First Bank: Staying ahead with technology reinvention

In his book, “The Age of Agile”, Steve Denning, former knowledge management program manager at the World Bank, discusses a “Copernican revolution” in management that highlights why innovations are no longer optional, but a necessity for the success of traditional management. banks.

This requires organizational cultural transformation, Denning rightly argues, and especially in banks that have long been guided by traditional measures. The Denning scenario basically sums up the story of FirstBank.

With a rich history dating back to 1894, First Bank under the leadership of Adesola Adeduntan is reinventing itself and tackling its biggest disruptors – fintechs and telecom operators by embracing innovative technologies and introducing more customer-centric experiences and digital for its customers.

As part of its efforts, the bank recently unveiled a fully automated subsidiary FirstBank Digital Experience Center, which has added to its bouquet of digital products such as USSD banking, FirstMobile, WhatsApp banking, among others.

For Adeduntan, at the heart of an agile and resilient business is technological innovation that enables organizations to stay one step ahead.

“The banking industry is very dynamic,” he says in an article published by KPMG, a multinational professional services network and one of the Big Four accounting organizations.

Growing strength

First Bank’s customer accounts grew from around 10 million in 2015 to over 36.9 million in the first quarter of 2022; the bank is also the second largest card issuer in Africa with over 11.9 million cards issued and over 18.6 million active customers on FirstBank’s digital banking platforms.

Top-tier bank ranked 2nd in Nigerian Consumer Digital Banking Satisfaction Index by Agusto & Co, won Best Banking Brand, Nigeria Award by Global Brand and named Investment Bank of the year in Nigeria by BusinessDay.

The bank reported further improvement in its half-year financial performance, with its after-tax profit standing at N56.5 billion in the first half of 2022, the bank’s highest half-year profit in 11 years. .

Beyond digital banking, First Bank’s cost-to-income ratio, a ratio used to determine how efficiently a business is run and how it earns its own organic revenue, remained at an impressive 68% in first half of 2022, an improvement from 56.5% in 2018.

“Amid a challenging operating environment and a dynamic regulatory environment in the first half of 2022, the Commercial Banking Group remained focused on executing key initiatives to position the group for improved profitability in fiscal year 2022. Our half-year results have further strengthened our drive to achieve our ‘quantum leap in profitability’ agenda,” said Adesola Adeduntan, Managing Director of First Bank of Nigeria Limited.

First Bank also recorded net interest income of N152.9 billion, 49.3% higher than the N102.4 billion recorded in the corresponding period of 2021.

Following years of strategic restructuring of its balance sheet and operations, its gross profit also shifted north by 22.43% to N338.5 billion in the first half of 2022, and its total assets grew by 18.7% to reach N9.5 trillion in June 2022. , from the N8.02 trillion recorded the previous year, just as its customer deposits also grew by 24.1% for reach 6.3 trillion naira, compared to 5.1 trillion naira recorded the previous year.

The recent turnaround and improvement in non-performing loans has also been a major boost in its quest to further improve profitability and strengthen its leadership in the financial services industry in Nigeria.

The bank’s customer loans and advances also improved by 43.4% to N3.38 trillion in the year under review from N2.36 trillion the previous year.

The bank has also lowered its NPL ratio significantly, from double digits in 2016 to single digits of 5.4% in the first half of 2022.

The Bank remains committed to its transformation momentum, which has resulted in a stronger balance sheet and improved asset quality, with non-performing loans closing at 5.4% in the first half of 2022. risk remains solid within the Bank, supporting the search for improved earnings for sustainable capital growth.

Bankers Magazine: Best Performing FirstBank in Nigeria

Its new winning streak emerged recently when it was recognized by The Banker Magazine, a Financial Times Limited publication, in the Top 100 African Banks Ranking 2022. The award showed that FirstBank tops the Nigerian rankings in four domains – the highest achieved by any Nigerian bank.

