FBN Holdings Plc H1 2018 Conference Call and Earnings Presentation - The Key Takeaways


Monday, July 30, 2018 06:35 PM / Proshare Markets

FBN Holdings Plc held its H1 2018 Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals.

FBN Holdings Plc recorded a gross earnings of N293.3bn in H1 2018 as against N288.8bn in H1 2017, up by 1.6% YoY. This was driven by 21.4% YoY growth in non-interest income as interest income dipped by 3% YoY on the back of declining yields in investment securities and constrained loan growth. The HoldCo’s  Profit After Tax increased by 13.6%  YoY from N29.5bn in H1 2017 to N33.5bn in H1 2018.

Its gross loan and advances declined by 3% due to moderated risk asset creation and paydown on existing facilities while it reviewed its net loan growth FY guidance to 5-7% from 7-10% as it achieved -7.1% net loan growth in H1 2018 from -4% net loan growth achieved in FY 2017.

At the close of trading today, the share price of FBN Holdings Plc moved up by a tick size of 0.50% to close at N10.05k from N10.00k previous close price.

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In a nutshell, below are the key takeaways from the H1 2018 earnings presentation made by the hold Co’s management;

1.      The operating environment in H1 2018 was particularly challenging for the hold Co’s merchant banking business, as it was characterized by lower yields in the fixed income market, a limited number of investment banking deals being completed and a highly competitive lending market.

2.      It revised its FY 2018 guidance on net loan growth downwards while other metrics remained unchanged for the full year 2018.

3.      About 98% of the Group loans and advances is accounted for by the Commercial Banking business, while the balance of 2% is from the Merchant Banking and Asset Management business.

4.      The ongoing digital banking initiatives seem to be yielding positive results as non-interest income was up by 15% YoY, excluding FX revaluation gain.

5.      The operating expense of the hold Co’s Insurance group grew by 17.4% YoY on the back of new staff headcount.

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