FBNH released FY 2019 audited numbers which showed an increase in Pre-tax profit to N83.6bn compared to N73.6bn printed in its earlier released unaudited numbers.
FBNH’s Interest Income grew marginally, up 1.6percent year-on-year mainly due to a decline in yields on customer loans. While Net Loans to customers were up 10.9percent year-on-year, Interest Income on those loans declined 6.8percent.
Interest Expense also grew marginally, up 1.4percent year-on-year despite an 11.9percent year-on-year growth in Interest Bearing Liabilities reflecting a decline in funding cost on the back of the low interest rate environment.
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Net Fee and Commission Income grew moderately, up 11.2percent year-on-year, on the back of a significant growth in E-banking income (up 41.2percent) and credit related fees (up 104.7percent), letters of credit commission (up 49percent) and other fees and commission (up 30.1percent).
Other Income ( Net Insurance Premium, Net gains on investment securities, Net gains or loss on financial instruments, Dividend Income, Other Operating Income) was up 32.9percent.
Impairment Charge declined 41.5percent to N51.1bn, compared with N87.5bn for FY 2018, resulting in a decline in Cost of Risk (COR) to 2.6percent compared to 4.3percent for FY 2018. The bank’s NPL ratio declined further to 9.9percent from 24.7percent for FY 2018 The bank’s management had advised that NPL will drop below 10percent by year end.
OPEX increased significantly, up 18percent, this, coupled with only a marginal increase in total operating income led to a deterioration in cost to income ratio (ex-provisions ) to 73.percent in FY 2019 compared to 63.4percent in the same period of 2018.
The y/y growth in opex was mainly on the back of a significant growth on other operating expenses, up 21.2percent y/y driven by mainly by advert and corporate promotions costs (up 135.5percent y/y) and operational and other losses which grew to N20.4bn in December 2019 from only N6.9bn in December 2018.
Pre-tax profit was up 13percent y/y while Net profits were up 4percent y/y bringing FY 2019 RoAE to 12.4percent compared to 9.7percent for FY 2018.
The bank announced a dividend of N0.38 per share, implying FY 2019 dividend yield of 8.64 based on Thursday closing price of N4.4/share