FBN Falls To 13-Year Low After Earnings Warning

FBN Holdings Plc retreated to its lowest level in almost 13 years after Nigeria’s largest lender by assets warned that full-year 2015 earnings would drop from the previous year.
The Lagos-based bank’s shares fell 4.4 per cent to N3.47 per share by the market close on Wednesday, its lowest since August 2003.
“The reduction in earnings is as 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,” FBN said in a statement on the website of the Nigerian Stock Exchange. The reassessment is driven by the “challenging” economic environment along with fiscal and monetary headwinds which have resulted in a marked reduction in domestic output, the bank said.
Growth in Africa’s biggest oil producer is estimated to have slowed to three per cent last year, the lowest since 1999, according to its statistics agency. Nigeria, which relied on oil for about two-thirds of government revenue and 90 per cent of foreign-currency earnings in 2014 is reeling from a slump in crude prices. Meanwhile, businesses reliant on imports have been suffocated by Central Bank of Nigeria foreign-exchange restrictions aimed at keeping the naira pegged at N197- N199 per dollar since last March.
“Our merchant banking and asset management as well as insurance businesses remain strong and resilient,” FBN said.

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