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Nairaland Forum / Nairaland / General / Business / First Bank’s Profit Plunges 82% In 2015 (11223 Views)
Naira Declines By 0.82%, Settle At N370/$ / Naira Plunges At Interbank Market / 8 Banks Pay N3.32bn As Fine In 2015 (2) (3) (4)
Re: First Bank’s Profit Plunges 82% In 2015 by stano2(m): 7:12am On Apr 27, 2016 |
THE RATE AT WHICH FIRST BANK DEDUCTS MONEY FROM MY ACCOUNT MAKES ME WANT TO KEEP MONEY AT HOME...I PREFER DIAMOND |
Re: First Bank’s Profit Plunges 82% In 2015 by gunpoint(m): 7:13am On Apr 27, 2016 |
Pranxta:For Hamechi Rotimi 1 Like |
Re: First Bank’s Profit Plunges 82% In 2015 by philomental: 7:14am On Apr 27, 2016 |
SamuelAnyawu: Sounds like the truth. I find it difficult to believe this news. 1 Like |
Re: First Bank’s Profit Plunges 82% In 2015 by praz001(m): 7:21am On Apr 27, 2016 |
emekamigo: real criminals....... illegal change every now and then . 1 Like |
Re: First Bank’s Profit Plunges 82% In 2015 by pedrilo: 7:23am On Apr 27, 2016 |
no wonder they r charging me "withdrawal fee" for withdrawing from my savings with them. its time to close my fbn account jare |
Re: First Bank’s Profit Plunges 82% In 2015 by KINGDOS: 7:26am On Apr 27, 2016 |
They should just fold up and blame it on buharonomics and they inventor of that field will blame on GEJ;;; |
Re: First Bank’s Profit Plunges 82% In 2015 by omogin(f): 7:29am On Apr 27, 2016 |
No thanks to bubu 2 Likes 1 Share |
Re: First Bank’s Profit Plunges 82% In 2015 by Nobody: 7:32am On Apr 27, 2016 |
I hate this bank cos of their excessive charges. imagine they charged me #40 twice for sms alert and I didn't receive a single alert. I still prefer diamond any day |
Re: First Bank’s Profit Plunges 82% In 2015 by teewazup: 7:36am On Apr 27, 2016 |
A dividend of 15k per unit of shares held was declared. Closure Date is 9th May, 2016. |
Re: First Bank’s Profit Plunges 82% In 2015 by Truth234(m): 7:50am On Apr 27, 2016 |
YoursGEJ: @Bolded, yet their gross earnings surged 4.9 percent without MDA money. Where did the statement says scarce forex is the sole reason? The statement simply says scarce forex and global slowdown, if you are a student of economics you should know that all these banks rely on oil companies huge fund a lot and a plunge in that industry is meant to affect them. Another cogent fact you are missing is that in 2014 the bank recorded N481.8bn gross earnings, when conditions were more favourable and in 2015 that things were more difficult their gross earnings surged 4.9 percent to N505.2bn. Now lets factor in exchange rates during the two period, naira was 150-155 to a dollar in 2014 and was raised 5 times in 2015 to 197-199 a dollar, that is around 33 percent increment. Which translate to higher exchange rate for the same transactions in 2015, so forex play pivotal role in this report. Again forex scarcity began in July, it was on 3rd of August that CBN restricted 41 items from accessing forex at official rate in order to reduce pressure on foreign reserves. Sir I don't just write, I look into facts and analysis it to the best of my ability. 1 Like |
Re: First Bank’s Profit Plunges 82% In 2015 by Prdo: 7:57am On Apr 27, 2016 |
This has confirmed my fears that First Bank may be in financial distress. With the introduction of withdrawal fee and maintenance charge on Savings account, i have always suspected that all is not well with First Bank. |
Re: First Bank’s Profit Plunges 82% In 2015 by davide470(m): 8:05am On Apr 27, 2016 |
YoursGEJ:That's not the main reason they made the loss as reported. Impairment charges skyrocketed, because of an increase of their NPLs ratio (Non-Performing Loans) to 21.5% (vs 5% regulators limit) |
Re: First Bank’s Profit Plunges 82% In 2015 by juwoonn(m): 8:07am On Apr 27, 2016 |
SamuelAnyawu:What are they doing with all the money deductions? Bunch of thieves. My wife stop using her first bank savings account in February because of over deductions..she moved all her funds to another bank and left just #1200...dey have since debited the account to #746 right now. Between february and april..even after clearing the #200..they still proceeded to eat in to the #1000minimum requirement. Imagine them doing this to almost all their customers? |
Re: First Bank’s Profit Plunges 82% In 2015 by jozee08(m): 8:34am On Apr 27, 2016 |
Truth234:No wonder they want to use me recover their losses |
Re: First Bank’s Profit Plunges 82% In 2015 by Nobody: 9:01am On Apr 27, 2016 |
YoursGEJ: He also did not disclosed that the.bank.made 100% provision of some of its hardcore...amounting to #120b |
Re: First Bank’s Profit Plunges 82% In 2015 by Nobody: 9:06am On Apr 27, 2016 |
surestakes: I.gez u.wanna knw that the bank does not involve in sharp practices as other banks.Also the bank is for the masses where u open a.current acct with #2000.So the bank is more valuable to the commona which is the ideal...Can u open a current acct in zenith for #20,000 naira? |
