
January 31, 2025/Cordros Report
FBN Holdings Plc (FBNH) released their 2024FY unaudited financial statements after the close of business yesterday, recording a 137.4% y/y increase in earnings per share to NGN20.40 (2023FY: NGN8.59). We attribute this to the broad-based growth across both core (+158.4% y/y) and non-core (+43.2% y/y) income lines.
FBNH reported a 158.4% y/y increase in interest income to NGN2.42 trillion in 2024FY, surpassing the NGN2.00 trillion mark for the first time. The surge in interest income was primarily driven by higher yields in the fixed income market and a 69.4% YTD expansion in earning assets to NGN18.99 trillion. In nominal terms, the group saw significant growth across key income lines, including loans and advances to customers (+123.7% y/y to NGN1.36 trillion), investment securities (+205.0% y/y to NGN849.66 billion), and advances to banks (+327.1% y/y to NGN206.42 billion).
Interest expenses also surged by 163.5% y/y to NGN1.03 trillion, driven by higher costs on deposits from customers (+135.2% y/y to NGN591.86 billion) and financial institutions (+427.4% y/y to NGN275.84 billion), despite an improved funding mix (CASA 2024FY: 81.6% | 2023FY: 81.2%). Similarly, borrowing costs rose by 86.3% y/y to NGN160.98 billion. Consequently, net interest income (ex-LLE) grew by 205.3% y/y to NGN980.93 billion after accounting for credit impairment charges of NGN410.81 billion.
The group’s non-interest income grew by 43.2% y/y to NGN847.28 billion, driven primarily by higher net fees & commission income (+27.9% y/y to NGN239.18 billion) and FX revaluation gains (+109.9% y/y to NGN33.83 billion). These gains were sufficient to offset losses from foreign exchange trading (NGN96.43 billion) and investment securities (NGN40.29 billion).
Further down, operating expenses increased by 73.4% y/y to NGN965.82 billion, primarily driven by an increase in personnel expenses (+82.1% y/y to NGN320.23 billion), AMCON levy (+56.5% y/y to NGN80.03 billion), depreciation and amortisation (+41.8% y/y to NGN60.79 billion), and NDIC premium (+46.9% y/y to NGN41.27 billion). Considering the group’s operating income (+100.2% y/y) grew faster than OPEX, the cost-to-income ratio (ex-LLE) settled lower at 52.8% (2023FY: 61.0%).
Profitability was stronger in 2024FY as PAT was 137.3% y/y higher at NGN736.73 billion, after accounting for the tax expenses of NGN125.66 billion (+163.3% y/y).
Comment: FBNH delivered a strong 2024FY performance, aligning with our expectations as both funded and non-funded income expanded. The group reported an EPS of NGN20.40/s, slightly outperforming our estimate of NGN19.18/s, underscoring the HoldCo’s strong fundamentals and resilience. Looking ahead to 2025E, while we anticipate a moderation in fixed income yields by year-end, we still expect core income growth, supported by the continued expansion of earning assets. Our estimates are under review.