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First Bank lays down its plans to be the number 1 Digital Bank

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The CEO of First Bank Plc, MD/CEO, Dr. Adesola Adeduntan had a media parley on Wednesday, 20th of March 2018 where he laid out the bank’s vision for the future. Nairametrics Founder, Ugodre Obi-chukwu was in attendance and had a chance to ask a few questions which we believe our readers could be interested in.

For First Bank, the oldest corporate institution in Nigeria, it also wants to be the leader in the digital revolution that is increasingly changing the financial landscape of the country. Before we get to the key questions asked by Nairametrics, let us summarized the key strategic ambitions articulated for the bank by its CEO;

  • Attain No 1 In digital customers
  • and E-transaction volumes
  • Top 3 in customer satisfaction
  • 35% growth in customers and number of accounts by 2019
  • Achieve 20% ROE by 2019
  • Achieve sub50% Cost to income ratio target by 2019
  • Achieve sub 10% NPLs by 2019

Now to the questions;

On increasing customers to over 30 million

We asked the CEO how the bank intends to manage customer acquisition cost typically associated with increasing the customer base of the bank

In response, he explained that the bank planned to leverage on its economies of scale which would enable it to increase customer base without increasing cost significantly. For example, it says the technological infrastructure it has deployed and plans to scale will ensure that it can cater for continuous customer acquisition drive without necessarily increase the cost per head.

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One the rise of Digital Banking

We asked him about the increasing adoption of Digital Banking in Nigeria and in Africa and how First Bank intends to confront the impending threat of a disruption. We also asked if the bank will be considering setting up a spin-off subsidiary that will focus mainly on Digital Banking.

In response, Dr. Adesola Adeduntan explained that the rather than set up a new subsidiary for Digital Banking, it will build on the successes of First Mobile, its banking mobile application as a vehicle into full-fledged digital banking. He also highlighted the Digital Labs initiative that the bank is currently promoting as a venture that would give the bank access to innovation-driven product and services. He also explained that First Bank is already on track for this as nearly 80% of customer induced transactions are carried out online. He remarked that First Bank facilitated over N1 trillion in USSD transactions in 2017 and has repeatedly carted awards for its prowess in the e-business space. 

On First Bank’s share price

The CEO was asked if the current share price of First Bank, trading at about N12 was rightly priced at an earnings multiple of about 19x when rival Tier 1 banks were still trading under 10x earnings multiple. We also wanted to know if he thought this was priced in already

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In response, he argued that the current share price of the bank was justified and a reflection of the inherent value the bank has. He further explained that the bank’s Strategic Plans will even portend more valuation for the company. He said the bank’s market value had increased by over N150 billion in the last year when it traded at under N3 to the N12 that it currently trades at today. 

On Non-interest income

Gleaning from some of the results that have been released, we pressed the CEO on the bank’s plans to grow non-interest revenue.

He responded by assuring investors that the bank was going to focus on growing its E-business assets an area where they believe they have significant upsides. He also explained that the bank is refocusing its overseas branches towards better operational efficiencies and profitability. For example, the China Branch will not only help facilitate trade with Nigerian businesses but with other African countries where they also have footprints in.

On hitting the N1 trillion in Gross Revenue mark

We asked if the bank was in the race to achieve N1 trillion in Gross Earnings seeing that rival Zenith Bank posted N745 billion in Gross Earnings for 2017 up 47% year on year. FBNH the parent company of First Bank reported

Dr. Adesola took a deep breath as he gathered his thoughts before answering this question. In response, he declared that the race to N1 trillion was still wide open and that First Bank was in it to win. 

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Other nuggets

  • The Bank’s foreign subsidiary will now report to its Group Executive, International Banking Group, Bashirat Odunewu.
  • The Bank will not be paying its holding company a dividend for 2017. However, this does not stop the Holding Company from paying dividends.
  • The bank currently does over 5000 transactions per minute on its ATM’s scattered nationwide. He claims the bank owns 25% of ATMs in the country.
  • Interesting to note that he said First Bank’s unique position as one of the few Nigerian banks that facilitate millions in transactions daily is significant to being a Systemic Important Bank.
  • They have also recruited a new Chief Risk Officer from the African Develop Bank who will be tasked to fix the bank’s risk assessment processes.

Finally,

At 12 per share (currently) First Bank appears to be overvalued. However, following this media briefing we believe the bank has a clear-cut strategy that could help sustain the current valuation at the very least.

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For the bank to continue to maintain investor positive sentiments, it will hope that some of its plans continue to materialize in the first quarter of 2018. 2017 is more or less a transition year for this bank considering that it had to take provisions of most of its loans.

Restructuring a humongous bank like First Bank is not a walk in the park considering its cost and benefit dynamics and the length of time required to deliver. So the bank will hope that it has the right human resource in key positions that can help it attain these objectives.

 

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Corporate Press Releases

UBA gets double honours at BAFI Awards

… Wins Best Bank of the Year, International Bank of the Year

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Pan-African financial institution, United Bank for Africa (UBA) Plc, carted two highly coveted laurels at the BusinessDay’s Bank and other Financial Institutions Awards (BAFI) winning the Bank of the Year and the International Bank of the Year at the glamorous event held over the weekend.

