FBNHoldings grows Q1’22 profit to N32.44bn as total earnings hit N180.6bn

BY CHARLES ABUEDE

First Bank Holdings, Nigeria’s oldest financial institution, has reported a solid 107.7 percent year on year surge in its first quarter profit to N32.4 billion in 2022, according to its financial statement filed to the Nigerian Exchange Limited at the weekend.

It also reported a 32.2 percent jump in its gross earnings to N180.6 billion from N136.6 billion in the corresponding quarter of last year.

On a quarterly analysis, FBNH reported a 45.3 percent drop in gross earnings from the Q4 of 2021 figure and it is worth noting that the results in the last quarter of 2021 were boosted by a one-off recovery on the Atlantic Energy Ltd loan, which was previously written off.

Similar to the gross earnings during the review quarter, FBN Holdings’s interest income grew by 39.7 percent year on year to N109.4 billion in the first three months of 2022 from N78.3 billion in the same period last year, partially offset by a 43.4 percent year on year rise in interest expense to N36.7 billion.

The interest expenses primarily rose due to a 72.7 percent year on year jump in customer deposits, leading to a 24.4 percent year on year increase in interest income from loans and advances to customers. The impairment charges declined 33.6 percent year on year to N8.8 billion in the reviewed period.

As a result, the net interest income after impairment expanded by 61.7 percent year on year to N64 billion from N39.6 billion in the first quarter of 2021.

In segmental break-up, the commercial banking and business group’s revenue vaulted 32.3 percent year on year to N169.4 billion in the first quarter of 2022, coupled with a 30.3 percent year on year jump in merchant banking and asset management business group revenue to N10.5 billion. ‘Other’ revenue also soared 30.4 percent year on year to N596 million in Q1 of 2022.

Elsewhere, the group’s net fee and commission income declined 3.9 percent year on year to N27.3 billion, mainly due to a 0.9 percent year on year fall in fee and commission income, further aggravated by a 14.1 percent rise in fee and commission expense due to increased ATM and SMS alert related expenses. The fee and commission income declined due to lower electronic banking fees which were down 15.4 percent in the first quarter.

The bank’s foreign exchange income soared 114.3 percent to N5.7 billion. The net gains on the sale of investment securities were N14.6 billion, as against N17.9 billion in the same period of 2021.

The gains from the fair value of financial assets reported at fair value through profit or loss (FVTPL) ballooned 5.51x year over year to N14.8 billion, versus N3.1 billion in Q1 last year, primarily driven by fair value gains of N15.9 billion.

Meanwhile, the dividend income increased to N84 million in the review period from N26 million in 2021. Other operating income spurted 335.7 per cent to N2.2 billion in the reviewed quarter set against an income of N501 million last year due to higher sundry income.

And then, the bank’s personnel cost grew a steady 3.3 percent year on year to N25.6 billion in Q1 and the depreciation charges rose 11.4 percent year on year to N7.2 billion in the same period. Moreover, the company’s operating expenses soared 41.2 percent year on year to N59.3 billion, driven by an 89.6 percent year on year jump in regulatory cost to N29.1 billion in the first three months of 2022.

Resultantly, the operating profit jumped 93.5 percent year on year to N36.6 billion in the first quarter. The effective tax rate declined to 11.2 percent in 2022, compared to 17.4 percent year on year in Q1 2021.

During the quarter, the company reported a loss from discontinued operations of N41 million set against a N21 million loss in Q1 of 2021. Accordingly, the bank reported earnings per share of N0.89, a 105.8 percent rise compared to N0.43 in the prior year quarter.