The new management of First Bank of Nigeria Limited has allayed fears that its exposure to huge Non- Performing Loans (NPL) would impact negatively on the financial health of the bank, stressing that its strategic focus is the reduction in its recurrent expenditure and impairment charges as well as developing and positioning the bank as a topline revenue earner in the economy.
Speaking in an interactive session with the media in Lagos on Tuesday, the Managing Director, Dr. Adesola Adeduntan who led his management team at the session assured that with a customer base of 10million depositors, 7000 branch network across Nigeria and with over 3million Automatic Teller Machines (ATM) deployed across the country, “our bank is aiming to regain its number one regional spot and remains fully embedded in the Nigerian economy in terms of growth and development of the economy.”
He acknowledged that although the bank had challenges and had to contend with high running cost as well as impairment charges, he assured that new management had deployed technological know-how to reduce the trend adding that “the cost to income which was at 67% has been reduced to 57% and our target is to further achieved a reduction to 48% just as we are also looking at getting a better credit profile for our NPLs.”
Adeduntan said despite the bank’s huge NPL exposure, “our fundamentals remain strong because our liquidity ratio is above 15% as required by the regulator. We are currently dealing with the exposures in our books but lots of them are already secured and we have the Profit and Loss (P&L) account to deal with the NPL exposures which have arisen from our failed investment in the oil and gas sector.”
On what the new management is doing to ensure it returns the bank to its number one position, Adeduntan said “right now we are engaged in recoveries and remediation. But importantly, the entire credit system has been overhauled and we have adopted a new model driven by People, Policy, Process and Technology.”
He said the bank under the new management “has adopted the Oracle risk management system and has recruited an internationally certified Credit Risk Officer to ensure that our NPL never goes way near where it is today and we are not in the category of any bank the regulator is intervening because our capital adequacy ratio is above the required minimum. In addition, we have revoked lending authority from junior officers and centralized the approval process to forestall infraction.”
He said under the new management, the bank is changing its business culture and getting its staff to refocus on ‘the customer first’, adding that although there has been spates of retrenchment across banks in the country, he assured that “we have no immediate plans for retrenchment, our staff will continue to be utilised in viable areas so long as they remain useful.”
