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Excitement In Shareholders’ Camp As FirstBank Sheds NPL Burden

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Excitement In Shareholders' Camp As FirstBank Sheds NPL Burden

EXCITEMENT IN SHAREHOLDERS’ CAMP AS FIRSTBANK SHEDS NPL BURDEN 

Olushola Okunlade Writes

With a significant cut in its impairment charges (which translates into a clean loan book) in its first quarter (1Q), 2022 results, after it successfully brought down its non-performing loan to 6.1 per cent in 2021 full year performance, analysts say the repeat of the impressive performance of FirstBank in the first quarter did not only show the consistency in its rebound but that it demonstrated the fact that the recovery is real. 

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 the 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 appetizer 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.

Dr. Adesola Adeduntan, Chief Executive Officer (CEO) FirstBank Limited.

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.

ADEDUNTAN: ‘WE ARE READY TO IMPROVE BOTTOM LINE PERFORMANCE’

Chief Executive Officer of FirstBank Group, Dr. Adesola Adeduntan, 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 effects of headwinds that may materialize given current macroeconomic pressures.

“Looking ahead, we will continue to maximize 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

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LCCI Holds Public-Private Dialogue On Crude Oil Theft And Artisanal Modular Refineries

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This action also has implications for economic growth, job creation, and revenue generation for the government

Olushola Okunlade Writes

The Lagos Chamber of Commerce and Industry (LCCI), the premier Chamber of Commerce and a leading voice in the Organized Private Sector (OPS) in Nigeria, with the support of Waltersmith Petroman Oil Limited has announced to hold a Public-Private Dialogue Session to proffer solution to challenges of crude oil theft in Nigeria.

The dialogue will explore the dimension, and impact, and offer practicable solutions to tackle the menace of crude oil theft. It will also articulate factors for creating an enabling environment where local modular refineries can thrive.

The dialogue is scheduled to take place on Thursday, 30th June 2022 by 11 am (WAT) at Commerce House, 1, Idowu Taylor Street, Victoria Island, Lagos. The program will feature presentations, a panel discussion, and audience participation to allow for a balanced expert diagnosis, evaluation, and intervention.

Dr. Chinyere Almona, Director General of the LCCI hinted that the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe, FNSE has confirmed to deliver the Keynote address (Public sector) while the Managing Director/Chief Executive Officer of Waltersmith Petroman Oil Limited, Mr. Chikezie Nwosu is confirmed to deliver the Keynote address (Private sector).

She stated that leading operators in the oil and gas sector, investors, regulatory institutions, and important stakeholders are billed to attend the event.

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Safe Driving: FRSC Commissions Dangote Truck Driving School

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Safe Driving FRSC Commissions Dangote Truck Driving School

…Dangote also trains block makers in Kano, Katsina to prevent building collapse

Olushola Okunlade Writes

Leading Cement manufacturer, Dangote Cement Plc, on Wednesday launched the Dangote Articulated Truck Driving School in a move aimed at inculcating safe driving culture in its drivers so as to stem the tide of road crashes.

The opening of the school in partnership with the Federal Road Safety Corps (FRSC), the Company management reasoned, would also make the drivers become better road users.

The Academy, which was officially commissioned by Corps Marshal of the Federal Road Safety Corps (FRSC), Dr. Boboye Olayemi Oyeyemi, was characterized as historic and unique. 

The new Academy for truck drivers, according to the Corps Marshal, is a significant step forward that will benefit not only the Dangote Group but Nigeria as a whole. 

The country’s top road safety official hailed Alhaji Aliko Dangote, President and Chief Executive of the Dangote Group, for taking “a big step” towards reducing truck accidents. 

He said: “This is what we’ve been waiting for. You made it. I have observed that Dangote has done a lot to address truck crashes and I must commend them for this.”  

Safe Driving FRSC Commissions Dangote Truck Driving School
Safe Driving FRSC Commissions Dangote Truck Driving School

He extolled the conglomerate for leading other companies on this path, saying the new school will play a key part in the country’s efforts to make roads safer. 

He said he had suggested such a school long ago, adding that he is happy that the school has come to fruition.  

