By Agency Reporter

Wednesday, 27 Oct 2010

FinBank Plc, one of the banks recently rescued by the Central Bank of Nigeria, has released its third quarter results to the Nigerian Stock Exchange.

By the result, the bank grew its balance sheet by 11 per cent, up from N157bn in December 2009 to N174bn at the end of September 2010, while deposits grew by four per cent from N197bn to N204bn.

A statement from the bank on Tuesday said the upward trend was first observed in the bank‘s first and second quarter results, with gross earnings rising from N12.5bn in the first quarter to N23.4bn in the second quarter and up to N34.8bn in the third quarter. Profit after tax also grew from N1bn in the first quarter to N2.2bn and N3.7bn in the second and third quarters respectively.

The banking group came from a loss position of N122.7bn in the comparable period of 2009, when it made adequate provisions for the bad loans in its books, thus making a leap by recording a profit after tax of N3.7bn at the end of the third quarter ending September 2010.

Reflecting the harsh operating environment, which is also evidenced by trends in its competitors‘ recent results, FinBank‘s gross earnings dipped by 42 per cent, from N59.5bn in September 2009 to N34.8bn in September 2010.

In the comparable period last year, the bank made provisions to the tune of N90.8bn for non-performing loans. However, in the review period, similar provisions were quite marginal at N1.35bn, showing significant improvements in its loan book quality.

According to sources at the bank, the management is concentrating its efforts on aggressive debt recovery, while also driving its retail business to achieve the desired mileage in deposit mobilisation.

The sources added that the bank was discussing with new investors to meet CBN‘s target of closing the process of fresh injection of funds into the banks by the end of the year.

With the expected injection of fresh capital into the bank and the recent announcement of the CBN Governor, Mr. Lamido Sanusi, that the Asset Management Corporation of Nigeria would commence the purchase of non-performing assets from banks in the next few weeks, expectations are high in the industry that the upward trend seen in the results of the bank will continue.

Source: Punch