FBN Holdings Plc slashed net foreign exchange losses in the final quarter but a massive build-up of bad loan losses in the same quarter jerked up the group’s full-year figure to N411 billion, more than the preceding three years’ credit losses of N388 billion.
The earnings numbers from the multinational financial group’s unaudited full-year financial report show that it counted net foreign exchange revaluation gains of N164 billion in the final quarter. That marks the first time the bank registered net foreign exchange gains since the great windfall began for banks and other financial institutions in 2023.
Having closed the third quarter operations with net foreign exchange losses of roughly N227 billion, the bank was headed for another huge net foreign exchange loss after hitting almost N333 billion at the end of 2023.
The final quarter gains, however, have changed the story. They mowed down the third quarter exchange loss to less than N64 billion at full year and marked a big change of fortune from a net foreign exchange loss of N237 billion in the same quarter in 2023. That is the good side of the final quarter developments.
The other side is a massive increase in credit losses, amounting to over N239 billion for the fourth quarter against N171 billion at the end of the third quarter. The loan losses in the final quarter alone are over the full-year figure of under N225 billion in 2023.
Adding to the upsurge in bad loan losses are interest expenses, which jumped by 163.5 per cent to cross the N1 trillion mark for the first time. That is ahead of an increase of 158.4 per cent in interest earnings to N2.42 trillion for the year.
FBN Holdings however took advantage of elevated earnings to overwrite surging costs and lift the bottom line roughly 139 per cent to N736.7 billion at the end of the 2024 operations.
Leading revenue growth for the year, interest earnings accelerated from the increase of 74 per cent to N960 billion in the preceding year, taking over from net gains from financial instruments that were the bank’s revenue growth driver in 2023.
With a disappointing performance in the final quarter, net gains from financial instruments went down from N678.4 billion in 2023 to less than N642 billion at the end of 2024.
In the preceding financial year, massive gains on financial instruments covered the equally massive foreign exchange losses. In 2024, the drop in net gains on financial instruments was more than compensated by the rapid drop in net foreign exchange losses.
Disappointing also are net gains on the sale of investment securities, which dropped from N34.8 billion to a net loss in excess of N40 billion over the review period.
Fee and commission income grew by about 28 per cent to N239 billion, slowing down from an increase of 64 per cent to N193 billion in the previous year. However, other income recovered from a two-year drop and more than tripled to N58.8 billion at the end of 2024.
The strong growth in interest income and the sharp drop in net foreign exchange losses powered gross earnings, which grew by 113.4 per cent to N3.33 trillion at the end of December 2024. This is an accelerated growth from 98 per cent to about N1.6 trillion in 2023.
The only major cost-saving line for the bank is operating expenses, which grew well below gross earnings at 71 per cent to N966 billion, lowering the operating cost margin for the second year to N29 per cent – the lowest in many years.
FBN Holdings earned N20.40 per share at the end of the 2024 operations, rising from N8.59 per share in 2023. It paid a cash dividend of 40 kobo per share for its 2023 full-year operations.
Comments are closed.