Profits at FBN Holdings, the parent company of Nigeria’s oldest bank, First Bank, dropped by approximately 10 per cent last year after the bottom line took a blow from mounting costs.
The group profits slumped even though it recorded its biggest revenue during the year.
Bucking the underwhelming result, the stock advanced by 1.8 per cent in Lagos on Friday, where it was quoted at N14.25 per share at the close of trade.
The financial services group reached the revenue milestone riding on the wave of higher interest rates in Nigeria, which have risen 650 basis points to 18.5 per cent since May 2022, enabling lenders to charge more for loans.
Interest income, which often accounts for the lion’s share of lenders’ revenues, surged by half to N551.9 billion, according to FBN Holdings’ audited earnings report issued on Friday, helping push turnover to N805.1 billion.
The group’s financials, the last to be released by a publicly quoted lender, came more than two months after the deadline set by the Nigerian Exchange.
Growth for a net fee and commission was flattish as that income category only grew 1.1 per cent to N118 billion.
Curiously, electronic banking fees, which have often contributed the bulk of such an income, slightly dipped by 2.3 per cent at a time other lenders were seeing a boom.
Operating expenses climbed by 23.3 per cent to N218.5 billion, driven by spikes in maintenance costs and insurance premiums, the latter alone jumping by 826.2 per cent.
The lender put aside N68.6 billion to cover the cost of potential borrower defaults, 25.2 per cent lower than the previous year’s.
Pre-tax profit slid to N157.7 billion from N166.7 billion, while profit for the year stood at N136.2 billion, down from N151.1 billion a year earlier.
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