FBNH chairman assures shareholders on bumper earnings, dividends

Shareholders of FBN Holdings plc have been assured of bumper dividend in 2018, following strategies put in place to check impairments, manage cost, enhancing risk management frameworks and de-risking risk portfolios.

The assurance was given at the company’s 5th annual general meeting in Lagos, during which the shareholders not only approved the 20 kobo per share dividend or N7.2 billion total dividends, but lauded the company’s board for recording profitability in 2016 believed to be Nigeria’s most challenging 2016 financial year in the past ten years.

Dr. Oba Otudeko, Chairman FBNH Plc while assuring the shareholders of better performance and returns on their investments in the present year said “we are confident that our group’s sound governance structure, resilient business model and the continued momentum reflected in our strategic business will, guarantee valuable returns in 2017 and beyond.”

Otudeko said that 2016 was characterized with operational and environmental challenges that cut across all sectors including the finance sector, leading to weak performances recorded in the year under consideration.

According to the holding company’s chairman, in 2016, most economic indicators regressed remarkably an d for the first time in over a decade, inflation rate maintained upward momentum while economy contracted throughout the year.

He recalled that by the end of 2016 financial year, year on year headline inflation rate peaked at 18.6 per cent, against 9.1 per cent in the preceding year, developments he said impacted negatively across businesses in the country including FBNH Plc.

Ire respective of the challenges, Otudeko said that contributions by the subsidiaries remained upbeat as the company is positioned to outperform its 2016 record in 2017 ,based on strategic business strategy to guide against higher positioning as well as check cost and risk mitigation.

He revealed that the company’s gross earnings as at the ed of 2016 financial year stood at N581 billion, total asset close the year at N4.7 trillion, while active customers account stood at 12.4 million, revealing that First Bank has remained the leader in electronic banking services across the country with 2,779 automated teller machines across the country.

He said that though, First bank Limited, the group’s commercial banking subsidiary made the highest contribution of 91,5 per cent during the year, the profit was retained to grow the banks business and to boost its capital adequacy ratio(CAR).

The FBNH chairman said that the N7.18 billion dividend, representing 20 kobo per share, was made possible by the contributions of the merchant bank/ Investment and Insurance subsidiaries, which contributed 6.2 per cent and 2.1 per cent respectively to the Holding company’s earnings in 2016.

Mr. UK Eke, Group Managing Director, FBNHoldings Plc in his remark said that the N50 billion profit recorded by the commercial bank subsidiary was retained to enhance he future operations of the bank, adding that deploying the funds to pay higher dividend and returning to the market to raise funds, would be counterproductive.

Eke explained “ if your none performing loan ratio is above 10 per cent, then regulation restricts you from paying dividend, he added that if the N50 billion were deployed to dividend payment, shareholders would have received N1.43 per share.

He said that FBNH in 2916 recorded 14.3 per cent decline in cost to income ratio to 47. Per cent, from 61.3 per cent, in 2015.grooss earnings grew by 15.7 per cent year on year, while merchant banking and asset management business grew by 13,5 per cent, closing the year at N37billion, against N33 billion in the preceding year.