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Adesola Kazeem Adeduntan MD/CEO ,FBN’  has ,indeed, hit the reset button; with a zeal  to restore the bank back to its glorious past and with fire in  his  belly , he has been steering  the financial Holding company (Holdco) and  currently navigating to the top , battling through a stream of operating headaches and re configuring the bank for leadership; no doubt ,  the brand is gaining stronger  traction  with the target to reclaim its industry leadership .

The feat couldn’t have been achieved without a strong determination and intellectual energy , relevant expertise and experience. To make the bank effectively competitive, Adeduntan has been busy  adjusting the bank’s  internal strengths to the environmental opportunities in the last few years. He is also  identifying ,  combining , re-combining , and managing   the  resources, competencies and capability to explore its potential and perform better than the competitors on the customer needs, preferences ,and desires satisfaction. 

The reason for this may not be far to seek .  The advantage of an organization consists in identification of the internal core competences, mainly based on knowledge assets and intellectual capital, that align with the key success factors of the market  that gives competitive advantage, better performance and better market position. Adeduntan was not oblivious of  external  forces , he identified  opportunities in the environment and built  strategy by matching resource capabilities to those opportunities .  He also  focused on resources and competencies that could influence its strategic success; those that could differentiate it from its rivals , deliver uniqueness potential and therefore superior performance. This is done by  building strategy on the bank’s unique competencies and resources , seeking  out markets where those competencies have special values or creating   new markets on the basis of such competencies.

Between 2015 and 2020 , the management led by Adeduntan had put up a spirited fight  to bail out  FBN from  both interest rate and  credit risk battles inherited by him from his immediate  predecessor . It is not only First Bank  that is confronted with these battles , bank management is coterminous with risk management   . In managing the risks, every bank has to satisfy five main constituencies. These include the surplus units from which it borrows, deficit units which borrow from the banks , shareholders, regulatory authorities and finally the community at large which is the  provider of the environment within which it operates . First Bank has a  long history of credibility and strong brand loyalty  that have delivered its  impressive performance for over a century in those five constituencies ; its unique resources and competences were instrumental to its ability  to satisfy the five constituencies every bank is naturally exposed to

The above initiatives  efforts ,however, paid off  more in the financial year 2021 than the years before .   He  has ,indeed, lived up the  expectations of regulatory authorities and other stakeholders of the bank ;it is now a season of turnaround with competitive order of magnitude . First  Bank  first staged the strongest comeback with its 2021 full year results ; its Q1 and Q2 2022   results consolidated the gains of that full year . With these results , analysts are equally optimistic that the bank will   retain the key strengths of growing revenue, moderating interest expenses and improving profit margin and stay the course of rebuilding profit for the second  straight year in 2022 .  

He has restored the investors’ confidence too. FBNH exceeded the  industry which returned -1.3% over the past year and the market which returned 2.1% over the past year. Its year on year return is 45.6% . Also its Earnings per share (EPS) is N4.6 ; gross margin , 92.92% and  Net Profit Margin , 30.25%. These performance indices are highly competitive and are signals of the return of FBN to the leadership track since 2021 .

For this, FBN is regarded as the soul of Nigeria economy with highly competitive and robust capital, deposit base ,sound assets and best in class value creation capability ; the architecture of the Nigerian banking industry could be said to be built around this dominant financial supermarket or player ; it could also be said that it has become an industry standard  ,an exemplary  organization .But between 2015 and 2020 , making   sense of an uncertain and increasingly complex  environment  around  it was a tug of war.


In 2015 , downturn hit First Bank hard. It was  confronted by  certain challenges that emanated from its large exposure to the global oil market downturn .  This crisis crept in after 2015 oil price crash ,though it started in the middle 2014 when the oil price started nose diving . As though this were not enough, the 2016 recession in Nigeria aggravated the situation on ground .Both had very grievous impacts  on the health of banks .First Bank was  worst hit for obvious  reasons : 47 percent  of its loan book comprised of oil and gas debt .The exposure was to the domestic oil and gas companies that bought oil fields from the oil majors like Shell and others when the price of oil was above $100 per barrel .The crisis  inflicted  heavy misfortunes on the bank  competitive trajectory: stagnant growth,  declining margins and falling  market share ;  its after tax profits were down by 82 percent and its nonperforming loans shot up to 18 percent from 3 percent in 2014 ;in the nominal  term  it’s bad loans increased by 445 percent in 2015 .

