The story of Corporate Nigeria in 2022 cannot be complete without a chapter on the incredible performance of First Bank of Nigeria Limited, which has seen the hitherto encumbered bank now return to the top of the Nigerian banking ladder, at the middle of a harvest of international laurels, written Festus Akanbi
By December this year, listed Nigerian companies will begin uploading their 2022 annual results in line with the dictates of the principle of disclosure to regulators, investors and customers as enshrined in the Corporate Governance Act.
As the game of waiting for the publication of more detailed annual results continues, analysts have said that bookmakers can only assess the current level of profitability, efficiency and recovery of these companies based on their reports. biannuals that have started hitting the various media. platforms from July this year.
For FirstBank, a subsidiary of giant FBN Holdings Plc, the operating year 2022 has been characterized by an exceptional performance which analysts say signals confirmation of the bank’s return to the forefront of the Nigerian banking sector after its all-time performance. also exceptional in 2021.
From its 2022 half-yearly reports, which show a remarkable turnaround, and the bank’s management’s ability to not only resolve old corporate governance issues but also put the bank back on the path to profitability, it has been proven beyond reasonable doubt that FirstBank has freed itself from the old burdens and returned to its old trajectory of breaking boundaries and being a leader in the Nigerian banking industry.
For example, analysts who thought FirstBank’s current strong performance is a reaffirmation of the new era of a return to better and better times are quick to point to the bank’s 2022 half-year results which proved the strength of the ‘financial institution and confirmed that it is back in shape as a formidable industry leader.
Quantum Profitability Enhancement Program
For example, in its 2022 half-year scorecard, FirstBank recorded 22.6% year-on-year growth in gross profit to N338.5 billion while net interest income grew 49.3% in year-on-year to N152.9 billion. respectively.”
The bank’s Managing Director/General Manager, Adesola Adeduntan, who gave the figure, disclosed that “In a challenging operational and dynamic regulatory environment during the half of 2022, the commercial banking group remained focused on executing… key initiatives to position the group for improved profitability in the full year 2022. Our half-year results have further reinforced our commitment to achieving our “quantum leap in profitability” program.
Adeduntan said, “Thanks to the impressive growth recorded in our revenue, our pre-tax profit recorded a strong year-on-year growth of 40.0% to N60.0 billion, while the post-tax profit also increased by 42.3% year-on-year. year to N53.3 billion as the bank continues to reap the dividends of the successful restructuring of our balance sheet and overhaul of our risk management architecture.
“We continue to make progress in reducing our non-performing loan ratio which now stands at 5.4% at the end of the first half and we are on track to bring it back within the regulatory limit of 5% by the end of 2022.”
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Awards and recognition: FirstBank leading the pack
In terms of recognition, there is no doubt that FirstBank’s ongoing transformation is globally recognized considering the crop of awards and recognitions that are already pouring in for the bank.
Analysts said the awards and accolades, which include those from Fitch Ratings and The Banker awards and Euromoney rankings, are a testament to FirstBank’s consistent performance.
Analysts argued that Fitch’s current re-rating of FirstBank aligns with ratings from other global agencies (such as S&P: B- with a stable outlook; Moodys: B2 with a stable outlook) – a confirmation of what Industry peers already recognize – back to the front of the pack.
On September 16, 2022, Fitch Ratings announced the upgrade of the long-term issuer default (IDR) ratings of FBN Holdings Plc (FBNH) and First Bank of Nigeria Ltd (FBN) from “B” to “B”, and according to the rating agency, the outlook is stable. Fitch also updated its Viability Ratings (VR) from “b” to “b-”.
He explained that the upgrade of long-term IDRs follows that of VRs, reflecting that the corporate governance irregularities raised publicly by the Central Bank of Nigeria (CBN) in April 2021, including two long-standing exposures to related parties, have been largely dealt with and the capitalization risks have therefore declined, helped by a strong generation of internal capital since the lifting of the irregularities.
Governance issues resolved
Following its oversight of the Bank’s corporate banking efforts over the past year, the rating agency gave FirstBank a clean bill of health stating that the bank’s governance irregularities have corrected and according to the bank’s management, “the two related party exposures highlighted by the CBN, which included equity and credit exposures to two companies of which the former chairman of FBNH was also chairman, were largely ceded and repaid Fitch understands from management that FBNH and FBN have not been sanctioned for the irregularities raised by the CBN in April 2021 and that no other irregularities have been raised.
