The board of FBN Holdings Plc, has presented its audited financial result for the year ended December 31, 2018,, indicating a 31.36 per cent growth in net profit.
The growth was supported by a combination of the 42.22 per cent reduction in impairment charge for credit losses, 51.86 per cent net insurance premium revenue rise; 53.96 per cent increase in net gains on foreign exchange and net gains on sales of investment securities of 119.66 per cent.
The directors proposed a dividend of 26 kobo from the earnings per share of N1.66, which rose from N1.05 in 2017, representing an increase of 58.23.
Gross earnings for the year which stood at N496.858 billion was derived from transactions in Nigeria and N86.819 billion from outside Nigeria, dropped by 2.01 per cent from N595.446 billion reported in 2017 to N583.477 billion within the period under review.
The commercial banking group contributing the lion’s share of N514.793 billion, followed by N45.259 billion from the merchant banking and asset management group; while insurance group added N22.663 billion.
The company’s interest income dropped by 7.49 per cent to N434.410 billion from N469.586 billion, helped by the N402.379 billion from commercial banking. Interest expenses grew from N138.064 billion to N150.242 billion, up by 8.82 per cent. Net interest income, therefore, stood at N284.168 billion, showing a decline of 14.28 per cent from prior year’s N331.522 billion.
Impairment charge for credit losses reduced by N63.513 billion from N150.424 billion to N86.911 billion, the bulk of which was N87.871 billion by the commercial banking group, following net interest income after impairment charge for credit losses stood at N197.257 billion, increasing by 8.92 per cent from N181.098 billion.
Net insurance premium revenue climbed to N15.541 billion from N10.234 billion; fee and commission income increased to N92.724 billion from N74.453 billion in 2017, mainly the N34.029 billion from money transfer commission, as against N24.989 billion in preceding year, followed by N12.329 billion from account maintenance, which was almost double the N6.686 billion in 2017, just as brokerage and intermediations contributed N11.901 billion, a significant increase when compared to N1.554 billion in the preceding year, among others.
Fee and commission expense increased 43.02 per cent from N12.117 billion to N17.33 billion.
Net gains on foreign exchange stood at N32.636 billion from N21.062 billion; net gains on sales of investment securities climbed to N5.733 billion from N2.61 billion; just as net losses from financial instruments at fair value stood at N3.135 billion from N11.117 billion gains in 2017.
The group earned dividend income of N2.312 billion during the period, representing 12.62 per cent from N2.053 billion; other operating income dropped 17.12 per cent from N3.901 billion to N3.233 billion; insurance claims for the period rose 16.73 per cent from N4.041 billion to N4.717 billion.
Personnel expenses increased by 9.01 per cent to N93.395 billion from N85.678 billion; depreciation of property, plant, and equipment crawled by 5.88 per cent from N11.6 billion to N12.282 billion; just as amortization of intangible assets increased 27.02 per cent from N4.201 billion from N5.336 billion.
Operating expenses rose from N134.799 billion to N147.976 billion, representing a 9.78 per cent rise; operating profit improved by 20.66 per cent from N54.092 billion achieved in the preceding year to N65.265 billion; the share of profit of associates dropped from N430 million to N23 million at the end of December.
Profit before tax, rose 19.75 per cent, rising from N54.522 billion in 2017 to N65.288 billion; income tax expenses dropped by 38.67 per cent from N9.04 billion to N5.544 billion; resulting in a net profit of N59.744 billion, from N45.482 billion in the corresponding full-year of 2017.
The group is yet to achieve its 2014 level of N84.011 billion net profit, which translated to EPS of N2.35 kobo
The external auditors- PwC, as part of key audit matter drew attention to the balance sheet, where gross balance of customer loans and advances for the period stood at N2.069 trillion while associated impairment reserve stood at N385 billion, at a time measurement of impairment losses remains highly subjective and involves the exercise of significant judgment and use of complex models and assumptions.
Meanwhile, total assets for the period rose to N5.568 trillion, up from N5.236 trillion, with customer loans and advances of N1.683 trillion, down from N2.001trillion; just as investment securities increased from N1.248 trillion to N1.663 trillion.
Total liabilities climbed from N4.562 trillion in the preceding year to N5.037 trillion in 2018; of which customer deposits rose from N3.143 trillion to N3.486 trillion, representing a N343.353 billion or 10.92 per cent rise, resulting in N530.647 billion shareholders’ funds that down by 21.76 per cent from N673.719 billion in 2017.
Meanwhile, qualification date for the dividend is April 22, 2019, closure of register is billed for April 23 to 29; after which shareholders are expected to consider and possibly approve the account and dividend offer at the annual general meeting on May 3. Payment is slated for May 6, 2019.