Sequel to this , it became a tug of war to live up to the above expectations particularly shareholder’ expectations and the regulatory authorities .The darkest spot that landed First Bank  in this trouble was the lending with the burden of delinquent loans that consequently stymied its earnings and capital  ;its market value equally  plummeted to a ridiculous level . The devastating impact of the bank’s bad loans may not be farfetched   .The importance   of loans  in banking cannot be overemphasized; it is the highest earning asset in the balance sheet ; it contributes materially to the achievement and fulfillment of the objectives  of profitability by providing higher return  than other financial assets   .All the technical training a banker receives is heavily geared towards lending .When it is said that one is a good or an astute banker ,what ,in fact , is meant is that one is a shrewd lender . –one who lends money safely and profitably ;it became difficult to live up to these.   Though , the crisis, no doubt, impacted negatively on the strategic capability of this bank , it survived it and now on its way up to reclaim its leadership position in the industry .

Darkest Spot Sanitized   

But First Bank is not the only one that has become a victim of a market vagary . However, though the present management of the bank led by Adeduntan inherited the crisis, it  developed an iron teeth to break the hard nut    .  No ,doubt , First Bank has sanitized the darkest spot. It  caged  highhandedness of the board and executive management actions  to restore a proper corporate governance architecture in 2021 ,  swiftly cleaned up its delinquent loan books, reducing its non performing loan ratio   .

To achieve these the management embarked strategic restructuring and re-engineering .This may not be farfetched ,. When the competitive problems become inescapable most executives pick up the knife and begin the brutal work of restructuring.  And the goal is to carve away layers of corporate fat ,jettison under performing businesses and raise the asset productivity.

First Bank’s management in a bid to arrest the deleterious impacts of delinquent loans headed for the operating room for emergency surgery; it had no option than this  since the foundation of the past  had  shaken and fractured  as the industrial terrain changed shape  faster  than the top management  could refashion its basic beliefs and assumptions  .This may not be farfetched . When there is a discrepancy between the change in the pace of industry environment and pace of change in the internal environment this usually  bring  out or spawn the daunting task of organization transformation.  This includes downsizing, overhead reduction, employee empowerment, and process redesign and portfolio rationalization.

What ,however , is commendable is the transparency with which this was carried out . In this environment, banks face a skeptical if cynical public. Rightly so; what with the proclivity for the interest mongers to duck festering positions behind spruced up figures. Not so for First Bank; it preserved age long  image and credibility  for itself as it grappled   with the challenge of competing in a harsh environment. The bank is at work, sleeves rolled-up, digging a trench for bad and delinquent loans and entrenching good governance with full disclosure and this has affected bottom line. It is the sinecure for a stronger balance sheet in the future.  


Today , First Bank is on the  fast lane reclaiming its leadership position bringing down its cost-to-income ratio (CIR) and restoring the group to its tier 1 status with robust balance sheet . The bank’s audited full-year result  beat analysts’ expectations to show a strong corporate rebound with net earnings growing by +68.37%, customer deposits rising steadily, and cost-efficiency (CIR) improving by over 100 basis points. FBNH’s gross earnings grew by +28.21% (Y-o-Y) from N590.6bn in FY 2020 to N757.3bn in FY 2021, representing the Holdco’s highest gross earnings in the last four years, reversing the -5.80% (Y-o-Y) growth rate decline between FY 2019 and FY 2020    


The financial year 2021 and Q1 ,2022 results became a springboard leveraged by FBN for a better Q2, 2022. This has proved some pessimists who had predicted that FBN may be about to sustain the impressive and turnaround result  of 2021 .  When the result  was  released not many believed  it could be sustained beyond 2021 .The observation was that the critical enablers of FBNH’s performance in FY 2021 and Q1 2022 might  repeat  themselves in FY 2022 and Q1 2023, since according to them they represent one-off book adjustments and loan recovery gains or write backs to the profit and loss account. They also noted that  the lender’s books were not totally the consequence of activities in the normal course of its business begs the question of how far the group is on the mend. 

