Banking

Moody’s Rates First Bank’s NPL Ratio Credit Negative

Published

7 years ago

03/05/2019

By Modupe Gbadeyanka

The non-performing loan (NPL) ratio of First Bank of Nigeria (FBN) Limited has been rated credit negative by Moody’s Investors Service because it requires higher loan-loss provisions that will harm profitability.

Moody’s said in a report on Thursday that, “We expected the bank’s NPL ratio to decline to 15 percent to 17 percent by year-end 2018 and to less than 15 percent this year.

“Although management is confident that a large percentage of these NPLs will be resolved this year, Nigeria’s benign economic environment will likely delay defaulters’ recoveries.”

First Bank, one of the five tier-one lenders in Nigeria, announced in its Q1 2019 earnings through its parent company, FBN Holdings Plc, that its NPL ratio was 25.3 percent of gross loans as of March 2019, and 25.9 percent at year-end 2018, versus 19.8 percent in October 2018.

FBN’s Stage 3 (impaired) loans at year-end were N535 billion (about $1.5 billion), which raised the NPL ratio to its present level, highest among its peers.

According to Moody’s, First Bank’s NPL ratio has been high, averaging around 22.6 percent between 2015 and 2018, indicating a challenging environment.

In addition, the Stage 2 loan, those with a significant deterioration in credit risk were 26 percent of gross loans at year end 2018 because of greater delinquencies.

Assuming there is no loan growth in 2019, and using FBN’s NPL ratio, which is a good proxy for First Bank, the bank would need to cut its stock of Stage 3 loans by about 60 percent to reduce the NPL ratio to below 10 percent, which is its management’s target for 2019. It is worthy to note that slower reduction in NPLs will strain First Bank’s solvency and credit profile.

Moody’s noted that because NPLs are concentrated among a few borrowers, resolution of just a few defaulters would significantly reduce the NPL ratio.

First Bank had substantial provisions of about 82 percent of NPLs as of March 2019, which would allow it to accelerate writing off some of its NPLs.

High NPLs will require First Bank to continue to set aside large loan-loss provisions, which will erode its net profits and reduce the amount it can retain capital.

First Bank’s high loan-loss provisions, which averaged 5.7 percent between 2014 and 2017, are significantly higher than those of its peers, which averaged 1.3 percent over the same period. Management’s 2019 loan-loss provision ratio target is 3 percent to 4 percent.

First Bank’s pre-provision income generation capacity is robust, which enables the bank to absorb these elevated asset risks.

The bank’s ratio of pre-provision income to average assets compares favourably with peers whose average ratio was 3.9 percent between 2014 and 2018.

However, the bank’s ratio of net income to average assets is weaker than its peers, limiting organic capital generation.

Banking

Secure IT, StockMed, 18 Others Make Wema Bank Hackaholics 6.0 Top 20 List

Published

21 hours ago

18/12/2025

Modupe Gbadeyanka

By Modupe Gbadeyanka

The six edition of the Hackaholics of Wema Bank Plc has produced 20 top finalists shared equally between two streams, Ideathon and Hackathon.

The Hackathon finalists are Rapid DEV, Secure IT, Neurafeed, Trust Lock Babcock, Pulse Track, IlluminiTrust, Trust Lock FUTA, Fix Fraud AI, KASH Flow and VOC AI.

The Ideathon finalists include PLOY, Fertitude, VarsityScape, Mama ALERT, StockMed, Chao, All Arbitrate, FarmSlate, Sane AI and Cycle X.

They emerged after a two-day pre-pitch held on December 16 and 17, 2025, for the grand finale slated for Friday, December 19, 2025.

They grand finale of Hackaholics 6.0 will convene the top players in Africa’s tech and innovation ecosystem, creating an avenue for these finalists to not only put their creativity to the ultimate test but also give their solutions visibility to potential investors for additional funding opportunities beyond the prizes to be won.

The prizes to be won for the Ideathon include N25 million for the winner, N20 million for the first runner-up, N15 million for the second runner-up and N5 million each for two women-led teams.

In the Hackathon category, the first to fourth-place winners will receive N20 million, N15 million, N10 million and N5 million, respectively.

The pre-pitch saw the top 43 contenders battle in a game of innovation and problem solving, presenting compelling pitches for a chance to make it to top 10 in their respective streams.

After a rigorous stretch of pitches and presentations, the top 20 emerged, securing their spot in the grand finale of Hackaholics 6.0.

