FBN Holdings Plc has beat profit estimates for the third-quarter (Q3) as the lender continues to benefit from rising interest rates as well as digital income, which validates copious investment in the latest technology.
The lender led by its Chairman Femi Otedola uses the resources of shareholders in generating higher earnings that makes it easier to meet the minimum rate of returns required by equity owners.
For the first nine months through September 2024, FBN Holdings’ profit after tax (PAT) surged by 125.80 percent to N533.87 billion from N234.72 billion the previous year.
The Bank earned N873.93 billion in Net interest income (NII) — what it generates from lending minus what it pays for deposits — in the nine months through September, which is 132.70 percent higher than 2023’s N375.53 billion.
The return on average equity (ROAE) rose to 32.80 percent in September 2024, from 26.60 percent as at September 2023.
Banks in Africa’s most populous nation are the beneficiary of monetary policy tightening by the central bank who has been hiking monetary policy rates as it seeks to tame rising inflation that ravages Nigerians.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria has voted to increase the monetary policy rate, which measures the benchmark interest rate, to 27.25 per cent.
Of course, gains from interest income have been much more steady than foreign exchange revaluation gains that are fading as the currency stabilises, but there are concerns the current illiquidity poses a threat.
FBN Holdings generated N171.34 billion as at September 2024, which is 48.92 percent higher than 2023’s N115.05 billion. Net fees and commission continues to drive transaction-based income, supported by larger transaction volumes, optimisation of digital products and delivery models
The lender is extending financial inclusion drive through agency banking, ensuring that those in the rural areas have access to banking services.
FirstMonie is FirstBank’s agent banking business, targeted at driving financial inclusion and gender empowerment. It has a sustained presence in all states and 772 (of 774 local) Local Government Areas in the country (December ‘23) with 246,000 agents.
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