Earnings Analysis 2013 H1: FBN Holdings Struggling On Multiple Fronts

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FBN Holdings Plc released its 2013 H1 results showing revenue rose 7.7% to N194billion (2012 H1: N180.9billion). Net Interest Income also rose 3.6% to N112.7billion compared to N108billion posted a year earlier. The banks operating profit fell rather flat at N54.2billion (2012 H1: N54.8billion) as the banks cost to income ratio rose slightly to 59%. Pre-tax profits at the end of the period was N54.8billion compared to N53.4billion posted a year earlier.

 

 Key Highlights

• Most Banks declared a drop in Net Interest Margins in the first half of the year and FBN Holding was no exception. It’s main subsidiary First Bank Plc is a leading Commercial Bank and was affected by the rise in banks borrowing cost. In fact, Net interest income was flat QoQ as Interest income dropped 4% between April and June 2013.
• The bank followed with the N9.1billion loan loss in 2012 H1 with another N9.9billion loan loss recorded this period. Over 80% of the loan write offs was in 2013 Q2 (April to June) alone. FBN write off this quarter is about 4x more than that of Zenith Bank.
• Income from commission and fees dropped 16% to N31billion . A closer look shows a 40% QoQ drop to N11.5billion (2013 Q1:N19.5billion).
• A silver lining though was the increase in Investment and Other income. It rose 245% to N9.7billion QoQ and 66% to N12.5billion YoY. Income from foreign exchange was key to this.

Interest and Similar Income

Fees & Commission Income

Other Operating Income

Other operating expense

 

First Bank Plc released its 2013 H1 results in the website of the NSE