In his remarks, the National Director, Logistics of the Dangote Cement (Transport section) Mr. Juan Carlos Rincon, said the new school is an expression of the determination of the company to bring to halt the incidences of the auto crashes in the country.  

Speaking also Executive Secretary National Board for Technical Education (NBTE) Professor Idris Bugaje who was represented by Engr S.M. Yusuf, said the NBTE will partner with the Dangote Cement Plc for a successful accreditation and takeoff of the new school.  

In his remarks, the Bajana of Obajana HRH Oba Idowu Isenibi said he was optimistic that the school will help address auto crashes in the country, even as he described the President of the Dangote Group Aliko Dangote as a “rescuer and God sent to their communities that should be emulated by other investors in the country.  

Speaking in the same vein, the Olu of Akpata Oba Frederick Balogun urged other investors to emulate the company.  

Both the Dangote Cement Transport and the FRSC signed a Memorandum of Understand (MoU) on how to cooperate to ensure that the school is a success.  

In the same vein, Dangote Cement organized thorough block molding training for block makers in both Kano and Katsina states respectively. This, according to the company is to ensure that the blocks moulded for building constructions are strong, reliable, and durable, noting that some block makers do not really know how to make strong and reliable blocks.

The Coordinator of the program, Mr. Johnson Olaniyi, said the workshop would give the block molders and allied product manufacturers the opportunity to once again build capacity and adhere to global best practices.   

Mr. Olaniyi said the Dangote Cement Plc is desirous of reversing the trend of collapse building through the capacity building of block manufacturers.     

Meanwhile, government representatives, quality regulators, cement dealers, block makers, and end-users have come to an accord that Africa’s cement giant produces the best quality of cement on the continent. 

Safe Driving FRSC Commissions Dangote Truck Driving School
Safe Driving FRSC Commissions Dangote Truck Driving School

The stakeholders who attended the meeting also said the ongoing nationwide workshop and sensitization of block manufacturers will help check the menace of collapsed buildings in the country.   

Speaking at the workshop in Kano, representatives of the Kano State Government Alhaji Muhammad Garba Kwall said that Dangote Cement Plc is not only the biggest company but produces the best quality in Africa.  

He described the company as socially responsible and that’s why it is giving back to society through the sensitization workshop and creating various platforms for educating end users to mitigate the incessant incidences of the collapsed buildings in the country.   

Speaking, Regional Director, Kano Directorate, Standard Organization of Nigeria(SON), Mr. Albert Wilberforce urged block molders to patronize the quality cement produced by the Dangote Cement Plc, adding that the SON was partnering with the company and ensuring that only quality cement is produced by the company.   

 In the same vein, The Kano State Coordinator (II) of SON Engr Hauwa M. Husseini urged the block moulders to comply with standard practice in order to prevent the menace of collapsed buildings in the country.   

Speaking also, Regional Sales Director for Northwest  Aliyu Dan Aliyu urged participants to be ambassadors by telling their customers about the quality of the cement.  

He said: A customer who wants to build a house, doesn’t know the quality or type of cement to use. It is the responsibility of the builder to advise him on the desired cement to use for quality building.  

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Odu’a Investment Held 40th AGM June 22, Declares N9.37 Billion As Profit Before Tax

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Odu'a Investment Held 40th AGM June 22, Declares N9.37 Billion As Profit Before Tax

…As Governor Dapo Abiodun, Lagos Governor, Governor Rotimi Akeredolu, and Others Present

…As Dr. Segun Aina Bow Out As Chairman, Bimbo Ashiru New Chairman Of Odu’a Investment Company

Dividend payable for Financial Year 2021 raised by 15%

Sets up ‘’The Odu’a Investment Foundation’’

Odu’a Investment declares N9.37 billion as Profit Before Tax

Olushola Okunlade Writes

Odu’a Investment Company Limited held its 40th Annual General Meeting on June 22, 2022, at Lagos Airport Hotel Limited, Ikeja, Lagos. In attendance were shareholders represented by the Secretaries to the State Governments (SSGs) of Oyo, Ondo, Ogun, Osun, Ekiti, and the Lagos States. All resolutions presented for shareholder approval were adopted.

