FinBank posts N4bn profit in 9 months

FinBank Plc has released its third quarter results, which shows a consolidation of the growth trends started in the first and second quarters.

The bank, which is among those in which the Central Bank intervened in August 2009, grew its Balance Sheet by 11%, rising from N 157 billion in December 2009 to N174 billion at the end of September 2010, while deposits grew by 4% from N 197 billion to N204 billion.

This upward trend was first observed in the bank’s first and second quarter results, with gross earnings rising from N12.5 billion in the first quarter to N 23.4 billion in the second quarter and up to N34.8 billion in the third quarter. Profit after tax also grew from N 1 billion in the first quarter to N2.2 billion and N3.7 billion in the second and third quarters respectively.

It is especially noteworthy that the banking group came from a loss position of N 122.7 billion in the comparable period of 2009 when it made adequate provisions for the bad loans in its books, making a significant leap by recording a profit after tax figure of N 3.7 billion at the end of the third quarter ending

September 2010. Reflecting the harsh operating environment, which is also evidenced by trends in its competitors’ recent results, FinBank’s gross earnings dipped by 42%, dropping from N59.5 billion in September 2009 to N 34.8 billion in September 2010. However, the prudency of the bank’s Management more than compensated for this, as operating expenses were cut by about half, from N33.3 billion in September 2009 to N 17.6 billion in 2010.

In a massive cleanup of its books in the comparable period last year, the Bank made provisions to the tune of N90.8 billion for non_performing. However, in the current period, similar provisions were quite marginal at N1.35 billion, showing significant improvements in its loan book quality.

According to inside sources at the bank, the management is concentrating its efforts on aggressive debt recovery, while also driving its retail business to achieve the desired mileage in deposit mobilization.

The sources added that the bank has continued its discussions with new investors to meet CBN’s target of
closing the process of fresh injection of funds into the banks by the end of the year.