2023FY FBNH Unaudited Financial Result | Interest Income & Non-Interest Revenue to the Rescue
FBNH released the unaudited Full-year results for 2023, revealing a respective 88.52% YoY and 129.41% increase in Gross earnings and Profit Before Tax (PBT). Major drivers for earnings growth include higher interest income (+66.27% YoY to NGN917.71bn) and non-interest income (+137.00% YoY to NGN599.66bn). PBT at NGN362.24bn exceeded our estimate due to outperformance in Gross earnings (2023FY actual; NGN1.52trn vs. 2023FY estimate; NGN1.27trn). Elsewhere, Operating Expenses remained elevated, increasing by 46.83% YoY to NGN534.34bn, and this was a result of surging personnel cost (+48.15% YoY to NGN173.89bn), maintenance cost (+76.75% YoY to NGN75.94bn) and advertising and corporate promotions (+162.18% YoY to NGN31.81bn). Overall, Net Profit Margin jumped to 20.42% in the period from 16.93% in 2022FY.
We expect non- interest income to normalize in 2024 owing to the one-off effect of the FX liberalization policy. Also, the recent CBN policy restricting the banks to a 0% long position on FCY assets would limit FX gains recorded by the bank. However, we are positive regarding overall 2024FY performance as we foresee higher interest income underscored by elevated interest rate environment. Our 2024FY target price is currently under review
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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