By Babajide Komolafe
FBN Holdings Plc, the parent company of First Bank Nigeria Limited, has recorded profit after tax of N51.8 billion for the nine months ended September 30th 2019 (9M’19).
This represents 15.3 per cent year-on-year (y/y) increase when compared with N44.9 billion recorded in the corresponding period in 2018 (9M’18).
The company disclosed this in a statement announcing its unaudited results for the nine months ended 30 September 2019.
According to the results, the 15.3 per cent increase in profit after tax was driven by growth in non-interest income, which rose by six per cent to N98.8 billion the 9M’19 from N93.2 billion in 9M’18. The growth in non-interest income was powered by 45.9 per cent y/y growth in electronic banking fees driven by 26.7 per cent y/y growth in fees and commission, reflecting the impact of increased customer acquisition and retention through improved offerings from agents, digital, trade and transaction banking products.
Also contributing to the increase in profitability was 62.6 per cent reduction in losses to bad loans (impairment charge) which fell to N28.5 billion in 9M’19 from N76.2 billion in 9M’18.
These improvements in non-interest income and reduction in impairment charges blunted the impact of 4.6 per cent decline in interest income to N211.4 billion in 9M’19 from N221.5 in 9M’18, on the company’s gross revenue, which fell slightly to N439.9 billion in 9M’19 from N441.5 billion in 9M’18.
Commenting on the results, Group Managing Director/Chief Executive, First Bank of Nigeria Holdings, Mr U.K Eke said: “Our performance in the third quarter reflects the growth trajectory over the first nine months of the year, with significant strides made in transforming the Group’s asset quality and diversifying our revenue streams across the board.
“During the third quarter, our NPL declined further to 12.6 per cent as we approach the end of the curve in the resolution of our legacy portfolio and are confident of further reducing this to under 10 per cent by the end of the current financial year. Critically, we have continued to focus on enhancing our risk framework processes enabling an improvement in the quality of our loan book. Concurrently, we have also continued our drive towards ensuing long-term operational efficiency, resulting in a one-off cost increase pushing our CIR for the first nine months. In terms of our revenue generation, we have delivered further increases in our non-interest income, on the back of growth in electronic banking fees as well as improvements in transaction-led income.
“Overall, we are pleased with the progress we are making on numerous fronts and remain committed to not only enhancing shareholder value but also adhering to the long-standing principles of this great financial institution.”