thisday0520

28 THISDAY • WEDNESDAY, MAY 20, 2015
BUSINESSWORLD
NIGERIAN BANKS AS CATALYST TO ECONOMIC GROWTH
with the award of the ISO22301 (Societal
Security: Business Continuity Management
System) certification.
Cash Machines
A distinct leader by total assets and gross
earnings in the Nigerian banking industry,
First Bank of Nigeria, a subsidiary of FBN
Holdings Plc, is validating its leadership
position yet again as it presently accounts
for 38 per cent of bills payment services in the
nation’s banking industry as at December 2014.
As at December 2014, the bills paid through
the bank’s Automated Teller Machines (ATMs)
stood at about N928.48 million while the value
of airtime purchase on all its ATMs was over
N3.2 billion. The bills payment option is one
of the features of First Bank’s ATMs, which
also have other unique functional features
which include cash transfer, air-time top-up,
and cash deposit among others.
The bills payment option is the non-cash
transaction feature on the ATM that makes
it easier for customers to pay for bills such
as Cable TV subscription, post-paid phone
bills, and pre- booked airline tickets. These
transactions can be executed through the
Quickteller option on any of the bank’s ATMs.
The Transfer feature enables customers
to transfer money from their accounts to
both intra (within the bank) and interbank
(other banks) accounts, thereby reducing
the queues in the banking hall, save time
as well as provide a more convenient option
for customers’ money transfer needs. In 2014
alone N251 billion was transferred from one
account to another using First Bank ATM.
To reach out to more customers and in line
with its strategy to drive ease of service in
banking, First Bank is presently leading in the
industry as the bank with the highest number
of Automated Teller Machines (ATMs) with
over 2500 ATMs deployed across the country,
making it the nation’s financial institution
with the widest retail footprint.
The bank is also currently responsible for
over 40 per cent of interbank transactions
and 26 per cent of airtime vending. As active
mobile network users in Nigeria are over
130 million and the need to recharge is on
the increase, the bank’s ATMs also provide
the platform for easy top-up.
To further enhance convenience, First
Bank’s ATMs also operate the Cash Deposit
function which allows customers to deposit
funds without customarily having to enter
a banking hall for this transaction. This is a
direct testament to its value proposition of
putting customers first.
According to the bank, this distinct
development was achieved as a result of the
bank’s desire to reach out to more people
in the country and as part of living true to
putting customers at the heart of our business.
“First Bank is positioned to meet the needs
GMD/CEO, First Bank of Nigeria Limited, Bisi Onosanya
of its customers and to reach out to the under
banked and unbanked. Our mission is to make
banking as convenient for our customers as
is obtainable globally”, the bank said.
Financial Performance
Most analysts believe the bank’s shareholders
will continue to enjoy mouth-watering returns
if the 2014 financial year results is anything
to go by. A review of the results show that
gross earnings increased by 21.3 per cent
y-o-y, 44.2 per cent q-o-q to N480.6 billion,
supported by strong growth in non-interest
income at N111.8 billion (66.1% y-o-y, 54.5%
q-o-q), followed by a 12 per cent y-o-y and
18 per cent q-o-q growth in interest income
to N362.6 billion. The bank said the growth
in non-interest income was driven primarily
by growth in foreign exchange income as well
as fees and commission income.
“Overall, gross earnings have been supported
by increased business volume as well
as enhanced treasury management activities,
“the bank said.
Also, net interest income increased 6.0 per
cent y-o-y and 9.8 per cent q-o-q to N243.9
billion (Dec 2013: N230.1 billion) despite 27.0
per cent y-o-y increase in interest expense.
Net interest income grew by N67.4 billion
in the last quarter, slightly stronger than the
earlier quarters, primarily due to 6.9% y-o-y
and 56.5 per cent q-o-q increase in income
from investment securities, followed by a
346.4 per cent q-o-q increase (10.3% y-o-y)
in interest on loans and advances to banks as
First Bank benefits from being a net placer in
the interbank market. Income on loans and
advances to customers grew 14.2 per cent
y-o-y to N251.2 billion. Interest income was
supported by re-pricing and reallocation of
assets and investments to the shorter end of
the curve given the increasing interest rate
environment. The composition of Interest on
customers’ loans and advances to interest
income was sustained at 69.3 per cent, income
from securities at 25.4 per cent, followed by
income from loans and advances to banks
at 5.3 per cent. In the same vein, the bank’s
unaudited results for the three months ended
March 31, 2015, showed that its gross earnings
increased by 23.5 per cent y-o-y to N126.8
billion with strong y-o-y growth of 51.2 per
cent in non-interest income to N29.3 billion
(March 2014: N19.3 billion).
Gross earnings, the bank said, was further
supported by a 17.0 per cent y-o-y increase
in interest income to N95.3 billion.
Negatively affecting gross earnings was the
impact of the CBN’s implementation of the
revised COT charges and the sterilisation of
the loanable funds in reserve requirements.
Net interest income increased 1.3 per cent
y-o-y to N59.6 billion (March 2014: N58.8 billion).
Interest income closed at N95.3 billion,
up 17.0 per cent primarily due to a 16.9 per
cent growth in interest on loans to customers’
at N68.3 billion and 12.3 per cent growth in
investment securities to N22.2 billion (March
2014: N19.7 billion). Net interest income was
however impacted by a 57.4 per cent y-o-y
increase in increase in interest expense to N35.7
billion due to the impact of an increase in
the monetary policy rate from 12 per cent to
13 per cent which commenced in November
2014, thereby increasing the savings deposit
rate (30 per cent of MPR) to 3.9 per cent from
3.6 per cent.