Re: First Bank’s Profit Plunges 82% In 2015 by surestakes: 9:12am On Apr 27, 2016 |
danjumakolo: GTB offer a zero account balance service. That means you can open an account without money. Ja ra e |
Re: First Bank’s Profit Plunges 82% In 2015 by kayodedada1(m): 9:18am On Apr 27, 2016 |
Mumu firstbank always deducting #100 from my savings account every month despite the fact that i don't carry out any transaction |
Re: First Bank’s Profit Plunges 82% In 2015 by Infinitikoncept(m): 9:21am On Apr 27, 2016 |
So this is why they have resolved to start charging adulterated fees calling it spurious names. |
Re: First Bank’s Profit Plunges 82% In 2015 by citizenisb: 9:31am On Apr 27, 2016 |
For shareholders of this bank, nothing could have prepared them more for this disaster that this result portends for the future of the bank and their investments. A very high NPL indicates the bank has a high proportion of loans in its books that have gone bad as borrowers have stopped paying. The Central Bank regulations for NPL’s is 5 percent meaning banks are only allowed to have no more than 5% of their loans as non performing. First Bank has now more than tripled this limit to 18%, a border line that could have sunk most banks. Fortunately for shareholders it appears the bank has the balance sheet to absorb the loans as it still managed to eke our some profits at the end of the financial year. Despite this, the lender’s net income dipped by 82 percent to N15.10 billion to end 2015 financial year much lower (based on audited financial statements), compared to N84 billion at December 2014. The reason for the sharp drop largely attributed to a 361 percent sharp rise in impairment charge for credit losses to N119.30 billion. Impairment charges or loan loss expenses occurs when it is probable that the Bank will be unable to collect all or some of the amounts due, including both the contractual interest and principal payments under a loan agreement. An impairment charge is thus an admission by the bank that a sum of N119.3 billion out of its total loans of N2.2 trillion may not be recoverable. The bank explained the reason for the impairment as follows; This was attributable to the recognition of impairment on some specific accounts as well as collective exposures following reassessment of the loan book in the commercial banking business due to the sharp decline in global oil prices, the volatile macro environment, and fiscal and monetary headwinds which have resulted in marked reduction in domestic output. Active remedial actions on the specific impaired accounts have commenced. The main sectors impacted are oil and gas, real estate and general commerce; contributing 59.7%, 12.3% and 10.2% to the impairment charge respectively. The bank actually declared a fourth quarter loss of N35 billion as N72.6 billion out of the impairment charge came in the fourth quarter alone. The aforementioned dent at the bottom lines hindered the bank from utilizing the resources of shareholders in generating higher profit as post-tax return on average equity fell to 2.7 percent in December in 2015 as against 16.9 percent as at December 2014. This results signals a porous risk management strategy for the bank a problem that has plagued this bank since it became a bank holding company. The bank admitted this much saying that; A critical review of the culture and practice of our risk management function has been undertaken. We are implementing structural initiatives as we retool and reshape the ethos of the underwriting practice towards building a resilient loan portfolio under a new leadership. Ironically FBNH still managed to propose a dividend per share of 15 kobo mostly from the profits it made from its other subsidiaries. However out of the N59 billion in profits posted about N41.6 billion came from its commercial banking business and another N10.7 billion from its Merchant Banking Business. This result in a nutshell confirms analysts fears about First Bank’s exposure to the beleaguered oil and gas sector. Loans to major upstream companies were disbursed at a time when the price of oil was above $100 to local upstream companies who had just acquired license from IOC’s. Some analysts we spoke to also believe this may not be the end as more loans are likely to be provisioned in the coming quarters. The company also released its 2016 Q1 results reporting that it has provisioned another N12.8 billion in loans impaired for the quarter. To understand how significant this is, rival Tier 1 Banks, GTB and Zenith Bank reported a full year impairment of N12.4 billion and N15.6 billion respectively in the whole of 2015. A lot of banks may have collapsed with this results. However, FBNH manages to stay afloat and still reporting profits and paying dividends. While this may sound as a respite to shareholders, history suggest when banks take impairment charges of the sort we have seen it is likely an indication of what is to come next. First Bank (FBNH subsidiary) still has over N2 trillion in loans suggesting that there could be more dirtbags to be provided for. |
