 Plc is gradually regaining its position as best lender in Africa’s largest economy as it earned reasonable return){kind=link}
|
Listen now
|
FBH Holdings (FBNH) Plc is gradually regaining its position as best lender in Africa’s largest economy as it earned reasonable return on capital employed, beating peer rivals in key financial metrics.
The Bank delivered strong financial performance in a challenging operational and regulatory environment, as increasing penetration of digital and transaction banking offerings supported non-interest income, notably in the first quarter.
FBNH net profit or profit after tax spiked by 54.48 percent in the first quarter of 2023.
And that compares with a +34.64 percent increase at the bottom line of Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), +29.14 percent; Access Holdings, +23.91 percent, and Zenith Bank, +16.82 percent.
It is worth paying attention to the fact that the substantial improvement in FBNH’s performance is also underpinned by expansion in efficiency even amid rising inflation and regulatory induced costs.
For instance, the return on average equity (ROAE) increased to 20.06 percent in March 2023 from 14.72 percent the previous year.
In short, FBNH’s ROAE is higher than Zenith Bank’s, making it the fourth largest lender by returns on equity while cost to income ratio improved to 60.40 percent in March 2023 from 61.70 percent the previous year.
Investors have fallen in love with the shares of the oldest lender in Nigeria as its shares have gained 24.80 percent, outperforming the NGXASI index’s 9.34 percent.
The Bank’s strengthened balance sheet supported by sustained asset quality improvements, gives it the leeway to surmount headwinds.
Asset quality continues to improve with a reduction in non-performing loans (NPL) ratio to 4.0 percent in March 2023 from 4.30 percent as at December 2022, and 22.80 percent in December 2017.
The lender’s balance sheet further strengthened with a coverage ratio at 96.7 percent in the first quarter of 2023, from 86.60 percent as at December 2022.
“Capital continues to be modulated in light of business needs, regulatory requirements and evolving macro environment,” said the Bank.
The Bank continues to leverage on its solid electronic banking which it uses to shrink financial exclusion gap to magnify earnings.
It processed 181 million mobile and internet transactions worth or valued at N9.49 trillion, which is 29.0 percent higher than 2022’s N7.35 trillion.
It processed 95 million transactions through its agent banking worth N2.28 trillion as at March 2022.