According to the ranking, which is based on the 2021 financial statements, the bank leads its peers in Nigeria in terms of overall performance, profitability, efficiency and return on risk. He was also second in the growth ranking.

The magazine, which explained that its ranking of Africa’s top 100 banks for 2022, demonstrates a broad return to stability for African banks after a torrid year for the continent’s biggest lenders placed FirstBank among other banks in Nigeria because ‘it turned out to be the only bank that led in four areas.

Euromoney ranking: FirstBank, market leader

Additionally, in 2022, Euromoney Market Leaders, an independent global assessment of financial services providers conducted by Euromoney Institutional Investor Plc, crowned FirstBank as a market leader.

The bank has been ranked among the top-tier banks in the areas of Corporate Social Responsibility (CSR).

Not only that, but FirstBank has also become a market leader among tier-one banks in the area of ​​Environmental, Social and Governance (ESG).

In the area of ​​corporate banking and digital solutions, FirstBank was highly rated, as it was crowned as a notable player in SME banking for the period under review.

fitch reviews

Fitch Ratings has raised the long-term issuer default ratings (IDRs) of FirstBank Limited and its parent, First Bank Holdings Plc, from ‘B’ to ‘B’, citing key performance indices including improved capitalization , asset quality and good health. profitability.

According to Fitch, “First Bank’s impaired loan ratio (IFRS 9 Stage 3 loans) declined significantly to 5.6% at the end of the first half of 2022 from a peak of 25% at the end of 2018 in due to significant write-offs, successful restructurings and recoveries and, more recently, the flattering effect of strong loan growth Stage 2 loans remain significant (15% of gross loans at the end of the first half of 2022), but Fitch expects these to decline as oil and gas exposures return to performing Specific loan loss provision coverage of impaired loans (49% at the end of H1 2022) is acceptable considering given its guarantee levels.

The rating agency further noted that FBN Holdings’ fixed charge coverage (FCC) ratio (19.1% at the end of the first half of 2022) has been on an upward trend in recent years, due to strong internal capital generation, which has been influenced by a modest dividend payout ratio, adding that “impaired loans net of specific loan loss provisions have declined as a share of FCC in recent years to a low moderated by 12% at the end of the first half of 2022. Operating profit before impairment is considerable (a 5.1% annualized rate of average gross loans in HY22), providing a reasonable buffer to absorb PFR without affecting capital .

The premier bank, in operation for over 128 years, has been recognized for its dedication and success in banking, corporate philanthropy, socio-economic development, business support and business development. commercial.

In the first five months of this year, the bank gained global recognition when Superbrand International presented FirstBank with the 2022 Superbrand Award for “maintaining tremendous brand perception for 128 years”.

More rewards

Additionally, the International Investor Awards recognized FirstBank as the Best Bank in Nigeria for the year 2022. This follows an independent survey and data from Thomson Reuters. The same survey and data from Thomson Reuters, International Investor Awards also awarded FirstBank the Best Banking Digital Transformation in Nigeria for the year 2022.

FirstBank has won the award for Best Digital Transformation Bank in Nigeria at the International Investor Awards 2022, a print and online publication that provides information, news and visual insights on topics ranging from global markets, investment opportunities , industry analysis and more.

Recently, First Bank of Nigeria Limited announced its commemoration of the 2022 edition of Customer Service Week to be celebrated globally from October 3-7, 2022 with the theme “Celebrating Service”, which will be marked in the bank’s subsidiaries in more than half a dozen. countries, including FBNBank UK, FBNBank Ghana, FBNBank Senegal and FBNBank Gambia. The others are FBNBank Guinea, FBNBank DRC and FBNBank Sierra Leone.

Last year the bank was also honoured, with Most Innovative Retail Banking App in Nigeria 2021 by the Global Banking and Finance Awards, African Bank of the Year 2021 and Innovative Banking Product from the year 2021 by African Leadership Magazine Awards and Best Online Bank in Nigeria 2021. by International Business Magazine added to his inflated profile.

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