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FirstBank Bounces Back to its Leadership Position, Delivers a Fantastic Performance in 2021

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Dr. Adesola Adeduntan - FirstBank CEO

 

 

As financial market analysts continue to digest the 2021 financial results of the FirstBank Limited, which they say reflect the return of the banking conglomerate to its leadership position, Festus Akanbi writes that the regime of strong fundamentals which the robust performance represents is in tandem with the ongoing restructuring being midwifed by the current board and management of the company

 

The Nigerian investing community was held spellbound earlier in the week when FBN Holdings Plc released its much-awaited 2021 financial statements to the public, showing a stellar performance, especially in its banking subsidiary, First Bank of Nigeria Limited, which is said to be indicative of its strong recovery from its hitherto dwindling financial position.

 

Banking and capital market analysts, in their immediate reactions, said the impressive results signpost a regime of strong fundamentals after a period of restructuring by the leadership of its current management and board. 

 

The Scorecard.

 

To mitigate the effect of the low-interest rate on investment securities and revenue generation, the bank was said to have intensified deposit mobilisation and funding strategy to support enhanced loan growth at optimised rates leading to a 5.7% increase in interest expense to N140.8 billion as against N133.2 billion in December 2020. 

 

During the period, non-interest revenue grew by 96.1% to N364.6 billion as against N185.9 billion in the preceding year on the back of increased fees and commission income, treasury activities, and other operating income. 

 

According to a report by Nairametrics, in its bid to further enhance its revenue generation capacity, First Pension Custodian Limited, a subsidiary of 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, according to the management of the bank will further boost its market share in the industry, aid revenue diversification, and support annuity income. 

 

The bank says it will continue to create quality loans with a focus on retail lending driven by technology as it continues to grow non-interest income to further diversify revenue.

To show for the relentless efforts of the board and management of the bank, deposits from customers increased by 19.5% y-o-y to N5.9 trillion (Dec 2020: N4.9 trillion) reaffirming the bank’s strong market access and robust funding base. 

A statement from the bank said, “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 at 91.2% (First Bank of Nigeria).”

In the same vein, total assets grew 16.2% y-o-y to N8.9trillion as against N7.7trillion in 2020, 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%).

“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%),” the report said.

Meanwhile, the audited report for the group indicated an impressive double-digit growth in the top line and the bottom line. Gross earnings rose from N590.66 billion in 2020 to N757.30 billion in 2021. Profit before tax doubled by 99.1 per cent to N166.66 billion in 2021 as against N83.7 billion in 2020. Profit after tax grew by 68.4 per cent from N75.6 billion to N151.079 billion. Earnings per share thus increased from N2.45 in 2021 to N4.17 in 2021.

 

Its balance sheet also gives cause for joy to its stakeholders as its total assets rose from N7.69 trillion in 2020 to N8.93 trillion in 2021. Customers’ deposits grew to N5.85 trillion in 2021 as against N4.9 trillion in 2020. Loans and advances to customers also improved from N2.21 trillion to N2.88 trillion. With total liabilities rising from N6.92 trillion to N8.05 trillion, shareholders’ funds increased from N765.17 billion in 2020 to N879.86 billion in 2021.

 

A quick analysis of the performance shows a progressive trajectory that has portrayed First Bank as an organisation that has recovered from past episodic challenges that led to a change of baton at its board level. 

 

Analysts are quick to point at the recent restructuring exercise in the organisation as the launchpad for the excellent balance sheet operations which translated into a 30.3 per cent rise in its gross earnings, while total assets and customer deposits rose by 15.9 per cent and 19.5 per cent respectively.

 

The audited report also confirmed Mr. Femi Otedola as the largest individual shareholder of the group, with total direct and indirect shareholdings of 7.57 per cent.

 

Fall in NPLs, Boost to Profitability

 

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, First Bank’s NPLs came down to 6.1 per cent, significant progress for the bank when compared to other Tier 1 banks and the regulatory threshold of 5.0per 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.

 

A Transition to Sustained Growth

 

In their view, First Bank, with these impressive results has demonstrated the fact that is transitioning into a sustained growth phase and delivering performance commensurate with the size of its business capabilities of its people. 

 

And for the shareholders of the company, it was a harvest time with N12.56 billion set aside as divided, about 8.3 percent of the total net earnings recorded in 2021.