But they were wrong ;Q2 ,2022 results were ,indeed, outstanding . And the result is now  generating commendations from the bank’s stakeholders ;the leadership too is excited.   Commenting on the results, Dr. Adesola Adeduntan, Chief Executive Officer of First Bank of Nigeria Limited (Commercial Banking Group) stated that: “Amidst a challenging operating and dynamic regulatory environment in H1 2022, the Commercial Banking Group remained focused on executing key initiatives to position the Group for improved profitability in FY2022. Our half- year results further reinforced our drive towards our ‘Quantum Profitability Leap’ agenda. Our gross earnings are up 22.6% y-o-y to ₦338.5 billion and net interest income up 49.3 % y-o-y to ₦152.9 billion respectively. On the back of the impressive growth recorded in our top line, our profit before tax recorded a strong growth of 40.0% y-o-y to ₦60.0 billion, whilst profit after tax also grew by 42.3% y-o-y to ₦53.3 billion as the Bank continues to reap the dividends of the successful restructuring of our balance sheet and revamping of our risk management architecture. We continue to record progress in driving down our non-performing loan ratio which now stands at 5.4% at the end of H1 and we are on target to bring it within regulatory limit of 5% by end of FY2022.

He is optimistic of better future performance too. “As we go into the second half of 2022, I am confident that the Commercial Banking Group will sustain the current momentum of generating impressive returns from the quality risk assets portfolio already created, whilst optimizing”

For the half year 2022 , FBNHoldings continued to demonstrate resilience despite the challenging operating environment with impressive improvements  in revenue and profitability.  The bank maintained its earnings growth levers on the upbeat,  Its gross earnings  grew by  22% from N293.4b to N359.2%.This was   spurred by a step up in interest earnings  by  40.6%  to N226.4% from  N161.0b  year on year  at the end of the first half .


This is where the pessimists are equally disappointed with strong showing of the bank  in the core banking income segment . Critics had raised doubt on the ability of bank to sustain the impressive performance   of FY 2021 and Q1 2022 growth,  due to  the bank’s   declining net interest income and rising impairment charge.   Its net interest income grew at greater paces by 47.3%  to  N152.9b  from N103.8b as its interest expenses grew by slower paces at 16% compared to interest income  to N36.79b from N31.63b.  A moderate decrease in   impairment loss on financial assets moreover boosted the positive impact  of the increase in net interest income and enhanced its profitability .Net loan impairment expenses fell  by 23 per cent to N10.42b billion from N13.63b  at the end of  June 2022   . The expenses claimed nearly 13 per cent of net interest income against 26.5per cent in the same period last year. With the strength of improving revenue ,depressing  the pace of the increasing   interest expenses and reduction in  its impairment charges Impairment charges for losses ,  FBN was able to dilute the impact of credit loss expenses and still add some momentum to the bottom line; its impairment charges Impairment charges for losses to 21.7  from 26.7 ,indicating year on year decrease of  -18.7%. What boosted  gains from the core banking segment is the improvement in the yields on earning assets though its cost of fund increased slightly .While the  Earnings yield grew to  7.5%  from  6.8%  its   Cost of funds  inched to 1.9% from  1.8%  leading to improvement in its  Net-interest margin to  5.1%   from 4.4%    


However, this impressive performance in the interest income segment was nearly frustrated or punctured by non-interest income which  shrank  insignificantly by 0.2% to N120.6b from N120.9b . The slight decline in the non- interest income segment could be attributed to the greater depressive pressures exerted by Net (losses)/gains from financial instruments at FVTPL   at N3.52b  as against gains of  N19.31b  recorded in 2021; also , other  operating income was another spoiler that led to less inspiring non interest income ,it fell by 73.4%  to N4.46b from N16.77b . The bank  should ,however , be commended for putting up frantic efforts that yielded impressive results in its net fee income ,foreign exchange income as well as net gains from the sale of investment securities which increased by 7.2%,387% and 120% respectively to ameliorate the negative impacts of the above spoilers .  


Despite the slight damage  from Net (losses)/gains from financial instruments at FVTPL and  other  operating income     FBN Group   sustained its profitable growth trajectory by recording an impressive 45.3% increase in profit before tax at the end of June 2022, a significant jump to N 65.7 billion from the N45.2 billion recorded in the same period in 2021. Also, profit after tax grew at greater paces by 48.6% Year-on-Year to N56.5 billion from N38.1 billion in 2021. Solid growth across all businesses supported this performance   .This supersonic jump in its profitability was still  made   possible despite 21.9 percent growth in its operating expenses .  

The Group remains committed in its transformation drive that resulted in stronger balance sheet and better asset quality with non-performing loans closing at 5.4% at H1 2022 fromm7.2% in 2021 .. Similarly, risk management capability remains robust across the Group supporting the drive for enhanced earnings for sustainable capital accretion. During the period, cost to income ratio remained flat y-o-y despite the inflationary and currency pressure, indicating its focus on optimising overall efficiency. The Group Nnamdi Okonkwo, the Group Managing Director,GMD, noted : “Our strategic intent remains unchanged in optimising opportunities that drive growth in revenue, profitability, capital accretion and overall operational efficiency that delivers sustainable value to our stakeholders.”

