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Ibukun Awosika
Ibukun Awosika
Mrs. Ibukun Awosika; Chairman First BAnk Holdings Plc

First Bank to fire 1,000 workers

FBN Holdings Plc, the parent company of First Bank Nigeria Limited, is planning to cut about 1000 jobs and focus less on providing loans to the oil industry in a bid to reverse the 2015 financial year’s 82 per cent slump in profit.

The lender expects to boost its return on equity, a key measure of profitability, to between 11 per cent and 14 per cent in 2016 from last year’s “really bad” figure of three per cent, according to the Chief Executive Officer of First Bank of Nigeria Limited, FBN’s main subsidiary, Mr. Adesola Adeduntan.

He said the company was also targeting a cost-to-income ratio of 55 per cent in two years time from 59 per cent, Bloomberg reported.

“ROE will be much better than last year,” Adeduntan said in a telephone interview from Lagos on Wednesday.

“At a minimum, we should triple it. We do not shy away from taking difficult decisions. We used to have above 8,000 people. We’ll push it down, gradually to 7, 000,” he added.

Its net profit fell to N15bn ($76m) from N84bn in 2014, as impairments soared and the economy slowed amid a crash in the price of crude, the biggest source of Federal Government revenue and export earnings.

Growth decelerated to 2.8 per cent in 2015, the lowest level since 1999, and may worsen to 2.3 per cent this year, according to the International Monetary Fund.

First Bank’s non-performing loans ratio stood at 22 per cent at the end of March, compared with 3.8 per cent a year earlier. Reducing that figure is the “number one priority,” said Adeduntan.

He said the bank would do that by reducing the proportion of its lending to the oil and gas sector, currently at about 39 per cent of total loans, and focusing more on blue-chip companies in other industries.

Adeduntan ruled out any equity raising this year, saying the bank’s capital adequacy ratio of 17.2 per cent was enough of a buffer and above the Central Bank of Nigeria’s minimum requirement of 15 per cent.

It would still be adequate if the floor is raised to 16 per cent in July for Systemically Important Institutions, including First Bank.

“We continuously evaluate it and the position now is that there’s no need for external capital,” Adeduntan, 46, who became the CEO in January after joining First Bank as chief financial officer in mid-2014, said.

“We generate enough internal capital,” he said. FBN’s shares rose by 5.3 per cent to N3.57 on Wednesday. They are, however, still down 30 per cent this year, more than the Nigerian Stock Exchange All Share Index’s drop of 13 per cent.

The bank’s valuation lags that of its main competitors such as Guaranty Trust Bank Plc and Zenith Bank Plc. Its stock trades at 0.22 times book value, or the theoretical price that shareholders will get if all assets are sold and liabilities paid off. That compares with 1.18 times for GTBank and 0.62 for Zenith.

“The market has over-corrected,” Adeduntan said, adding, “It’s priced in all the negative information. For us, it can only go up.”

President Muhammadu Buhari

President Muhammadu BuhariFG declares Monday public holiday

The Federal Government has declared Monday, May 2, 2016 as public holiday to commemorate the 2016 Workers’ Day Celebration.

The Minister of Interior, Lt. Gen. Abdulrahman Dambazau (retd.), who made the declaration on behalf of the government, congratulated Nigerian workers for “their resilience, hard work and commitment to the change mantra of President Muhammadu Buhari, despite current challenges.”

A statement by the Permanent Secretary, Ministry of Interior, Bassey Akpanyung, on Thursday in Abuja, enjoined the workers to continue to support the President in his desire to fight corruption, ensure security of lives and property and stabilize the economy through creation of jobs and diversification of the economy.

Dambazau further urged Nigerian workers to re-dedicate themselves to the service of the nation and remain productive for the growth and development of the country, the statement said, adding that the minister wished all Nigerian workers a joyful and peaceful celebration.

President Muhammadu Buhari

President Muhammadu BuhariBREAKING: Buhari, Governors others meet over economic crisis

 

President Muhammadu Buhari is currently meeting with the 36 state governors.

The meeting which started at exactly 2pm is holding inside the Council Chambers of the Presidential Villa, Abuja.

Most of the state governors are in attendance while a few others were represented by their deputies.

One of the main critics of the President, Governor Ayodele Fayose of Ekiti State is absent.

The meeting is also being attended by Vice-President Yemi Osinbajo; Minister of Finance, Kemi Adeosun; and the Governor of Central Bank of Nigeria, Godwin Emefiele.

It is expected to discuss the economic crisis facing the country and the herdsmen attacks in parts of the country among other national issues.

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