Investor interest in key stocks such as Dangote Cement, FBNHoldings, Guaranty Trust Holding Company, GTCO, and Fidelity Bank, alongside other advancing equities, contributed to the market’s positive performance.

The market capitalisation increased by N53 billion, or 0.09 per cent rising from N62.257 trillion at the opening to N62.310 trillion at the close.

Similarly, the All-Share Index, ASI, advanced by 0.09 per cent, gaining 87.11 points to close at 102,183.06, compared to 102,095.95 reported on Wednesday.

This performance brought the Year-To-Date, YTD, return to 0.72 per cent.

However, in spite the gains, the market breadth closed negative, with 35 gainers against 26 losers.

On the losers’ chart, Livestock Feeds led by 60k to close at N5.40, Eunisell trailed by N1.73 to close at N15.63 per share.

Neimeth International Pharmaceutical and Regal Insurance lost 7k each to close at N3.12 and 68k per share respectively, while Honeywell Flour shed 94k to close at N9.21 per share.

Conversely, North Nigerian Flour Mill led the gainers table by N4.95 to close at N54.45, Dangote Sugar followed by N3.65 to close at N40.50 per share.

John Holt gained 83k to close at N9.30, The Initiate Plc added 25k to close at N2.80 and Omatek went up by 8k to close at 90k per share.

Trade turnover settled higher relative to the previous session, with the value of transactions up by 76.82 per cent.

A total of 472.16 million shares valued at N16.70 billion were exchanged in 12,336 deals, compared with 435.54 million shares valued at N9.44 billion traded in 12,098 deals, posted in the previous session.

Meanwhile, GTCO led the activity chart in volume and value with 65.05 million shares worth N3.77 billion.

[NAN]

In this interview, Mr. Olusegun Alebiosu, the bank’s managing director/chief executive officer, described 2025 as the beginning of the bank’s new strategic planning horizon when it is poised to double down on its market dominance position across all the markets where the bank operates.

What’s your view on the global economic outlook in 2025, and what implications does this have for FirstBank’s strategy?

In line with the views of most analysts, the current global economic growth trajectory should continue in 2025. Indeed, the International Monetary Fund (IMF) forecasts the global economy to grow at about the same rate of 3.2% at which it is estimated to have grown in 2024.

Also, I expect the inflation rate to continue to decline across the major global economies such as in the United States of America, United Kingdom, China, etc., and as such, interest rate normalization in these key markets is expected to continue. This should create opportunities for most emerging markets.

However, major risks to this forecast exist in terms of the ongoing geopolitical tensions around the world and its likelihood to worsen depending on the extent of some of the expected actions of the incoming President Donald Trump of the United States of America. Severe trade sanctions and tariff impositions in China might further repress global productivity and taper real global growth in 2025.

Given this context, FirstBank’s plans for 2025 are aligned towards positioning for this global economic growth by strengthening the Bank’s intermediation and facilitation role across all our markets in a way that empowers every customer segment to achieve their objectives for the new year. To this end, we are enhancing our value propositions across each customer segment to fully reflect and capture the opportunities we see in the external operating environment.

What opportunities and challenges do you see for African economies in 2025, and how will FirstBank capitalize on these trends?

Across many African economies, especially in Sub-Saharan Africa, rising inflationary pressures and currency depreciation characterized most of 2024. These realities led to significant increases in interest rates by the monetary authorities to curb the surging inflation rate.

Similarly, to correct fiscal imbalances, several African countries, such as Nigeria, South Africa, Kenya, etc., pursued major reforms which are aimed at repositioning the economies on a path of predictable progress, despite the immediate pains caused by these reforms.

Therefore, going into 2025, the general expectation is that inflation and interest rates will reduce, albeit at a much slower pace than projected for the advanced global economies. The reforms are also expected to have yielded more visible signs of progress, thereby improving the overall resilience of these economies.

As a Bank with a Pan-African focus, FirstBank is prepared to support Africa through this journey to economic stability by providing relevant products and services to every sector of the economy. Our suite of consumer and business products can provide immediate relief for households and Micro, Small & Medium Enterprises (MSMEs).

FirstBank also possesses deep technical capabilities and a rich bouquet of investments, collections and payment products that can support various governments’ aspirations for the revitalization of their local economies.

Nigeria’s proposed 2025 budget has significantly increased by 74.18% aimed at addressing developmental challenges. With this in perspective, what are your expectations for Nigeria’s economic performance in 2025, and how will FirstBank respond to potential challenges or opportunities?