Return on Equity (RoE)

FBNH’s shareholder’s equity rose by +15.0% (Y-o-Y) to N879.5bn in contrast to N765.2bn in 2020, mainly supported by the +135.5% increase in retained earnings.  

The bank’s net income margin and equity growth in 2021 generated higher shareholder return with a +46.0% increase from 12.6% in Q1 2021 to 18.4% in Q1 2022, analysts believe the returns served as a signal for investors to go long riding on hidden-value opportunities (see chart 11 below). The bank’s improved earnings in Q1 also spread to the equity returns, rising to 14.5 in Q1 2022 compared to 8.2% in Q1 2021. The +132.02% rise in retained earnings and bottom-line earnings accounted for the expansion 

Return on Assets 

The asset turnover ratio for the bank improved, settling at 18.4 compared to 12.6 in 2020. The growth was attributed to the considerable rise in its top-line earnings which rose by +68.37% (Y-o-Y) and the simultaneous growth of its assets by +16.1% (Y-o-Y).  

The higher ratio indicates that the bank generated 1.8k revenue for every N1 of asset employed in comparison to the 1.3k revenue generated in both 2020 and 2019, hereby depicting an efficient optimization of its available assets relative to previous years (see chart 13 below). The increased profitability of the bank in the first three months this year reflected an efficient use of its assets, with the asset turnover ratio climbing up by +75.0% from 0.8 recorded in the previous year to 1.4 


It was noted that the Holdco’s CIR fell slightly from a high of  68 percent to  67.9 percent between the first half of 2021 and the  first six months of 2022; the improvement came off the back of net income that grew by 47.3% in the Half year  2022 . Starting from 2021 financial year end to the first quarter 2022,FBN cost to income ratio has taken a downward indicating its operational efficiency .   Between  the first quarter  and the corresponding period in 2022 it declined from 69.6% to 67.0%    .Analysts observed that the Holdco’s cost-to-income ratio (CIR) improved with a -17.78% decline in Q1 2022 from Q1 2021 despite a difficult operating environment in 2022. Ignoring the +14.2% rise in operating cost, the +37.9% rise in net interest income helped to push down the group’s CIR. The lower ratio suggested an improvement in cost efficiency  .

Gross loans to deposits

FBN increased its loan to deposit ratio from 51.7% in the first half of 2021 to 55.9% in the similar period of 2022  .This is  sequel to the increase in its gross loans to N4.532trn from N4.019trn as its total deposit inched up to N7.325trn from N6.948trn . Despite the growth in its loans to  deposit ratio which indicates increase in risk by the bank it maintained a better asset quality  as its  non performing loan ratio improved from 7.2%  to 5.4%  The bank’s  asset quality impacted positively leading to a more  impressive growth record of the bottom line. Instead, it gained speed on profit growth from the half-year position from 2021  year-on-year at the end of the second quarter 2022 .


FBN’s balance sheet also gained further sinecure with the group’s asset base increased by +17.5% from N7.84bn to N9.21bn in this quarter and Customer deposit rose by +20.5% year on year (Y-o-Y) between Q1 2021 and Q1 2022

Share Price Movement

The speculation of the possibility noticeable profit-taking  in June came to pass   as investors went  short, to take advantage of the rise in price  but this was  tempered by other investors willing to wait for dividend payments to enhance their overall investment yield 

The Holdco’s share price traded in a neutral channel in Q1 2021 before a breakout occurred in September as it saw increased volatility. The lender’s price volatility calmed towards the end of 2021 and reverted into a Q1 neutral channel in 2022. It eventually rose by +35.6% to a peak of N12.20 in October 2021, but steadily tilted downward towards December 2021 when it dipped by -5.74% to 11.50.

Technical analysts have noted that in Q2 2022 the Holdco’s share price rose by +4.35% to 12.00 and swung several times within a trading range between N11.05 and N12.00, then finally settled at N11.85 in May.

The impressive half year performance is a consolidation of its first quarter ,2022 results .At the end of the first three months of 2022 , the bank’s Net interest income rose by +37.9% , operating expenses grew by +41.2% relative to the preceding year. The profit before tax still inched up by +93.2% despite the rise in its operating expenses indicating a commendable growth in earnings. Despite the fact that the Loan and advances to customers grew by +32.8% in Q1 its impairment charges declined by -33.3%.

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