FBN Holdings Plc. (“FBNH” or “FBNHoldings” or the “Group”) today announces its audited results for the full year ended 31 December 2016.
- Gross earnings of N8billion, up 15.7% year-on-year (y-o-y) (Dec 2015: N502.7 billion)
- Net-interest income of N4 billion, up 14.8% y-o-y (Dec 2015: N265.2 billion)
- Non-interest income of N5 billion, up 68.9% y-o-y (Dec 2015: N97.9 billion)
- Operating income of N9 billion, up 29.4% y-o-y (Dec 2015: N363.1 billion)
- Impairment charge for credit losses of N0 billion (Dec 2015: N118.8 billion)
- Operating expenses of N9 billion, down 0.8% y-o-y (Dec 2015: N222.7 billion)
- Profit before tax of N9 billion, up 6.3% y-o-y (Dec 2015: N21.6 billion)
- Profit after tax N1 billion, up 10.3% y-o-y (Dec 2015: N15.5 billion)
Statement of Financial Position
- Total assets of N7 trillion, up 13.7% (Dec 2015: N4.2 trillion)
- Customer deposits of N1 trillion, up 4.5% (Dec 2015: N3.0 trillion)
- Customer loans and advances (net) of N1 trillion, up 14.7% (Dec 2015: N1.8 trillion)
- Post-tax return on average equity of 3.0% (Dec 2015: 2.8%)
- Post-tax return on average assets of 0.4% (Dec 2015: 0.4%)
- Net-interest margin of 8.8% (Dec 2015: 8.1%)
- Cost to income ratio of 47.0% (Dec 2015: 61.3%)
- NPL ratio of 24.4% (Dec 2015: 18.1%)
- 7% liquidity ratio (FirstBank (Nigeria)) (Dec 2015: 58.6%)
- 8% Basel 2 capital adequacy ratio ((FirstBank (Nigeria)) (Dec 2015: 17.1%)
- 6% Basel 2 CAR (FBN Merchant Bank) (Dec 2015: 23.0%)
- Key leadership changes across the group:
- Appointed new executives within the Commercial Banking group
- Executive Director – Corporate Banking
- Chief Risk Officer
- Chief Financial Officer
- Group Executive, Technology and Services
- Overhauled the Risk Management framework and governance of the Commercial banking group
- African Development Bank (AfDB) approval of $300 million to refinance FirstBank’s trade finance transactions
- FirstBank sustained its leadership as the only financial institution in Nigeria to achieve 100 million electronic-banking transactions per month.
- Launched *894# USSD banking service to deepen financial inclusion
- FBN Insurance now the fastest growing Insurance company in Nigeria
Selected Financial Summary
|∆%||Key Ratios %||FY
|Gross earnings||581.8||502.7||15.7||Post-tax return on average equity||3.0||2.8|
|Interest income||405.3||395.2||2.6||Post-tax return on average assets||0.4||0.4|
|Net-interest income||304.4||265.2||14.8||Earnings yield||11.7||12.1|
|Non-interest income||165.5||97.9||68.9||Net-interest margin||8.8||8.1|
|Operating Income||469.9||363.1||29.4||Cost of funds||2.8||3.7|
|Impairment charge for credit losses||226.0||118.8||90.3||Cost to income||47.0||61.3|
|Operating expenses||220.9||222.7||-0.8||Gross loans to deposits||77.1||65.9|
|Profit before tax||22.9||21.6||6.3||Liquidity (FirstBank(Nigeria))||52.7||58.6|
|Profit after tax||17.1||15.5||10.3||Capital adequacy (FirstBank (Nigeria))||17.8||17.1|
|Basic EPS (kobo)||53||44||-20.4||Capital adequacy
(FBN Merchant Bank)
|Total assets||4,736.8||4,166.2||13.7||NPL/Gross Loans||24.4||18.1|
|Customer loans & advances (Net)||2,083.9||1,817.3||14.7||NPL coverage||57.3||40.2|
|Customer deposits||3,104.2||2,970.9||4.5||PPOP/impairment charge (times)||1.1||1.2|
|Non-performing loans||584.2||353.5||65.2||Cost of risk||10.4||5.7|
|Shareholders’ funds||582.6||578.8||0.7||Leverage (times)||8.1||7.2|
Commenting on the results, UK Eke, the Group Managing Director said:
“2016 has been a year characterised by significant uncertainty in the operating environment. Despite this, FBNHoldings has delivered a solid performance while focusing on addressing the pre-existing issues in the loan book which resulted in the current loan loss. This performance has been achieved through ongoing initiatives in driving efficiency across the various businesses, transforming the risk management and control environment, containing cost, as well as enhancing revenue generation from the banking and non-banking subsidiaries.
