FBN Holdings issues profit warning for the year

Nigeria’s oldest and leading banking group, First Bank of Nigeria Holdings has issued a profit warning to stakeholders, saying earnings “will be materially below that of the prior year”.

In a statement sent to the Nigerian Stock Exchange today, the company secretary, Tijjani Borodo, said the warning has become necessary after the review of the management accounts for 2015.

Borodo said the reduction in earnings “is a result of the recognition of impairment charges on some specific accounts resulting from a reassessment of the loan portfolio within our commercial banking business.

“This reassessment was driven by the challenging macro economic environment, coupled with fiscal and monetary headwinds which have resulted in marked reduction in domestic output.

“This is a prudent measure being taken while the Bank has commenced active remedial action on the specific impaired accounts”.

Borodo however said the Holdings merchant banking and asset management as well as insurance business remain strong and resilient.

FBN Holdings Plc, in 2014 made a PAT of N82.8 billion, as against N70.6 billion in 2013

Its gross earnings grew to N480.6 billion, from N396.2 billion in 2013.

The group paid a cash dividend of N0.10k per 50 kobo Ordinary Share and a scrip (bonus) issue of one (1) Share for every ten shares held amounting to a total distribution of N1.05k per share.

FBN Holdings is the second Nigerian financial institution to give a profit warning this year. The first was FCMB Group, which issued a warning in January, saying that earnings in Q3 and Q4 will be materially lower than projected.

Since the disclosure, FCMB’s share price has been trading at less than 80kobo, from its height of N3.73 in April last year.

Similarly FBN Holding stock was trading at about N3.47 today on the Lagos bourse, declining by 4.41 per cent as news of the profit warning sank home.

*Reported By Bayo Onanuga