FBN Holdings Plc FY 2017 and Q1 2018 Conference Call and Earnings Presentation - The Key Takeaways

Proshare

Monday, April 30, 2018 04:17 PM / Proshare Markets 

FBN Holdings Plc held its FY 2017 and Q1 2018 Investors and Analyst Conference Call Earnings Presentation. Proshare NG participated along with leading market analysts and professionals.

The holding company recorded a gross earning of N595.4bn in FY 2017 as against N581.8bn in 2016, up by 2.3% YoY. This was driven by an increase in interest income on the back of enhanced yields and volume growth in investment securities while it recorded a gross earning of N138bn in Q1 2018 as against N141bn in corresponding quarter in 2017, down by 1.6% YoY. The drop in earnings is on the back of declining yields on investment securities.

The holding company recorded a gross earning of N595.4bn in FY 2017 as against N581.8bn in 2016, up by 2.3% YoY. This was driven by an increase in interest income on the back of enhanced yields and volume growth in investment securities while it recorded a gross earning of N138bn in Q1 20178as against N141bn in 2016, down by 1.6% YoY. The drop in earnings is on the back of declining yields on investment securities.

Its Profit Before Tax was put at N56.8bn in FY 2017, up by 147.6% YoY from N22.9bn in FY 2016 while it recorded N18.8bn in Q1 2017, down by 5.7% from N20bn in Q1 2017.

The bank recorded Improvements in risk governance and operational efficiencies. Its NPL ratio dropped from 24.4% in FY 2016 to 22.8% in FY 2017 and 21.5% in Q1 2018. Its NPL ratio for FY 2017 was in line with its guidance except for additional provisions from 9mobile and FCY translation impact from legacy loans.

The HoldCo puts its FY 2018 guidance at 9-10% for ROaE; 1-1.5% for ROaA; NPL to be less than or equals to 15%; Cost of Risk at 6-7% and Cost of Funds at 3-4%.

In a nutshell, below are the key takeaways from the FY 2017 and Q1 2018 earnings presentation made by the bank’s management;

  1. FirstBank ATM transactions now account for 37% of bills payments on ATM platforms in Nigeria and 1trn transactions processed on the *894# USSD banking channel making it the fastest growing USSD product in the industry.
  2. NPL significantly trending down despite difficult environment as the bank maintains healthy financial position with 54.4% liquidity ration and CAR also remaining stable at 18%.
  3. Flagship franchise, FirstBank remains market leader in Retail banking with significant growth in digital banking initiatives and the roll-out of agency banking leveraging its large network of over 750 branches and business locations
  4. With over 2m subscribers, FirstBank’s mobile platform ‘FirstMobile’ achieved the fastest growing mobile banking penetration across Africa, becoming the highest transacting bank on the Interswitch payment platform
  5. Subsidiary contribution inching up with Merchant Bank and Asset Management (MBAM) growing revenue by 3.4% YoY to N39bn from N37.8bn in December 2016 whilst Insurance business sustained its strong performance by growing total revenue by 50.0% YoY to N18.8bn as against N12.5bn in 2016

 Proshare Nigeria Pvt. Ltd.

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