 

A capital market analyst, Mr. David Edobor explained that the major transformation in First Bank, as evident in its mouth-watering performance should be attributed to the doggedness and determination of the new leadership of the bank. His view was corroborated by a source from the company who explained that the performance was driven by a relentless focus on the needs of customers and improving the competitiveness of the bank’s 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.”

 

Over the years, FirstBank has been able to grow customer accounts from about 10 million in 2015 to over 36 million (including digital wallets). It also became the second-largest issuer of cards in Africa with over 11.8million issued cards, onboard over 18.6 million active customers on First Bank digital banking platforms.

 

New Hands, New Culture of Excellence

 

Market watchers said although some of the impressive figures represented the performance of the bank before the coming of the current leadership, analysts said the good news coming from the organisation will greatly challenge the incumbent board and management to push the frontier of excellent performance in the company.

 

It would be recalled that the bank was able to stabilise after a leadership tussle at the board level. However, with the triumph of Adeduntan and his return to his post, the foremost bank has been recording stellar performances.

 

Part of the changes was the emergence of the chairman of Geregu Power Plc, Femi Otedola as the highest single shareholder of the company.

 

An elated Chief Executive Officer of First Bank, the banking arm of the holding company, Dr. Adesola Adeduntan, described the success of the commercial banking business as the beginning of the transition into a sustained growth phase.

 

He 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%.”

 

This performance, according to him, was driven by a relentless focus on the needs of customers and improving the competitiveness of the bank’s 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.

 

“This performance is also in line with the Bank’s Quantum Profitability Leap agenda which seeks to ensure that we fully maximise the revenue-generating capacity of our business to boost the bottom line and fulfil the expectations of all stakeholders in the business,” Adeduntan stated.

 

FirstBank engages in the business of commercial banking and has many subsidiaries that focus on international commercial banking, trusteeship, capital markets, pension fund custodianship, mortgage financing, insurance brokerage, and management of SMIEIS fund investments, small-scale banking, and bureau de change activities.

 

Culled from ThisDay

 

Health & Wellness

Polaris Bank clinches healthcare excellence award

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Polaris Bank, Nigeria’s leading retail Bank, has been recognized as the “Outstanding Healthcare Financial Institution of the Year” by the Nigeria Healthcare Excellence Awards (NHEA). The award presentation, which took place in the Bank’s head office in Lagos on Tuesday was presented in recognition of the Bank’s contribution to the healthcare sector as part of the high points of the 8th Annual Nigeria Healthcare Excellence Awards (NHEA) which was held over the weekend in Lagos.

The Chairman of the Advisory Board of NHEA, Dr. Anthony Omolola, who presented the award canvassed for support; both in terms of funding and the establishment of a system of empowering healthcare providers with trainings on the business of managing healthcare where doctors can be taken through modules on finance, credit balance, operations and reconciliation that will assist them run their medical facilities profitably.

Omolola noted that the Polaris Bank’s intervention in Nigeria’s healthcare system is urgently needed, adding that, “A huge number of almost 70% of Nigeria’s population access the primary health centers where their health cases get sorted at that level.”

Reacting to the award presentation, Polaris Bank Managing Director/CEO, Innocent C. Ike, stated that, “As a Bank, we stand for excellence, and in any sphere of life or part of the economy where you see our involvement or presence, it is driven by the fact that we see an opportunity to add value and support the growth of that sector. We are primarily motivated by the impact of our work not awards, but we deeply appreciate recognitions such as the one from NHEA. Indeed, we cherish it and are motivated to do more.”

According to Mr. Ike, “In the first two to three years as a company and brand, especially at the period Covid-19 broke out, we saw the pandemic as an existential threat that made us extend support to Nigeria’s healthcare sector with other like-minded organisations, while commending medical practitioners whom we could say were literally taking the bullets for us.”

The CEO used the opportunity to pledge that Polaris Bank will work with NHEA to understand the needs of players in the primary and secondary healthcare segments to see what we can do together.

On his part, Dr. Olaokun Soyinka, a former Health Commissioner in Ogun State and a member, NHEA Advisory Board however noted that, “Any of us who have accessed healthcare of late and look at what has been expended would understand that it is difficult for average Nigerians to access healthcare with what they earn. So please put good money behind the growth of the sector following the huge gap noticed in healthcare delivery by the outbreak of Covid-19.