We expect an improved economic environment through 2017 and are confident that the foundations we have put in place will drive improved financial performance and consequently enhance shareholder returns.”
Group Financial Review
Gross earnings increased by 15.7% y-o-y to N581.8 billion (Dec 2015: N502.7 billion), driven by 2.6% y-o-y growth in interest income to N405.3 billion and 68.9% y-o-y growth in non-interest income to N165.5 billion. This highlights the revenue generating capacity of the Group despite the challenging business environment and it clearly demonstrates the resilience of our business and is consistent with our aspiration of becoming the foremost financial services company in Middle Africa.
Net-interest income closed at N304.4 billion (Dec 2015: N265.2 billion), a growth of 14.8% y-o-y driven by a 22.4% reduction in interest expense to N100.8 billion (Dec 2015: N130.0 billion) and a 2.6% y-o-y increase in interest income to N405.3 billion (Dec 2015: N395.2).
The reduction in interest expense is in line with our deliberate strategy of letting off expensive customers’ deposits and only accepting deposits that are within our price ranges. This initiative resulted in 24.5% y-o-y decline in interest in customers’ deposits closing at N78.8 billion (Dec 2015: N104.2 billion). The gain in interest to customers was however partly offset by the 22.9% y-o-y increase on borrowings to N18.8 billion (Dec 2015: N15.3 billion), primarily driven by translation effect of the devaluation of the currency.
The growth in interest income was driven primarily by 14.2% y-o-y growth in interest in investment securities to N115.4 billion (Dec 2015: N101.0 billion) as interest earning investment securities grew by 23.1% y-o-y to N1,194 billion (Dec 2015: N970.2 billion). Interest on customer loans on the other hand grew marginally by 0.2% as loans to customers grew by a 14.7% y-o-y. However, the growth in customer loans was essentially driven by the translation effect of the currency movement.
Cost of funds improved to 2.8% (Dec 2015: 3.7%) indicating better efficiency in pricing. While blended cost of borrowings increased to 6.6% from 5.3% in the prior year, blended cost of bank and customer deposits declined to 1.2% and 2.6% from 6.6% and 3.5% respectively. Average yield on assets declined marginally from 12.1% to 11.7% by 2016 year end. Consequently, net interest margin increased to 8.8% from 8.1% in the prior year.
Non-interest income (NII) increased by 68.9% y-o-y to N165.5 billion (Dec 2015: N97.9billion) contributing 35.2% to net revenue (Dec 2015: 26.9%). The increase in non-interest income can be attributed to the foreign exchange translation gain as well as an increase in fees and commission income. Foreign exchange income for the year increased to N89.1 billion (Dec 2015: N22.2 billion), representing 53.8% of non-interest income (Dec 2015: 22.7%). The revaluation gain arose from exchange rate movements on the Group’s long foreign currency balance sheet position as at reporting date.
Fees and commission (F&C) income, representing 43.1% (Dec 2015: 65.2%) of total non-interest income, grew by 11.7% to N71.4 billion (Dec 2015: N63.9 billion). The growth in F&C income is driven predominantly by a 42.1% y-o-y increase in electronic banking fees to N21.8 billion (Dec 2015: N15.4 billion) and to a lesser extent, remittance fees and money transfer commissions increase to N5.4 billion (+18.4% y-o-y) and N5.2 billion (+64.2% y-o-y) respectively. This was partly offset by a 2.2% decline in account maintenance fees to N15.6 billion (Dec 2015: N16.0). Electronic banking fees is now the highest component of F&C at 30.6% (Dec 2015: 24.1%), with account maintenance fees accounting for 21.9% of F&C (Dec 2015: 25.0%).
