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Company Results

FBNHoldings PAT rises 56.3%, as total assets crosses N7 trillion

FBN Holdings unaudited results for the six months ended June 30, 2020.

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FBNHoldings, FirstBank

FBN Holdings Plc. (“FBNH” or “FBNHoldings” or the “Group”) today announces its unaudited results for the six months ended June 30, 2020.

Income Statement                                                          

  • Gross earnings of 296.4 billion, up 5.8% year-on-year (y-o-y) (Jun 2019: 280.3 billion[1])
  • Net-interest income of 131.3 billion, down 7.4% y-o-y (Jun 2019: 141.7 billion1)
  • Non-interest income of 80.1 billion, up 46.8% y-o-y (Jun 2019: 54.6 billion1)
  • Operating income of 211.4 billion, up 7.7% y-o-y (Jun 2019: 196.3 billion1)
  • Impairment charge for credit losses of 30.7 billion, up 38.6% y-o-y (Jun 2019: 22.1 billion)
  • Operating expenses of 139.2 billion, up 0.9% y-o-y (Jun 2019: 137.9 billion1)
  • Profit before tax of 41.4 billion, up 14.3% y-o-y (Jun 2019: 36.2 billion1)
  • Profit after tax[2] of 49.5 billion, up 56.3% y-o-y (Jun 2019: 31.6 billion1)

Statement of Financial Position 

  • Total assets of 7.1 trillion, up 14.9% year-to-date (y-t-d) (Dec 2019: 6.2 trillion)
  • Customer deposits of 4.4 trillion, up 8.8% y-t-d (Dec 2019: 4.0 trillion)
  • Customer loans and advances (net) of 2.0 trillion, up 7.7% y-t-d (Dec 2019: 1.9 trillion)

Key Ratio 

  • Post-tax return on average equity 14.5% (Jun 2019: 11.6%)[3]
  • Post-tax return on average assets 1.5% (Jun 2019: 1.1%)3
  • Net-interest margin 6.8% (Jun 2019: 7.5%)
  • Cost to income ratio 65.8% (Jun 2019: 70.3%1)
  • NPL ratio 8.8% (Dec 2019: 9.9%)
  • 16.5% Basel 2 Capital Adequacy Ratio (FirstBank Nigeria: Dec 2019: 15.5%)
  • 17.2% Basel 2 CAR (FBNQuest Merchant Bank) (Dec 2019: 17.1%)

Notable Developments 

  • Completed the sale of 65% FBN Holdings Plc ownership in FBN Insurance Limited to Sanlam Emerging Markets Limited; effective June 1, 2020
  • FBN Holdings injected additional Tier 1 capital into FirstBank boosting Capital Adequacy Ratio to 16.5% (excluding profit for the year)
  • Firstmonie Agent banking network grown to over 59,000, further reaffirming FirstBank’s undisputed agent banking leadership, strong retail franchise and wide coverage

Financial Performance Highlights 

READ MORE: FBN Holdings Plc reports gross earnings of N293.3 billion for the six months ended 30 June 2018

Commenting on the results, UK Eke, the Group Managing Director of FBNHoldings said:

“The H1 2020 financial results are impressive and reconfirm our consistent focus on enhanced shareholder value. Despite the difficult operating environment, the H1 results demonstrate our resilience and capacity to deliver on long-term ambitions.  

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The 56.3% y-o-y growth in profit after tax for the period is a testament to the strength of our organisation to continually deliver exceptional services to our customers in these unprecedented times. We have been able to achieve this feat by leveraging our agent banking network, innovative e-banking capabilities, and operational efficiency utilizing technology.  

During the quarter, we successfully divested from the underwriting (insurance) businesses to focus on our banking operations. We are confident this will enhance greater value to our stakeholders and strengthen the Group’s resolve to consolidate its leadership of the banking sector. Following the divestment, FBNHoldings injected Tier 1 capital into FirstBank, effectively increasing its CAR to 16.5%. This provides a comfortable buffer against regulatory requirements with the potential to support any emerging business opportunities. 

Looking ahead, we remain cautious, but we are confident that our business is fundamentally strong to withstand any future challenge towards enhanced performance”.  

