…The earnings result published on Friday at the close of business, showed that the Holdco recorded a 160.6% y/y increase in earnings per share to N6.54
…Profitability was stronger in 9M-23 as PAT was 156.3% y/y higher at N270.33 billion
MON, OCT 30 2023-theGBJournal|FBNH Holdings Plc delivered a 71.1% y/y in interest income to N633.80 billion in 9M-23, largely driven by elevated yields in the fixed income and an increase in earning assets (+30.3% YTD to N8.33 trillion).
As a result, the group’s earnings yields increased by 250bps y/y to 10.5% in the review period. Parsing through the contributory lines in nominal terms, the group recorded higher income from loans and advances to customers (+53.9% y/y to N414.03 billion), investment securities (+132.1% y/y to N186.72 billion), and loans and advances to banks (+72.1% y/y to N33.06 billion).
The earnings result published on Friday at the close of business, showed that the Holdco recorded a 160.6% y/y increase in earnings per share to N6.54 (vs 9M-22: N2.51), attributed the substantial earnings expansion to the increases across the group’s funded (+71.1% y/y) and non-funded (+108.5% y/y) income lines.
In Q3-23, FBNH’s standalone EPS printed N1.35, which is 40.6% y/y higher than N0.96 in Q3-22.
Elsewhere, interest expense advanced by 112.0% y/y to N256.11 billion as the group incurred higher costs on its deposits from customers (+125.8% y/y to N174.44 billion) and financial institutions (+114.4% y/y to N54.43 billion) due to the elevated interest rates in the debt market and deteriorating funding mix (CASA 9M-23: 77.4% | 2022FY: 84.8%).
In the same vein, the group incurred higher costs on its borrowing (+49.9% y/y to N27.23 billion). Accordingly, the net interest income ex-LLE expanded by 19.4% y/y to N268.93 billion. Ultimately, the group’s net interest margin (NIM) increased by 80bps y/y to 6.2% in 9M-23.
The group recorded a higher non-interest income (+108.5% y/y to N327.29 billion), majorly driven by the higher gains from investment securities (+61.6% y/y to N43.55 billion), net fees & commission income (+30.8% y/y to N118.98 billion), and FX revaluation gains (+10.24ppts y/y to N246.08 billion).
The preceding was sufficient to offset the losses (N96.67 billion) incurred on FX trading. We highlight that the income from fees and commission (17.9% q/q to NGN45.28 billion) was the quarter’s major drive for non-interest income growth.
Further down, operating expenses inched higher by 33.3% y/y to N352.28 billion, primarily driven by an increase in personnel expenses (+33.3% y/y to N113.19 billion), AMCON levy (+19.5% y/y to N70.83 billion), depreciation and amortization (+19.3% y/y to N24.45 billion), and NDIC premium (+7.3% y/y to NGN11.09 billion).
Considering the group’s operating income (+68.4% y/y) growing faster than OPEX, the cost-to-income ratio (ex-LLE) settled lower at 56.6% relative to 71.5% in the prior year.
Profitability was stronger in 9M-23 as PAT was 156.3% y/y higher at N270.33 billion. FBNH’s ROAE and ROAA ultimately settled at 26.6% (vs 9M-22: 13.7%) and 2.5% (vs 9M-22: 1.3%), respectively.
Management will hold an investor call today at 3:00 pm Lagos time.
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