FBN : QUARTER 5 - FINANCIAL STATEMENT FOR 2022

FBN Holdings Plc.

Separate and Consolidated Financial Statements for the year ended 31 December 2022

FBN Holdings Plc.

Index to the separate and consolidated financial statements for the year ended 31 December 2022

Note		Page	Note		Page
	Directors and advisors	1	8	Interest expense	115
	Corporate Governance Report	2	9	Impairment charge for credit losses	115
	Director's report	23	10a	Fee and commission income	116
	Responsibility for annual financial statements	27	10b	Fee and commission expense	116
	Statement of corporate responsibility	28	11	Foreign exchange income	116
	Statement of compliance with NSE listing rule on Securities	29
	Trading Policy		12	Net gains/(losses) on sale of investment securities	116
	Report of the Audit Committee	30	13	Net (losses)/gains from financial instruments at FVTPL	117
	Report of the Independent Auditors	31	14	Dividend income	117
	Separate and consolidated statement of profit or loss	36	15	Other operating income	117
	Separate and consolidated statement of comprehensive	37	16	Personnel expenses	117
	income
	Separate and consolidated statement of financial position	38	17	Other operating expenses	118
	Separate statement of changes in equity	39	18	Taxation - income tax expense and liability	118
	Consolidated statement of changes in equity	40	19	Cash and balances with central banks	119
	Separate and Consolidated statement of cash flows	41	20	Cash and cash equivalents	120
			21
	Notes to the separate and consolidated financial statements			Loans and advances to banks	120
1	General information	42	22	Loans and advances to customers	120
			23	Financial assets and liabilities at fair value through profit or	123
2	Summary of significant accounting policies	42		loss
2.1	Basis of preparation	42	24	Investment securities	125
2.2	Changes in accounting policy and dislosures	43	25	Asset pledged as collateral	126
2.3	Consolidation	43	26	Other assets	127
2.4	Segment reporting	45	27	Investment in associates	128
2.5	Common control transactions	45	28	Investment in subsidiaries	129
2.6	Foreign currency translation	45	29	Asset Held for Sale: Discontinued operations	133
2.7	Income taxation	46	30	Property and equipment	135
2.8	Inventories	47	31	Intangible assets	138
2.9	Financial assets and liabilities	47	32	Deferred tax assets and liabilities	141
2.10	Revenue recognition	53	33	Deposits from banks	142
2.11	Impairment of non-financial assets	55	34	Deposits from customers	142
2.12	Discontinued operations	55	35	Other liabilities	143
2.13	Collateral	56	36	Borrowings	144
2.14	Leases	56	37	Retirement benefit obligations	146
2.15	Property and equipment	59	38	Share capital	149
2.16	Intangible assets	59	39	Share premium and reserves	149
2.17	Cash and cash equivalents	60	40	Non-controlling interests	150
2.18	Employee benefits	61	41	Cashflow workings	150
2.19	Provisions	62	42	Commitments and contingencies	152
2.20	Fiduciary activities	62	43	Offsetting financial assets and financial liabilities	153
2.21	Issued debt and equity securities	62	44	Related party transactions	154
2.22	Share capital	62	45	Directors' emoluments	155
2.23	Financial guarantees	62	46	Compliance with regulations	155
3	Financial risk management	64	47	Events after statement of financial position date	155
3.1	Introduction and overview	64	48	Dividends per share	155
3.2	Credit risk	66	49	Earnings per share	156
3.3	Liquidity risk	91	50	Restatement note	156
3.4	Market risk	95
3.5	Equity risk	102		Other National Disclosures and Other Information
3.6	Fair value of financial assets and liabilities	103		Evaluation of the impact of COVID-19	158
4	Capital management	108		Statement of value added	160
5	Significant accounting judgements, estimates and	111		Five year financial summary
	assumptions				162
6	Segment information	113
7	Interest income	115

FBN Holdings Plc.
DIRECTORS AND ADVISORS
DIRECTORS
Ahmad Abdullahi	Non-Executive Director (Group Chairman)
Nnamdi Okonkwo	Group Managing Director - with effect from January 1, 2022
Oyewale Ariyibi	Executive Director (Appointed on August 16, 2022)
Adesola Adeduntan	Non-Executive Director
Abiodun Oluwole Fatade	Non-Executive Director
Alimi Abdul-Razaq	Non-Executive Director
Peter Aliogo	Non-Executive Director
Ahmed Modibbo	Non-Executive Director
Kofo Dosekun	Non-Executive Director
Khalifa Imam	Non-Executive Director
Julius B. Omodayo-Owotuga	Non-Executive Director
AG. COMPANY SECRETARY:	Adewale Arogundade
REGISTERED OFFICE:	Samuel Asabia House
	35 Marina
	Lagos
AUDITOR:	KPMG Professional Services
	KPMG Tower, Bishop Aboyade Cole Street,
	Victoria Island, Lagos
	Telephone: [phone]
	Website: www.kpmg.com/ng
REGISTRAR:	Meristem Registrars & Probate Services Limited
	213 Herbert Macaulay Way
	Yaba
	Lagos
BANKERS:	First Bank of Nigeria Limited
	35 Marina
	Lagos
	FBNQuest Merchant Bank Limited
	10 Keffi Street, Ikoyi
	Lagos
TAX IDENTIFICATION NUMBER:	15562790-0001
RC NUMBER:	916455

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CORPORATE GOVERNANCE REPORT

Introduction

FBNHoldings is dedicated to upholding high standards of corporate governance across the Group to maintain the company's long-term business sustainability and create value for all its stakeholders. As a Group, we are committed to defining frontiers for market dominance in the highly competitive and dynamic financial services industry. Thus, the principles of accountability, strong risk management, transparency and integrity are inherent in the Group's values, culture, processes and operating structures

The Board recognises the importance of operating in a manner that is consistent with best corporate governance practices. As a result, the Board provides purpose-driven and ethical leadership by setting the tone from the top in how it conducts itself and oversees the operations and management of the Group. It ensures good governance principles are adopted across the Group to achieve its imperatives.

