FBN Holdings plc, owner of First Bank Limited, on Thursday released its audited results for the financial year ended December 31, 2016, with gross earnings increase by 15.7 percent to N581.8 billion, from N502.7 billion in 2015.
This record growth in full year earnings was driven by 2.6 percent growth in interest income to N405.3 billion and 68.9 percent growth in non-interest income to N165.5 billion, the results released at the Nigerian Stock Exchange (NSE) show.
“The growth in non-interest income highlights the revenue generating capacity of the Group despite the challenging business environment and it clearly demonstrates the resilience of our business and is consistent with our aspiration of becoming the foremost financial services company in Middle Africa,” the bank said in a statement released to the media.
The Holding Company’s Net-interest income closed at N304.4 billion a growth of 14.8 percent driven by a 22.4 percent reduction in interest expense to N100.8 billion and a 2.6 percent increase in interest income to N405.3 billion.
“The reduction in interest expense is in line with our deliberate strategy of letting off expensive customers’ deposits and only accepting deposits that are within our price ranges. This initiative resulted in 24.5 percent decline in interest in customers’ deposits closing at N78.8 billion. The gain in interest to customers was however partly offset by the 22.9 percent increase on borrowings to N18.8 billion, primarily driven by translation effect of the devaluation of the currency.”
The growth in interest income was driven primarily by 14.2 percent growth in interest in investment securities to N115.4 billion as interest earning investment securities grew by 23.1 percent to N1,194 billion. Interest on customer loans on the other hand grew marginally by 0.2 percent as loans to customers grew by a 14.7 . However, the growth in customer loans was essentially driven by the translation effect of the currency movement.”
Non-interest income (NII) increased by 68.9 percent N165.5 billion contributing 35.2 percent to net revenue. The increase in non-interest income can be attributed to the foreign exchange translation gain as well as an increase in fees and commission income. Foreign exchange income for the year increased to N89.1 billion, representing 53.8 percent of non-interest income. The revaluation gain arose from exchange rate movements on the Group’s long foreign currency balance sheet position as at reporting date.
FBN Holdings said the group remains focused on extracting the opportunities within its business and improve revenue generation.
“In line with this initiative, the non-interest income of the group was enhanced by the 14.8 percent growth of our net insurance premium revenue of N8.4 billion. Similarly, financial advisory fees from our merchant banking and assets management business contributed to the growth in total financial advisory income to N7.1 billion at the end of December 2016 from N5.3 billion at the end of December 2015 and contributing 10 percent to group fees and commission income.”