Nigeria Content Online

First Bank of
Nigeria Plc, suffering from huge post-audit losses like every other
bank in the country, refines growth strategy for the current fiscal
year.

First Bank in its
financial report for the nine month period ended December 31, 2009, in
line with the common year end required by the Central Bank of Nigeria,
reports 29 percent increase in gross earnings and 15 percent increase
in operating income.

However, profit before and after tax nose-dived deeply by 72.64 percent and 90.5 percent respectively.

Nonetheless, the
bank appears to be already making up for the losses as its first
quarter 2010 results recorded a 62 percent quarter on quarter increase
in profit, before tax and capital adequacy of 16.6 percent.

Although gross
earnings stood at N62.4 billion for the three months ended March 3,
2010, showing a year on year decrease of 10.6 percent, from N69.8
billion in March 31, 2009, profit before tax was put at N15.4 billion,
following a loss of N9.8 billion in March 2009. However, this is an
increase of 62.1 percent quarter on quarter (N9.5 billion December
2009).

On the other hand, shareholders’ funds stood at N310 billion, a decrease of eight percent from N337 billion in March 2009.

Stephen Olabisi
Onasanya, Group Managing Director of First Bank, while commenting on
the year end results, in a statement made available to NEXT, said: “We
have also refined our strategy based on four strategic themes and
priorities: growth via the diversification of assets and revenue
streams; service excellence by developing world class processes,
systems and capabilities; performance management to create a culture of
individual accountability at all levels; and developing talent with a
view to becoming the hub for the best talent in the industry.”

Financial highlights

The group’s
financial highlights show gross earnings of N196.4 billion during the
period in review, or an increase of 29 percent compared with N152.5
billion recorded in the corresponding period of 2008.

Operating income
was put at N130.5 billion (N113.2 billion December 2008), an increase
of 15.3 percent; profit before tax of N11.6 billion (N42.4 billion
December 2008), 72.64 percent fall impacted by an increase in
provisions for loan-losses post CBN-audit.

Profit after tax
stood at N3.2 billion (N33.9 billion December 2008), representing over
90.5 percent decrease, while shareholders’ funds fell to N310 billion,
a decrease of six percent from N331 billion year on year.

Also, full and
conservative provision against loans and advances rose to N40.6
billion, as at December 31 2009, compared to N18.9 billion a year ago.
Loan-to-deposit ratio fell to 81 percent, down from 84 percent during
the period in review, while non-performing loan ratio rose to 8.2
percent from 2.1 percent in December 2008. Also, cost/income ratio rose
to 60 percent, up from 56.4 percent in December 2008.

Basic earnings per share was put at 10.99 kobo for the nine month period, compared to N1.36 as at December end 2008.

Speaking on the
result, Mr. Onasanya said, “As highlighted in our results, 2009 has
been a tough year for the Nigerian banking sector as a whole and this
is reflected in our performance. We have also made full provisions in
compliance with the CBN requirement and I am pleased to say that our
operating performance and financial stability remain solid, with
operating income up 15.3 percent, against the prior year period and a
risk weighted capital adequacy ratio (CAR) of 15.8 percent, well in
excess of the regulatory minimum.”

Strategic Themes

Despite the huge
losses, Alex Otti, Executive Director, South, noted that total deposits
for the Group continued to grow over the period, albeit at a slower
pace. “However, since the year end, there has been a flood of liquidity
into the system, which has brought fixed income yields to record lows,
dragging deposit rates down with them, and potentially lending rates as
well, albeit at a much slower rate.” However, the bank is anticipating
a pick-up in mergers and acquisition activities, in the banking sector
with further growth in infrastructure funding.

The bank also said
it will focus more on investment banking, asset management, insurance
and international expansion, and plans “to consolidate our subsidiaries
within five business groups (First Bank of Nigeria, FBN Bank
International, Investment Banking & Asset Management, Insurance,
and Emerging Ventures),” which will be overseen by a new Group
Management Committee.