks appreciated 53.8 per cent  year on year, while  the one to  customers increased by 53.3 per cent  compared to the corresponding period of 2022.
Analysts at Cordros Research, a research and strategy division that provides insights and analysis for clients in the equity, fixed income, currency and money markets, attribute the higher funded income to the increase in FBNH’s interest earning assets, loans & advances to customers, which increased 38.9 per cent  to N5.26 trillion and investments securities, which increased 39.8 per cent  to N3.64 trillion in the first half of 2023.
Similarly, interest expense grew by 98.7 per cent  to N145.96 billion, primarily attributed  to the 109.7 per cent  y surge in the cost incurred on customers’ deposits.
Impressively, the Holdco’s non-interest income (NII) rose by 114.0 per cent   to N258.12 billion, driven by the spike in net gains on financial instruments.
FBNH recorded higher gains from fees and commissions, an increase of 1.7 per cent  to N58.37 billion, and net gains on investment securities grew 4.6 per cent  to N22.4 billion. The growth in the funded income supported by the significant growth in NII drove the increase in operating income 73.9 per cent to N437.82 billion.
Additionally,  operating expenses rose by 24.5 per cent,  following the increase in regulatory costs, as Asset Management Corporation of Nigeria (AMCON) levy increased  18.4 per cent   to N62.12 billion, and Nigeria Deposit Insurance Corporation (NDIC) levy increased by 6.0 per cent to N7.26 billion, while  personnel expenses increased by 17.9 per cent  to N65.22 billion.