FBNHoldings expenses still high, rises to N263.7bn

FBNHoldings Plc operating expenses grow higher, at the end of 2018 financial result, increasing to N263.7 billion

The company’s result showed that expenses rose by 9.7 per cent from N240.3 billion recorded in the preceding year to N263.7 billion within the period under review. 

Gross earnings also declined to N583.5 billion from N595.4 billion, representing a drop of two per cent. 

The decrease in earnings according to the group was due to a 7.5 per cent decline in interest income on the back of a decrease in the loan book as well as the depressed yield environment which led to a fall in income from investment securities. 

The drop in gross earning was because of offset by 15.8 per cent year on year growth in non interest income. The result showed that Interest income and non-interest income contributed 74.5 per cent and 22.6 per cent against 78.9 per cent and 19.1 per cent recorded in 2017.

Shareholders at the annual general meeting approved for payment total dividend of N9.332 billion for the financial ended December 31, 2018. 

The amount translated into N0.26 kobo of ordinary share of 50 kobo held by investors.

Commenting on the performance of the company, National Chairman, New Dimension Shareholders Association of Nigeria, Mr Patrick Ajudua who commended the growth of the agency banking said that it had helped to increase the visibility of FirstBank across the country.

Ajudua said that 85 per cent of the bank’s customers initiate transactions through the channel.

He also lauded the company’s effort in NPL reduction and urged them to intensify efforts in loan recoveries to forestall further reoccurrence. 

Chairman, Association for the Advancement of the Rights of Nigerian Shareholders Association of Nigeria, Dr Farouk Umar, appreciated the company for dividend declared during the review period.

Umar who also commended the company’s risk management initiatives said that it had impacted positively on its NPL ratio.

Addressing investors, group managing director, FBNholdings, Mr U.K Eke said in 2018 the Nigeria financial industry posted a satisfactory performance on the back of the recovering economy, improving macroeconomic variable such as crude oil price, declining inflation and stable value of the naira relative to major global currencies.

On the bank’s performance, he said net interest income decreased by 14.3 per cent year on year to N284.2 billion against N331.5 billion in the preceding year. Customer loans declined by 9.1 per cent year-on-year to N262.4 billion from N288.6 billion in 2017.

Profit before tax rose by 19.7 per cent to N65.3 billion from N54.5 billion while profit after tax grew by 31.4 per cent to N59.7 billion in 2017 from N45.5 billion. Customer deposit increased by 109 per cent to N3.486 trillion from N3.143 trillion in the preceding year.

He said the significant growth in the bottom lines is down to several factors including the improved risk management process which ensured that impairment charges dropped year on year, learner and more efficient balance sheet as well as progress made in the implementation of several cost containment initiative.

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