FBN Holdings Plc’s full-year 2024 unaudited financial results highlighted strong growth across key financial metrics, driven by the impressive performance of its core banking operations.
The Group is well-diversified and one of Africa’s largest financial services organisations. It is structured in Commercial Banking, Merchant Banking, Capital Markets, Trusteeship, and Insurance brokerage. FBNHoldings drives Group coordination, collaboration, and synergies across the business groups to deliver innovative financial solutions.
Financial Performance
The outstanding financial results showcase significant growth across multiple key metrics. The strong growth recorded in net interest income is a testament to FBN Holdings’ resilience and ability to deliver value in a competitive and evolving market landscape.
Interest income surged by 158.4 per cent year-on-year as the bank capitalised on higher yields on government securities. In comparison, interest expenses also increased significantly by 163.5 per cent Y-o-Y. Despite the rise in interest expenses, net interest income saw a robust 154.8 per cent Y-o-Y increase, supported by a substantial improvement in the Net interest margin (NIM), which grew by 326 bps to 8.8 per cent from 5.6 per cent in the full year 2023, indicating effective management of rising funding costs while also increasing earnings from lending and investing activities so they more than offset rise in funding costs.
Additionally, the bank’s trading revenues significantly affected the performance, recording a 68.3 per cent year-on-year growth, buoyed by an N641.87 billion net gain from financial instruments at fair value through profit or loss (FVTPL).
Operating expenses grew by 73.4 per cent Y-o-Y, driven by maintenance advert and promotion costs. However, the bank’s cost-to-income ratio was 43.1 per cent, recording a significant improvement of 581bps from the previous year, suggesting that the bank’s focus on improving its operational efficiency is bearing fruit. Provisions for loan impairments increased by 82.6 per cent Y-o-Y, reflecting a prudent approach to provisioning given the macroeconomic headwinds experienced in 2024. The cost of risk was 5.1 per cent, which was up from 4.3 per cent in FY 2023. Despite the rise in provisions, the bank’s pre-provision operating profit grew by 119.3 per cent Y-o-Y, reflecting the strength of its core business.
Net profit grew 138.4 per cent year over year to N730.3 billion, underpinned by improved revenues. Earnings per share showed strong growth, increasing by 138.4 per cent year over year to N20.35.
Company Balance Sheet Performance
FBNHoldings showed solid growth, with total assets rising by 56.7 per cent Y-o-Y to N26.54 trillion, driven by a significant increase in interest-earning assets, which grew by 63.2 per cent. The bank’s loans to customers increased significantly by N2.797 trillion, closing at N9.4 trillion, signaling its continued commitment to supporting economic activity despite the challenging macroeconomic environment. Customer deposits rose by 62 per cent Y-o-Y to N17.29 trillion, bolstering the bank’s lower-cost funding base.
The bank’s capital remains strong, with shareholders ‘ equity increasing by 45.3 per cent yearly, contributing to a solid Return on average equity (ROAE) of 34.4 per cent. This is a significant improvement from the 22.5 per cent recorded in FY 2023, which will be encouraging to shareholders and potential investors as the institution continues its capital-raising activities.
FBNH’s View
FBN Holding is confident that this performance will be sustained to improve its shareholder value in the future. It said that “the Group is committed to further enhancing revenue and profitability by strengthening our value proposition, refining our governance model, and maximising operational efficiencies.
“In the face of the increasingly competitive environment, the Group maintains a forward-looking approach, with a clear aim of building a sustainable institution and surpassing stakeholders ‘ expectations.”
Company secretary, Adewale Arogundade, in a release recently, First Bank reiterated its commitment to protecting the interests of all stakeholders and taking all necessary measures to safeguard its operations.
It highlighted its strong financial performance, which has led to an increase in market capitalisation and affirmed its readiness to surpass the regulatory minimum capital requirements well before the deadline.
FBNH Capital Raise
To support its business expansion and align with new regulations for international bank capital requirements, FBNH issued a rights issue of 5.983 billion ordinary shares priced at N25.00 each in December 2024, amounting to N149.56 billion. The initiative is designed to meet the capital requirements of Nigeria’s Central Bank. Beyond regulatory compliance, the funds are expected to enhance liquidity, improve financial stability, and support sustained growth for First Bank of Nigeria Limited, FBNH’s flagship subsidiary, strengthening its competitiveness in the Nigerian market.
Analysts said, “In the long term, the proceeds from the rights issue are expected to drive sustained profitability and market leadership, mainly through expanded lending capacity, international growth, and improved digital infrastructure.
“While the increased cost of risk poses challenges, shareholders participating in the rights issue stand to benefit from both immediate value opportunities and the bank’s strengthened market position, assuming effective management of credit risk and profitability.”
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