In line with our Group strategy, we remain focused on extracting the opportunities within our business and improve revenue generation. In line with this initiative, the non-interest income of the group was enhanced by the 14.8% growth of our net insurance premium revenue of N8.4 billion (Dec 2015: N7.3 billion). Similarly, financial advisory fees from our merchant banking and assets management business contributed to the growth in total financial advisory income to N7.1 billion at the end of December 2016 from N5.3 billion at the end of December 2015 and contributing 10.0% to group fees and commission income.
Operating expenses declined by 0.8% y-o-y to N220.9 billion (Dec 2015: N222.7 billion) despite the high inflationary environment. This demonstrates the success of our cost optimisation initiatives which resulted in increased operational efficiency of our business and in a decline in: regulatory costs (-4.0%, N1.2 billion) to N28.8 billion, advert and corporate promotions (-25.3%, N2.1 billion) to N6.3 billion, directors remuneration (-45.0%, N2.9 billion) to N3.5 billion, legal and professional fees (-19.7%, N1.2 billion) to N4.9 billion, net insurance claims (-33.8%, N1.1 billion) to N2.2 billion amongst other several cost line declines. These costs savings were however partly offset by some operational expenses partly due to the inflationary environment. These include: maintenance cost (+18.4%, N3.5 billion) to N22.8 billion, staff cost (+4.7%, N3.7 billion) to N83.8 billion, operational and other losses (+174.7%, N3.8 billion) to N6.0 billion.
Notwithstanding what we have achieved so far, we will continue to focus on operational efficiency to further improve current results. Currently, we are implementing the First Share Service (FSS) initiative which aims at centralising transaction processes at the branches. This ensures that the Commercial Bank optimises its human resources, leverages the technology platform and frees-up resources for market facing activities including revenue generation. Furthermore, the ongoing implementation of our ERP/ERM project in addition with other initiatives including the Group Share Service project, will fundamentally change the way we operate and further drive down operating cost.
Cost-to-income ratio improved to 47.0% (Dec 2015: 61.3%) following strong operating income growth and a sustained decline in operating expenses. Current improvement has been achieved largely through entrenched discipline in budget and procurement, optimising manning levels across functions and other conscious cost containment measures of the Group. We remain resolute in our commitment to further enhance our efficiency level.
Net impairment charge on credit losses amounted to N226.0 billion (Dec 2015: N118.8 billion), largely driven by the translation effect of the foreign currency portfolio due to the Naira devaluation as well as one-off exceptional credit charge from legacy exposures in subsidiaries. Credit losses are predominately driven by the oil and gas sector exposures and to a lesser extent real estate/residential mortgages, general commerce and the general sectors. As a result, Cost of risk increased to 10.4% (Dec 2015: 5.7%), while NPL ratio closed at 24.4% (Dec 2015: 18.1%).
We have remained focused on remediation and recovery activities towards declassifying non-performing accounts and driving asset quality improvements. In line with this, we have made significant progress on remediation and recovery of NPLs in the last nine months. One of the three major accounts contributing to the NPL has been fully restructured and will be reclassified as a performing loan in 2017 in line with IFRS guideline, while asset realization is at advanced stage on the second material NPL.
Resolution on Atlantic Energy has taken longer than expected but despite the delays we are confident in achieving a positive outcome in the near future.
Profit before tax closed 6.3% higher y-o-y at N22.9 billion (Dec 2015: N21.6 billion). Income tax expense was N5.8 billion (Dec 2015: N6.0 billion), resulting in an effective tax rate for the period at 25.3% (Dec 2015: 28.0%). This resulted in earnings per share of N0.53 (Dec 2015: N0.44), with post-tax return on average equity of 3.0% (Dec 2015: 2.8%) and post-tax return19 on average total assets of 0.4% (Dec 2015: 0.4%).