The bank beat other strong contenders – Zenith Bank, Guaranty Trust Bank, Access Bank and First Bank – to clinch the two top categories in a well-attended ceremony comprising of Bank CEO’s, Captains of Industries and Senior financial executives.

UBA won the ‘Bank of the Year’ in recognition of UBA’s consistent effort in outperforming its peers using a composite of financial metrics, strategic foresight, execution discipline, world-class governance and global vision.

The Bank also won the award for ‘International Bank of the Year’, a keenly contested category, that pitches Nigerian financial institutions that have expanded on the continent against their international peers operating across Africa.

UBA’s Deputy Managing Director, Mr. Liadi Ayoku, who received the awards on behalf of the bank, expressed his delight on the recognition from BusinessDay.

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He said, “These awards mark another milestone for UBA Group and is a testament of the diligent execution of the bank’s strategic initiatives on customer service. Being recognized as Nigeria’s best bank complements positive feedback from customers and is a recognition of our improving efficiencies, service quality and innovation. I therefore dedicate it to our growing loyal corporate and retail customers, who are our essence. Given our heritage commitment to Africa’s development, we continue to impact lives through our service as well as funding to individuals, businesses and government.”

l-r: Head of Media and External Relations, UBA Plc, Ramon Nasir; Deputy Managing Director, United Bank for Africa, Liadi Ayoku, President, Nigerian Institute of Taxation, Dame Gladys Olajumoke Simplice; and Managing Director, BusinessDay Newspapers. Mr Ogho Okiti at the BusinessDay Bank and other Financial Institutions Award (BAFI) where UBA won Bank of the Year and International Bank of the Year Awards, held in Lagos at the weekend.

Ayoku pointed out that the bank remains focused on its goal of democratizing banking in Africa, leveraging on new technologies and emphasised its determination to change the narrative of financial services in Africa.

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Publisher of BusinessDay Newspapers, organisers of the event, Frank Aigbogun, noted that UBA has excelled in the key areas of prioritising customers, which according earned the bank the double honours.

While explaining the rationale behind UBA winning the two prestigious categories in its December issue, Aigbogun noted that the bank stood out in prioritising customers as has been evident in the significant rise in Customer Deposits which leaped by 35.7 % to N5.2trillion up from N3.8 trillion at the end of the last financial year.

He noted that even though Africa’s economic landscape has been unpredictable in recent times which resulted in recession in Nigeria and some of Africa’s best performing economies, the bank still found its rhythm and excelled.

He said, “In these conditions only the most diversified and innovative of regional banks can prosper. And this is precisely why UBA has scooped the BAFI 2020, Best Bank of the year and International Bank of the year, a testament to hard work, resilience. For one, the lender registered impressive top- and bottom-line growth over the review period.”

United Bank for Africa Plc is a leading Pan-African financial institution, offering banking services to more than twenty-one million customers, across over 1,000 business offices and customer touch points, in 20 African countries. With presence in the United States of America, the United Kingdom and France, UBA is connecting people and businesses across Africa through retail; commercial and corporate banking; innovative cross-border payments and remittances; trade finance and ancillary banking services.

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Corporate Press Releases

COVID-19: FirstBank launches next-generation ATM, spearheads innovation in electronic banking in Nigeria

FirstBank customers can now leverage the real-time mobile banking capabilities of their cellphones to activate cash withdrawals at the FastTrack ATM.

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First bank, Dr. Adesola Adeduntan, CEO, FirstBank

In the light of COVID-19, FirstBank has launched the FastTrack ATM, a Next Generation ATM and first of its kind in Africa, designed to promote financial activities on the ATM devoid of any form of physical interaction with the machine. The introduction of the FastTrack ATM which is done in partnership with Inlaks enables customers carry out cash withdrawals without having to touch the interface of the ATM.

With the FastTrack ATM, widely referred to as Touchless Solution, the customer carries out the transaction by using his or her mobile phone to perform the needed steps designed originally for implementation on the ATM. By using one’s phone, the transaction is carried out – in advance – through the Bank’s USSD or mobile banking option. Upon the schedule, the customer visits the FastTrack ATM to complete the transaction by tapping a contactless Near Field Communication (NFC) card on the ATM to withdraw his or her cash.

READ: Mobile Banking applications remain the most popular platform for digital banking

FirstBank customers can now leverage the real-time mobile banking capabilities of their cellphone to activate cash withdrawals at the FastTrack ATM. The ATM solution is the Bank’s response to control the spread of COVID-19, whilst promoting the safety of customers that carry out transactions at the ATM.

Speaking on the launch of the FastTrack ATM, Dr. Adesola Adeduntan, CEO, First Bank of Nigeria Limited said ‘at FirstBank, we are driven to provide seamless financial solutions to ensure our customers are able to timely carry out their transactions in safe, secured and efficient ways, thereby putting them ahead in digital banking, not just in Nigeria but Africa. We are delighted to set the pace regarding the use of the Next Generation ATM in Africa which enables customers to use their mobile phones to remotely initiate ATM-based cash withdrawals via our *894# USSD banking or FirstMobile application. At the core of our strategy lies innovation which is critical to adapting to the new normal’.

