FBN Holdings Plc has announced its financial results for the full year ended December 31, 2020 which showed its assets grew by 23.9 per cent to N7.7 trillion.
The asset increase was driven by a 59.1 per cent year-on-year increase in cash and balances with Central Banks, as well as, a 19.7 per cent year-on-year increase in customer loans.
The bank’s profit before tax grew by 11.2 per cent year-on-year to N83.7 billion and our non-interest income recorded a growth of 26.7 per cent to N174.7 billion.
These results were despite the challenging rate environment evidenced by the decline in fixed income rates and higher cash reserving requirements leading to a 10.9 per cent year-on-year decline in interest income to N384.8 billion. However, we mitigated the impact on net interest income by containing interest expense through reducing the cost of deposit and driving low-cost deposits.
The Group Managing Director, U.K Eke, said:
“FBN Holdings is pleased to close the year in a healthy financial position despite the difficult operating environment that has been characterized by unprecedented events as a result of the pandemic and challenging economic environment”.
He said the group remained focused on driving operating expenses down and improving cost to income ratio.
“In 2020, operating expense was up marginally by 0.5 per cent year-on-year growing significantly slower than inflation. Notwithstanding, our strategy is to continue to deploy the two-pronged approach of driving revenue through the transaction-led banking model, whilst implementing initiatives geared towards containing operating cost, to help reduce the cost to income ratio”.
Gross earnings were down 1.9 per cent to N579.4 billion as against N590.4 billion the previous year.
“This was driven by a 10.9 per cent year-on-year decline in interest income to N384.8 billion as against N431.9 billion in 2019 largely on the back of Government securities which declined on the short and long end of the yield curve.”
Commenting on the results, Dr. Adesola Adeduntan, Chief Executive Officer of FirstBank Group said: “The Commercial Banking Group posted another strong performance in 2020 with a profit before tax growth of four per cent and total asset growth of 25.5 per cent year-on-year despite the unprecedented macro-economic challenges and disruptions caused by the COVID-19 pandemic. As a Group, our investments in technology and digital channels ensured that we were well positioned to respond in the face of the outbreak, keeping our services to our customers stable and unbroken during the period.
The impressive growth of 20.5 per cent N803 billion in customers’ deposit demonstrates the significant value of our brand equity which has become synonymous with security and safety. It further demonstrates customers’ confidence in the Bank, which we have continue to sustain even in the face of a challenging operating environment.
We continue to successfully expand our Agent banking network and optimise our banking franchises in all the markets where we operate. In 2020, we recorded remarkable growth in the on-boarding of new FirstMonie Agents, significant increase in the uptake of our USSD, mobile app and other digital channels thus further reinforcing our leadership position in the financial inclusion and payment space. It was also pleasing to see the contributions from our international subsidiaries recording an impressive improvement in the year.