He also attests to the strength of the bank, saying that FBN is the third largest bank in Nigeria, accounting for 11% of the assets of the national banking system at the end of 2021.
Another reason for the high rating is the fact that the bank’s asset quality has improved since FirstBank’s impaired loan ratio (stage 3 loans under IFRS 9) declined significantly.
FirstBank also boasts of a stable funding profile. For example, NBF’s customer deposit base (76% of total funding at the end of HY22) comprises a high share of retail deposits (64% at the end of 2021) and current and savings accounts (81 % at the end of HY22), supporting stable funding and low funding cost. The concentration of depositors is quite low. Liquidity coverage is comfortable in local and foreign currencies.
Bankers Magazine: Best Performing FirstBank in Nigeria
It is also no coincidence that FirstBank was ranked first among its peers in Nigeria by Bankers Magazine, a publication of the Financial Times.
The Top 100 African Banks 2022 ranking recently released by The Banker shows FirstBank leading the Nigerian rankings in four areas, the highest achieved by a Nigerian bank; only FirstBank leads in four areas. The ranking, based on the year-end audited financial statements as of December 31, 2021 of all Top 100 banks, reveals FirstBank’s ranking as number one in Nigeria in terms of overall performance, profitability, efficiency and return on risk.
The magazine, which explained that its ranking of Africa’s Top 100 Banks for 2022 demonstrates a broad return to stability for African banks after a torrid year for the continent’s biggest lenders, placed FirstBank among other banks in Nigeria because ‘it was the only bank that led in four areas.
First Bank of Nigeria Limited leads its peers in fifth place overall, overtaking Guaranty Trust Bank, now in seventh place. Access Bank ranks eighth, with Zenith Bank in 10th place.
Euromoney ranking: FirstBank, market leader
Additionally, in 2022, Euromoney Market Leaders, an independent global assessment of leading financial services providers conducted by Euromoney Institutional Investor Plc, crowned FirstBank as a market leader. The bank has been ranked among the top-tier banks in the areas of Corporate Social Responsibility (CSR).
Not only that, but FirstBank has also become a market leader among tier-one banks in the area of Environmental, Social and Governance (ESG).
In the area of corporate banking and digital solutions, FirstBank was highly rated while being crowned as a notable player in SME banking for the period under review.
FirstBank has been named “Best Banking Brand in Nigeria” for six consecutive years – from 2011 to 2016 – by The Banker magazine of the Financial Times Group; it received the “Most Innovative Bank in Africa” award at the EMEA Finance African Banking Awards 2014; it has won the “Best Bank in Nigeria” award 15 times by Global Finance Magazine and the “Best Private Bank in Nigeria” award seven times by World Finance Magazine. Other awards recently received by the Bank include “Best Banking Brand Nigeria, 2019” by Global Brands Magazine; “Best Mobile Banking App – Nigeria, 2019” by Global Business Outlook and “Best Financial Inclusion Program – Nigeria, 2019 by International Investor.
In the words of FirstBank CEO, Dr. Adesola Adeduntan, “What all of these current ratings and recognitions demonstrate is that FirstBank is strongly back on track! Knowing that this is only the beginning of a new era of returning to the pioneering position and that better times are ahead of us, we encourage our customers and other stakeholders to continue to believe and stand by us.
Leverage a robust customer service network
Over the past 128 years of its operations, FirstBank has played a leading role in utilizing its strong customer service network and digital banking architecture to help its customers – crossing diverse cultures, tribes and races beyond of Nigeria’s shores – to meet their individual needs and the needs of the business.
First Bank of Nigeria Limited operates as the parent company, with FBNBank subsidiaries in the Democratic Republic of Congo, Ghana, Gambia, Guinea, Sierra Leone and Senegal; FBN Bank UK Limited in the United Kingdom with a branch in Paris; First banking representative office in Beijing to capture business related to trade between geographical areas. FirstBank also operates First Pension Custodian Nigeria Limited, Nigeria’s leading pension custodian. First Bank Group’s many customers are served from a network of over 700 business locations across Africa.
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