Profit ratio

Sustained growth trend in HI’s financial dashboard

FBNHoldings Plc released an unaudited financial scorecard for the first half of 2022, recording impressive growth. AMAKA IFEAKANDU examines the outstanding performance of the group in the first half of this year and the other strategies to be adopted by the group in the second half to maintain profitability and bring returns to investors.

Amid growing insecurity and a difficult operating environment, FBNHoldings Plc has remained in business for a long time. An indication to this effect was shown in the holding’s growth profile, as reflected in all of its financial indices during the first six months of its operations in fiscal year 2022.

The group remained focused on optimizing opportunities that drive revenue growth, profitability, capital growth and overall operating efficiency that will deliver outstanding shareholder value and returns.

Group performance

During the first half of its financial year ended June 30, 2022, the group recorded a good performance with a gross profit of N359.2 billion, an increase of 22.4% against N293.4 billion recorded at during the same period of 2021. the company’s unaudited financial result for the six months of this year showed that interest income rose 40.6% to 226.4 billion naira from 161, 0 billion naira recorded in the previous year, while net interest income increased by 47.3% to 152.9 billion naira from 103.8 billion naira recorded compared to last year.

Operating profit also increased by 21.7% to N273.5 billion from N224.7 billion in 2021. Operating expenses jumped by 21.9% to N186.0 billion. naira, compared to 153.6 billion naira during the comparative period of last year.

According to the group’s unaudited financial results, pre-tax profit rose 45.3% to N65.7 billion from N45.2 billion in the corresponding period last year, while profit for the period went from 38 billion naira to 56.5 billion naira. 1 billion, or 48.6 percent.

Total assets also increased by 6.6% to 9.525 billion naira from 8.932 billion naira. Customer loans and advances increased by 17.3% from N2,881 billion to N3,381 billion, while customer deposits stood at N6,302 billion from N5,849 billion, representing growth of 7.8%.

The Commercial Bank

The report further showed that the commercial banking segment recorded a gross profit of N338.5 billion, up 22.6 percent year on year from N276.1 billion the previous year. Net interest income jumped 49.3 percent year-on-year to N152.9 billion from N102.4 billion a year earlier.

For non-interest income, it increased by 2.4% to 108.8 billion naira from 111.5 billion naira in 2021, with operating expenses increasing by 23.1% to 178 .8 billion naira compared to 145.5 billion naira during the comparative period of last year. .

The report also revealed that pre-tax profit stood at N60.0 billion, a 40% year-on-year increase from N42.9 billion recorded the previous year, while profit after tax stood at 53.3 billion naira, or 42.3% from 37.4 naira. billion posted in the comparable period of 2021. The bank’s total assets stood at 9.1 trillion naira, growing 6.7% year-to-date from 8.5 trillion naira in December 2021. Customer loans and advances reached 3.3 trillion naira, representing 17% year-to-date growth from the 2.8 trillion naira reported at the end of December 2021, while customer deposits increased by 8.4% to 6.1 trillion naira from 5.6 trillion naira recorded in December 2021.

Investment Banking and Asset Management (MBAM) / FBNQuest

On the side of Merchant Banking and Asset Management section, the report showed that FBNQuest Group’s gross profit increased by 19.8% year-on-year in the first half of 2022, from 18.3 billion naira recorded during the period. 2021 comparative. Profit before tax also improved by 44.8% year-on-year to N7.1 billion from N4.9 billion in the same period last year. Total assets grew to 414.3 billion naira from 385.5 billion naira the previous year, representing a year-to-date growth of 7.4%.

S1 Performance Commentary

The Managing Director of FBNHoldings Group, Nnamdi Okonkwo, spoke about the performance displayed by the group. He said: “FBNHoldings continues to demonstrate resilient performance despite the challenging operating environment with impressive improvement in revenue and profitability. For the half of 2022, gross profit and pre-tax profit increased by 22% YoY and 45% YoY to N359.2 billion and N65.7 billion respectively. Additionally, we continue to see good progress in our performance metrics, which remain in line with our objective of driving sustainable growth.

“The Group remains committed to its transformation momentum, which has resulted in a stronger balance sheet and improved asset quality, with non-performing loans closing at 5.4% in the first half of 2022. Similarly, the management capacity risk management remains strong across the Group, supporting momentum for increased earnings for sustainable capital growth During the period, the cost/income ratio remained stable year-on-year despite inflationary and currency pressures, while that we continue to focus on maximizing overall efficiencies Our strategic intent remains unchanged in maximizing opportunities that drive revenue growth, profitability, capital growth and operational efficiencies global offering lasting value for our stakeholders.

Commenting on the results, the Managing Director of First Bank of Nigeria Limited, Dr. Adesola Adeduntan said that amid a challenging operational and dynamic regulatory environment during the half year of 2022, the commercial banking group remained focused on executing key initiatives to position the group for improvement. profitability in fiscal year 2022. Our half-year results further reinforced our commitment to achieving our “Quantum Profitability Leap” program. Our gross income increased 22.6% year-on-year to N338.5 billion and our net interest income increased 49.3% year-on-year to N152.9 billion, respectively.

“Following the impressive growth recorded in our revenue, our pre-tax profit grew strongly by 40.0% year-on-year to N60.0 billion, while after-tax profit also increased by 42.3% year-on-year to N53.3 billion.The Bank continues to reap the dividends from the successful restructuring of our balance sheet and overhaul of our risk management architecture.

“We continue to make progress in reducing our non-performing loan ratio, which now stands at 5.4% at the end of the first half and we are on track to bring it back within the regulatory limit of 5 % by the end of FY2022. As we enter the second half of 2022, I am confident that Commercial Banking Group will maintain the current momentum of generating impressive returns from the portfolio of quality risk assets already created, while optimizing its balance sheet in view of changing macroeconomic conditions. In addition, we will continue to build our leading digital banking capabilities by providing best-in-class services to all segments of our customers across all of our footprints in Sub-Saharan Africa and beyond.

And with what can be described as a stellar performance in just six months, event watchers believe the group has better performance to do more and further consolidate its achievements.