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    Nigerian Exchange: FBN Holdings joins N1 trillion market cap club

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    The share price of FBN Holdings one of Nigeria’s oldest banks crossed the N1 trillion market capitalization on Wednesday.

     

    This is after back-to-back gains of about 10% sent the share price soaring this week.

     

    By hitting the N1 trillion market cap, FBNH now officially joins the SWOOTs, an acronym for Stocks Worth Over One Trillion Market Capitalization.

     

    FBN Holding has gained 160% year-to-date in 2023 after opening the year at about N11.15. The share price closed at N29.4 per share on Wednesday taking its market capitalization to N1,055,321,608,084.80

     

     

    Otedola’s influence: FBN Holdings surge started in 2022 after billionaire investor Femi Otedola announced he had secured a majority holding in the bank.

    • The announcement kick-started a frenzy for the stocks as investors started scrambling to acquire the stock.
    • At the time, FBNH was trading for just under N6 per share indicating that it has gained 4 folds since the billionaire announced his acquisition of the stock.
    • Femi Otedola’s acquisition of companies is often synonymous with improved market perception for stocks leading to higher valuations.
    • This happened with Forte Oil when the share price also surged in 2014.
    • The same also happened with Transcorp when he made the announcement early in the year that he had purchased a significant stake.
    • The billionaire power company, Geregu Power is also close to hitting the N1 trillion market capitalization mark.

     

    Financial Performance: FBNHoldings Plc announced the release of its third-quarter financial statements for the period ending 30th September 2023.

    • The Group’s profit before tax was up 156.3% to N270.3 billion from N105.5 billion posted in 2022, driven by strong growth in interest income.
    • According to the group’s financial statements for nine months, the company’s profit after tax (PAT) was N236.4 billion, a 159.2% increase from the N91.2 billion recorded in the corresponding period in 2022
    • The company posted a net interest income of N377.0 billion, up 51.4% y-o-y as against N249.5 billion recorded in 2022.
    • The group’s non-interest income stood at N326.9 billion, up 108% y-o-y from (Sep 2022: N157 billion).

     

    Operating expenses were N352.3 billion, up 33.3% y-o-y (Sep 2022: N264.3 billion).

     

    What the group is saying:

    Nnamdi Okonkwo, the Group Managing Director commented:

    • “Over the period, we have delivered a strong performance and growth enabled by focused execution of our strategic plans. Gross earnings were up by 80.1%, while our profit before tax grew by 156% year-on-year.
    • At the same time, our credit risk portfolio remains healthy, with an NPL ratio of 4.6% and a coverage of 85.4%. Cost to cost-to-income ratio improved to 50% from 65% in 2022 on the back of enhanced revenue generation as well as effective cost-containment initiatives despite the high inflationary environment. 
    • We remain committed to leveraging technology, automation, and our brand strength to enhance our value proposition, increase revenues, and improve the overall operational efficiency of the Group. 
    • We are confident in our continuous progress in generating sustainable value for our shareholders.”

     

    Commenting on the results, Dr Adesola Adeduntan, Chief Executive Officer of First Bank of Nigeria Limited (Commercial Banking Group) stated that:

    • “In the nine months ended September 30, 2023, FirstBank Group reported impressive financial results, reflecting sustained growth and resilience of the franchise. Our gross earnings at the end of the quarter were N922.2 billion, marking a remarkable increase of 79.8% year-on-year. 
    • The substantial increase of 49.3% y-o-y in net interest income reflects our commitment to managing interest rate dynamics effectively and optimising our interest-earning assets, while the impressive growth of 111.6% y-o-y in non-interest income underscores our success in diversifying the Bank’s revenue streams and providing value-added services to our customers. 
    • Growth of 157.9% and 158.2% y-o-y in Profit Before Tax and Profit After Tax respectively reflect our commitment to delivering exceptional value to our shareholders and stakeholders. 
    • This performance is a testament to the dedication and hard work of our entire team, and it reaffirms FirstBank’s position as one of the leading players in the commercial banking industry. 
    • As we continue to face dynamic market conditions, our agility, risk management capabilities, and strategic approach will remain pivotal in sustaining this impressive growth trajectory. 
    • Looking ahead, we are committed to sustaining this momentum, exploring new growth opportunities through innovation, and upholding our core value of customer centricity”.

     

    FBN Holdings was among the top gainers on Wednesday after it closed 9.9% higher with a trading volume of 28.4 million units valued at N728.1 billion.

     

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