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READ; Zenith Bank posts PBT of N177.3 billion in 9M 2020

According to Olufemi Adeoti, Managing Director, Inlaks, “given that consumers are more adaptable to mobile technology Inlaks – the Africa’s leading Information Technology Solutions provider together with Hyosung ATM OEM are partnering with FirstBank to introduce the first fully compliant COVID-19 FinTech ATM. This is in alignment with the ‘new normal’ desired customer experience which includes digitalization and delivering a secure contactless cash access to the bank’s FirstMobile customers for better user experience, simplicity, speed and convenience’’

In recognition of its giant strides at promoting electronic banking in the country, FirstBank’s mobile banking application – FirstMobile –  was recently awarded the Best Mobile Banking App award 2020 in the Global Finance Best Digital Bank Awards 2020 as well as 2019 Best Mobile Banking App by Global Business Outlook.

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READ: FBN Holdings announces N25 billion capital injection into FirstBank

FirstBank has been at the forefront of promoting electronic banking solution in Nigeria. In 2017, the Bank was recognized as the first financial institution in Nigeria and the West-Africa sub-region to issue 10 million ATM cards to customers across the country. The bank was the second in Africa to achieve the milestone.

These feats are achieved through the trusts in its industry-leading innovative banking solutions by over 10 million customers on its USSD *894# banking platform and over 4.1 million customers on its FirstMobile banking application, endearing the Bank to process about 30% of card transactions in the entire banking industry in the country.

About FirstBank

First Bank of Nigeria Limited (FirstBank) is the premier Bank in West Africa and the leading financial inclusion services provider in Nigeria for over 125 years.

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With over 750 business locations and over 57,000 Banking Agents spread across 99% of the 774 Local Government Areas in Nigeria, FirstBank provides a comprehensive range of retail and corporate financial services to serve its over 15 million customers. The Bank has international presence through its subsidiaries, FBN Bank (UK) Limited in London and Paris, FBNBank in the Republic of Congo, Ghana, The Gambia, Guinea, Sierra-Leone and Senegal, as well as a Representative Office in Beijing.

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The Bank has been handy at promoting digital payment in the country and has issued over 10million cards, the first bank to achieve such a milestone in the country. FirstBank’s cashless transaction drive extends to having more than 9million people on its USSD Quick Banking service through the nationally renowned *894# Banking code and over 3 million people on FirstMobile platform.

Since its establishment in 1894, FirstBank has consistently built relationships with customers focusing on the fundamentals of good corporate governance, strong liquidity, optimised risk management and leadership. Over the years, the Bank has led the financing of private investment in infrastructure development in the Nigerian economy by playing key roles in the Federal Government’s privatisation and commercialisation schemes. With its global reach, FirstBank provides prospective investors wishing to explore the vast business opportunities that are available in Nigeria, an internationally competitive world-class brand and a credible financial partner.

FirstBank has been named “Most Valuable Bank Brand in Nigeria” six times in a row (2011 – 2016) by the globally renowned “The Banker Magazine” of the Financial Times Group; “Best Retail Bank in Nigeria” for seven consecutive years (2011 – 2017) by the Asian Banker International Excellence in Retail Financial Services Awards and “Best Bank in Nigeria” by Global Finance for 15 years. Our brand purpose is always to put customers, partners and stakeholders at the heart of our business, even as we standardise customer experience and excellence in financial solutions across sub-Saharan Africa, in consonance with our brand vision “To be the partner of the first choice in building your future”. Our brand promise is always to deliver the ultimate “gold standard” of value and excellence. This commitment is anchored on our inherent values of passion, partnership and people, to position You First in every respect.

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Biden to appoint Nigerian-born attorney as Deputy Treasury Secretary

Nigerian-born attorney, Adewale Adeyemo has been selected by US President-elect, Joe Biden as Deputy Treasury Secretary.

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United States President-elect, Joe Biden, has selected a Nigerian-born attorney, Adewale Adeyemo, as the Deputy Treasury Secretary.

This was disclosed by Biden on Sunday, according to Wall Street Journal.

Adeyemo, who is a former senior international economic adviser during the Obama administration, will serve under former Federal Reserve Chair Janet Yellen, who Biden plans to appoint to lead the US Treasury Department.

Adeyemo’s appointment is one of many key cabinet positions Biden is expected to announce in the coming days.

What you need to know

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Born in Nigeria, Adeyemo was raised in California where he obtained a bachelor’s degree before proceeding to Yale Law School for his legal education.

Before his appointment into the Obama administration, Adeyemo worked as an editor at the Hamilton Project, then served as senior advisor and deputy chief of staff to Jack Lew in the United States Department of Treasury.

He later worked as the chief negotiator for the Trans-Pacific Partnership and also served as the first chief of staff of the Consumer Financial Protection Bureau under Elizabeth Warren.

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In 2015, he was appointed to concurrently serve as Deputy National Security Advisor for International Economics and deputy director of the National Economic Council.

He went on to become the first president of the Obama Foundation.

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