Our governance framework is designed to ensure compliance with international best practices and the Companies and Allied Matters Act 2020, the Nigerian Code of Corporate Governance 2018 issued by the Financial Reporting Council (FRC), the Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014 issued by the Central Bank of Nigeria (CBN), the Securities and Exchange Commission's (SEC) Corporate Governance Guidelines 2020 and Corporate Governance Guidelines issued by the National Insurance Commission (NAICOM). At the Group and across the operating entities, the Boards operate through various Committees. FBNHoldings' governance framework ensures a dynamic blend of Board autonomy and Group coordination at the operating company level.

Diversity

Through robust policies and procedures, FBNHoldings creates an environment that promotes equal opportunity, diversity, fairness, respect and inclusion for better decision-making and effective governance. Diversity ensures the Group assembles a healthy mix of people from different backgrounds, cultures and experiences to balance the voices, perspectives, insights and empathy required to thrive. We believe recruiting employees from diverse backgrounds, experiences, expertise and knowledge will improve innovation, the quality of our products and service offerings and employee productivity. This ultimately supports the values created. Diversity within FBNHoldings is reflected not only in the gender mix, which aligns with CBN's recommendations but also through the Group's various viewpoints, experiences, cultures, nationalities, religions, social and academic backgrounds and inclusive policies that prevent any form of discrimination.

Shareholder and Regulatory Engagement

Our stakeholders, which include customers, shareholders, employees, regulators, partners and the community are crucial to the success of our business. They provide the patronage, capital, skills, guidance, support and regulatory framework that shape our operations. While their interests and concerns are often diverse and may conflict, our ability to build sustainable relationships and open lines of communication is vital to success. The Board and Management remain committed to effective stakeholder engagement and interact through shareholder groups and other platforms. Engagement sessions provide valuable opportunities for the Board and Management to listen to external perspectives and gain insight into stakeholders' concerns. We are committed to engaging regulators to foster an atmosphere of trust and goodwill and ensure the highest level of compliance with relevant extant regulations across the Group.

Appointment Philosophy

The appointment philosophy of FBNHoldings is guided by regulatory guidelines, laws, and global best practices. The Company selects Directors based on their skills, competencies and experience. The Board Governance and Nomination Committee identifies and recommends candidates to the Board. In accordance with legal and regulatory requirements, the Board then deliberates and decides on the appointment of the most qualified candidates, subject to the approval of the applicable regulatory authorities and the shareholders at the Annual General Meeting (AGM).

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Board Composition

There are eleven Directors: seven Independent Non-Executive Directors (INED), two Non-Executive Directors (NED) and two Executive Directors. This composition aligns with global best practices that encourage a higher ratio of Independent Non-Executive Directors to Executive Directors. All Directors are distinguished by their professional ability, integrity, and independence of opinion.

Board Changes

In 2022, the FBNHoldings' Board of Directors appointed Samson Oyewale Ariyibi as Executive Director, Finance, Investment Management and Oversight with effect from August 16, 2022.

Leadership

Alhaji Ahmad Abdullahi

Group Chairman

Alhaji Ahmad Abdullahi was appointed Group Chairman of the Board of Directors of FBN Holdings Plc on 17 December 2021. He is a seasoned economist and an accomplished professional with extensive experience in banking operations, financial regulation and banking supervision; corporate governance and ethics; and academia.

Alhaji Abdullahi started his academic career in 1985 as a Lecturer in the Department of Agricultural Economics & Rural Sociology, Usman Danfodio University, Sokoto. In 1990, he joined the services of Central Bank of Nigeria (CBN), where he rose through the ranks from being a Manager in Retail Banking Services at the Ibadan, Kano and Katsina branches to becoming a Director and Head of the Banking Supervision Department of CBN where he retired in 2020. He garnered a wealth of experience in business reengineering and performance management, corporate governance, ethics and compliance, supervision of banks and financial institutions.

Prior to his appointment to the Board of FBNHoldings, Alhaji Abdullahi served on the Boards of several institutions, including Africa Finance Corporation, Financial Market Dealers Quote (FMDQ), Financial Institutions Training Centre (FITC), Chartered Institute of Bankers of Nigeria (CIBN), Nigeria Deposit Insurance Corporation (NDIC) and Asset Management Corporation of Nigeria (AMCON).

Alhaji Abdullahi graduated from the prestigious Ahmadu Bello University in 1983 with a Bachelor of Science Degree in Agricultural Economics and went further to bag an MSc in Agricultural Extension from Nigeria's premier institution, the University of Ibadan. He also obtained another Master's degree in Banking & Finance from Bayero University, Kano, Nigeria. Alhaji Abdullahi is a member of several professional bodies such as the Nigerian Institute of Management (NIM), Chartered Institute of Bankers of Nigeria (CIBN), Society of Corporate Compliance and Ethics (SCCEC), Certified Compliance & Ethics Professionals International (CCEPI), and Institute of Directors (IoD). He attended several local and international training programmes as a professional in all his roles. As an academic, he has to his credit a journal publication titled "Training and Visit Model", a tool to extend improved farming techniques among rural communities around Sokoto. He is married with children and enjoys spending his leisure time in the company of his family.

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