Statement of Financial Position
Total assets increased by 13.7% y-o-y to N4.7 trillion (Dec 2015: N4.2 trillion) driven by: increase in loans to customers as well as growth in investment securities. Net loans to customers grew by 14.7% to N2.1 trillion (Dec 2015: N1.8 trillion), while total investment securities were up by 23.8% y-o-y to N1.3 trillion (Dec 2015: N1.0 trillion). Total interest earning assets grew by 17.7% y-o-y to N3.7 trillion from N3.2 trillion, representing 79.0% of total assets (Dec 2015: 76.3%).
Total customer deposits rose by 4.5% y-o-y to N3.1 trillion (Dec 2015: N3.0 trillion). We continue to focus on ensuring an appropriate deposit mix at the optimum price. Low-cost deposits now represent 72.9% of the Group’s total deposits, up from 67.3% as at December 2015. The growth in deposit has been driven by a 14.8% and 31.5% increase in savings and domiciliary deposits to N952.7 billion (Dec 2015: N829.8 billion) and N564.7 billion (Dec 2015: N429.4 billion) respectively, with term deposits declining by 13.2% y-o-y to N842.3 billion (Dec 2015: N970.4 billion). This is testament to the strength of our franchise as well as of our ability to attract a well-diversified funding base, despite the difficult market environment. Within FirstBank(Nigeria) retail banking deposits continue to grow strongly at 70.6% of total deposits (Dec 2015: 67.7%) as deposits in other business lines grew stronger during the year. Foreign currency deposits now represent 18.2% of the Group’s total deposits (Dec 2015: 14.5%) but 18.9% (Dec 2015: 17.8%) of the FirstBank (Nigeria) deposits at N470.7 billion.
At year end, FirstBank(Nigeria) had N536.95 billion (Dec 2015: N473.1 billion) in mandatory CRR balances, representing 22.5% of qualifying deposits with Central Bank of Nigeria (CBN). This amount represents 21.6% of the Bank’s customer deposits.
Total loans & advances to customers (net) increased by 14.7% y-o-y to N2.1 trillion (Dec 2015: N1.8 trillion), driven by the translation effect of the Naira devaluation. As a result, FCY loans now constitute 51.1% of the loan portfolio (Dec 2015: 44.7%). The oil and gas sector which was predominantly impacted by the devaluation now accounts for 42.2% of the loan portfolio with the upstream segment accounting for 21.3%, downstream at 14.1% and services at 6.8%. Accordingly, the impact of devaluation because of translation including a classified legacy loan in one of our subsidiaries contributed to the growth in the non-performing loan book and the corresponding impairment charge.
There have been intense remediation and recovery activities for prompt declassification of the non-performing accounts. Significant progress has been made with approximately 5% of the loan book restructured. Oil and gas constitute about 70% of the restructured loans, with upstream at 30% and downstream and midstream (oil services) at 70%. Portfolio of subsidiaries reflect legacy assets but analysis indicate NPLs are less than 2%.
Furthermore, we have implemented various initiatives and overhauled our risk management approach from origination to recovery. Considerable emphasis has been placed on ensuring quality at entry, based on moderate risk appetite as well as an increase in portfolio diversification along obligor, industry, product and geography in the three-year portfolio strategy plan. We have seen progressive improvement in risk indicators from NPL, portfolio diversification to reverse trend in NPL formation.
Other key initiatives that have been instituted to prevent a recurrence of past events include a holistic culture change, retooling, training and automation of the credit process. To further strengthen the risk environment, we are overhauling the risk management framework across our subsidiary businesses including risk appetite, target market and risk acceptance criteria to align with moderate risk appetite. Similarly, the governance model and oversight of the subsidiaries has been enhanced through centralising the coordination of subsidiary risk management.
We continue to de-risk the balance sheet, especially from currency movement by converting loans from FCY to Naira as we prioritise loan growth to top tier corporates, trade and export oriented transactions as well as the retail and consumer segments. We expect improvements in asset quality to manifest by end 2017 through 2018.