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Business Groups:   

Commercial Banking 

  • Gross earnings of 278.7 billion, up 6.1% y-o-y (Jun 2019: 262.8 billion)
  • Net interest income of 126.1 billion, down 8.2% y-o-y (Jun 2019: 137.4 billion)
  • Non-interest income of 72.8 billion, up 48.7% y-o-y (Jun 2019: 49.0 billion)
  • Operating expenses of 132.1 billion, up 0.7% y-o-y (Jun 2019: 131.2 billion)
  • Profit before tax of 36.4 billion, up 9.2% y-o-y (Jun 2019: 33.3 billion)
  • Profit after tax of 32.6 billion, up 21.9% y-o-y (Jun 2019: 26.7 billion)
  • Total assets of 6.8 trillion, up 16.5% y-t-d (Dec 2019: 5.9 trillion)
  • Customers’ loans and advances (net) of 2.0 trillion, up 7.2% y-t-d (Dec 2019: 1.9 trillion)
  • Customers’ deposits of 4.2 trillion, up 8.2% y-t-d (Dec 2019: 3.9 trillion)

Commenting on the results Dr. Adesola Adeduntan, the Chief Executive Officer of FirstBank and its subsidiaries said:

“Over the period, the commercial banking group increased its y-o-y growth in gross earnings and profit before tax by 6.1% and 9.2% respectively, despite the economic shutdown during the quarter and varying degrees of challenges in the operating environment. Notwithstanding, we have continued to provide services to our customers with minimal disruption in a safe environment, supported by seamless transactions through our increasing agent banking network and digital platforms (FirstMobile and USSD). Furthermore, continuous focus on operational efficiency remains a priority, as improvement in non-performing loan ratio has further been sustained. 

As the economy reopens gradually, in Nigeria and other key markets as in the rest of the world, we are adopting a pragmatic approach with optimism on propelling our performance for enhanced profitability through customer led innovation and disciplined execution.” 

Merchant Banking & Asset Management (MBAM) / FBNQuest 

  • Gross earnings of 17.5 billion, up 3.1% y-o-y (Jun 2019: 16.9 billion)
  • Profit before tax of 6.1 billion, up 107.6% y-o-y (Jun 2019: 2.9 billion)
  • Total assets of ₦330.8 billion, up 33.1% y-t-d (Dec 2019: ₦248.6 billion)

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Company Results

UACN Property Development Company Plc: Decrease in sale of property stock, others depletes revenue

UACN Property Development Company Plc recorded decreased revenues from its four revenue-generating units, as total revenues dipped.

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UACN Property Development Company Plc

UACN Property Development Company Plc recorded decreased revenues from its four revenue-generating units, as total revenues dipped. The company reported revenues of N458.26million in 2020 (9months) – 75.81% decrease compared to N1.90billion in the corresponding period of 2019. 

READ: UPDC reaps benefits of NSE’s resilience with listing of N16 billion Rights Issue

What you should know 

Key highlights from its 2020 (9months) results are:

  • Revenues decreased by 75.81% from N1.90billion to N458.26million YoY. 
  • Revenues from sale of property stock decreased to N137.51million, -89.69% YoY. 
  • Revenues from share of James Pinnock sale of property stock decreased to N45.39million, -82.75% YoY.
  • Revenues from rental and management fee on rent decreased to N78.11 million, 25.71% YoY. 
  • Revenues from project and management surcharge decreased to N192.25 million, –0.26% YoY. 
  • Gross profit decreased to N107.94 million, -71.61% YoY. 
  • Operating loss decreased to N378.72 million, -1.85% YoY. 
  • Finance cost decreased to N1.30 billion, -41.03% YoY. 
  • Pre-tax loss increased to N2.46 billion, +34.65% YoY.
  • Post-tax loss decreased to N3.38 billion, -76.96% YoY. 
  • Earnings Per Share decreased to N29 kobo, -94.90% YoY. 
  • Total assets decreased to N26.93 billion, -14.53% YoY. 
  • Total liabilities decreased to N12.56 billion, -55.33% YoY. 
  • Total equity increased to N14.38 billion, +322.37% YoY. 

