FBN Holdings’ Nine-Month Profit Soars to N534 Billion Amid Rising Interest Rates
Detailed Breakdown:
FBN Holdings has announced a significant increase in its nine-month net profit, reporting a 125.8% rise to NGN 534 billion, driven largely by increased interest rates that allowed the bank to earn more on loans. This is part of a broader trend among Nigerian banks that have benefitted from the Central Bank of Nigeria’s series of rate hikes aimed at combating inflation.
Key Financial Highlights:
• Interest Income Growth: Interest income surged by 164.6% compared to the same period last year, reflecting the bank’s ability to charge higher rates on loans, a benefit of the central bank’s tighter monetary policy.
• Net Interest Income: The bank’s net interest income, a critical indicator of profitability in lending, grew from NGN 375.5 billion last year to NGN 873.9 billion this period.
• Profit Before and After Tax: Profit before tax rose by 128% to NGN 610.9 billion, while profit after tax increased by 533.9% from NGN 236.4 billion a year ago.
Credit Quality and Risk Management:
FBN Holdings reserved NGN 171.4 billion to cover potential loan losses, reflecting an increase of 111.4% compared to last year. This conservative approach shows the bank’s commitment to maintaining strong credit quality despite the higher lending environment.
Foreign Exchange and Investment Gains:
• The group recorded a foreign exchange loss of NGN 226.7 billion, up from NGN 97.4 billion a year earlier, impacted by fluctuations in currency rates.
• Gains from financial instruments saw a remarkable increase, with net gains from instruments measured at fair value reaching NGN 551.8 billion, a boost of 125.8%.
Strategic Moves:
The group recently sold its subsidiary, FBNQuest Merchant Bank, to a consortium of investors as part of its strategic repositioning efforts. Additionally, FBN Holdings has launched a rights issue to raise NGN 150 billion to meet Nigeria’s new capital requirements for banks with international operations.
This strong financial performance positions FBN Holdings well for future growth amid a challenging economic landscape, driven by strategic decisions and the favorable lending environment shaped by central bank policies.
Detailed Breakdown:
FBN Holdings has announced a significant increase in its nine-month net profit, reporting a 125.8% rise to NGN 534 billion, driven largely by increased interest rates that allowed the bank to earn more on loans. This is part of a broader trend among Nigerian banks that have benefitted from the Central Bank of Nigeria’s series of rate hikes aimed at combating inflation.
Key Financial Highlights:
• Interest Income Growth: Interest income surged by 164.6% compared to the same period last year, reflecting the bank’s ability to charge higher rates on loans, a benefit of the central bank’s tighter monetary policy.
• Net Interest Income: The bank’s net interest income, a critical indicator of profitability in lending, grew from NGN 375.5 billion last year to NGN 873.9 billion this period.
• Profit Before and After Tax: Profit before tax rose by 128% to NGN 610.9 billion, while profit after tax increased by 533.9% from NGN 236.4 billion a year ago.
Credit Quality and Risk Management:
FBN Holdings reserved NGN 171.4 billion to cover potential loan losses, reflecting an increase of 111.4% compared to last year. This conservative approach shows the bank’s commitment to maintaining strong credit quality despite the higher lending environment.
Foreign Exchange and Investment Gains:
• The group recorded a foreign exchange loss of NGN 226.7 billion, up from NGN 97.4 billion a year earlier, impacted by fluctuations in currency rates.
• Gains from financial instruments saw a remarkable increase, with net gains from instruments measured at fair value reaching NGN 551.8 billion, a boost of 125.8%.
Strategic Moves:
The group recently sold its subsidiary, FBNQuest Merchant Bank, to a consortium of investors as part of its strategic repositioning efforts. Additionally, FBN Holdings has launched a rights issue to raise NGN 150 billion to meet Nigeria’s new capital requirements for banks with international operations.
This strong financial performance positions FBN Holdings well for future growth amid a challenging economic landscape, driven by strategic decisions and the favorable lending environment shaped by central bank policies.