First Bank of Nigeria Limited foresees a return to its pre-eminent position in the nation’s financial services industry in terms of converting much of its revenue to profit in the not-too-distant time as its loan book becomes healthier with a drop in its portfolio of bad debts.
According to Adesola Adeduntan, Managing Director and Chief Executive, in an interview with Bloomberg, the biggest subsidiary of FBN Holdings Plc is targeting an “improved performance” in revenue and profit in 2018, he said.
Such improvement, he expect would ride on the wings of Nigeria’s improving macro-economic conditions, even as it plans increased lending to companies in manufacturing, agriculture and consumer-goods industries.
“As GDP growth continues, then the opportunities to do more banking or transactions will improve,” Adeduntan said.
For him, “the current macro environment is supportive of loan growth,” at a time the Federal Government is hopes to raise spending on infrastructure, even more this year and support the ongoing economic recovery.
The emergence of Nigeria’s economy from recession was boosted by the increased crude output helped by the twin effects of peace in the volatile Niger Delta region and rising oil prices, just as the Central Bank of Nigeria (CBN) sustained its intervention in the foreign exchange market, enabling manufacturers import raw materials.
Taking advantage of this improvement in Nigeria’s economic outlook, First Bank, he continued plans to “aggressively” rolling out agency banking this year, while strengthening its digital platforms to boost fee and commission income.
Agency banking allows lenders to use third parties to take small deposits and offer other services.
Also important, Adeduntan noted, is First Bank’s less than 10% expansion in 2017, even as growth in loan book will be “much better” than the second half of last year, when it already started showing signs of improvement.
Non-performing loans as a percentage of total credit will “continue to trend downward” after declining to 20% in the nine months through September from 26% in 2016, helped by recoveries and write-offs, Adeduntan said.