First Bank of Nigeria Plc has recorded a plunge in its profit after-tax for the six months ended September 30. The profit fall comes in spite of the 32 per cent increase in revenues for the period in view.

The unaudited financial results which were released at the floor of the Nigerian Stock Exchange (NSE) yesterday, showed gross earnings of N128.1 billion, against the N96.9 billion recorded in the corresponding period in 2008.

Profit before tax stood at N3.2 billion compared with N30 billion in 2008; a decrease of 89 per cent, while profit after tax dropped to N2.2 billion from N23.8 billion in 2008; a decrease of 91 per cent. Total Assets recorded during the period grew by 14 per cent; from N1.8 trillion in 2008 to N2.0 trillion.

Bad loans

Bisi Onasanya, Group Managing Director of First Bank, in a statement, attributed the low performance to the company's provision for bad loans.

He said, "2009 has been a tough trading environment for the Nigerian banking sector. While First Bank has not been immune to such challenges, we have emerged stronger from the financial crisis. In line with our conservative nature, we have taken provision in excess of the N20.1 billion mandated by the Central Bank of Nigeria. We believe that subsequent recoveries of these loans will have positive impact on our performance in coming periods. Importantly, we continue to win market share as one of the longstanding, trusted institutions in the country."

Mr. Onasanya affirms that First Bank remains committed to "capturing synergistic value through further diversification of the bank's business model, supported by enhanced cost efficiencies and a strong capital base." He added that "First Bank strong capital adequacy ratio of 22 per cent and stable funding base allows it to withstand short-term pressures without deviating from our long-term objectives."

Ola Oyelola, the bank's Group Chief Financial Officer, said First Bank cannot deny the impact the global financial crisis has had on its performance, especially with regard to its customer base.

He, however, said, "We (First Bank) have made further prudent provisions against the value of loans and investments on our balance sheet. This allows us to provide a transparent view of the bank's assets at the end of the period, as well as look forward with confidence that the impact of the prevailing market environment has been largely recognised."

Future plans

First Bank said it plans, over the next 12 months, to focus on solidifying its leadership position within the Nigerian financial services industry by "leveraging its scale advantages, for example: distribution network, and balance sheet strength, which will serve customers better and more efficiently."

The bank, in the statement, noted "in all its businesses, economies of scale and scope - in areas such as operations, marketing and sales, and risk management - are critical to success."

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