READ: Austin Avuru retires as CEO of Seplat petroleum, to receive huge benefits

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Bottomline 

UACN Property Development Company Plc recorded decreased revenues from its four revenue-generating units, as total revenues dipped.

Companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19. UACN Property Development Company Plc was unable to increase its total revenues and pre-tax profits in the period under consideration.

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Company Results

Portland Paints and Products Plc: Decrease in paint sales depletes revenues

Portland Paints and Products Plc recorded decreased revenues in one of its revenue-generating units, as total revenues dipped.

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Bolarin Okunowo, Portland Paints and Products Nigeria Plc appoints Non-Executive Director, Portland Paints announces new board changes, Portland Paints and Products Plc: Decrease in paint sales, depletes revenues. 

Portland Paints and Products Plc recorded decreased revenues in one of its revenue-generating units, as total revenues dipped. The company reported revenues of N1.23 billion in 2020 (9 months) – 38.43% decrease compared to N1.99 billion in the corresponding period of 2019.

READ: CAP Plc set to merge with Portland Paints and Products Plc.

What you should know

Key highlights from 2020 (9 months) results

  • Revenues decreased by 38.43%, from N1.99 billion to N1.23 billion YoY.
  • Revenues from paints decreased to N1.22 billion, -38.72% YoY.
  • Recorded revenues of N502 thousand on executed projects, +100% YoY
  • Revenues from franchise/management fees increased to N7.21 million, +142.33% YoY.
  • Gross profits decreased to 385.35 million, -45.43% YoY.
  • Operating profit decreased to N-102.62 million, -175.89% YoY.
  • Finance cost increased to N6.73 million, +51.52% YoY.
  • Pre-tax profits decreased to N-106.58 million, -175.48% YoY.
  • Post-tax profits decreased to N-115.45 million, -220.24% YoY.
  • Earnings Per Share decreased to -15 kobo, -225% YoY.
  • Total assets decreased to N1.80 billion, -9.19% YoY.
  • Total liabilities decreased to N530.45 million, -12.48% YoY.
  • Total equity decreased to N1.47 billion, -7.94% YoY.

(READ MORE:Big players in Paints and Coatings industry suffer 52% profit loss in the first 6 months of 2020)

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Bottom Line

Portland Paints and Products Plc recorded decreased revenues in one of its revenue-generating units, as total revenues dipped.

Companies have generally recorded decreased revenues in the last three quarters mostly due to COVID-19. Portland Paints and Products Plc was unable to grow its revenue. The company also recorded a pre-tax loss in the period under consideration.

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Company Results

CAP Plc: Increase in investment income, others boost revenues

CAP Plc recorded a boost in its two revenue-generating units, as total revenues grew.

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CAP Plc is running at a risk of increased bad debts

CAP Plc reported revenues of N5.99 billion in 2020 – 3.63% increase compared to N5.78 billion in the corresponding period of 2019.

What you should know

The key highlights of its financial year 2020.

  • Revenues increased by 3.63% from N5.77 billion to N5.99 billion YoY.
  • Revenues from paint products increased to N6.05 billion, +3.69% YoY.
  • Revenues from services increased to N33.90 million, +44.11% YoY.
  • Cost of sales increased to N3.30 billion, +8.86% YoY.
  • Gross profits decreased to N2.69 billion, -2.06 YoY.
  • Operating profits decreased to N1.17 billion, -20.94% YoY.
  • Pre-tax profits decreased to N1.36 billion, -24.50% YoY.
  • Post-tax profits decreased to N927.50 million, -24.50% YoY.
  • Earnings Per Share decreased to 133 kobo, -24% YoY.
  • Total assets increased to N7.82 billion, +15.64% YoY.
  • Total liabilities increased to N4.37 billion, +3.07% YoY.
  • Total equity increased to N3.45 billion, +36.78% YoY.

(READ MORE: Nigeria’s inflation rate hits 13.71% as food prices soar)

Bottom Line

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CAP Plc recorded a boost in total revenue from an increase in its two revenue-generating units.

Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19 – CAP Plc was able to increase its total revenues; however, pre-tax profits decreased.

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