The meeting approved the Audited Financial Statement of the Company for the Financial Year ended 31st December 2021 as well as the payment of a cash dividend of N418.4 million to its shareholders which is a 15% increase over the prior year.

The Group Chairman, Dr. Segun Aina, OFR in his statement to shareholders stated that Profit Before Tax grew significantly by 149.8% from N3.75Billion achieved in 2020 to N9.37Billion, driven by the increased focus on the different areas of the business and gains in investment properties.

Odu'a Investment Held 40th AGM June 22, Declares N9.37 Billion As Profit Before Tax
Group photograph of Board and Shareholders at the 40th Annual General Meeting of Odua’ Investment in Lagos on Wednesday, June 22, 2022.

On the strength of this performance, the company increased its dividend payout by 15% to N418.4 million for the 2021 Financial Year (2020: N364m), This marks the 8th consecutive year that the company is declaring and paying dividends to shareholders.

Dr. Aina assured shareholders that the Board had put in various best practice governance policies in the year under review that will ensure the company’s investments create sustainable impact in the ensuing years.

He thanked the shareholders for the great privilege and rare honour to have been given the opportunity by shareholders to be the Group Chairman of Odu’a Investment between May 2020 and June 2022 and urged fellow Directors and Management to remain focused on the delivery of the Company’s 5 Years “SRC-2025” (Sweat, Revive and Create 2025) Strategic Thrust.

Odu'a Investment Held 40th AGM June 22, Declares N9.37 Billion As Profit Before Tax

Commenting on the result, the Group Managing Director/CEO, Mr. Adewale Raji buttressed that PBT for 2021 included revaluation gains of N7.11Billion from the company’s investment properties portfolio which was N2.63Billion in 2020. If these accounting gains are stripped off, the normalized PBT for 2021 will be N2.26Billion and N1.12Billion for 2022; representing an appreciable 102% growth.

He also reported that the company celebrated 45years since it commenced operations in November 2021 and that as part of the celebrations, the Odu’a Investment Foundation was established to positively influence the next generation of youths with a focus on Health, Education, and Youth Empowerment

Our Agric Investment Subsidiary, SWAGCO Ltd (South West Agriculture Company), has begun to make significant efforts in investing in agriculture opportunities that will drive capacity development for a new generation of commercial farmers and entrepreneurs. We have committed a large proportion of our land bank towards these efforts focusing on Cassava, Maize, Paddy Rice, and Dairy.

The company’s investment in Oil & Gas through the acquisition of part of BITA Marginal Field and the set up of BITA Exploration & Production Ltd with our JV partner is gathering momentum. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) that replaced DPR is currently finalizing the model for Licensing and Contracting documents that will govern the operations of the 2020 Marginal Field Bid Winners. This is the critical hurdle to scale to make the coast clear for a Field Development Plan and approval that will lead to achieving ‘’First Oil’’

The business outlook of the company is to transit to a lean non-operating holding company that will focus on driving the growth and expansion of its Subsidiaries and Associate Companies, ensuring Investment Excellence across its portfolio of assets, and seeking new partnerships for growth in its 8 sectors as captured in ’’SRC 2025 Strategic Plan” (i.e. Agriculture, Real Estate, Hospitality, Financial Services, Energy, Healthcare, ICT/Digital, and Logistics/e-Commerce).

In accordance with the established principle of rotation of Chairman among shareholder States every 4 years as enshrined in the Shareholders Agreement the tenure of Dr. Segun Aina, OFR will come to an end on the completion of this AGM. Consequently, the Board and Shareholders have approved that Otunba Bimbo Ashiru will take over as the new Chairman.

Our shareholders and stakeholders are appreciated for their devotion to corporate governance, accountability, and steadfast support. The Board and Management thank our Staff across the Holding Company and Subsidiaries whose tireless efforts continue to propel the organization forward and prayed for an exciting and rewarding 2022 and beyond for the company.

About Odu’a Investment Company Limited: Odu’a has a substantial investment in real estate, equipment leasing, food and beverages, construction, agriculture, manufacturing, hotel and catering, financial services, and oil and gas and it is entrusted with delivering sustainable returns to all stakeholders; enhancing the legacy for future generations.

      

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