FBN Holdings Plc 9M:2024 Earnings Note | Strong Earnings
In its recently released unaudited 9M:2024 financial result, FBNH’s Gross Earnings grew by 134.07% YoY to NGN2.25trn. The impressive topline performance rode on significant increases in both interest income (+164.64% YoY to NGN1.63n) and non-interest income (+79.37% YoY to NGN618.72bn). Meanwhile, Operating Expenses remained elevated, surging by 94.79% YoY to NGN676.82bn, an offshoot of rising personnel cost (+89.17% YoY to NGN210.41bn), maintenance (+117.95% YoY to NGN88.08bn) and regulatory cost (+61.27% YoY to NGN78.80bn). Profit Before Tax (PBT) and Profit After Tax (PAT) grew by 128.03% YoY and 124.86% YoY to NGN610.86bn and NGN526.28bn respectively. However, Net Profit Margin declined to 23.37% in the period from 24.33% in 9M:2023.Considering its prospect for the remaining part of the year, we believe the Bank will close with strong margins. We therefore maintain our target price at NGN29.95. At its current close price of NGN26.50 as of 30th of October 2024, this translates to an upside prospect of 13%. Thus, we put an “OVERWEIGHT” rating on the stock.
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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