BY EMEKA EJERE
FBN Holdings Plc moved a step closer to its goal of becoming one of the foremost financial services institutions in sub-Saharan Africa last week, with its unaudited consolidated financial statements for the year ended December 31, 2020, showing improvement in key income lines.
This is in defiance of a tough operating environment which has been compounded by a conspiracy of the COVID-19 pandemic and oil price crash.
According to the document submitted to the Nigeria Stock Exchange (NSE), the Group’s Profit before tax (BBT) rose from N75.286 billion in 2019 to N78.114 billion in 2020, while profit after tax (PAT) grew faster from N73.665 billion to N79.708 billion in 2020.
Loans and advances rose from N1.852 trillion to N2.220 trillion, while customers’ deposit improved from N4.019 trillion to N4.959 trillion. FBN Holdings’ total assets berthed at N7.626 trillion, up from N6.204 trillion.
Net interest income stood at N256.691 billion, compared with N297.592 billion. Impairment charges fell from N51.093 billion to N50.875 billion, making the Group to end the year with an operating profit of N78.058 billion, up from N75.199 billion in 2019.
It would be recalled that the Group Managing Director, FBN Holdings Plc, Mr. UK Eke, had last year told shareholders that the long-term strategy of the Group was ultimately geared towards ensuring that FBN Holdings becomes one of the foremost financial services institutions in sub-Saharan Africa.
He assured the shareholders that the strategy to reposition the Group was gathering momentum and the key pain points, including the challenging delinquent loan portfolio, have been effectively addressed except for the need to intensify efforts at reducing their cost to serve.
“Now that we are on course for a normalised non-performing loan (NPL) territory in 2020 and with our leadership position in electronic channels, the Group is positioned to take advantage of the evolving opportunities in the market for the benefit of our esteemed shareholders,” Eke had said.
The financial services Group had also beaten analysts’ expectations when it posted a better-than-expected financial performance in the first six months of 2020, growing post-tax profit by more than half.
Its PAT increased 56.3 per cent to ₦49.5 billion, compared to ₦31.6 billion in the corresponding period of the previous year and PBT grew 14.3 per cent to ₦41.4 billion, according to the group’s financial statement as released at the time.
The financial Group grew gross earnings by 5.8 per cent to ₦296.4 billion (Jun 2019: ₦280.3 billion ), buoyed by 46.8 per cent rise in non-interest income to ₦80.1 billion, though net-interest income dipped 7.4 per cent to ₦131.3 billion in H1 2020.
Eke had explained: “The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the H1 results demonstrate our resilience and capacity to deliver on long-term ambitions.
“The 56.3% y-o-y growth in profit after tax for the period is a testament to the strength of our organisation to continually deliver exceptional services to our customers in these unprecedented times. We have been able to achieve this feat by leveraging our agent banking network, innovative e-banking capabilities, and operational efficiency utilizing technology.
“During the quarter, we successfully divested from the underwriting (insurance) businesses to focus on our banking operations. We are confident this will enhance greater value to our stakeholders and strengthen the group’s resolve to consolidate its leadership of the banking sector.”
The divestment saw FBN Holdings’ previously-held 65% stake in FBN Insurance completely sold to Sanlam Emerging Markets (Proprietary) Ltd, with effect from June 1, 2020. In a statement, FBN Holdings’ CEO said: “The divestment is in line with the group’s medium to long term strategic objectives. This will ultimately improve our shareholders’ wellbeing and deliver greater value to all the stakeholders.”
Still in pursuit of its strategic objective, the Group, on Thursday, announced the appointments of Mr. Seni Adetu and Mrs. Juliet Anammah as Independent Non-Executive directors, and Mr. Otu Hughes as a Non-Executive director, all subject to the approval of the Central Bank of Nigeria (CBN).
Speaking on the appointments, the Group Chairman of FBN Holdings Plc, Dr. Oba Otudeko, CFR, said, “On behalf of the board, management and staff of FBNHoldings, I am delighted to welcome the trio of Seni Adetu, Mrs. Juliet Anammah and Otu Hughes to the FBN Holdings board as they bring on board their combined professional experience and expertise of over 97 years, cutting across various industries and institutions of global repute.”
“I am certain that these rich experiences will have immediate and long-term impact on the group and its subsidiaries across Africa and beyond,” he added..
FBN Holdings Plc is a leading African banking and financial services group serving individuals, businesses, organisations and governments in leading markets across Africa and the world.
The Group’s principal subsidiary is First Bank of Nigeria Limited, Nigeria’s foremost financial institution and leading banking services provider. First Bank has forged an incredible partnership with its people and built an enduring heritage through a vast array of seasons and societies, to remain an icon of Gold Standard in today’s financial services industry in Africa and beyond.
FirstBank operates in 10 countries, with subsidiaries that include FBNBank (UK) Limited, and subsidiaries in the Democratic Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone, and Senegal. The bank also has interest in the pension custodian business through its subsidiary, First Pension Custodian Limited.
Others are the merchant banking and asset management businesses, which comprise FBNQuest Merchant Bank Limited, FBNQuest Capital Limited, FBNQuest Securities Limited, FBNQuest Asset Management Limited, FBNQuest Trustees Limited and FBNQuest Funds Limited.
Until its recent divestment, the 20 year-old Insurance broking company, FBN Insurance Brokers Limited was a subsidiary of the FBN Holdings Plc offering insurance brokerage and advisory services.