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First Bank’s bad loans hit N13.2bn in three months

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First Bank of Nigeria’s provisions for ‘bad loans’ impairments increased by 35.7 per cent to N13.2 billion in the first quarter of this year, a new report by the bank has revealed.

The impairment charges technically imply losses which usually have top-down negative effect on the organisation’s profit.

The provisions for non-performing loans (bad loans) in the first quarter depressed the group’s net bottom-line by 39.3 per cent or N10.1 billion, the report also showed.

These were part of the highlights of the latest operational reports of FBN Holdings Plc, the holding company for First Bank of Nigeria and its former subsidiaries.

The release of the scheduled three-month report for the quarter ended March 31, 2021, came at the time the Central Bank of Nigeria (CBN) cited bad loans as a major challenge facing the first generation bank.

Analysts’ report on the first quarter results of FBN Holdings showed that impairment charges increase  depressed the group’s core banking net interest income by 21.6 per cent to N39.6 billion in first quarter 2021 as against N50.5 billion recorded in comparable period of 2020.

The report showed double-digit declines across key performance indicators. These were attributed to drag-on effects of non-performing loans, among others.

Analysts’ report by FSDH Group, a leading investment banking group, noted that the “company continues to lose the market share as it has been focusing on resolving a spike in NPLs over the past few years”.

FBN’s NPLs are still about 2.9 percentage points above the industry threshold of 5.0 per cent of gross loans and advances. The NPLs/Gross loans ratio however dropped from 9.2 per cent in first quarter 2020 to 7.9 per cent in first quarter 2021. The bank increased its provisions for non-performing loans with a NPL coverage of 54.5 per cent in first quarter 2021 compared with 46.4 per cent in corresponding period of 2020. Impairment charges rose from N9.71 billion in first quarter 2020 to N13.18 billion in first quarter 2021.

Gross earnings dropped from N159.68 billion in first quarter 2020 to N136.58 billion in first quarter 2021. Profit before tax declined from N28.68 billion to N18.91 billion. After taxes, net profit dropped from N25.70 billion in first quarter 2020 to N15.6 billion in first quarter 2021.

“It is worth noting that the weak results in this quarter are on the back of lacklustre results in financial year 2020,” FSDH stated.

The bank’s interest income fell by 25.3 per cent from N104.9 billion in first quarter 2020 to N78.4 billion in first quarter 2021. This fall in interest income was offset by more than a proportionate decline in interest expense that fell 42.7 per cent to N25.6 billion in first quarter 2021. The impairment charges further increased by 35.7 per cent to N13.2 billion in first quarter 2021. As a result, the net interest income after Impairment sank 21.6 per cent to N39.6 billion from N50.5 billion in first quarter 2020.

The review showed that net fee and commission income jumped 36.8 per cent to N28.4 billion, driven by a 31.8 per cent spurt in fee and commission income, supported by a less than proportionate 11.2 per cent rise in fee and commission expense. The fee and commission income increased mainly on the back of growth in credit-related fees, letters of credit commissions and fees and electronic banking fees.

The bank’s foreign exchange income inched 1.8 per cent higher to N2.7 billion. The gains on the sale of investment securities also continued to perform well as it climbed 32.3 per cent to N17.9 billion in first quarter 2021. However, the gains from the fair value of financial assets reported at fair value through profit or loss (FVTPL) continued to drag with a 62.6 per cent fall to N3.1 billion. Dividend income tumbled 99.4 per cent to a mere N26 million in first quarter 2021, from N4.0 billion in first quarter 2020.

The bank’s personnel cost increased 3.5 per cent to N24.8 billion in first quarter 2021, and the depreciation charges bumped up 13.7 per cent. However, the company managed to keep the operating expenses in check with a mere 0.2 per cent rise to N42.0 billion.

With these, operating profit fell by 34.1 per cent to N18.9 billion in first quarter 2021. The bank’s earnings per share dropped by 36.8 per cent from 68 kobo in first quarter 2020 to 43 kobo in first quarter 2021.

In segmental breakdown, commercial banking and business group’s revenue fell by 15.2 per cent as it faced varying degrees of challenges in the operating environment. Merchant banking and asset management business group declined marginally by 1.5 per cent while other revenue fell by 16.2 per cent.

Central Bank of Nigeria (CBN) Governor Godwin Emefiele had last week cited bad loans, especially insider loans, as major challenges facing Nigeria’s oldest bank

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Ghana university lecturers begin strike over poor service conditions

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Public university teachers in Ghana on Monday commenced an indefinite strike over poor conditions of service.

 

Professor Charles Marfo, national president of the University Teachers Association of Ghana (UTAG), said the strike was borne out of the government’s refusal to heed calls by the association to improve the worsening conditions of service of the university teachers across the country.×

 

He said the association was not happy with the way the authorities had been dragging their feet on negotiations concerning the welfare of the teachers, which started two years ago.