The Federal Government of Nigeria (FGN) has proposed and submitted an NGN49.7 trillion 2025 Appropriation Bill to the National Assembly. This budget, the highest in the nation’s history in nominal terms, is on the back of an improved Government revenues position and the need to address critical developmental challenges confronting the nation.

With the proposed significant allocations to critical Ministries such as Health, Education, Defence, Power, Works, etc., and the NGN13.39 trillion deficit financing proposed in the budget, the economic expansionary intent of the 2025 Appropriation Bill is unmistakable.

Therefore, I expect that the 2025 national budget will sufficiently stimulate economic activities and lead to increased economic outputs within the year. Also, the growing revenue generation capacity of the Government reduces the likelihood of poor budget implementation which has plagued previous budget performances.

As the premier financial institution in Nigeria, we are keenly aware of the opportunities that the Nigerian market presents to us, and we are poised to take advantage of them leveraging our unparalleled local knowledge and suite of innovative financial services and products.

What role do you envision technology, and innovation would be playing in shaping the banking industry in 2025, and how will FirstBank stay ahead of the curve?

I believe it has become quite apparent to all stakeholders in the financial services industry that “digital” is the future of banking. Not only is “digital” the future, but it is also gradually becoming the primary means by which financial services and products are delivered and consumed, even today.

In 2025, I expect this trend to continue with the growing adoption of Digital Financial Services (DFS) among the banking populace. DFS will also be very critical if the significant financial inclusion gaps that still exist in the country (and indeed on the continent) are to be closed in record time.

The appeal for the infusion of technology into the delivery and consumption process of financial services and products stems from the ability of technology to confer significant scale on banking operations and deliver the ultimate customer experience at the same time. These advantages will remain relevant in 2025 and beyond.

As a Bank that has pioneered several innovations on the Nigerian banking landscape, such as the first to introduce ATMs in 1991; the first to introduce instant debit card issuance; the first to launch a wholly human-less branch with the FirstBank Digital Xperience Centers in 2021, etc., FirstBank is already ahead of the curve.

FirstBank has also taken proactive steps to institutionalize innovation with the establishment of Nigeria’s first-ever fully-fledged Digital Innovation Lab in 2018 to ensure we continue to curate products and services that not only meet the needs of our customers today but also their future needs.

What policies had the most overwhelming impacts on banking in 2024?

While several monetary and fiscal policies impacted the operations of Nigerian banks in 2024, in my opinion, two policies probably had the most impact on banks in the outgoing year – the successive increases in Cash Reserve Ratio (CRR) for Commercial Banks from 32.5% in January 2024 to the current 50% and the Central Bank of Nigeria’s (CBN) announcement of new minimum capital requirements for all categories of banks in March 2024.

As part of its efforts towards taming inflationary pressures, the CBN’s Monetary Policy Committee (MPC) has rightfully increased the CRR to reduce the overall money supply in the economy and in so doing, generally curtailed banks’ ability to create money via lending activities or pursue other investments as the banks would have loved to.

With the CRR at 50%, only half of customer deposits within the banking system are available for banks’ use.

Also, in support of the FGN’s objective to build a $1 trillion economy by 2030, the CBN announced new minimum capital thresholds, requiring, for example, banks with international license (like FirstBank) to have at least NGN500 billion in paid-up capital by 31st March 2026. This directive is responsible for the flurry of capital market activities which you have seen among banks over the last few months.

Last year, most banks posted extraordinary FX gains, at a time when many manufacturers were wallowing in FX losses. This raised a question on the relationship between banks’ profitability and economic prosperity with some even insinuating the banks even profit from the misery of the people. Do you think otherwise?

While I understand the optics and sentiments around these insinuations, I must strongly state that they are not well-placed. In line with the fundamentals of the formal banking systems, banks are mere financial intermediaries that facilitate the exchange of value between economic units.

In support of the real economy and at a time of significant FX paucity, Nigerian banks deployed their balance sheets to fund the importation of raw materials required by local manufacturers, thus helping to keep factory doors open at one of the direst FX periods in the nation’s recent history.

The advent of the current administration and the move to float the currency impacted everyone within the economy. However, since banks have created assets in foreign currencies to support local manufacturing, it therefore means manufacturers would have liabilities in foreign currencies. Hence, the decision to float the naira would naturally impact both parties in opposite directions. The reverse scenario would have been the case had the domestic currency significantly appreciated during this period.

