FBN Holdings’ half-year profit jumps 95% to N360 billion

Financial services group FBN Holdings posted a 95.1 per cent increase in net profit for the six months of the year.

The performance shows that its flagship banking subsidiary – First Bank of Nigeria Limited – continues to benefit significantly from interest rate hikes by the central bank, which allows lenders to charge more for loans.

The apex bank jerked up the interest rate three times in the first half of the year, raising it by 750 basis points to 26.3 per cent as it sought to decelerate Nigeria’s inflation rate, which leapt to its highest level in nearly thirty years.

The group’s interest income for the period stood at N947.7 billion, compared to N371.1 billion a year ago, according to its newly released financial report for the period.

Net interest income, a profitability metric that measures the difference between what a bank generates from interest-bearing assets and how much it pays on interest-bearing liabilities, climbed 314 per cent to N514.9 billion.

While the high interest rate environment has created a boom for lenders on the one hand, it has added to the burden of borrowers especially companies, who are also battling record inflationary pressures, on the other hand.

That has fuelled loan defaults for banks, causing the cash FBN Holdings set aside to cover the potential to surge to N93 billion from N56.7 billion a year earlier.

The group earned N432.2 billion as net gains from financial instruments at fair value through profit and loss, 89.5 per cent higher than a year ago.

Other operating expenses rose to N281 billion from N150.2 billion.

At a time when lenders holding assets in foreign currency are reporting huge revaluation gains, FBN Holdings incurred a foreign exchange loss of N165 billion during the period, compared to a loss of N101.1 billion in the same period of last year.

Profit before tax stood at N412 billion, more than double the figure for half-year 2023.

Profit for the period advanced to N365.3 billion from N187.2 billion.

The group earned N278.7 billion through foreign currency translation, gaining up from N156.5 billion.

Total assets stood at N23.4 trillion in contrast to N16.9 trillion at the end of last year, buoyed by higher loans & advances to customers.