FBN Holdings has reported an impressive 154.5% increase in net interest income, fueled largely by the Central Bank of Nigeria’s (CBN) continued monetary policy rate (MPR) hikes.
According to its unaudited financial statement for 2024, the group’s interest income soared to N1.39 trillion, up from N546 billion in 2023. This growth was primarily driven by Nigeria’s rising interest rates, which increased by 850 basis points to 27.50% in November, enabling lenders to charge higher interest on loans.
Interest income, calculated using the effective interest rate, surged to N2.42 trillion from N936 billion. At the same time, interest expenses climbed significantly, rising by 164% to N1.03 trillion from N390 billion due to the high-interest rate environment.
Analysts at CardinalStone Research noted a substantial rise in interest income from loans and customer advances, which grew by 123.7%. This increase was attributed to the effective repricing of risk assets, boosting asset yields. Furthermore, FBN Holdings expanded its investments in Nigerian Treasury Bills (NTBs), adding N2.1 trillion year-over-year. This strategic shift contributed to a 3.1x growth in interest income from investment securities.
The Nigerian Exchange Limited data indicated that the company’s operating income surged to N58.8 billion from N19.1 billion, primarily driven by sundry income and recoveries. The after-tax profit increased significantly, rising 138% to N738 billion from N318 billion.
FBN Holdings generated total revenue of N3.3 trillion, with the commercial banking segment contributing N3.2 trillion, the merchant banking and asset management segment accounting for N100 billion, and other operations adding N7 billion.
The company also recorded N302 billion in fee and commission income, while fee and commission expenses amounted to N63.7 billion. However, foreign exchange income experienced a decline, dropping to N62.5 billion from N334 billion. Meanwhile, net gains from the sale of investment securities reached N40 billion, marking a 17.5% increase from N34 billion in the previous year.
Dividend income saw a 71.9% rise, reaching N9.8 billion in 2024 compared to N5.7 billion in 2023. Additionally, an analysis of the company’s cash flow statements showed that net cash flow from operating activities increased by 36% to N1.57 trillion from N1.16 trillion.
Investment-related cash flow improved significantly, reaching N807 billion from a loss of N317 billion in the previous period. Similarly, cash flow used in financing activities increased to N236 billion from a previous loss of N32.5 billion. As a result, cash and cash equivalents surged to N5.2 trillion in 2024, up from N2.6 trillion in the first quarter of 2023.
The strong financial performance underscores FBN Holdings’ ability to navigate the evolving interest rate environment while leveraging strategic investments and asset repricing to drive revenue growth.