Nevertheless, I am aware that most banks have adopted several measures (including availing of naira funding to enable manufacturers to exit the volatile FX positions) that are aimed at providing necessary cushions for some of the affected manufacturers.

What are FirstBank’s strategic priorities for 2025, and how will you allocate resources to achieve these goals?

Coincidentally, 2025 marks the beginning of our new strategic planning horizon (that is the 2025 – 2029 strategic planning cycle) which is a period we intend to double down on our market dominance position across all the markets where we operate.

In line with this broad objective, we have identified a few priorities for the FirstBank Group beginning in 2025. Specifically, we would be making necessary investments to elevate customer experience across all our touch points to make it easier for existing and prospective customers to interact and do business with us.

The Bank would also be accelerating its process automation program (including the adoption of robotics technology and Artificial Intelligence, at scale) to gain a distinct competitive advantage in the industry. In addition, commencing from 2025, we intend to deliberately pursue our expansion plans which will see us entering new markets both within and outside of the continent.

At FirstBank Group, we are very excited about the next strategic plan cycle, which is commencing in 2025, and we are confident that the strides we will be making will translate to an undisputable market leadership position for us.

One of the key impacts of high inflation is increased cost of production with businesses facing the challenges of being unable to thrive. How will Nigerian banks assist operators of small and medium-scale enterprises which form the bulk of businesses in Nigeria?

First, it is important to point out that the high cost of operations affects businesses across all sectors (including banking) as we all operate within the same environment.

Given this reality, all businesses should be exploring creative ways to stay afloat whilst keeping operational costs under control.

Nevertheless, Small and Medium Enterprises (SMEs) might be particularly more vulnerable given the fragility of their business dynamics.

In this regard, they might benefit from critical skills and development initiatives organized by banks (such as the SME Connect Hub from FirstBank) to acquire relevant insights and cost-saving ideas required to thrive during this period.

In addition, opportunities for concessioned funding from commercial banks or other developmental partners may arise from time to time for longer-term capital projects while the traditional commercial lending facilities might be targeted for shorter-term transaction-based business funding activities.

Finally, the current economic realities highlight the need for businesses to be more deliberate in keeping a firm rein on costs without sacrificing operational quality, which remains the ultimate source of a sustainable competitive advantage.

You took over a FirstBank that has undergone tremendous transformation and growth in the past decade under a management you were part of. Do you feel pressured about this when charting your tenure’s vision for the bank?

Indeed, the previous Management team, led by the former CEO, Dr Adesola Adeduntan, did a remarkable job of turning FirstBank around and setting it on a sustainable growth path. Luckily for me, besides the former CEO who retired in the course of 2024, the rest of the management team is still very intact. So, I guess this helps to reduce any “pressure” I may feel from time to time!

Therefore, I am confident that the Bank will not only continue its growth trajectory but also step up momentum as we commence the execution of our new strategic plan.

As a risk management expert, how do you intend to balance the accelerated growth path seen in the past few years with the call for restraint most risk managers are known for?

As you noted, as the Executive Director/Chief Risk Officer in the previous Management team of FirstBank, I made modest contributions to the successes recorded under that regime. As such, I am not new to business development.

In fact, I spent the first half of my professional career in several business development roles and functions prior to my venture into risk management. As a result, you can view me as one possessing the right blend of business development and risk management skills and competencies.

I would like to note that risk management should not be misconstrued as an impediment to business growth, rather, effective risk management should be viewed as a strategic lever required for a business to grow sustainably, and that is what we want to do at FirstBank.

You haven’t spoken much about where you are headed with the bank. What informs your strategic direction?

In 2023, the Management team of FirstBank Group articulated a 10-year vision aspiration for our Bank. That effort, codenamed Vision 2033, produced an overarching aspiration for FirstBank to become a Top 3 universal bank in Africa across retail, wholesale and wealth management customer segments by leveraging differentiated value propositions and customer-led innovations.

Given that the 10-year vision aspiration is still very market-relevant, and I was also an integral part of the process that birthed it, I intend to focus on ensuring its disciplined execution during my tenure as the Chief Executive Officer of FirstBank Group.

As the CEO, I have a clear vision for FirstBank Group, and I am confident that with the strong support of the rest of the Management team and Board, we will deliver a franchise that will continue to be the pride of Nigeria and Africa within the financial services landscape.

Where is FirstBank in the recapitalisation journey?

As the leading player in Nigeria’s banking industry, FirstBank had maintained a strong capital base (relative to other players) before the announcement of the new CBN’s capital threshold requirements for banks.