Shareholders’ funds closed at N582.6 billion, up 0.7% y-o-y (Dec 2015: N578.8 billion), benefitting from revaluation gains of N26.7 billion, taking foreign currency translation reserves to N34.8 billion (Dec 2015: N8.0 billion) as well as statutory credit reserve of N21.2 billion, closing at N23.6 billion (Dec 2015: N2.4 billion). This was partly offset by a y-o-y decline in share premium and AFS fair value reserve by 7.7% and 51.1% to N233.4 billion and N27.5 billion respectively.
Capital adequacy ratio for FirstBank (Nigeria) closed at 17.8% (Dec 2015: 17.1%) above the current regulatory minimum of 15%, while tier 1 ratio was 13.97% (Dec 2015: 13.3%). Capital adequacy ratio for FBN Merchant Bank closed at 22.6% (Dec 2015: 23.0%) above the 10% required by regulation for Merchant Banks, with a tier 1 ratio of 25.9% (Dec 2015: 22.6%).
A dividend per share of N0.20 (133% of 2015 dividend payment) is proposed to shareholders. FBNHoldings’ ability to declare dividend whilst retaining all earnings at the Commercial Bank to support growth underpins the diversification of the Group’s earnings wherein other non-bank subsidiaries have been able to cushion the performance of the Group.
Liquidity ratio for FirstBank (Nigeria) closed at a healthy 52.7% (Dec 2015: 58.6%) above the 30% regulatory mark demonstrating the strong and stable funding profile of the franchise.
- Gross earnings of N5 billion, up 15.0% y-o-y (Dec 2015: N465.8 billion)
- Net interest income of N3 billion, up 13.6% y-o-y (Dec 2015: N258.9billion)
- Non-interest income of N4 billion, up 84.5% y-o-y (Dec 2015: N76.1 billion)
- Operating expenses of N0 billion, down 0.3% y-o-y (Dec 2015: N199.7 billion)
- Profit before tax of N7 billion, down 4.9% y-o-y (Dec 2015: N10.2 billion)
- Profit after tax of N8 billion, over 100% y-o-y (Dec 2015: N2.9 billion)
- Total assets of N51 trillion, up 13.6% y-o-y (Dec 2015: N3.97 trillion)
- Customers’ loans and advances (net) of N09 trillion, up 14.9% y-o-y (Dec 2015: N1.82 trillion)
- Customers’ deposits of N0 trillion, up 4.3% y-o-y (Dec 2015: N2.9 trillion)
Commenting on the results Dr. Adesola Adeduntan, the MD/CEO of FirstBank and subsidiaries said:
“The Commercial Banking group has delivered a robust performance with a 15.6% y-o-y growth in gross earnings to N535.5 billion in a challenging operating environment while addressing the quality of the asset portfolio and overhauling the group risk management governance and architecture.
During the year, we strengthened leadership in key business areas ensuring we have the appropriate skillset in place to drive us forward. We remain resolute in our commitment to transform the bank’s risk management approach towards sustainable improvement in asset quality, enhancing the revenue generation capacity of our business and optimising costs. In all, we will ensure profitable growth of the group leveraging technology to drive innovation as we position for improved performance”
FirstBank (Nigeria) (“FirstBank”)
Gross earnings grew by 13.5% y-o-y to N478.2 billion (Dec 2015: N421.2 billion), driven by the 72.2% y-o-y increase in non-interest income to N127.5 billion (Dec 2015: N74.0 billion). Interest income remained flat, up only 0.5% to N339.3 billion (Dec 2015: N337.8 billion) with interest from investment securities, contributing 28.0% to total interest income, increased by 13.5% y-o-y to N95.0 billion (Dec 2015: N83.7 billion). This growth was offset primarily by the decline in interest on loans to customers by 3.5% to N234.3 billion (Dec 2015: N242.8 billion). The impact of the flat interest income was mitigated by a 27.4% y-o-y reduction in interest expense to N79.7 billion (Dec 2015: N109.9 billion), in line with our strategic objective of improving efficiencies in our pricing structure. As a result, net interest margins grew stronger to 10.2% from 9.1% in the previous year as net interest income improved by 13.9% y-o-y to N259.6 billion (Dec 2015: N227.9 billion)
Non-interest income was largely driven by gains in foreign exchange income (>100%) and fees and commission income (+12.0%) resulting in a 72.2% y-o-y growth to N127.5 billion (Dec N74.0 billion). Fees from electronic banking (+42.1% y-o-y) and account maintenance (+>100% y-o-y) essentially contributed to the growth in F&C, followed by money transfer commission (+65.5% y-o-y) and funds transfer & intermediation fees (+25.9% y-o-y) to a lesser extent.