“Hackaholics started off as a hackathon and morphed into an ideation. For Hackaholics 6.0, the sixth edition, we decided to give both the builders of new solutions and the refiners of existing ones, an opportunity to make meaningful impact.

“For us at Wema Bank, we understand that innovation isn’t just building from scratch. Sometimes, it’s looking at what exists and developing new ways to optimise that and create more efficiency. This is the idea behind our two-stream Ideathon-Hackathon structure.

“Every year, Hackaholics shows us just how eager and motivated Nigerian youth are when it comes to exploring creativity and innovation, and we are honoured to be the institution that provides them with the platform and resources to put this drive to good use.

“We toured seven cities, indulged 1,460 participants and discovered hundreds of remarkable ideas; some of which needed some refining and some of which deserved to move to the next stage.

“For those who needed to go back to the drawing board, we provided useful guidance and for the top contenders, we were able to shortlist to the top 43, who proceeded to the pre-pitch. To every participant, Wema Bank is proud of you. This is just the beginning,” the chief executive of Wema Bank, Mr Moruf Oseni, said.

Banking

Customs to Penalise Banks for Delayed Revenue Remittance

Published

1 day ago

18/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigeria Customs Service (NCS) says it will enforce penalties against designated banks that delay the remittance of customs revenue, in a move aimed at strengthening transparency and safeguarding government earnings.

This was disclosed in a statement on the NCS official account on X, formerly known as Twitter and signed by its spokesman, Mr Abdullahi Maiwada, who said the delays undermine the efficiency, transparency, and integrity of government revenue administration.

“The Nigeria Customs Service has noted instances of delayed remittance of customs revenue by some designated banks following reconciliation of collections processed through the B’odogwu platform,” the statement read.

“Such delays constitute a breach of remittance obligations and negatively impact the efficiency, transparency, and integrity of government revenue administration.

“In line with the provisions of the Service Level Agreement executed between the Nigeria Customs Service and designated banks, the Service hereby notifies stakeholders of the commencement of enforcement actions against banks found to be in default of agreed remittance timelines.”

Mr Maiwada disclosed that any bank that fails to remit collected Customs revenue within the prescribed timeline will be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the period of the delay.

He added that affected banks would be formally notified of the delayed amounts, the applicable penalty, and the deadline for settlement.

“Accordingly, any designated bank that fails to remit collected Customs revenue within the prescribed period shall be liable to penalty interest calculated at three per cent above the prevailing Nigerian Interbank Offered Rate for the duration of the delay.

“Affected banks will receive formal notifications indicating the delayed amount, applicable penalty, and the timeline for settlement,” the statement read.

Banking

First Bank Deputy MD Sells Off 11.8m First Holdco Shares Worth N366.9m

Published

1 day ago

18/12/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

The deputy managing director of First Bank of Nigeria (FBN) Limited, Mr Ini Ebong, has offloaded some shares of FBN Holdings Plc, the parent firm of the banking institution.

A regulatory notice from the Nigerian Exchange (NGX) Limited confirmed the development on Thursday.

It was disclosed that the transaction occurred on Friday, December 12, 2025, on the floor of the stock exchange.

The sale involved about 11.8 million shares, precisely 11,783,333 units traded at N31.14 per share, amounting to about N366.9 million.

Mr Ebong, who studied Architecture from University of Ife and obtained Bachelor and Master of Science degrees, became the DMD of First Bank in June 2024. Prior to this appointment, he was Executive Director, Treasury and International Banking since January 2022.

He was previously the Group Executive, Treasury and International Banking, a position he held since 2016 after serving as the bank’s Treasurer from 2011 to 2016.

Before joining First Bank, he was the Head of African Fixed Income and Local Markets Trading, Renaissance Securities Nigeria Limited, the Nigerian registered subsidiary of Renaissance Capital. He also worked with Citigroup for 14 years as Country Treasurer and Sales and Trading Business Head.

He has a passion for market development and has worked actively to drive change and internationalisation of the Nigerian financial markets: foreign exchange, fixed income and securities.

He has worked closely with regulatory bodies such as the Central Bank of Nigeria (CBN) and the Debt Management Office (DMO) in assisting with the development of fresh monetary and foreign exchange policies, to broaden and deepen markets and open them up to international practices.

At various times he has facilitated and delivered courses and seminars on a wide variety of subjects covering Money Markets, Securities and Foreign exchange trading and market risk management subjects to regulators, corporate customers, banks and market participants.