Recall that before the announcement of the new capital requirement by CBN, FBNHoldings, the parent company of FirstBank, had obtained its shareholder approval for a capital raise action of NGN150 billion at its 2023 Annual General Meeting (AGM) with FirstBank billed to be a major beneficiary of the proceeds. This capital raise action was executed via the FBNHoldings NGN150 billion Rights Issue program that closed on 30th December 2024. I am particularly delighted with the rate at which existing shareholders have taken up their rights under this program.

In addition, at the 12th AGM of FBNHoldings held on 14th November 2024, shareholders approved another NGN350 billion capital raise action which will be executed in a combination of ways in the days ahead.

In view of the visible progress made, I am very confident that FirstBank will meet and exceed the new NGN500 billion minimum capital requirements well ahead of the deadline of 31st March 2026 set by the Regulator.

The post-2005 reconsolidation crisis suggests that there is more to banking than a large capital base. How prepared is FirstBank to guide against the poor risk management crisis we had?

While I agree that capital is not all there is to a healthy financial system, a strong capital base is, nonetheless, very important to a financial institution’s ability to withstand shocks and absorb losses that might arise in the ordinary course of business.

By virtue of FirstBank’s long and uncheckered 130-year history, the Bank is quite adept at effective risk management. Indeed, as events in our recent history have also shown, sound risk management practices are required to keep the Bank on a sustainable growth path.

On the back of previous lessons learnt, the Bank has undertaken a significant overhaul of its risk management architecture to make it more resilient across multiple fronts – digital, operational, credit, cybersecurity, etc. Overall enterprise risk awareness level is also much higher across all jurisdictions where we operate.

Be assured that under this current leadership team, FirstBank’s commitment to effective enterprise risk management principles and practices will be unwavering.

How will FirstBank continue to leverage digital technologies to enhance customer experience, improve operational efficiency, and drive growth in 2025?

At FirstBank, we have made significant investments over the years to transform our service delivery model from a branch-led to a digital-led model. Today, over 90% of FirstBank’s customer-induced transactions happen on our digital channels – FirstMobile, FirstOnline, Lit App, *894#, FirstDirect, ATMs, etc.

The Bank has also adopted several leading technologies (such as Artificial Intelligence (AI) and robotics) to improve internal operational efficiency and elevate customer experience across all our touchpoints. Nevertheless, in 2025, we will be increasing the scope of existing use cases for these technologies to better serve our clients.

Similarly, several initiatives are on the way to making our digital platforms become a formidable one-stop shop for all the financial and lifestyle needs of our customers. This is in line with our strategy to strengthen our platform and ecosystem play through unique value propositions and strategic partnerships that empower our customers to do more on our platforms.

What are your plans to enhance Firstbank’s customer service network and digital banking architecture in 2025?

At FirstBank, we have elevated our view on technology as not just being a business enabler but as the business itself and given the investments we have made (and will continue to make) in building the right technological and digital backbone for our business, the Bank is well on its way to fully becoming a technological firm that provides financial services.

Beginning in 2025, we intend to ramp up our cloud migration strategy as a crucial precursor to making our services more agile with the attendant improvements in the overall customer experience.

Perhaps, one of the major competitive speed breakers affecting traditional players today in the financial services spaces has to do with the natural advantage that new players have being cloud-natives, whereas traditional players seem to have several legacy constraints to deal with.

As the Bank implements its cloud strategy, we are focused on building a nimbler, always-on and resilient financial services group that leverages its rich legacy to serve its customers’ current and emerging needs.

What steps will FirstBank take to manage risks associated with economic uncertainty, regulatory changes, and technological disruption in 2025?

FirstBank has fully embedded the principles and practices of Enterprise Risk Management (ERM) in its operations and across all operating jurisdictions. This framework enables the Bank to assess its risk universe on a regular, ongoing and future-looking basis.

The Bank also has robust and advanced risk management functions overseeing specific risk areas within our businesses such as market & liquidity risks, credit risks, operational risks, compliance risks, legal risks, etc. This is in addition to other assurance functions such as the internal control and audit teams that ensure that pre-defined standards are adhered to.

Over and above these dedicated risk functions, we are also taking steps to strengthen the inherent risk-mitigating elements within every process in the Bank to further reduce the probability of any risk crystallizing. In addition, we continue to invest in training efforts to raise employees’ risk awareness levels, thereby empowering those closest to the risk triggers to promptly identify and manage the risks within their domains.

