January 29, 2022


Accounting + Finance Blog

First Bank Holdings (FBH) Earns 22.4 billion profit for Half Year FS 2021

First Bank Holding (FBH) Earns 22.4 billion profit for Half Year FS 2021

The First bank holdings (FBN) earned 22.4 billion Naira in the half-year to June 2021 financial statement (FS). FBH is the group name for First bank (Nigeria’s top five banks). The half-year profit for the period when compared with the similar period for 2020 fell below expectation. The period to June 2020 profit was 38 billion. This is a fall in earnings by 41 percent.

Revenue of FBH in Half-year 2021

The revenue from the first bank holdings primary operation was 82.6 billion Naira in the period under review. The previous period shows an interest income of 161 billion Naira. For the company, 325 million and 587 million. The fall in interest revenue might be a decrease in loans and advance given to clients.

The bank recorded 57 million Naira as loans provided to customers as opposed to 61 million in the preceding period. Also, the group (that Is, first bank holdings) reported 880.3 billion Naira as loans and advances to other banks for the half-year to June 2021. But the previous period was 1.01 trillion Naira.

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Reported impairment loss for First Bank Holdings

Its impairment loss for first bank holdings dipped to 11.3 billion as opposed to 24.5 billion in the comparing periods. This may be as a result of the effective recovery of loans or the fall in the loan value for the period under consideration.

Why did First Bank Holdings Earnings decline?

As stated at the onset, FBH profit fell to 22.4 billion. Which was a 41 percent decline in earnings for the period. The reasons for this are:

Income: Interest income decreased to June 2021. The group reported 82.6 billion Naira as interest income which was a high shortfall from the other period. The half-year to June 2020 has a total interest income of 161 billion Naira.

Foreign Exchange loss: Another reason why profit for the period dipped was foreign exchange loss. Here, the company makes a huge loss of 2.2 billion Naira. This may be due to the devaluation of the Naira and the dollar exchange rate. Or FX rate adjustment that occurs in the earlier part of this year. Another possible reason is the continuous fall in the black market rate for foreign exchange.

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What else? Net gains on sale investment securities fell to 3.5 billion from 21.4 billion Naira. Net gains/(loss) from financial instruments at FVTPL was 19.3 billion. A sharp fall from 22.4 billion Naira. More so, Fee and commission income decreased to 35 billion Naira.

Cash and Cash Equivalent of FBH

The cash and cash equivalents of FBH were 1.630 trillion Naira. For the period to June 2020, it was 1.631 trillion Naira. You can say that the company maintained a high cash profile. This will help meet current obligations as they are available for payments.

Shareholders’ value of First bank holdings

The shareholders’ value for first bank holdings is 772 billion. For the comparing period, it was 765 billion Naira. The reason for the increase in shareholders’ value is the accumulated retained earnings. This increased to 155.2 billion Naira from 132.4 billion Naira.