…As FBN Holdings declares N73.67bn profit in 2019, reduces NPL***
Investors in the Nigerian equities market are not finding it easy as activities opened for the week on a bearish note with market capitalisation further losing N222 billion within six hours of trading.
Specifically, the market capitalisation which opened for the week on Monday at N10.993 trillion shed N222 billion or 2.02 per cent to close at N10.771 trillion.
In the same vein, the All-Share Index dipped 425.24 points or 2.02 per cent to close at 20,669.38 compared with 21,094.62 achieved on Friday.
The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which are; Seplat, Dangote Cement, BUA Cement, BOC Gases Nigeria and Nigerian Aviation Handling Company (NAHCO).
This week, analysts at United Capital Plc expected sentiment for stocks to remain broadly tepid, with renewed interests anticipated on select blue-chip stocks, as discerning investors continue to take advantage of the current market valuation.
Cutix, Learn Africa and NAHCO led the losers’ chart in percentage terms dropping by 10 per cent each, to close at N1.26, 90k and N2.34, per share, respectively.
Seplat followed with a decline of 9.99 per cent to close at N490.10, while BUA Cement lost 9.92 per cent to close at N31.80 per share.
BOC Gases depreciated by 9.88 per cent to close at N3.65 and Academy Press declined by 8.82 per cent to close at 31k, per share.
On the other hand, Access Bank topped the gainers’ table in percentage terms, improving by9.92 per cent, to close at N6.65 per share.
AIICO Insurance followed with a gain of 9.59 per cent to close at 80k, while Lafarge Africa appreciated by 9.50 per cent to close at N9.80 per share.
Wema Bank grew by 8.51 per cent to close at 51k, while Fidelity Bank rose by 8.28 per cent to close at N1.83 per share.
The total volume of traded increased by 42.98 per cent as investors bought and sold 336.43 million shares valued at N4.13 billion exchanged in 4,184 deals.
This was in contrast with 235.29 million shares worth N2.98 billion traded in 3,988 deals on Friday.
Transactions in the shares of FBN Holdings topped the activity chart with 98.62 million shares valued at N393.42 million.
Guaranty Trust Bank followed with 55.66 million shares worth N1.003 billion, while Zenith Bank traded 32.53 million shares valued at N392.77 million.
FCMB Group sold 27.15 million shares worth N40.63 million, while Fidelity Bank sold 23.61 million shares valued at N41.75 million.
In the meantime, the FBN Holdings Plc on Monday declared profit after tax of N73.67 billion in its audited result for the financial year ended Dec. 31, 2019.
The result, released by the Nigerian Stock Exchange (NSE), showed that the profit rose by 26.5 per cent when compared with N58.23 billion achieved in the comparative period of 2018.
Profit before tax stood at ₦83.59 billion, up by 30.9 per cent in contrast with ₦63.85 billion recorded in 2018.
Its gross earnings rose by 6.7 per cent to N627.01 billion from N587.41 billion in the corresponding period of 2018.
Net-interest income stood at ₦290.2 billion, up by 1.7 per cent in contrast with ₦285.3 billion in 2018.
Customer deposits increased by 15.3 per cent to ₦4.0 trillion compared with ₦3.5 trillion in 2018.
The company’s non-interest income appreciated by 20.6 per cent to ₦159.2 billion against ₦132.0 billion in 2018.
Further analysis of the result indicated that impairment charges was down by 41.5 per cent to ₦51.1 billion against ₦87.5 billion in the previous period.
Its total assets stood at ₦6.2 trillion, representing an increase of 11.4 per cent on the ₦5.6 trillion recorded in 2018.
Non Performing Loan (NPL) ratio returned to single digit at 9.9 per cent against 24.7 per cent achieved in 2018.
The company, as a result of the impressive records, recommended a dividend of 38k to its shareholders which will be approved at the Annual General Meeting (AGM) slated for April 27.
Commenting on the results, Mr Urum Kalu Eke, the company’s Group Managing Director described 2019 as a positive year .
“We are happy to close the 2019 financial year on positive notes across a number of key metrics, giving the Group a clean-slate to accelerate its growth plan as we conclude the 3-year Strategic Planning Cycle which ran from 2017-2019 and commence a new cycle.
“In line with our promise to the market, FBN Holdings closed the year with a 30.9 per cent y-o-y increase in profit before tax and delivered its target of a single digit NPL which closed at less than 10 per cent.
“Similarly, we successfully overhauled our risk management architecture, strengthened our processes by leveraging technology and institutionalising a strong credit culture across the lending entities,” he said.
According to him, these deliberate steps have seen the NPL ratio of the company’s vintage book remain below 1 per cent.
“In the same vein, we have made significant improvement in our revenue generation capacity with non-interest income benefiting from our market leadership in electronic banking channels.
“It is also noteworthy to highlight that our investments aimed at improving operational efficiencies and enhancing revenue accretion have resulted in higher cost-to-income ratio.
“The benefits of these investments will be realised in subsequent periods.
“The new cycle is focused on strengthening and positioning the various businesses across the Group for sustainable growth over the long-term.
“As a Group, we are committed to transforming our financial performance to tangible results for the benefit of all stakeholders especially our shareholders through enhanced returns and dividend payment.
“As a testament of the resolution of the legacy issues and an indication of the future, FirstBank re-commenced dividend upstream to the holding company,” he stated.