Cost-to-income ratio at FirstBank (Nigeria) improved strongly from 59.3% in the previous year to 44.9% as at the end of the 2016 financial year. This is as a result of the 28.2% y-o-y growth in operating income to N387.0 billion (Dec 2015: N301.9 billion) supported by a 3.0% y-o-y decrease in operating expenses to N173.6 billion (Dec 2015: N179.0 billion). Reflected in the growth in electronic banking is the introduction of the USSD banking service, with over one million users currently, deepening financial inclusion by providing an alternative platform to customers to perform simple banking transactions without the use of a smart phone or internet service.
Asset quality challenges exacerbated by the scarcity of foreign currency to repay maturing obligations and the impact of foreign currency translation resulted in cost of risk of 9.1% from a 24.8% NPL with a coverage ratio of 50.3%. Despite this challenges, FirstBank(Nigeria) remained resilient and returned a stronger profit before tax of N53.5 billion (Dec 2015: N2.8 billion).
The Commercial Banking business contributed 91.4% (Dec 2015: 91.4%) to gross earnings of the Group and 38.4% (Dec 2015: 44.1%) profit before tax.
Merchant Banking & Asset Management (MBAM)/ FBNQuest
Notwithstanding the challenging operating environment, the merchant banking and asset management businesses recorded a strong performance, demonstrating the resilient and diversified nature of the business portfolio.
Total revenue increased by 13.5% to N37.8 billion from N33.3 billion in Dec. 2015 while profit before tax increased by 28.8% to N13.7 billion from N10.6 billion in Dec 2015. This performance reaffirms our position as one of the leading players in the merchant banking and asset management segment.
Assets under management (AuM) across the group (FBN Capital Asset Management and FBN Trustees) dipped slightly by 3% to close at N211 billion while total assets closed at N195.1 billion. Our businesses are well capitalised, with total group equity of N48.1 billion, capital adequacy of about 22.6%, and 14% growth in the loan portfolio for the merchant bank.
Our equities brokerage business moved up one position to rank 5th in the top ten broker ranking, while our asset management business closed the year in the 3rd position based on SEC registered funds (2nd position in 2015) now back to the 2nd position as at end of first quarter 2017.
Looking ahead, we expect the weak macroeconomic conditions to prevail in the first half of the year and anticipate a gradual pickup in business activity from the second half of 2017. We will continue to progress with organisational restructuring and optimisation of the merchant banking license. Our strategy remains to continue to accelerate growth, optimise internal and external collaboration, and excel in delivery by leveraging technology.
The Merchant Banking and Asset Management business contributed 6.4% (Dec 2015: 6.5%) to gross earnings of the Group and 49.3% (Dec 2015: 46.1%) profit before tax.
The insurance industry, similar to the rest of the financial services industry, was impacted by the volatile macroeconomic and operating environment in 2016. The decelerating trends had huge impacts on the Nigerian insurance industry as players re-evaluated their business approaches with a view to delivering optimal value to stakeholders. The industry also witnessed a number of reformatory initiatives from the regulator including the implementation of the 2009 corporate governance code and a draft road map for the transition to Risk Based Supervision (RBS) to enhance corporate governance and develop a focused risk supervisory approach in the industry.
