2006 Press Release

Bank PHB declares N3.52 billion Profit
Lagos Island, Lagos – November 23, 2006

• Deposits at a new high of N109 billion
• Total assets hit N188 billion, up 395%
• Capital base now N28 billion
• Writes off goodwill
• Recommends N1.25 billion dividend

Bank PHB has announced an impressive performance for its financial year ended June 30, 2006 showing more than a 200 percent increase in profit before tax and recommending dividend for shareholders. In a year when most merged banks could not pay dividend, the bank’s decision to pay dividend has gladdened the hearts of shareholders and resulted in a surge in its share price on the Nigerian Stock Exchange (NSE).

The Bank’s financial result for the year ended June 30, 2006 shows gross earnings of N13.28 billion, a 99 percent increase on the earnings of N6.62 billion in June 30, 2005. The growth in earnings was fuelled by more than a doubling in the bank’s core business as interest income hit an all time high of N8.28 billion while non-interest income rose an impressive 128 percent to N5.0 billion indicating a strategic spread and sustainability of the bank’s earnings.

Though merger expenses shot up operating costs, Bank PHB management was able to retain efficiencies in the bank’s operations raising profit before tax by a significant 233 percent to N3.52 billion. Profit after tax stood at N2.45 billion, a 248 percent increase on the bank’s profit after tax of N703 million in 2005.

Further analysis of Bank PHB’s financial results shows that profit before tax per N100 of earning stood at N26 in June 2006, a significant 68 percent increment over the N15 per N100 of earning made in June 2005. This shows a significant improvement in efficiencies, which analysts trace to the synergistic benefits arising from the bank’s merger.

Also significant is a steep increase in deposit base by 395 percent to N109 billion which analysts attribute to increased confidence by the banking public in Bank PHB. The increased deposits resulted in buoyant liquidity position, which stands at about 66 percent of the bank’s non-risk adjusted assets, well above the 40 percent recommended by the Central Bank of Nigeria. This impacted positively on the bank’s holdings of low risk, high yielding money market instruments, which stand at over N90 billion as at June 2006. The bank also expanded significantly its credit to the private sector to boost economic activities.

Total assets, including contingents also rose an impressive 209 percent to a high of N188 billion in June 2006 from N61 billion in June 2005. This effectively places Bank PHB among the top 10 banks in the country.

Riding on the impressive performance, the Bank’s board is recommending dividend of N1.25 billion in 2006, after fully writing off goodwill arising from the merger of Platinum Bank Plc and Habib Nigeria Bank Limited in 2005.

Close observers in the banking industry are already linking the increased confidence in Bank PHB to the bank’s highly successful post consolidation creative branding and strategic initiatives. Beyond a strong award winning post consolidation advert campaign, Bank PHB had taken several strategic initiatives that included the launch of an array of widely acceptable banking products. The Bank also entered strategic partnerships with international organizations like Fortis Investments, for which it got CBN’s approval to manage a portion of the country’s foreign reserves; MoneyGram international money transfer; as well as reputable international alliances for its widely applauded Nigerians in Diaspora Account (NIDA), a first in the Nigerian banking industry.