Banking
S&P Affirms First Bank ‘B-/B’ Ratings, Revises Outlook to Stable

By Dipo Olowookere
One of the leading rating agencies in the world, S&P Global Ratings, has revised its outlook on First Bank of Nigeria to stable from negative.
In a statement issued on Wednesday, S&P also revealed that it has affirmed its ‘B-/B’ long- and short-term counterparty credit ratings on top Nigerian lender.
In addition, the rating firm said “we have raised our long-term national scale rating on First Bank to ‘ngBB+’ from ‘ngBB’, while we have affirmed our short-term national scale rating at ‘ngB’.”
“Furthermore, we took the same rating actions on FirstBank’s non-operating holding company (NOHC), FBN Holdings PLC (FBNH),” S&P said.
Explaining the reason for its action, the agency said the rating actions reflect its view that First Bank’s regulatory capital has improved and the risk of breaching regulatory requirements has thus diminished.
In addition, the bank’s funding and liquidity remain a credit strength. Although asset quality remains a weakness, it believes this was stabilizing mainly due to the steadying of the oil price and new management’s efforts.
“We expect First Bank will continue to display weaker asset quality metrics and lower profitability than other rated top-tier banks in Nigeria in 2017 due to continuing high credit costs. That said, we believe that the bank’s new leadership team will address the legacy asset quality issues and institute more prudent risk management measures,” the rating company stated.
According to S&P, cost of risk jumped to 10.4% at year-end 2016 from 5.7% at year-end 2015, and nonperforming loans (NPLs) increased to 24.4% for the same period compared with 18.1% the prior year.
The performance of the bank’s portfolio stems from high concentration and foreign currency loans (51% of total loans in 2016), particularly the oil and gas-related exposures.
This performance and the huge impairments have prompted the bank to recruit a new Chief Risk Officer and launch a review of its risk management process to improve loans approvals, risk monitoring, and collection.
The bank is also in the process of de-risking its loan portfolio by converting some of its vulnerable foreign currency exposures to local currency.
“In our opinion, cost of risk will remain high and above the sector average, but decline to 5.3% over the next 12-18 months, while we think NPLs will drop below 20%. At year-end 2016, the bank restructured 5% of its portfolio, with the oil and gas sector accounting for 70% of the total.
“We expect First Bank to continue to restructure some loans, particularly in the downstream oil, manufacturing, and general commerce sectors in 2017.
“We anticipate that our risk-adjusted capital (RAC) ratio for the bank will decline slightly below 5% in the next 12-18 months. This will result from the bank’s risk asset growth moderately outpacing internal capital generation, based on our assumption of a 20% devaluation of the Nigerian naira (NGN) in 2017 and high credit costs,” the statement said.
On Dec. 31, 2016, FirstBank’s CAR improved to 17.8% from 15.4% on June 30, 2016, following a write back of a capital charge of NGN29 billion ($95 million) for exceeding the related party single obligor limit and an increase in retained earnings.
First Bank raised U.S. dollar funding in 2013 and 2014, which underpins its long dollar position at year-end 2016. The bank’s U.S. dollar-denominated subordinated debt provides a natural hedge to its capital position in the scenario of naira depreciation.
Positively, S&P said it views the bank as well-positioned in Nigeria’s competitive banking sector, thanks to its large retail footprint, low cost of funding, and stable deposit base. On Dec. 31, 2016, First Bank recorded a stable funding ratio of 125%, supported by a high proportion (66%) of deposit funding.
The bank’s foreign currency maturity profile displayed positive gaps at year-end 2016. Net broad liquid assets covered 54% of short-term deposits, comparing well with peers.
However, similar to other banks operating in Nigeria, First Bank’s deposit base is somewhat confidence sensitive, due to its contractually short-term nature.
The ratings on the bank reflect the overall creditworthiness of the First Bank group, whose group credit profile (GCP) it assess at ‘b-‘. The bank is the core component of the group, which is one of the largest in the Nigerian financial services industry, with a significant retail franchise, providing it with a leading deposit franchise and good naira liquidity.
S&P said despite the bank’s high systemic importance, the ratings on First Bank reflect its assessment of the bank’s core group status to the First Bank group and its GCP of ‘b-‘.
“We classify the likelihood of support from the Nigerian government to systemically important banks as uncertain and, as such, we do not factor into the ratings any uplift above the bank’s stand-alone credit profile (SACP).
“Our ratings on First Bank’s holding company FBNH are at the same level as the ratings on First Bank, reflecting the absence of debt at the holding company level. Under our criteria, we generally notch down from the GCP to reflect the structural subordination of the NOHC and its exposure to potential regulatory intervention.
“Nevertheless, in FBNH’s case, we take into account the absence of debt at the holding company level and believe that the risk of the NOHC defaulting is not commensurate with the ‘CCC’ rating category,” the agency said.
S&P said further that the stable outlook on First Bank reflects its view that the bank will maintain its CAR above the minimum requirement of 15% over the next 12 months, despite expectations that risk-weighted asset growth will moderately outpace internal capital generation. It also reflects our view that asset quality will continue to stabilize, although still at weak levels, while the bank will maintain its above average funding and adequate liquidity over the next 12 months.
However, the rating agency warned that, “We could lower the ratings on First Bank if we saw a sharp deterioration of capitalization due to higher risk weights (caused by a devaluation of the Naira) or weaker asset quality due to higher credit losses than anticipated.
“A positive rating action on First Bank would depend on the bank substantially improving its asset quality indicators, while maintaining its capitalization, business position, and funding and liquidity at levels commensurate with a higher rating.”
Banking
Advans Nigeria Appoints Odetayo as Deputy Chief Executive Officer