In spite of the prevailing headwinds, we remained resolute in delivering a strong performance, further supporting our strategic view of positioning the group as a leading underwriting business in the country. Amidst the economic challenges, the Gross Premium Written within the insurance group increased by 6.0% to close at N11.6 billion (Dec 2015: N10.9 billion) with total revenue for the group increasing by 18.9% y-o-y to N12.5 billion in 2015 from N10.5 billion in 2015, while profit before tax rose to N3.4 billion, up 50.4% y-o-y for the year Dec 2015, from N2.3 billion in Dec 2015. The business group closed with a 36.9% y-o-y increase in Total assets to N32.3 billion (Dec 2015: N23.6 billion).
The success of the business in 2016 can be attributed to deeper retail penetration essentially in the life business and corporates in the general business. Other drivers include a combination of product innovation, robust risk management and efficient service delivery with increased investment income on account of improvement in securities yield. Going forward, we will remain focused on deepening our retail life footprints, which we consider as a sustainable market segment while driving agency expansion and enhancing productivity. Furthermore, we will expand annuity sales to new locations, enhance operational efficiency and effectiveness across key organisational functions and leverage on technology for superior service delivery to customers. Overall, we are confident that in 2017, we will once again build on the successes of previous years.
The insurance business contributed 2.1% (Dec 2015: 2.1%) to gross earnings of the Group and 12.3% (Dec 2015: 9.8%) to profit before tax.
 Prior year numbers have been adjusted for appropriate year-on-year comparison following respective board decisions to dispose and divest from Rainbow Town Development Limited and FBN Mortgages Limited. These assets have been classified as held for sale / discontinued operations
 For continuing operation
 Appointments in the CBN regulated entities are subject to approval
 Post-tax return on average equity is computed as profit after tax before discontinued operations divided by the average of opening and closing balances attributable to equity holders
 Post-tax return on average assets is computed as profit after tax before discontinued operations divided by the average of opening and closing balances of its total assets
 Earnings yield is computed as interest income divided by the average opening and closing balances of interest earning assets
 Non-interest income is net of fee and commission expenses
 Net-interest margin is computed as net interest income divided by the average opening and closing balances of interest earning assets
 Operating income is defined as net interest income plus non-interest income
 Cost of funds is computed as interest expense divided by average interest bearing liabilities
 Cost to income ratio computed as operating expenses divided by operating income
 Basic EPS is computed as profit after tax from continuing operations attributable to shareholders divided by average number of shares in issue
 NPL coverage is computed as loan loss provisions plus statutory credit reserve divided by gross NPLs
 PPOP – Pre-provision operating profit is computed as sum of operating profit and impairment charge
 Cost of risk is computed as credit impairment charges divided by the average opening and closing gross loans balances
 Total assets divided by shareholders’ equity
 BVPS – Book Value Per Share computed as total equity divided by number of outstanding shares
 AMCON and NDIC costs. AMCON cost dropped by 4.5% y-o-y to N16.8 billion from N17.6 billion while NDIC decreased by 2.5% y-o-y to N12.1 billion from N12.4 billion
 From continued operations
 Interest earning investment securities grew by 23.1% y-o-y from N970 billion to N1.2 trillion
 Adjusting for the impact of Naira devaluation, the Group’s deposit book would have declined by 2.5%
 Including Private Banking
 Pre-devaluation in June 2016, foreign currency loans represented 42.9% of total loans
 Please refer to the ‘Notes to Editors’ section on page14 for the companies in each business group
 The pre-consolidation numbers of each of the business groups have been considered in discussing their performance
 Post consolidation, the Commercial Banking, Merchant Bank & Asset Management, Insurance and Others contributed 91.6%, 6.2%, 2.1% and 0.2% (Dec 2015: 90.9%, 6.6%, 2.0% and 0.6%) respectively to the Group’s gross earnings and 36.1%, 59.7%, 14.9% and -10.7% (Dec 2015: 56.0%, 47.9%, 10.0% and -14.0%) to the Group’s profit before tax.
 This relates to FirstBank Nigeria only
 Following the acquisition of the Merchant Banking License in the latter part of 2015, the Merchant Banking & Asset Management Business (MBAM) is also known as FBNQuest