 Plc, the parent company of First Bank has reported strong growth in net interest income as it continues to benefit){kind=link}
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FBN Holdings (FBNH) Plc, the parent company of First Bank has reported strong growth in net interest income as it continues to benefit from the high interest environment while at the same time stamping its footprint in the digital space.
For the year ended December 2022, FBNH’ net interest income (NII) surged by 55.15 percent to N363.24 billion from N228.24 billion as at December 2022.
Net interest income is the difference between what banks earn from loans and investments and what they pay to depositors.
Interest income and similar charges were up 49.55 percent to N51.93 billion in December 2023 from N369.04 billion as at December 2022.
Of course, the aggressive monetary policy of the central bank who seeks to rein in stubborn inflation was a boon to lenders as they made more money from interest on the loans they grant to customers while enjoying juicy yields as they had invested in government securities when yields were attractive.
The Monetary Policy Committee (MPC) of the central bank increased its benchmark interest rate (MPR) to 18.5% in its recently concluded MPC meeting.
FBNH’s made N76.29 billion from short term government securities in 2022, which is 1.47 percent higher than 2022’s N75.18 billion.
The lender’s focus remains on optimising margins while innovatively strengthening revenue and diversification opportunities
Its balance sheet is continuously being de-risked to eliminate vulnerabilities.
The lender’s capital remains adequate and supportive of institutional growth objectives.
Due to the impact of the high inflationary environment and macroeconomic headwinds, FBNH’s total operating expenses were up 16.65 percent to N356.84 billion as at December 2022.
Regulatory cost increased by 28.01 percent; the largest driver for the opex increase over the comparable period regulatory costs reflect the increasing size of the business.
The Bank’s customer deposits continue an upward trend, reinforcing its robust funding base retail franchise remains key driver of deposit growth
Total deposits increased by 17.89 percent to N8.17 trillion in the period under review from N6.93 trillion the previous year.
The Board of Directors, pursuant to the powers vested in it by the provisions of Section 426 of the Companies and Allied Matters Act (CAMA) 2020, has recommended a dividend of 50 kobo per ordinary share, amounting to N17, 947,646,398 (2021: N12, 563,352,477). Withholding tax will be deducted at the time of payment.