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First Bank’s bad loans hit N13.2bn in three months
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
News
Judge absent in Fayose N6.9bn fraud case, matter adjourned to July 1
Judge absent in Fayose N6.9bn fraud case, matter adjourned to July 1
The money laundering trial of a former governor of Ekiti State, Ayodele Fayose, could not proceed on Thursday due to the absence of the trial judge, Justice Chukwujekwu Aneke, of the Federal High Court, Lagos.
Justice Aneke was said to be away on an official assignment and the case was adjourned to July 1 for the continuation of trial.
Fayose is being prosecuted by the Economic and Financial Crimes Commission (EFCC) for an alleged N6.9bn fraud and money laundering.
He was first arraigned on October 22, 2018, before Justice Mojisola Olatotegun, with his company, Spotless Investment Ltd, on an 11 counts bordering on fraud and money laundering offences.
He pleaded not guilty to the charge and was granted bail on October 24, 2018, in the sum of N50m with sureties in like sum.
The defendant was re-arraigned before Justice Chukwujekwu Aneke on July 2, 2019, after the case was withdrawn from Justice Olatoregun, following a petition by the EFCC against the judge.
He also pleaded not guilty to the charge and was allowed to continue on the earlier bail granted, while the case was adjourned for trial.
Fayose was alleged to have received a cash payment of the sum of five million dollars, (about N1.8bn) from the then Minister of State for Defence, Senator Musiliu Obanikoro, without going through any financial institution.
He was also alleged to have retained the sum of N300m in his account, with a control of the aggregate sums of about N622m.
Fayose was also accused of procuring De Privateer Ltd and Still Earth Ltd to retain the aggregate sums of N851m.
He was alleged to have used the aggregate sums of about N1.6bn, to acquire properties in Lagos and Abuja.
News
Updated: Unite against Israel for humanity, Fani-Kayode tells Christians, Muslims
Updated: Unite against Israel for humanity, Fani-Kayode tells Christians, Muslims
Former Minister of Aviation, Chief Femi Fani-Kayode, has appealed to Christians and Muslims to unite against Israel, drawing parallels between its actions and those of Nazi Germany.
FFK’s message, shared on various platforms, urged Catholics, Protestants, Shia, and Sunni Muslims to set aside their differences and jointly oppose what he termed as the “evil and demonic agenda” of Zionists and the state of Israel.
In his statement, FFK condemned Israel’s alleged history of carnage, ethnic cleansing, genocide, and mass murder, as well as its purported perpetuation of racism, apartheid, religious intolerance, and injustice. He questioned the legitimacy of Israel’s claim to be God’s chosen people, particularly in light of its perceived disregard for human life and suffering, including the targeting of women, children, and babies.
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By likening Israel’s actions to those of Nazi Germany, FFK sought to underscore the severity of the situation, accusing the state of accumulating “much blood on its hands” comparable to the atrocities of the past. He distinguished between the historical Israel of King David, which he portrayed as reverent toward God, and the contemporary Israel under leaders like Benjamin Netanyahu, whom he accused of espousing hatred and aligning with evil forces.
Unite against Israel for humanity, Fani-Kayode tells Christians, Muslims
News
BREAKING: Panic at Lagos airport after fire outbreak, flights diverted
BREAKING: Panic at Lagos airport after fire outbreak, flights diverted
Following a fire at the facility, the Federal Airports Authority of Nigeria (FAAN) has diverted flight operations from Terminal 1 of the Murtala Muhammed International Airport (MMIA) in Lagos to the D Wing.
The fire outbreak occured at the E54 Passenger Air Bridge at the domestic wing of the Airport.
The incident occurred at 5:29hrs on Thursday, according to a press release issued by Obiageli Orah, FAAN’s head of public affairs and consumer protection.
According to the statement, the fire, however, was brought under control by the Airport Rescue and Firefighting Services (ARFFS) at 06:41hrs while efforts to ventilate the smoke from the building were in progress.
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“At 05:29 hrs, smoke was detected billowing from the E54 Bridge, leading electrical engineers to immediately cut off power to the entire E Wing. The Airport Rescue and Firefighting Services (ARFFS) team was quick to respond, arriving at the scene by 05:30 hrs. Initial suspicions point to sparks from an electrical unit as the cause, but a thorough investigation is ongoing to ascertain the cause of the fire.
“The incident, which had escalated into a fire, was brought under control by 06:41 hrs. Efforts to ventilate the smoke from the building are in progress. In the meantime, all flight operations in Terminal 1 of MMA have been diverted to the D Wing. More details will follow shortly,” Orah stated.
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