Nigeria's FBN Falls to 13-Year Low After Earnings Warning

  • Bank warns 2015 earnings below previous year on impairments
  • Other businesses remain resilient amid economic downturn

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 percent to 3.47 naira 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 3 percent 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 percent 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 197-199 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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