In the first nine months of last year, the earnings per share (EPS) of FBNHoldings
Plc, the parent company of First Bank of Nigeria Limited as well as its profit grew by
125 per cent year-on-year (Y/Y).
But there is much more to where the premier bank stands in core banking and its
profitability is not a mere accretion of transaction charges but that it has also
increased its commitment to financial intermediation. In the three quarters, its
interest income, which gives a clue of sustainable profit run, grew by as much as 165
per cent to N1.63 trillion.
And these are not just a random progression, neither are they products of white
noise in its corporate journey. It has shown consistency of growth in both top and
bottom-line metrics in the last few years, giving an expression to the tagging of its
post-2015 crisis era as the ‘decade of miracle’ in the investment market.
For instance, from 2019 to 2023, its most recent audited financial, its EPS has
expanded by over fourfold – from 195 kobo to 859 kobo, one of the fastest growing
in Nigeria’s capital market. In the same period, it grew its yearly operating profit by
over 320 per cent, from a mere N73.8 billion to N310.5 billion.
On the top line, its earnings nearly tripled, growing from N623 billion to N1.6 trillion in
five years, during which its total assets jumped by N10.7 trillion to close last year at
N16.94 trillion. In the half-decade, according to data obtained from its books, its total
shareholder’s equity even grew faster – expanding from N661 billion to N1.75 trillion
or 163 per cent.
As a key growth driver, its loans to customers saw a whopping rise of 243 per cent in
the period to hit N6.36 trillion as of December 2023. Its facilities, according to
information gleaned from its financials are spread across key sectors, including oil
and gas, manufacturing, agriculture, agro services, construction, and real estate
among others.
Whereas the five-year cycle has demonstrated robust growth, last year’s operations
demonstrated even more resilience with the awaited full-year result promising to
trump the previous ones. On key profitability indices, last year’s nine months
exceeded the 2023 comparative period or full year by wide margins.
For instance, its earnings in the first nine months of 2024 were N2.25 trillion or N655
billion higher than the entire 2023 figure and 134 per cent higher than its
comparative period, pointing to an annualised gross of N2.8 trillion. While the interest
income showed remarkable growth, its non-interest income was also 82 per cent up
from the 2023 three quarters’ N320.5 billion.
The lender’s recent migration to transaction-led banking is paying off with the
reinvention of its digital payment system. At the close of last September, First Mobile
subscribers had hit 6.9 million while over 23 million had subscribed to a potpourri of
online platforms.
With its new 10-year vision, which was articulated in 2023, billed to consolidate these
gains, the ‘decade of miracle’ might as well serve as the launch pad of the new
FirstBank. But the recent boardroom intrigue and the dispute with General
Hydrocarbons Limited (GHL) are a costly distraction the bank cannot afford. Hence,
many stakeholders are seeking faster and less confrontational solutions to the crisis.
Amidst the conflicts, the Chief Executive of FirstBank Group, Olusegun Alebiosu,
described a 10-year vision of the bank as a major stand in its Vision 2033, which
would push the Nigerian premier financial institution to top three universal banks in
Africa across retail, wholesale and wealth management customer segments.
“Given that the 10-year vision aspiration is still very market-relevant, and I was also
an integral part of the process that birthed it, I intend to focus on ensuring its
disciplined execution during my tenure as the Chief Executive Officer.
“As the CEO, I have a clear vision for FirstBank Group, and I am confident that with
the strong support of the rest of the management team and board, we will deliver a
franchise that will continue to be the pride of Nigeria and Africa within the financial
services landscape,” the chief executive, who has told the market that his risk
management background means nothing short of sustainable growth, said.
At the 12th AGM of FBNHoldings held on 14th November 2024, shareholders
approved another N350 billion capital raise action, which the bank said would be
executed in a blend of approaches this year. Plus, with the previous N150 billion
rights issues, FirstBank is expected to exceed the new N500 billion minimum capital
requirements well ahead of the 2026 deadline to keep its international licence.
A major speed slowing the pace of the traditional banks today is the natural
advantage that digital-first banks like Opay, MoniePoint and others have been cloud-
natives. Sadly, the brick-and-mortar toga poses a legacy constraint for traditional
banks. But FirstBank, the first fruit of the conventional banks, has gone ahead with a
digital evolution campaign.
Today, the CEO said, over 90 per cent of FirstBank’s customer-induced transactions
happen on the digital channels – FirstMobile, FirstOnline, Lit App, *894#, FirstDirect
and ATMs, where it has a comparative advantage.
“As the bank implements its cloud strategy, we are focused on building a nimbler,
always-on and resilient financial services group that leverages its rich legacy to
serve its customers’ current and emerging needs,” Alebiosu believes.
Interestingly, 2025 is the take-off of the bank’s 2025 to 2029 strategic planning cycle.
The bank intends to “double down” on its dominant position across all the markets
where we operate. Part of the programme is strategic investments to improve
customer experience to make it easier for existing and prospective customers to
interact and do business on its offline and digital platform, deploying new
technologies and ramping up artificial intelligence deployment to scale up digital
operations.
But as it turns out, FirstBank and its sister organisations also have a responsibility to
urgently put behind the current distractions to continue consolidating the gains of the
‘decade of miracle’.
By Geoff Iyatse
Culled From The Guardian
