FBN Holdings Plc has announced a total dividend of N14.35 billion, equating to 40 kobo per share, for the financial year ended December 2023. This announcement was made public through the company’s corporate action notification to the Nigerian Exchange Limited (NGX).
The Board of Directors of FBN Holdings recommended a dividend of 40 kobo per ordinary share of 50 kobo each, totaling N14.358 billion. This marks the second consecutive year that the company has maintained this dividend rate, with no increase from the previous year’s payout.
Despite the stagnant dividend growth, FBN Holdings closed the week with a share price of N20, translating to a modest dividend yield of 2%. This yield is notably lower compared to other members of the FUGAZ stocks, with UBA, GTCO, Access Corporation, and Zenith Bank declaring dividends of N2.8, N3.2, N2.1, and N4 per share, respectively.
The low dividend yield may be partly responsible for the falling share price of FBN Holdings, which saw an 11% decline last week. However, the company reported a record-breaking profit after tax of N310.4 billion, a significant increase from N136.3 billion in the previous year. This profit is the highest ever declared in the financial services giant’s more than 130-year history.
Key financial highlights from FBN Holdings’ 2023 full-year results include:
- Net Interest Income: Increased by 51% to N548.9 billion, up from N363.2 billion in 2022.
- Impairment Charge: Surged by 231%, reaching N227.4 billion compared to N68.6 billion in the previous year.
- Fees and Commissions: Grew by 64% to N193.1 billion, up from N117.6 billion.
- Operating Profit: Rose by 127% to N358 billion, from N157.7 billion.
- Earnings Per Share (EPS): More than doubled, increasing by 129% to N8.59 from N3.75.
The impressive profit growth underscores the company’s robust operational performance and strategic management, despite the static dividend. The increased profit and other positive financial metrics highlight the company’s strong market position and ability to generate substantial revenue streams.
However, the considerable rise in the impairment charge suggests an area of concern that the company needs to address to sustain its profitability. The surge in net interest income and fees and commissions indicates solid core banking activities, but the high impairment charge could signal underlying risks in the loan portfolio or broader economic challenges.