FBNH’s Gross Earnings for Q1:2023 grew remarkably by 43.73% YoY to NGN259.51bn primarily due to the impressive growth in interest income. Interest income soared 64.11% YoY to NGN179.61bn while non-interest income increased by 12.36% YoY to NGN79.90bn. Elsewhere, Operating Expenses grew by 20.61% YoY to NGN111.17bn following the spike in personnel expenses (+22.18% YoY to NGN31.30bn) and advertising expenses (+211.32% YoY to NGN5.81bn). Contrary to its 2022FY earnings result, the Group posted an impressive growth in its bottom-line. Profit Before Tax (PBT) and Profit After Tax (PAT) grew by 53.64% YoY and 54.39% YoY to NGN56.11bn and NGN50.09bn respectively. As a result, Net Profit Margin improved by 1.33% to 19.30% in the period.
Considering the Bank’s prospect in 2023FY, we arrived at a target price of NGN16.41. At its current close price of NGN15.95 as of 20th June 2023, this translates to an upside prospect of 3%. Thus, we put a “NEUTRAL” 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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