By Modupe Gbadeyanka
To improve operational efficiency, Advans La Fayette Microfinance Bank has appointed Mrs Elizabeth Odetayo as the new Deputy Chief Executive Officer.
She will work closely with the Chief Executive Officer, Mr Gaetan Debuchy, and the executive team to drive the bank’s strategic initiatives, optimize operational performance, and expand its reach to empower more individuals and businesses with access to tailored financial solutions.
Before her new appointment, she served as the Chief Financial Officer (CFO) of Advans La Fayette Microfinance, where she played a pivotal role in shaping the bank’s financial strategy, ensuring robust fiscal management, and supporting its mission to provide inclusive financial services to underserved communities.
A statement from the financial institution disclosed that the appointment of Mrs Odetayo became effective Saturday, February 1, 2025.
She is expected to bring her over 20 years of wealth of experience and a proven track record of excellence in the financial services sector to her new role.
“This strategic appointment underscores the bank’s commitment to fostering leadership from within and strengthening its executive team to drive continued growth and innovation,” a part of the statement read.
Mrs Odetayo has demonstrated exceptional leadership, strategic vision, and a deep understanding of the microfinance industry.
Her expertise in financial management, risk assessment, and operational efficiency has been instrumental in advancing the bank’s objectives and enhancing its impact on clients and stakeholders.
Commenting on the appointment, Mr Debuchy said, “Elizabeth’s appointment as Deputy CEO is a testament to her dedication, expertise, and outstanding contributions to our bank.
“Her deep understanding of our operations and her commitment to our mission position her to help steer the bank toward achieving its strategic goals.
“We are confident that her leadership will further strengthen our ability to deliver impactful financial services to our clients.”
In her reaction, Mrs Odetayo said, “I am honored to take on this new responsibility and to continue contributing to the growth and success of the bank.
“I look forward to collaborating with our talented team to drive innovation, enhance customer experience, and expand our reach to create lasting value for the communities we serve.”
Advans La Fayette Microfinance remains committed to its mission of fostering financial inclusion and empowering individuals and businesses through accessible and sustainable financial solutions.
The appointment of Mrs Odetayo as DCEO marks an exciting new chapter in the bank’s journey toward achieving its vision.
Her promotion and over 130 staff in 2024 is a demonstration of the bank’s commitment to empowering its employees, fostering a culture of excellence, and driving productivity against all odds. By investing in internal talent, Advans continues to build a strong, motivated workforce that is equipped to deliver on its mission and vision.
Banking
NIBSS Upgrades NQR Payment to Reduce Cash Dependency

By Adedapo Adesanya
The Nigeria Inter-Bank Settlement System (NIBSS) has unveiled significant upgrades to its Nigeria Quick Response (NQR) payment system.
The mechanism is designed to reduce cash dependency and streamline and enhance digital transactions for businesses and individuals across Nigeria.
The NQR payment system, launched in March 2021, is part of Nigeria’s broader push to promote cashless transactions across the country.
The system allows customers to make payments by scanning a QR code, which redirects them to their bank or mobile wallet to complete the payment. It is also timely and avoids delays.
Speaking on the development, Mr Premier Oiwoh, MD/CEO of NIBSS, emphasized the evolving capabilities of NQR and how it is poised to revolutionize payments, transactions are processed instantly, ensuring immediate settlement.
“This account is the only QR in the world that is instant for the beneficiary,” he said.
He noted that the system is also far more robust, offering smoother and more secure transactions. It now supports both Person-to-Person (P2P) and Entity-to-Person (E2P) payments, significantly expanding its use cases.
“Beyond the P2P, there is also E2P on the MQR, and most of the bank apps have it today.
“My dream is to have hawkers on the streets being able to present their QR in the form of an ID card and then make payment. Cash cannot be everywhere, what we are all looking for is payment” he said.
“You can also send your personal QR code to anybody to pay you rather than send an account number,” he said
Mr Oiwoh announced that a new pricing structure for NQR payment will take effect on March 1, 2021.
The use of QR codes is expected to significantly reduce Nigerians heavy reliance on cash, thereby contributing to the digital economy infrastructure and financial inclusion agenda of the Central Bank of Nigeria (CBN).
Banking
UBA Resolves ‘Transfers to Other Banks’ Glitch on Mobile Banking App

By Aduragbemi Omiyale
The United Bank for Africa (UBA) Plc has restored full service to its mobile banking app after some customers experienced difficulties completing financial transactions from the platform.
Business Post reports that earlier, some UBA customers could not make fund transfers to other financial institutions from the mobile app.
The lender quickly swung into action to resolve the issue and has fully restored its mobile banking app service, with customers now able to send funds to other banks via the platform.
Confirming this development, the bank, in a notice to customers on Thursday afternoon, said, “We are pleased to inform you that the transfers to other banks service has been restored on the UBA Mobile Banking App.
“We sincerely apologise for any inconvenience this may have caused and reassure you of our commitment to continuously improve our services.”
While thanking them for their patience and understanding, UBA advised any customer still experiencing “any further issues [to] please contact our CFC support team.”
“For enquiries, please contact our 24-hour Customer Fulfilment Centre (CFC) on 02012808822 or send us an email at [email protected],” the message said.
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