The Group Managing Director of FBN Holdings Plc, Mr. Urum Eke, has said that the injection of N25bn into the group’s commercial banking arm, FirstBank, is in line with the group’s mandate of delivering greater value to shareholders and strengthening the resolve to consolidate its leadership in the banking sector.
He made this assertion during the Q2 investor and analyst conference call.
Giving further insight into the development, the Chief Financial Officer of FBN Holdings, Wale Ariyibi, said that FBN Holdings injected N25bn into First Bank of Nigeria Limited as equity capital.
His words, “This capital injection has cleared all regulatory approvals. However, this is not the total amount received as consideration for selling our 65 per cent holdings (investment) in FBN Insurance.
“The N25bn is made up of two parts: net proceeds of sale of stake in FBNI, which is gross proceeds less professional fees, charges and other cost of sale and FBN Holdings’ own funds.”
According to him, with the injection, FirstBank leveraged the Tier 1 Capital with its existing Tier 2 capital to increase its Capital Adequacy Ratio from 15.3 per cent at Q1 2020 to 16.53 per cent at Q2.
Speaking on the Q2 financial performance of FBN Holdings, Eke said the group delivered a very robust financial performance, which demonstrated the group’s resilience and the successful execution of its strategy.
“From the financial performance, gross earnings was up 5.8 per cent year-on-year, Profit After Tax for the period was up 56.3 per cent on the back of strong growth in non-interest income.
“The progress made in our non-interest income was driven by good treasury management activities benefiting from the increased volatility as well as increasing market share in the e-banking segment,” he said.
According to him, FirstBank has made significant progress in agent banking, increasing its agent banking network by over 100 per cent to 59,024 agents within the period.
“Similarly, it crossed the N5tn threshold for value of transaction processed, as we processed 5.71tn compared to N1.61tn in the prior period. More importantly, we are monetising our agent banking and its revenue contribution to e-business.
“The growth in volume and value across our electronic banking channel continues to offset the reduction in regulated fees, and this has allowed us to keep our revenues flat,” he said.
Eke added that, as promised, Non-Performing Loans ratio had remained in single digit and continued to decline, saying the NPL ratio dropped further to 8.8 per cent from 9.9 per cent at year end.
Looking ahead, he said, “We remain steadfast and are focused on the controllable elements with a mission to propel our performance over the coming periods.
“In particular, we will continue to innovate and maintain our distinctive advantage in digital and agent banking, and continue our transformation in transaction-led banking activities.
“As recent events have shown, we have managed to weather the storm and are focused on delivering greater value to our stakeholders.”
