THUMBS UP FirstBank

Nigeria’s premier bank, First Bank of Nigeria Limited, a commercial banking subsidiary of FBN Holdings Plc (FBNH), last week reported record breaking profits for the 2021 financial year to the elation of its numerous shareholders and other stakeholders.

The stellar performance of the tier one bank in 2021 gives cause for joy given the consecutive losses it recorded in the prior years.

For its numerous stakeholders, the 2021 financial year is remarkable and calls for celebration, because the feat was achieved, despite the challenging operating environment that was worsened by high inflation with its attendant consequences.

Indeed, it is a period to shower praises on the board and management of the bank for successfully returning the top financial institution to profitability after a long period of operational challenges mostly blamed on rising  non-performing loans (NPLs).

* Profit after tax of ₦117.8 billion, up 73.9% y-o-y from ₦67.8 billion posted in 2020.

* Profit before tax was ₦130.9 billion, up 77.9% y-o-y from ₦73.6 billion reported in 2020.

* Non-interest income grew by 106.4% to ₦342.2 billion from ₦165.8 billion on the back of increased fees and commission income, treasury activities and other operating income.

* Gross earnings of ₦716.8 billion, up 30.3% y-o-y from ₦550.3 billion posted in 2020.

* Total assets rose 15.9%.

* Operating expenses of ₦313.9 billion, up 14.3% y-o-y from ₦274.6 billion in 2020.

* Total assets of ₦8.5 trillion, up 15.9% y-o-y from ₦7.4 trillion in 2020.

* Customers’ loans and advances (net) of ₦2.8 trillion, up 27.7% y-o-y as against ₦2.2 trillion in 2020

* Customers’ deposits of ₦5.6 trillion, up 19.5% y-o-y as against ₦4.7 trillion in 2020.

Commenting on the results, Nnamdi Okonkwo, group managing director of FBNH, said: “Our performance over the course of 2021 is reflective of the resilience of the group and underpins our growth strategy to generate sustainable value for all our stakeholders.

“In 2022, our 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.”

Adesola Adeduntan, chief executive officer of First Bank Group, commented: “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.”

FBNH, in 2021,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 percent to N334.2 billion from N292.5 billion in December 2020, according to FBN Holdings.

“Despite the inflationary push factors, operating income grew 35.5 percent to N592.8 billion from N437.6 billion, resulting in an improvement in cost to income ratio to 56.4 percent from 66.8 percent,” the bank said.

“This performance was driven by a relentless focus on the needs of customers and improving the competitiveness of our offerings. We have sharpened our ‘Go To Market’ approach to better leverage the opportunities which our large scale provides in addition to becoming more relevant to our clients by improving our value propositions,” Adeduntan added.

According to FBN Holdings, cash and balances with the Central Bank, loans to banks and customers, and investment securities constituted 87.2 percent of total assets compared to 83.4 percent in December 2020.

“Total assets grew 16.2 percent year on year to N8.9 trillion from N7.7 trillion, driven by a 30.0 percent year-on-year increase in customer loans and 26.3 percent increase year-on-year in investment securities,” it said.