On Wednesday, shares of FBN Holdings Plc fell 4.4 per cent to N3.47 per share, its lowest since August 2003, following warning that earnings for the full year ended December 31, 2015 would be lower than those of 2014.
However, some market analysts said this is a proactive measure as the market only reacted negatively to the earnings warning.
In a statement signed by Company Secretary Tijjani Borodo, to the management of the Nigerian Stock Exchange (NSE) and market operators FBN Holdings said a review of its management accounts for the 2015 indicate that earnings will be lower than the previous year.
The statement reads:
“The reduction in earnings is as a result of the recognition of impairment charges on some specific accounts resulting from a reassessment of the loan portfolio within our commercial banking business. This reassessment was driven by the challenging macro environment coupled with fiscal and monetary headwinds, which have resulted in marked reduction in domestic output. This is a prudent measure being taken while the bank has commenced active remedial action on the specific impaired accounts.”
But the company has assured stakeholders that its other businesses – merchant banking, asset management and insurance remain strong and resilient.
“We reiterate our 2016 focus on restoring shareholder value by driving improvements in underlying asset quality, cost efficiency, enhancing revenue generation and extracting synergies across the Group, as well as growth through innovation.”