On how the award recipients emerged, the Director of Marketing, Communication and Strategy, NHEA, Mr. Moses Braimah, said, “The awardees emerged through a rigorous process involving essentially nomination and voting. The exercise is then subjected to a verification team that carries out independent research and intelligence gathering over an organisation’s history of contribution to the health sector.”

NHEA is an initiative of Global Health Projects and Resources in collaboration with Anadach Group of the United States of America. It is an annual event where individuals and organisations are recognized and celebrated for their exceptional contributions to the healthcare sector.

Polaris Bank has committed billions of naira to Nigeria’s healthcare sector; providing access to finance, capacity building and technology platforms to assist build a robust ecosystem. A good example is being a funding partner of the major equipment for the establishment of Marcelle Ruth Cancer Center.

Polaris Bank, adjudged the Digital Bank of the Year, is a future-determining and digitally-driven Bank committed to delivering industry-defining products to individuals and businesses.

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Entertainment

Sesan Adeniji Stars In “Journey Of The Beats” On Showmax

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Journey Of The Beats – a once-in-a-lifetime story that explores the origin and evolution of Afrobeats and black music that debuts exclusively on Showmax on 23 June 2022, is a must-see. The 10-part documentary series produced by Obi Asika digs into the stories that drove the movement. Episode 1, hosted by music historian ED Keazor and Kunle Tejuosho, is a testament to that.

Episode 2, which premiered on 30 June 2022, zeroes in on the hardship of the early 1990s, political disruption and the exit of international record companies in Nigeria, and how the deregulation in the broadcast media helped open the space for the growth of Afrobeats. But, the rise of the independent superstars was held back by piracy and greed. From the streets in Abeokuta, Ajegunle, and Onitsha to Idumota and Alaba, it revealed the struggle, pain, and joy.

This captivating story in episode 2 hosted by Sesan Adeniji (an entertainment journalist with over two decades of experience in the Nigerian music industry, an Associate Producer, Researcher, and co-director on the #JOTB documentary) also has a curated JOTB EPISODE 2 companion playlist on Spotify. According to Showmax Head of Content, Candice Fangueiro, “The growth of Afrobeats cannot be overstated, and we feel privileged as a platform to showcase and tell the story behind its evolution.”

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Digital Marketer, Tosin Ajibade Hosts 2022 New Media Conference School Debate

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Media practitioner and author, Tosin Ajibade-Oladeinde on Friday, June 24, 2022 successfully hosted the New Media Conference School Debate at Chalcedony School, Abijo G.R.A, Ibeju-Lekki. This year’s edition is themed ‘Does Social Media Enrich Education or take away from Education?’

 

The event featured award-winning Nigerian dancer and choreographer Kaffy Shafau, award-winning Tiktoker Rodney Umeh, and Communications Manager for Anglophone West Africa at Meta, Sola Obagbemi.

 

The students between year nine and eleven in their arguments emphasized on the importance of social media and how the excessive use of it can be curbed. Some of the points argued during the debate include; cyber bullying, adult content, fake news dissemination, plagiarism, social media control mechanism among others.

 

Speaking at the event, Kaffy advised the students to always make sure they take advantage of the social media platforms in a positive way. She added that “social media is a tool and you’re the driver, adding that the good the bad will always exist but who is behind the keyboard is what matters.”

 

Sola Obagbemi admonished the children to be good ambassadors irrespective of the social media they use. She said children should learn to make use of social to benefit them in the area education, and self improvement.

 

The organizer of the event, Oluwatosin Ajibade-Oladeinde in her remarks thanked the host school, the panelists and the students for making it a success. She further assures that she would continue to do her best to sensitize and educate children about the use of new media.

 

Prizes were awarded to groups of  student who came first and second while each student at the venue got a copy of the book ‘Olori Supergal from Social Misfit to Social Media Hero’ written by Tosin Ajibade and Alajota by Kafayat ‘Kaffy’Shafau.

 

NMC is an annual networking event that focuses on digital marketers, vloggers, podcasters, influencers, content creators, bloggers, tech enthusiasts, and more in the field of media and communications.

 

The school debate was powered by OSG MEDIA.

 

Follow us on social media for more information:

 

Facebook – New Media Conference

Tiktok – @newmediaconference

Twitter – @nmcafrica

Instagram – @newmediaconference

Youtube – New Media Conference

Website – www.newmediaconference.ng

 

 

 

 

 

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