Re: First Bank’s Profit Plunges 82% In 2015 by Chukzyfcb(m): 9:40am On Apr 27, 2016 |
Aha, I knew it...82percent decline jesus!!!........I'v been soo eager to hear bout their results. Abeg make firstbank no go bust o. |
Re: First Bank’s Profit Plunges 82% In 2015 by Nobody: 9:59am On Apr 27, 2016 |
First Bank's decline is primarily due to NPLs (Non Performing Loans) - not Forex or TSA. First Bank was highly exposed to the Oil ad Gas sector, and when the oil price tanked, a lot of the guys in that sector, have since found it hard to maintain their loan repayments. If you dirve along Marina often, you would probably see an Oil Rig anchored by the road (I think its called Oritsemeyin) - that's one of FBN's bad bets. |
Re: First Bank’s Profit Plunges 82% In 2015 by Adesiji77: 10:09am On Apr 27, 2016 |
Tough times.... |
Re: First Bank’s Profit Plunges 82% In 2015 by DEDEAL77(m): 10:13am On Apr 27, 2016 |
Simply the first among the worst banks in the land. Filled with incompetency and unnecessary charges not to say stealing from there customers nation . |
Re: First Bank’s Profit Plunges 82% In 2015 by sleek2tap: 11:36am On Apr 27, 2016 |
SamuelAnyawu: If you have read their annual report you would have noticed that they propose a dividend of 15Kobo.( Just for your information ) |
Re: First Bank’s Profit Plunges 82% In 2015 by livgenius: 12:31pm On Apr 27, 2016 |
Truth234: the main reason for the decline is not forex or MDA funds. The bank made a provision of almost N120 billion towards non performing loans as a result of over exposure to the oil sector. We all know what's going on in the oil sector at the moment. If you go through the accounts you will notice that both gross earnings and operating earnings actually went up. The sizeable provision expense is the reason for the huge decline |
Re: First Bank’s Profit Plunges 82% In 2015 by citizenisb: 12:49pm On Apr 27, 2016 |
The former MD, Onasanya, keeps buying and developing multi-billion Naira properties in Ikoyi, Banana Island, Lekki and Victoria Island. I know some of these properties. He owns an estate developer (name withheld) currently developing super luxurious properties in Banana Island, Ikoyi and Lekki (in the neighbourhood of Jakande Shoprite). I have no problem with people making prudent investment with their money. But when such is done at the wake of the destruction in First Bank, then Im definitely not impressed. First Bank investors like myself have lost a substantial portion of our life savings to these crooks. Former MDs Ajekigbe and Sanusi left a very solid FBN. What happened all of a sudden with Onasanya at the helm? |
Re: First Bank’s Profit Plunges 82% In 2015 by citizenisb: 12:49pm On Apr 27, 2016 |
Which Sanusi? Just on Marina you will see the SeaWolf (na real WOLF) deal done when Sanusi was the Chief Risk Officer. A rig on water with no preservation for over 3 years! The current CBN Deputy Governor use to be CFO and ED at First Bank. He is building properties/hotels all over the place. He is planning to be Oyo State governor in 2019. You need to ask where that war chest is coming from. They were just chopping shareholders money anyhow! |
Re: First Bank’s Profit Plunges 82% In 2015 by Truth234(m): 12:50pm On Apr 27, 2016 |
livgenius: Where does the money they used to offset non performing loans comes from? The article mentioned two factors forex scarcity and global economic slowdown. Oil glut led to forex scarcity in Nigeria, the 120 billion is part of operating capital which is clearly started in the article. Please look at it from a bigger picture. |
Re: First Bank’s Profit Plunges 82% In 2015 by livgenius: 2:07pm On Apr 27, 2016 |
Truth234: Don't believe everything you read in an article. Journalists are not accountants or finance experts. I'm a chartered account. To answer your question, you do not use money to offset non performing loans per say. Basically when a bank gives a loan, they expect to get it back. That loan is an asset to a bank and is recorded in their accounts as an asset. Not an expense. When it is observed that the loan is not likely to be repaid, a provision is made and expensed in the accounts. The loan is also removed from assets and it becomes an expense. The oil price drop lead to oil companies defaulting on loans which lead to banks experiencing non perfoming loans which has resulted in the huge provision which has resulted in the huge drop in profits |
Re: First Bank’s Profit Plunges 82% In 2015 by daveP(m): 2:13pm On Apr 27, 2016 |
Caracta:the kingto.m effect. |
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