FBN Holdings Re-appraises Business for 2015/2016

Nigeria’s biggest financial brand, FBN Holdings, have announced that their loan growth at its banking unit, First Bank Limited, is expected to reduce by 4 per cent this year from a soaring 23 per cent in 2014 as the company attempts to concentrate on short-term trade finance transactions after heavily financing the power and oil sectors last year.

Bello Maccido, Chief Executive officer, FBN Holdings, who made this known on Monday said FBN Holdings is likely to generate a tenth of its revenues from its investment banking and insurance units combined by 2016, up from around 7 per cent presently after the company purchased Kakawa Discount House and Oasis Insurance last year. He also gave assurances that despite the company’s policy being moderate on loans; its income would arise from short-term lending.

The commercial banking arm, First Bank Limited, with over 9.4 million customers in Africa’s biggest economy, accounts for around 93 percent of revenues, Maccido said, adding that the group has applied for a merchant banking license.

Maccido said the bank holding company was trading at a discount of 0.6 times book value relative to peers, but expected a rally in its share price this year after a rule restricting pension funds from investing in holding companies was lifted.

FBN Holdings proposed to pay 0.10 naira cash dividend for 2014 with a bonus of one new share for every 10 held, Maccido said because the group planned to retain a greater proportion of its earnings to fund growth rather than raising fresh funds.

In Mr Maccido words, “Capital market conditions are not ideal for raising funds because the market has been bearish over the past one year and going to the market will devalue our shareholders.”

FBN Holdings, a company with interest in lending, insurance and investments last week reported growth in 2014 pre-tax profit of 1.7 percent, driven by project and trade finance.Shares in FBN Holdings, which have risen 8 percent this year, fell 0.1 percent to 9.50 naira each on Monday. The stock fell 46 percent last year.


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