FirstBank’s institutionalized innovation framework ensures that we keep abreast of developments in the digital and technological space, and we are able to harness unique insights and ideas, residing in any part of the FirstBank Group, to respond to competitive trends and meet the needs of our clients.

Is the Bank planning on expanding into other markets? If yes, where are your priority areas and considerations?

As I mentioned earlier, a key strategic priority within our 2025 – 2029 strategic plan horizon is the acceleration of our African expansion plans. This thrust is in tandem with our vision to be “Africa’s Bank of First Choice”.

Within this period, we would be doubling down on efforts to expand into some of the already identified high-impact African markets. The Bank will also be exploring entry to some strategic markets outside Africa.

In summary, the 2025 – 2029 strategic plan cycle is a growth phase for the FirstBank Group, and we are super excited about the new grounds we will be breaking during this period.

How will FirstBank invest in employee development and talent acquisition to ensure it has the skills and expertise needed to succeed in 2025?

As the premier financial institution in Nigeria, we recognize that our employees are our primary source of strategic advantage in the highly competitive financial services industry. As such, the Bank runs targeted talent identification and development initiatives for each workforce cadre – junior, middle and senior management.

FirstBank currently organizes several recruitment pathways to give young and talented Africans the opportunity for a meaningful career in the financial services industry. These exercises targeted both fresh school leavers (such as the FirstBank Pan-African Graduate Trainee Program) and offer solid employment opportunities for young people on an annual basis, with some of the programs running several streams within the same year.

Our flagship FirstBank Management Associate Program (FMAP) and the Leadership Acceleration Program (LAP) are specially curated talent acceleration and development.

FirstBank was again recognized as a market leader in the sustainability/ESG space in Nigeria and Africa winning amongst others the best ESG Bank in Nigeria by Euromoney Awards of Excellence. Please what is FirstBank doing in the ESG and the broader sustainable development space to achieve these recognitions and how do you intend to ensure this is strengthened to enhance your market leadership considering that ESG/sustainability space?

As a brand that has existed for over 130 years, we understand the importance of sustainable business practices perhaps better than any other player in our space. This understanding provides the seriousness with which we hold our responsibilities to all our stakeholders.

FirstBank’s ESG framework is hinged on three strategic pillars: Education, Health & Welfare; Diversity & Inclusion; and Responsible Lending, Procurement & Climate Initiatives.

These pillars are operationalized through several initiatives such as our partnerships with the Nigeria Conservation Foundation, Junior Achievement Nigeria and FirstBank’s flagship annual employee give-back program known as Start Performing Acts of Random Kindness (SPARK), etc.

In addition, as an institution, the Group is also taking proactive steps to reduce its carbon footprints through coordinated initiatives aimed at transforming our operations to be more climate-friendly. We are also poised to fund Africa’s energy transition by providing critical support to emerging players in the energy ecosystem.

[Culled from THISDAY]

The All-Share Index and market capitalization shed 3.44 percent week-on-week to 102,088.30 points and N55.86tn, respectively, on the back of weak sentiment, which was spurred by higher yields outlook in the fixed-income market.

The equity market has also witnessed portfolio rebalancing ahead of expected corporate earnings and the outcome of the Monetary Policy Committee meeting scheduled for Monday and Tuesday.

A look at the sectoral balance indicated that the insurance and industrial goods sectors were the least-performing indexes as they pared the previous week’s gains by 8.91 percent and 7.94 percent, trailing the banking index which closed the week in a weak region by 2.10 percent due to a sell-off in some bellwether banking stocks.

However, the Consumer goods (2.01 percent) and the Oil & Gas sectors (0.01 percent) experienced an upswing as investors showed further interest across those indices.

Trading activities throughout the week were also characterized by waning sentiments as a total turnover of 1.377 billion shares worth N31.58bn was traded in 42,040 deals, lower than 1.559 billion shares valued at N36.50bn that exchanged hands in 42,546 deals in the previous week.

In terms of Measurement by volume, the financial services industry led the activity chart with 960.519 million shares valued at N16.84bn traded in 19,669 deals, contributing 69.77 percent and 53.33 percent to the total equity turnover volume and value, respectively.

The conglomerate industry followed with 115.241 million shares worth N1.51bn in 2,859 deals, whilst the third place was the oil and gas industry, with a turnover of 80.866 million shares worth N1.72bn in 2,726 deals.

