FBNHoldings Delivers a Stelar Performance of 99% Growth in FY 2021, Declares N166.7 billion Profit Before Tax

 

FBN Holdings Plc. today announces its audited results for the financial year ended 31 December 2021.

FBN Holdings Plc saw its gross earnings for last year jump to N757.3 billion, 28.2 per cent higher than the figure recorded one year prior, while its net profit climbed by more than three-fifths according to its audited financial statement obtained on Thursday.

Late in coming, the release of the earnings report came nearly two months after the March 31 deadline, with management citing difficulty in completing the audit of one of the biggest subsidiaries of the group as the ground for the delay, making it the last of the thirteen lenders listed on the Nigerian Exchange to issue its audited financials.

The parent company of Nigeria’s oldest commercial bank FirstBank Limited achieved the feat even though interest income, its major earnings source, diminished by 4.1 per cent.

Fee and commission income rose 24.2 per cent to N140.6 billion, helping to soften the blow of depressed interest income on revenue.

But the major boost to both top-line and profit came from a mind-blowing surge in the amount of loan recovered, which ballooned by nearly twelvefold to N141 billion.

FBN Holdings highlighted the recovery of a written-off credit availed to Jide Omokore-backed Atlantic Energy Limited as the principal driver.

To cover loan facilities whose repayment has been made uncertain by repeated defaults, the lender made a provision N91.7 billion from its earnings for the year. That was nearly half of the cash it set aside for that purpose a year earlier.

Pre-tax profit came to N166.7 billion compared to the N83.7 billion reported for the 2020 financial year.

Profit for the year stood at N151.1 billion, 28.4 per cent higher than a year before.

Commenting on the results, Dr. Adesola Adeduntan, Chief Executive Officer of FirstBank Group said:

“Following years of strategic restructuring of the Bank’s balance sheet and operations, the Commercial Banking business is beginning to transition into a sustained growth phase delivering performance commensurate to the size of our business and capabilities of our people. Profit before tax is up 77.9%, gross earnings 30.3%, total assets 15.9% and customer deposits up 19.5%.

This performance was driven by a relentless focus on the needs of customers and improving the competitiveness of our offerings. We have sharpened our ‘Go To Market’ approach to better leverage the opportunities which our large scale provides in addition to becoming more relevant to our clients by improving our value propositions.

This performance is also in line with the Bank’s Quantum Profitability Leap agenda which seeks to ensure that we fully maximise the revenue generating capacity of our business to boost the bottom line and fulfil the expectations of all stakeholders in the business.

The demonstrated resilience of our franchise to headwinds and excellent risk management capabilities place us in a good position to weather any macro-economic shocks which may arise due to the volatile nature of current operating environment. Our Non-performing loans ratio at the end of the year was 6.1% which represents significant progress towards those of other Tier 1 banks and the regulatory threshold of 5.0%.

We will continue to leverage our investments in digital platforms, IT infrastructure, people, and pan-African operations to ensure this growth trend is sustained.

Merchant Banking & Asset Management (MBAM) / FBNQuest

The FBNQuest Group recorded a strong performance in 2021 and continues to demonstrate resilience despite the unprecedented economic and regulatory headwinds, including pronounced uncertainty, lower market yields, higher cost of funds, and elevated Cash Reserve Requirement (CRR) debits.

FBNQuest Group’s gross earnings grew by 8.5% to close at ₦42.5 billion, while profit before tax declined by 17.3% year-on-year to close at ₦9.8 billion. Our focus on annuity and fee income-driven businesses led to a growth of 14.6% in non-interest revenue y-o-y. However, net interest Income declined by 30.5% y-o-y due to lower yields on assets and a higher cost of funds, and profitability was also impacted by a 20.7% growth in operating expenses.

The Group remains well capitalised, with a capital base of ₦60.4 billion, and modest leverage, as total assets grew by 10.5% to ₦385.5 billion. The capital adequacy ratio for the Merchant Bank is 19.5%, above the regulatory requirement of 10.0%, while its loans to customer grew y-o-y by 37.6% to close at ₦78.6 billion, and customer deposits grew by 19.3% to close at ₦119.4 billion.

The Investment Management (IM) Group continues to perform strongly, contributing 32.0% of gross earnings in 2021; in particular, FBNQuest Asset Management contributed 14.4% to gross earnings. The IM Group’s contribution to revenue is a 3.8-percentage point increase from the prior year.

The Corporate and Investment Banking (CIB) group continues to leverage its position as a strategic partner of choice, participating in several deals and offering credit, capital raising and financial advisory services to Corporates. Our participation in these deals was recognised with several awards, including:

The African Banker Awards 2021

• Deal of the Year – Equity: for the privatisation of Afam Power Plc and Afam Three Fast Power Limited

Business Day Banks and other Financial Institutions (BAFI) 2021 Awards

• Investment Bank of the Year (Nigeria)

Public Sector Bond Deal of 2020

• FGN Roads Sukuk Company 1 PLC – 7-year Ijara Sukuk

The bank remain committed to enhancing its financial performance, growing market share, nurturing its human capital and leveraging digital technology to serve its customers better. First bank will continue to explore opportunities to optimisits its operations in order to increase customer satisfaction and grow annuity income as its look to maximum productivity in 2022.

Last Wednesday, FBN Holdings said it entered a pact with Access Bank Plc to acquire the latter’s pension unit, Access Pension Fund Custodian for an undisclosed fee in a deal aimed at consolidating the operation of its own pension subsidiary First Pension Custodian Limited.

The financial services group stated in the earnings report its board is proposing a dividend of N0.35 per share for the year, translating to a payout of N12.6 billion. That compares with the N0.45 paid a year earlier, summing up to N16.2 billion.

May 26, 2022