Corporate Identity Refreshed
As a brand of fortitude, strength and innovation
in the Nigerian financial sector, following
its adoption of a holding company structure,
First Bank on January 27, 2014 unveiled a
refreshed corporate identity, including that
of all its subsidiaries, designed to reflect the
company’s strategic direction and position it
to meet the future needs of the market. The
African elephant which is a respected and
instantly recognisable icon of its brand identity
was retained. However, it was re-ignited with
a number of enhancements that communicate a
robust evolution relevant to today’s marketplace.
The Bank
First Bank of Nigeria Limited is Nigeria’s
leading financial services institution by total
assets and gross earnings and one of the
largest corporate and retail banking financial
institutions in sub-Saharan Africa (excluding
South Africa). Since its establishment in 1894,
the Bank has consistently built relationships
with customers focusing on fundamentals of
good corporate governance, strong liquidity,
risk management and strong capitalisation.
First Bank operates an extensive distribution
network with over 750 business locations
(623 branches, 61 quick service points and 69
cash canters/agencies), over 2,464 ATM’s and
over 9 million customer accounts. The Bank
provides a comprehensive range of financial
services and has international presence through
its subsidiaries, FBN Bank (UK) Limited in
London and Paris, Banque International de Credit
(B.I.C) in the Republic of Congo, International
Commercial Bank (ICB) in Ghana, The Gambia,
Guinea, Sierra-Leone and Senegal as well as
its Representative Offices in Johannesburg,
Beijing and Abu Dhabi.
Nigeria’s First Sugarcane Bio-factory Begins Operation
•FG targets production of 12.5million cane seedlings per annum
The federal government has inaugurated
Nigeria’s first Sugarcane Bio-factory in Zaria as
part of efforts to achieve national self-sufficiency
in Nigeria’s sugar requirements.
Minister of Industry, Trade and Investment,
Mr. Olusegun Aganga, said the inauguration
of the one-million seedling per annum capacity
bio-factory was the first in the series of biofactories
to be established in the next five years,
with combined capacity estimated at 12.5million
cane seedlings per annum. Aganga spoke while
declaring the Sugarcane Bio-factory open for
operations at the Ahmadu Bello University,
Zaria, Kaduna State on Monday.
He said: “The provision of high grade and
quality seedlings of sugarcane is essential for
the attainment of the set goals of the National
Sugar Master Plan. A bio-factory is a facility
where disease-free crop seedlings are rapidly
micro-propagated under controlled laboratory
environment for planting in the fields.
“This facility is designed to address a critical
constraint facing Nigeria’s sugar industry –
timely provision of high quality and clean seeds
to sugar estates and farmers across Nigeria.
We expect that, in four years, five of this kind
of facility would have been established across
Nigeria with capacities of between 2million
and 2.5million seedlings per annum each.”
Aganga explained that the projection in the
NSMP was that at least 250,000 hectares of
sugarcane fields would be required for processing
in about 28 mills of varying capacities
to produce 1.79 metric tons of sugar in the
first phase of the Master Plan. He said: “The
event today marks another milestone in the
implementation of the Nigeria Sugar Master
Plan, which was approved by the administration
of President Goodluck Jonathan in September
2012. The NSMP is one of the major sectoral
policies under the Nigeria Industrial Revolution
Plan, enunciated by the Ministry of Industry,
Trade and Investment and launched by the
President in February 2014. The ultimate goal is
to make Nigeria’s manufacturing sector highly
competitive and dynamic.
“The production of sugar is an integrated
process with field and factory processes that
are inter-dependent and mutually inclusive.
Thus, efficiency in the cultivation and supply of
sugarcane is essential for efficient milling and
production of sugar and associated by-products
such as ethanol and electricity.”
He noted that the vibrancy and efficiency
of the Brazilian Sugar industry had been
attributed to the investment and innovation
services, which institutions like Brazil’s Cane
Technology Centre(CTC) were providing to the
sugar industry in Brazil.
“This is what the National Sugar Development
Council seeks to replicate for the Nigerian sugar
industry through the establishment of this biofactory.
Today, I feel fulfilled by the achievements
that we have recorded under the programmes and
policies that were executed under my charge as
the Minister of Industry, Trade and Investment.
“One of the major aims of the NIRP is the
deliberate linkage of research, technology
and innovation to industry. Bio-technology in
particular has opened to mankind a vast array of
opportunities to significantly improve both the
quality and quantity of biological deliverables”,
the minister added.y
Speaking during the event, the Executive
Secretary, National Sugar Development Council,
Dr. Latif Basari, said the new bio-sugarcane
factory would fast-track the development of the
nation’s sugar industry, boost industrialisation
and generate employment. Busari said: “For us,
the establishment of this ultra-modern facility
that would support cutting edge technologies to
rapidly multiply sugarcane seeds for our sugar
estates and farmers is a clear demonstration
of the determination of this administration to
link our nation’s industrial development to
advances in science, technology and innovation.
“It will enable the Sugar Council to achieve
the NSMP goal of ensuring sustainable sugarcane
production and enhanced productivity
of sugar mills, all resulting in meeting our
sugar sufficiency target.”
According to the executive secretary, this
will also ensure the long-term viability of the
Nigerian sugar industry and guarantee that
Nigeria continues, not only to be food-secure
in sugar but also derive all the notable benefits
such as contribution to clean renewable fuel
and power generation; huge employment
opportunities; poverty alleviation and rapid
rural industrial development.