Trading in the top three equities namely Guaranty Trust Holding Company Plc, FBNHoldings Plc, and Transnational Corporation Plc (measured by volume) accounted for 343.584 million shares worth N9.43bn in 5,659 deals, contributing 24.96 percent and 29.86 percent to the total equity turnover volume and value, respectively.

Recall that last week, 14 equities appreciated; lower than 35 equities in the prior week, and 66 equities dipped; higher than 51 in the previous week, 74 equities remained unchanged, higher than 68 recorded in the previous week.

At the close of the week, Juli Plc, FBN Holdings, Geregu Power, and BUA Foods were investors’ toasts amid the cherry-picking activities as their share prices advanced by 59.18 percent, 10.71 percent, 9.32 percent, and 6.27 percent, respectively.

The laggards for the week were Morison Industries Plc, which lost 32.66 percent to close at N1.67; Consolidated Hallmark Holdings Plc lost 19.35 percent to close at N1.25 and Sterling Financial Holdings Company Plc lost 18.69 percent to close at N4.35.

For the shareholders of the Nigerian banking behemoth, First Bank of Nigeria Limited, it is a season of celebration and a period to shower praises on the board and management of the bank for successfully working its way back into reckoning, after a long period of operational challenges mostly blamed on rising cases of non-performing loans.

The shareholders, who joined other stakeholders of the bank and its parent company, FBN Holdings Plc., in appraising its first-quarter 2022 results made public last week, said it is a great relief that the organisation has put the issue of non-performing loans behind it.

According to them, the outstanding results for the bank’s full-year 2021 is an appetiser to the first-quarter 2022 results and that the repeat of impressive results for the first quarter did not only show the consistency of its restructuring but that it demonstrated the fact that the recovery is real.

Shareholders’ Endorsement

The founder and pioneer National Coordinator, Independent Shareholders Association, Sunny Nwosu, in an interview with THISDAY, at the weekend, said the management of FirstBank deserves praise for working the bank back to profitability and clean loan book.

He believes the ability of the FBNHoldings, the parent company, to significantly cut the exposure to non-performing loans to 6.1 percent showed that the bank has shut the door against future delinquent debtors, a development he said will consolidate the bank.

Nwosu said many of the shareholders were pleasantly surprised first, by the performance in the 2021 full results, saying the first quarter 2022 results came as a confirmation of the readiness of the bank to take its leadership position in the nation’s banking industry.

“Considering all the provisions they had made in the past two years and for them to have come out clean shows it is not a bad result and for them to have agreed to pay 35 kobo dividend to shareholders, it is encouraging because most shareholders did not know the company was going to pay anything, especially with all the challenges going on in the economy.

“We are indeed excited that they have been able to bring down non-performing loans, which means they will have more money to do business with and I’m quite sure they will be more careful this time when it comes to giving out loans,” Nwosu stated.

He maintained that FirstBank can still return to the leadership position in the Nigerian banking industry, saying the current leadership should keep an eye on the business and encourage the staff with a good incentive to compete in the industry.

1Q 2022 Results

Analysts said the bank has remained dazzling in virtually all its performance metrics, a development they attributed to the NPL improvements which restored investors’ confidence. And success with NPL means the quality of assets is bound to rise.

An analysis of the bank performance gleaned from the group Q1, 2022 results showed that its exposure to bad loans has substantially reduced given the fact that the amount set aside as impairment charges has come down from N13.175 billion in the first quarter of 2021 to N8.75billion in 1Q 2022.

In the period under review, First Bank of Nigeria Limited recorded gross earnings of N170.4 billion, up by 33 per cent as against N128.1billion in the previous year.  

The bank’s net interest income was put at N72.9 billion, a 42.1 per cent from N51.3 billion generated in the same period of 2021, while non-interest income was N58.8 billion, up by 21.7 per cent from the 2021 figure.

Profit After Tax for the first quarter of 2022 was N31billion, whereas N16.3 billion was the figure declared for 1Q, 2021. The bank declared total assets of N8.8 trillion, a 3.5 per cent rise from N8.5 trillion in the preceding year.

To show the bank was in a serious business of lending, its customers’ loans and advances (net) totaled N2.999 trillion, up by 5.8 per cent, year-to-date as of December 2021, which was put at N2.835 trillion, while customers’ deposits were N5.9 trillion, as against N5.6 trillion in the first quarter of 2021, a 5.4 per cent increase.