 

“We write on behalf of the National Executive Committee of UTAG to inform and/or remind you of the intended strike action of UTAG,” read a statement issued earlier by UTAG.

“By this notice, all campuses are to withdraw all teaching and related activities namely teaching, examinations, invigilation, marking of examination scripts, processing of examination results, etc. from Aug. 2 until further notice.”

There are 15 public universities in Ghana.

 

Among them are University of Ghana, Legon, Kwame Nkrumah University of Science and Technology, Kumasi, University of Cape Coast,

CK Tadem University for Technology and Applied Sciences.

 

Others are University of Education, Winneba and Simon Diedong Dombo University for Business and Integrated Development Studies.

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Olympiacos sign Henry Onyekuru on permanent deal

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Olympiacos FC have announced the signing of forward Henry Onyekuru from Ligue 1 club Monaco.

 

The 24-year-old Nigerian forward arrived in Greece to seal a permanent move on Saturday after spending last season on loan at Galatasaray.

 

Olympiacos have confirmed the signing of the 24-year-old star on their official website by stating: “Olympiacos have announced the acquisition of international ace, Henry Onyekuru.

 

“The Nigerian, born on June 5, 1997, in Lagos, has been acquired from Monaco after signing a four-year contract.

 

“Having spent five years at Aspire Academy, Onyekuru took the first big step in his career in 2015 by signing a contract with Eupen.

“His 30 goals in 60 games with the Belgian club attracted several clubs with Everton acquiring his services in 2017. The Nigerian spent the next two seasons on loan at Anderlecht (28 assists, 10 goals) and Galatasaray (31 assists and 14 goals) respectively.”

 

Speaking after signing for the team, Onyekuru said: “I know it is a big club in Greece, one of the biggest and they have good ambition and target every season and they are always in the Champions League.

 

“I also know of two Nigerians who played here before and I am just here to contribute and keep on pushing and also to be champions countless times, achieve more goals and aims with the club.

On June 30, 2017, Onyekuru joined Premier League side, Everton, for £7 million and was immediately loaned out to Anderlecht where he was handed the number 9 jersey.

Onyekuru, who made his debut for the Super Eagles in a 3-0 friendly win over Togo on June 1, 2017, is part of the key players for head coach Gernot Rohr ahead of the upcoming World Cup qualifying matches in September.

 

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COVID-19 kills 6 persons daily in Lagos – Sanwo-Olu raises alarm

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Lagos State Governor, Babajide Sanwo-Olu on Monday raised the alarm over rising COVID-19 death in Lagos, saying the virus has killed an average of six persons daily in the last one week.

 

He also admitted that the third wave of the virus is right now in Lagos, saying that proactive measures must be put in place to nip the crisis in the bud.

Speaking at a news conference at the State House, Alausa, the governor said from the beginning of July the state started to experience an increase in the number of daily confirmed cases of COVID-19 in Lagos State, with the positivity rate going from 1.1% at the end of June 2021 to 7% at the end of July 2021.

“As at the 1st of August 2021, the positivity rate in Lagos is 8.9%. This is an 8-fold increase over the recorded figure a month ago, and it should rightly alarm all of us. This has resulted in 4,300 confirmed cases in July alone and 352 admissions into our isolation facilities.

 

“But let me make it clear that this necessary sense of alarm should not be responded to with panic, but instead with a firm 2 resolve and determination to reverse the trend. We have done it before and we can do it again. We dealt with the first and second waves and did our best to prevent a third wave,” Sanwo-Olu stated.

 

The governor said now that the third wave of the virus has come, the state must dig deep into what “we have learnt from the previous waves, as well as summon the will to do everything necessary to bring down the numbers, on the way to eventually defeating the virus once and for all. Epidemiology Update From the beginning of the outbreak in February 2020 to date, Lagos State has recorded a total of 64,032 confirmed cases of COVID-19.”

“Of this number, 56,336 have recovered in community, 2,755 are currently being managed actively in community. Over the course of managing the COVID-19 pandemic, about 5,029 patients have been admitted into our various COVID-19 care centres in Lagos. We have, sadly, recorded 390 fatalities in Lagos State, 30 of which have taken place in this current 3rd wave of the pandemic.

 

“Essentially, we have recorded on average 6 deaths per day since last week. 3 Home-Based Care Given the huge population of our State and the rising numbers of confirmed cases during the first and second waves of the pandemic, it became necessary for us to deploy tele-medicine in managing positive patients. In this vein, we launched a home-based program, driven by our EKOTELEMED call center service,” Sanwo-Olu added.

 

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