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FIRSTBANK PROUDLY REFLECTS ON ITS PHENOMENAL PROGRESS

On: June 10, 2023 - In: Headlines - No comments

FIRSTBANK PROUDLY REFLECTS ON ITS PHENOMENAL PROGRESS

 

 


First Bank, a subsidiary of FBN Holdings Plc, has captured the attention of stakeholders with its exceptional performance in recent years. Under the leadership of a committed, competent, and experienced Board and management team, the bank has demonstrated a consistent and impressive growth trajectory.
Festus Akanbi acknowledges that First Bank’s success extends far beyond mere recoveries, as it has achieved remarkable profit figures and significantly reduced its Non-Performing Loan (NPL) portfolio.
The Nigerian banking sector is currently facing challenges due to the changing dynamics of the local and international economy. With the population growth in Nigeria, there is an increased demand for banking services.
However, the rise in unbanked and underbanked individuals presents new competition among banks. Analysts agree that only banks with a proven track record of preparation for emerging challenges will thrive, particularly during periods of regime change and economic policy restructuring.
First Bank stands out as one of the banks that have consistently prepared for such challenges and demonstrated resilience. Its performance trajectory over the past seven years showcases sustained growth and stability, propelling it to the top of the Nigerian banking industry. The bank’s strategic decisions have set new benchmarks in the industry and contributed to its triumphant return to solid profitability within a relatively short period.

 

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In its full-year 2022 results, First Bank achieved significant improvements across various performance metrics. The number of total customer accounts grew from 10 million in 2015 to an impressive 41 million by December 2022.
Additionally, the bank increased the issuance of its cards from seven million in 2015 to 12 million in the same period. Its digital banking services also experienced remarkable growth, with 6.1 million First Mobile users, 1.1 million First Online users, and 14.7 million USSD users in 2022. The total number of digital banking customers surged from 600,000 in 2015 to an impressive 22 million in 2022.
First Bank’s agent banking business, known as First Monie, has made significant strides as well. In 2015, this business was nonexistent, but by 2022, the bank boasted 200,000 direct agents nationwide. Analysts note that considering each agent typically employs two additional staff, First Bank’s agent banking initiative has empowered approximately 600,000 individuals.
The bank’s performance indicators reflect its consistency, innovation, and recovery measures since 2015. A comparative analysis of the bank’s statement of account between 2015 and 2022 confirms analysts’ confidence in First Bank’s board and management.
Notable improvements include a substantial increase in customer deposits from N2.905 billion in 2015 to N7.351 billion in 2022, and a rise in total assets from N3.973 billion in 2015 to N10.605 billion in 2022.
Profit before tax also witnessed a significant jump, increasing from N10.2 billion in 2015 to N147.3 billion in the past year. The bank’s pretax return on equity surged from 0.6% in 2015 to an impressive 17.3% in 2022, while the pretax return on assets rose from 0.1% to 1.6%.
Furthermore, FirstBank achieved a notable reduction in its cost of funds from 3.6% in 2015 to 2.1% in 2022.
Of great significance is the bank’s successful reduction of non-performing loans, which plummeted from 45% in 2015 to an impressive 5.6% in 2022. This accomplishment attests to the bank’s ability to tackle challenges head-on and effectively manage its loan portfolio.
As part of its turnaround strategy, First Bank’s African subsidiaries transformed from negative positions in 2015 to profitability, contributing 21.3% to its profit before tax in the reviewed year. The bank’s share price also experienced a substantial increase, rising from N4.88 to N14.17, further confirming its return to profitability.
First Bank’s focus areas as a growing institution have positioned it as a pioneer in several aspects. It was the first financial institution established in West Africa, the first Nigerian company to be recognized as the Most Valuable Banking Brand in Nigeria for six consecutive years, and the first Nigerian bank to surpass 200,000 agent banking locations, promoting financial inclusion. Other notable firsts include becoming the first bank to achieve a market capitalization of N1 trillion on the Nigerian Stock Exchange, undertaking the largest public offer on the Nigerian capital market with a N100 billion hybrid offer, and establishing an offshore subsidiary, First Bank UK Ltd.
The bank has also set itself apart through unique product offerings. Its First Bank Sustainability Centre, established in partnership with the Lagos Business School, has been recognized globally as a case study for sustainable partnerships and environmental, social, and governance (ESG) initiatives. First Bank’s commitment to ESG principles has earned it prestigious awards, including being named the Market Leader Nigeria (ESG) by Euromoney Market Leaders in 2022.
First Bank’s impressive ratings have continued since the release of its first-quarter 2023 results. Gross earnings showed a substantial year-on-year increase of 44.2%, while net interest income surged by an impressive 50.9% due to optimal asset pricing and effective management of interest-earning assets.
The bank’s Chief Executive Officer, Dr. Adesola Adeduntan, attributed the strong performance to the increasing penetration of digital and transaction banking offerings, which contributed to a 15.3% growth in non-interest income. Adeduntan also highlighted the bank’s 21% year-on-year increase in operating expenses within revenue growth, demonstrating the bank’s ability to manage inflationary pressures.
A pivotal aspect of First Bank’s transformation has been its transition into a transaction-led institution. This achievement has been made possible through significant investments in technology. The bank’s Technology Academy, the first of its kind in Nigeria, has empowered it to build a robust digital infrastructure capable of handling large-scale transactions. As a result, FirstBank’s customer accounts have grown to 42 million, a significant increase from the 10 million recorded in 2015, with over 22 million active customers on its digital channels.
Crucially, First Bank’s transformation has been achieved without any additional capital injection, protecting the interests of its shareholders. The bank’s focus on human resources is evident, as it invests in staff development and seeks external assistance when necessary.
Collaborations with international institutions such as Standard Chartered, Citibank, and JP Morgan have further strengthened FirstBank’s capabilities. The bank has implemented a structured succession plan, filling most, if not all, vacancies internally. Notable programs include the Senior Management Development Programme (SMDP), Leadership Acceleration Programme (LAP), and First Bank Management Associate Programme, all aimed at developing future leaders and driving the bank’s vision of being Africa’s Bank of First Choice.

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