Building Confidence in Operation

Analysts believed the recent turnaround and improvement in the Non-performing loans of First Bank of Nigeria Limited (FirstBank) have been a major boost in the bank’s quest to reinforce its leadership in the financial services industry in Nigeria.

For instance, it has been observed that the current leadership of its Chief Executive Officer, Dr Adesola Adeduntan has been instrumental in building stakeholders’ confidence and trust in the bank’s financial viability with analysts left to ponder and perhaps, understudy the pace of such feat has been achieved. They said answers to these have been provided by the bank’s consistent improvements in its Non-performing Loans (NPL) ratio and position.

For instance, by June 2020, when improvements were noted in the bank’s NPL ratio, the NPL ratio stood at 8.8 per cent. By March 2021, this figure had impressively dwindled to 7.9 per cent, and going by the 2021 results, the figure only stood at 6.1 per cent.

Non-performing loans, or ‘NPLs’, are bank loans that are subject to late repayment or are unlikely to be repaid by the borrower. The inability of borrowers to pay back their loans was aggravated during the financial crisis and the subsequent recessions.

For a bank that was almost brought to its knees by the burden of non-performing loans, it came as a great relief to both the shareholders and the regulatory authorities that for the first time in a long while, FirstBank’s NPLs came down to 6.1 per cent, a significant progress for the bank when compared to other Tier 1 banks and the regulatory threshold of 5.0 per cent.

Analysts also attributed the significant fall in the NPL rates from 40 in 2016 to 6.5 per cent in 2021, to a new culture of corporate governance currently in place in the group and which has successfully revamped the company’s risk management capabilities.

According to the bank, the recent turnaround and improvement in the non-performing loans have been a major boost in FirstBank’s quest to improve profitability and reinforce its leadership in the financial services industry in Nigeria.

Analysts said with the impressive results for its 2021 operations, the board and management of FBN have proven to the investing community that the company is ready to take its leadership role in the nation’s banking sector and that the years of locusts have been put behind the institution.

Maintaining Fairly Manageable NPL Ratio

For a sector already under pressure as a result of a sluggish economy, a challenging operating environment, and increased competitive intensity, the year 2022 came with a lot of fears for the Nigerian banking industry.

As economic realities dawned on Nigerians, especially in a pre-election year, many investors struggled to get decently priced loans in Nigerian banks, and their plight is not helped when a bank is risk-averse because it already has lots of bad loans on its books.

It is interesting to note that amidst the huge pressure placed on Nigerian banks by the prevailing sluggish economy, what the management of FirstBank did was diversify its loan books and maintained a fairly manageable Non-Performing Loan (NPL) ratio.

This is because the percentage of non-performing loans in Nigeria reflects the health of the banking system. A higher percentage of such loans shows that banks have difficulty collecting interest and principal on their credits. That may lead to less profits for the banks in Nigeria and, possibly, bank closures.

FirstBank recorded the highest NPL ratio in four years with 24.7 per cent in 2018 which dropped to 9.9 per cent, 7.7 per cent, 7.2 per cent in the period of 2019, 2020, and 6.1 per cent in the 2021 full-year results.

Adedutan: We are Ready to Improve Bottom Line Performance

Dr. Adesola Adeduntan, the Chief Executive Officer of FirstBank Group, who expressed the determination of the bank to aim higher said, “At FirstBank, we have historically been interwoven with the fabric of this nation with a full-service commercial banking offering catering to every segment of the economy.

“We believe we are now in a good position to translate this unique revenue generating potential into improved bottom-line performance.

“Our first-quarter results demonstrate that we have commenced our journey of Quantum Profitability Leap in earnest with profit before tax doubling to N34.1 billion as the Bank begins to reap the dividends of the successful restructuring of its balance sheet, revamped risk management, robust technology, and innovative service offerings.

“Our gross earnings are also up 33.0 per cent YoY to N170.4bn and Net Interest Income up 42.1 per cent YoY to N72.9bn. Furthermore, our strengthened risk management capabilities equip us with the ability to mitigate any negative effect of headwinds that may materialise given current macroeconomic pressures.

“Looking ahead, we will continue to maximise all opportunities presented by our large network, and support our customers with innovative value-adding solutions through these uncertain times while investing in strengthening our digital banking offerings to deliver a better customer experience.”

Culled from Vanguard

As a financial service holding company, driving synergies remains a critical part of FBNHoldings ‘ strategy and has been integrated into every aspect of its delivery model.

Highlighting revenue and profitability, the Group delivered a stellar performance growing gross revenue by 28.2% to ₦757.3 billion and profit before tax by 99.1% to ₦166.7 billion.

