More banks have released their financial reports for the nine months ended September 30, 2016. FBN Holdings Plc, which is one of the banks wednesday posted a profit before tax (PBT) of N57.4 billion, showing a marginal decrease of 3.5 per cent from N59.6 billion in the corresponding period of 2015.
The financial conglomerate ended the period with gross earnings of N417.3 billion, up by 7.0 per cent from N390 billion in 2015. Net-interest income improved by 5.2 per cent to N202.9 billion, from N192.9 billion in 2015, driven by a 38.4 per cent reduction in interest expense on customers’ deposits to N56.7 billion.
Non-interest income increased by 56.5 per cent to N131.0 billion, up from N83.7 billion. The increase in non-interest income was driven largely by the foreign exchange translation gain as well as fees and commission income. Foreign exchange income in the period increased to N68.4 billion, from N22.5 billion.
However, net impairment charge on credit losses came up to N114.7 billion, up from N46.6 billion, resulting from incremental provisions from oil and gas sector. Other sectors include construction, transport, general commerce and information services sectors. Consequently, cost of risk increased to 6.9 per cent as against 3.0 per cent), while Non-performing loan (NPL) ratio increased to 24.9 per cent, largely driven by the translation effect of the Naira devaluation.
As a result, the company ended the period with a profit after tax of N42.5 billion, showing a decrease of 15 per cent from N50.2 billion in 2015.
Commenting on the results, the Group Managing Director of FBN Holdings Plc, UK Eke said: “FBN Holdings’ performance has again demonstrated its underlying resilience despite the ongoing macroeconomic and business challenges with gross earnings and profit before tax closing at N417.3 billion and N57.5 billion respectively. This has been achieved through sustained revenue generation as well as increased cost efficiencies. Although the current currency weakness is a challenge for our remedial process, we are steadfastly progressing on improving the overall risk management culture, governance and technology as well as the degree of compliance across the group. The Group remains committed to ensuring sustained improvement in our performance with a view to restoring shareholder value.”