FRI, JUNE 02 2023-theGBJournal |FBN Holdings Plc (FBNH) delivered impressive numbers in Q1-23 as revealed in its unaudited financial report published today, despite the unfavourable business environment.
The Bank reported double-digit expansions across its core (+64.1% y/y) and non-core (+11.8% y/y) income lines.
Consequently, the group’s EPS grew markedly by +55.1% y/y to N1.38 in Q1-23.
The group recorded a 64.1% y/y growth in interest income to N179.61 billion, driven by gains recorded across the loans and advances to customers (+60.4% y/y) and investment securities (+106.8% y/y) contributory lines.
We highlight that the growth in these income lines was supported by the twin impact of the higher yield environment and the rise in the group’s interest-earning assets (+5.7% YTD to NGN7.38 trillion).
Interest expense grew by 84.9% y/y to N67.76 billion owing to the higher cost incurred on deposits from customers (+88.0% y/y) and financial institutions (+22.1% y/y).
We attribute the higher cost on deposits from customers to the increase in the bank’s deposits (+4.2% YTD to NGN3.95 trillion) amid a slight deterioration in its CASA mix (Q1-23: 82.7% vs 2022FY: 84.8%).
Consequently, the group recorded an expansion in net interest income (+53.6% y/y). Eventually, net interest income ex-LLE closed 48.3% higher year-on-year after taking account of the 93.1% y/y growth in the group’s impairment charges in Q1-23.
Non-interest income advanced by 11.8% y/y to NGN72.33 billion, buoyed by higher gains from investment securities (+114.1% y/y) and net fees and commission income (+29.2% y/y) in the period. Accordingly, operating income rose by 29.9% y/y to N167.28 billion.
Operating expenses grew by 20.6% y/y, triggered by increases in the group’s regulatory and personnel costs. Precisely, the group incurred higher costs on personnel expenses (+22.2% y/y), NDIC premium (+135.6% y/y), and AMCON levy (+6.9% y/y) in Q1-23.
However, subsequent to the higher operating income than OPEX, the group’s operational efficiency improved as the cost-to-income ratio (ex-LLE) settled at 66.5% (vs 71.6% in the prior year).
The HoldCo’s profit before tax grew by 53.3% y/y to N56.11 billion. FBNH’s ROAE and ROAA ultimately settled at 20.1% and 1.9%, respectively.
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