The 30.0% growth in loans and advances to ₦2.9 trillion and 16.2% growth in total asset to ₦8.9 trillion reaffirms our commitment to drive revenue and profitability as we complete the balance sheet clean-up.

In 2022, FBNHoldings ‘ strategic focus is on revenue generation through digital channels and retail product offerings, “further driving our synergy potential as well as continuing to improve our operating model to deliver more efficiencies”.

Commenting on the results, Dr. Adesola Adeduntan, Chief Executive Officer of FirstBank Group said:

“Following years of strategic restructuring of the Bank’s balance sheet and operations, the Commercial Banking business is beginning to transition into a sustained growth phase delivering performance commensurate to the size of our business and capabilities of our people. Profit before tax is up 77.9%, gross earnings 30.3%, total assets 15.9% and customer deposits up 19.5%.

Gross earnings grew by 28.2% to ₦757.3 billion (Dec 2020: ₦590.7 billion). Interest income remained challenged given the moderated interest rate environment negatively impacting yields; as a result, interest income declined 4.1% to ₦369.0 billion (Dec 2020: ₦384.8 billion).

To mitigate the effect of the low interest rate on investment securities and revenue generation, we remained deliberate with our intensified deposit mobilization and funding strategy to support enhanced loan growth at optimised rates leading to a 5.7% increase in interest expense to ₦140.8 billion (Dec 2020: ₦133.2 billion).

As a result, net interest income declined by 9.3% to ₦228.2 billion (Dec 2020: ₦251.6 billion).

Conversely, non-interest revenue grew by 96.1% to ₦364.6 billion (Dec 2020: ₦185.9 billion) on the back of increased fees and commission income, treasury activities and other operating income.

Additionally, and in line with our focus to further enhance our revenue generation capacity, First Pension Custodian Limited, a subsidiary of FBNHoldings ’ flagship subsidiary, First Bank of Nigeria Limited, entered into a definitive agreement with Access Bank Plc for the planned acquisition of the entire share capital of Access Pension Fund Custodian Limited held by Access Bank Plc.

“This will further boost our market share in the industry, aid revenue diversification and support annuity income.

“Looking ahead, we will continue to create quality loans with focus on retail lending driven by technology as we continue to grow non-interest income to further diversify revenue.

In 2021, FBNH operated in a challenging operating environment that was pressured by high inflation and currency devaluation, the effect of which increased operating expenses by 14.2% to ₦334.2 billion (Dec 2020: ₦292.5 billion).

“However, this 14.2% is below the inflation level (Dec 2020: 15.6%) whilst regulatory cost also rose during the period, up 23.2% y-o-y”.

“Despite the inflationary push factors, operating income grew 35.5% to ₦592.8 billion (Dec 2020: ₦437.6 billion), resulting in an improvement in cost to income ratio to 56.4% (Dec 2020: 66.8%). Going forward, we will sustain our focus towards further improving efficiency by containing cost and increasing revenue”, he said.

Deposit from Customers increased by 19.5% y-o-y to ₦5.9 trillion (Dec 2020: ₦4.9 trillion) reaffirming our strong market access and robust funding base. Our investment in agent banking, digitalisation and deployment of digital platforms which our customers have adopted, improved customer penetration and deepened our solid retail franchise.

“This continues to provide us with access to stable funding, reducing our cost of fund ratio to 2.1% (Dec 2020: 2.3%) while supporting the float of our current and savings account (CASA) at 91.2% (First Bank of Nigeria).

“Total assets grew 16.2% y-o-y to ₦8.9trillion (Dec 2020: ₦7.7trillion) driven by a 30.0% y-o-y increase in customer loans and 26.3% increase y-o-y in investment securities. Cash and balances with Central Banks, loans to banks & customers and investment securities constitute 87.2% of total assets (Dec 2020: 83.4%)”.

“We continue to record progress in Asset Quality and Risk Management stemming from our retooled and strengthened risk management architecture. On the back of this, non-performing loan ratio further declined to 6.1% (Dec 2020: 7.7%) while coverage ratio improved to 62.2% (Dec 2020: 48.0%).

With a cleaner balance sheet and resilient earnings generating capacity, FirstBank (Nigeria) was able to accrete capital buffers from organic earnings. Hence, despite the increase in loans and advances, Capital Adequacy Ratio (CAR) remained steady, marginally increasing to 17.4% (Dec 2020: 17.0%).