FirstBank’s Resilience Paves the Way for Another Decade of Success

 

By journalist Cabal News 

 

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, grew by 125% year-on-year. The bank’s growth in core banking and profitability is not solely from transaction charges but also from a stronger commitment to financial intermediation. In these three quarters, its interest income surged by 165% to N1.63 trillion, indicating a sustainable profit trend.

 

This growth is not a random occurrence but a consistent upward trajectory in both top and bottom-line metrics. This has earned the post-2015 era the title of the ‘decade of miracle’ in the investment market.

 

Between 2019 and 2023, the EPS expanded over fourfold, from 195 kobo to 859 kobo, marking one of the fastest growth rates in Nigeria’s capital market. Within the same period, annual operating profit increased by over 320%, from N73.8 billion to N310.5 billion.

 

In terms of top-line performance, the bank’s earnings nearly tripled, rising from N623 billion to N1.6 trillion over five years. Total assets grew by N10.7 trillion, closing last year at N16.94 trillion. Data from its financial records shows that total shareholder equity expanded by 163%, from N661 billion to N1.75 trillion.

 

A major growth driver has been its loans to customers, which increased by 243%, reaching N6.36 trillion by December 2023. These loans are spread across key sectors, including oil and gas, manufacturing, agriculture, agro services, construction, and real estate.

 

While the past five years have shown robust growth, last year’s operations demonstrated even greater resilience. The awaited full-year results promise to surpass previous records. For instance, earnings in the first nine months of 2024 were N2.25 trillion, 134% higher than the entire figure for 2023, pointing to an annualized gross of N2.8 trillion. Interest income showed remarkable growth, and non-interest income also rose by 82% from N320.5 billion in the first three quarters of 2023.

 

The bank’s shift to transaction-led banking is yielding positive results, with its digital payment system seeing significant improvement. By last September, First Mobile subscribers had reached 6.9 million, and over 23 million users were subscribed to various online platforms.

 

FirstBank’s new 10-year vision, articulated in 2023, aims to consolidate these gains. However, recent boardroom intrigue and a dispute with General Hydrocarbons Limited (GHL) are distractions the bank must address promptly. Stakeholders are seeking quicker, less confrontational solutions to these issues.

 

Amidst the conflicts, Chief Executive of FirstBank Group, Olusegun Alebiosu, emphasized the importance of the bank’s 10-year vision, which aims to position FirstBank among the top three universal banks in Africa by 2033.

 

Alebiosu assured that with the strong support of the management team and board, the bank will continue to be a pride of Nigeria and Africa within the financial services landscape.

 

At the 12th AGM of FBNHoldings on November 14, 2024, shareholders approved another N350 billion capital raise, expected to be executed through a blend of approaches this year.

 

Along with a previous N150 billion rights issue, FirstBank is set to exceed the new N500 billion minimum capital requirements ahead of the 2026 deadline to maintain its international licence.

 

While digital-first banks like Opay and MoniePoint pose a challenge with their cloud-native advantage, FirstBank has initiated a digital evolution campaign. Currently, over 90% of its customer-induced transactions occur on digital channels like FirstMobile, FirstOnline, Lit App, *894#, FirstDirect, and ATMs, where it holds a comparative advantage.

 

According to Alebiosu, the bank is focused on building a nimble, resilient financial services group that leverages its rich legacy to serve current and emerging customer needs.

 

The bank’s 2025-2029 strategic planning cycle aims to double down on its dominant position across all markets, invest strategically to improve customer experience, deploy new technologies, and scale up digital operations.

 

FirstBank and its sister organizations must urgently address current distractions to continue consolidating the gains of the ‘decade of miracle.’

 

By Geoff Iyatse

Adapted from The Guardian