FBN Holdings Plc may have re-entered a sustainable growth path, as its 2021 financial forecasts a more resilient near-term picture than projected, with commercial banking activities dominating growth across key metrics.
According to the report, First Bank of Nigeria Limited increased its total financial assets by 15.9% year on year (Y/Y), from N7.4 trillion to N8.5 trillion. The improvement in its clients’ loans and advances, which increased 27.7% year on year to N2.8 trillion, drove the company’s balance sheet expansion.
The banking subsidiary’s expansion increased the holding’s total asset to N8.93 trillion, up 16.2% from N7.69 trillion in 2020.
As a result of the ownership reorganization procedure, the main bank’s gross earnings increased by 30.3 percent to N716.8 billion, compared to N550.3 billion the previous year. Non-interest revenue increased by 106.4 percent to N342.2 billion in the 2019 financial year, compared to N165.8 billion in the previous year.
Its operational income revenue margin increased by 19 percentage points, from 42.5 percent to 61.5 percent. The bank’s increased returns from investments in financial technology, such as electronic payment systems, may have been indicated by non-interest income performance.
With all of the communications businesses getting into payment system banks, there have been questions about how traditional banking institutions would compete in the new diffused financial services landscape (PSB). This month, MTN Nigeria and Airtel both announced their PSB activities.
The bank’s deposit mobilisation drive also improves, with consumer deposits increasing by nearly 20% to N5.6 trillion. Customer accounts have increased from over 10 million in 2015 to over 36 million (including digital wallets), with over 11.8 million issued cards and over 18.6 million active consumers, according to the bank.
Its bottom line outperformed the industry as profit before tax (PBT) increased by 77.9% to N130.9 billion, up from 73.6 billion the previous year. Profit after tax (PAT) increased by 73.9 percent year on year to N117.8 billion, while operational expenses were N313.9 billion.
The quality of its asset is reflected in a drop in non-performing loans (NPLs) from 7.7% to 6.1%, a significant step toward meeting the regulatory level of 5%.
The bank’s capital adequacy ratio increased from 17.4% to 17.4%, while the holding company’s was at 19.5 percent. The stock’s book value per share increased to 24.5 as well.
FirstBank has entered a period of continuous expansion, delivering results that are commensurate with the scale of our company and the talents of our people.
“Following years of strategic restructuring of the bank’s balance sheet and operations, the commercial banking business is beginning to transition into a sustained growth phase, delivering performance commensurate with the size of our business and capabilities of our people,” said Dr. Adesola Adeduntan, Chief Executive Officer of FirstBank Group.
“A constant emphasis on client demands and improving the competitiveness of our offers drove this performance.” We’ve refined our ‘go-to-market’ strategy to better capitalize on the opportunities that our size affords us, as well as to become more relevant to our clients by strengthening our value offerings.”
He went on to say that the bank’s outstanding performance highlighted its resilience to headwinds and solid risk management capabilities, putting it in a strong position to weather any macroeconomic shocks.
“To ensure this growth trend is continued, we will continue to use our investments in digital platforms, IT infrastructure, people, and pan-African operations,” the CEO stated.
