Geoff Iyatse
FBNHoldings Plc, the parent company of First Bank of Nigeria Limited, saw its earnings per share (EPS) and profits soar by 125% year-on-year in the first nine months of last year.
But there's more to the story than just a bump in transaction fees; the bank has really stepped up its game in financial intermediation. Over those three quarters, its interest income, a solid indicator of ongoing profitability, skyrocketed by 165% to N1.63 trillion.
These numbers aren't just random fluctuations; they reflect a consistent growth pattern in both revenue and profit over the past few years, earning it the nickname 'decade of miracle' in the investment scene post-2015 crisis.
For example, from 2019 to 2023, its EPS jumped more than four times, going from 195 kobo to 859 kobo, making it one of the fastest-growing stocks in Nigeria. During the same timeframe, its annual operating profit surged over 320%, climbing from N73.8 billion to N310.5 billion.
On the revenue side, earnings nearly tripled, increasing from N623 billion to N1.6 trillion in five years, while total assets rose by N10.7 trillion, finishing last year at N16.94 trillion. According to their records, total shareholder equity grew even faster, from N661 billion to N1.75 trillion, a 163% increase.
A major factor in this growth has been the bank's loans to customers, which shot up by 243% to reach N6.36 trillion by December 2023. These loans are distributed across various key sectors, including oil and gas, manufacturing, agriculture, agro services, construction, and real estate, among others.
The five-year cycle has shown solid growth, but last year's performance really stood out, with the full-year results expected to surpass previous years. In terms of key profitability metrics, the first nine months of last year outperformed the same period in 2023 by a significant margin.
For example, earnings for the first nine months of 2024 reached N2.25 trillion, which is N655 billion more than the total for 2023 and 134% higher than the same period last year, suggesting an annual gross of N2.8 trillion. Interest income saw impressive growth, and non-interest income also jumped by 82% compared to the N320.5 billion from the first three quarters of 2023.
The bank's shift to transaction-led banking is really paying off, especially with the upgrade of its digital payment system. By the end of September, First Mobile had attracted 6.9 million subscribers, and over 23 million people had signed up for various online services.
With a new 10-year vision introduced in 2023 aimed at building on these successes, this "decade of miracle" could be the starting point for a revamped FirstBank. However, the recent boardroom drama and the ongoing dispute with General Hydrocarbons Limited (GHL) are distractions that the bank can't afford. As a result, many stakeholders are pushing for quicker and less confrontational resolutions to these issues.
In the midst of these challenges, FirstBank Group's CEO, Olusegun Alebiosu, outlined a 10-year vision as a key part of its Vision 2033, aiming to elevate the bank to one of the top three universal banks in Africa across retail, wholesale, and wealth management sectors.
“Given that the 10-year vision aspiration is still very market-relevant, and I was also an integral part of the process that birthed it, I intend to focus on ensuring its disciplined execution during my tenure as the Chief Executive Officer.
“As the CEO, I have a clear vision for FirstBank Group, and I am confident that with the strong support of the rest of the management team and board, we will deliver a franchise that will continue to be the pride of Nigeria and Africa within the financial services landscape,” the chief executive, who has told the market that his risk management background means nothing short of sustainable growth, he stated
At the 12th AGM of FBNHoldings on November 14, 2024, shareholders gave the green light for another N350 billion capital raise. The bank plans to roll this out using a mix of strategies this year. With the earlier N150 billion rights issue, FirstBank is set to surpass the new N500 billion minimum capital requirement well before the 2026 deadline needed to maintain its international license.
One of the big challenges traditional banks face today is the edge that digital-first banks like Opay and MoniePoint have due to their cloud-native setups. Unfortunately, the physical branch model creates a legacy hurdle for these banks. However, FirstBank, being a pioneer among traditional banks, is pushing forward with a digital transformation initiative.
According to the CEO, over 90% of transactions initiated by FirstBank customers now take place through digital channels like FirstMobile, FirstOnline, Lit App, *894#, FirstDirect, and ATMs, where they hold a competitive edge.
“As the bank implements its cloud strategy, we are focused on building a nimbler, always-on and resilient financial services group that leverages its rich legacy to serve its customers’ current and emerging needs,” says Alebiosu.
In 2025, the bank is kicking off its strategic planning cycle for 2025 to 2029. They’re really looking to strengthen their leading position in all the markets they serve. A big part of this plan involves making strategic investments aimed at enhancing customer experience, making it easier for both current and potential customers to engage with them, whether online or offline. They’re also focusing on adopting new technologies and boosting their use of artificial intelligence to scale up their digital operations.
However, it’s important for FirstBank and its affiliated organizations to quickly move past any current distractions and keep building on the successes of what they call the ‘decade of miracle’.