To support the Group's strategy and ensure that the Bank's performance can be monitored, management utilises a number of financial KPIs. The table on the previous page presents these KPIs for the period up till March 2009. At a business level, the KPIs are complemented by a range of benchmarks which are relevant to the planning process and to reviewing business performance. FirstBank has a number of key targets against which future performance can be measured (see table).

Net Operating Income Growth

Net operating income growth provides an important guide to the Group's success in generating business. In 2009, the Bank's total net operating income grew by 32.3% to N143.3 billion (Group 31.6% to N163.4 billion), reflecting the resilience of FirstBank's income-generating capabilities in these exceptionally turbulent economic circumstances.

Net Operating Income Mix

Net operating income mix represents the relative distribution of revenue streams between net interest income, net fee and commission income and other income. It is used to understand how changing economic factors affect the Group, to highlight dependence on balance sheet utilisation for income generation and to indicate success in cross-selling fee-based services to customers with loan facilities. This understanding assists the Bank's management in making business investment decisions. Comparison of the revenue mix between 2006 and 2009 shows a downward trend of the other income component.

Cost to Income

Cost to income is a relative measure that indicates the consumption of resources in generating revenue. Management uses this to assess the success of technology utilisation and, more generally, the productivity of the Group's distribution platforms and sales forces. There has been a consistent effort to reduce this ratio.

The Group's cost-to-income ratio rose to 66.8% (2008: 63.7%). This was driven predominantly by rising wage cost on keen competition for skills as well as higher administrative and general expenses reflecting the inflationary environment.

Credit Performance

Credit performance, as measured by risk-adjusted margin, is an important gauge for assessing whether credit is correctly priced so that the returns available after recognising impairment charges meet the Group's required return parameters. The ratio for 2009 was 10.7% for the Group (2008: 13.8%) as loan impairment charges rose at a faster rate than income on higher average risk-weighted assets.

Shareholder Returns

The Bank aims to deliver sustained dividend per share growth for its shareholders. The total dividend for 2009, based on the year to which the dividends relate (rather than when they were paid), amounts to N1.35k, an increase of 12.5% over the preceding year (2008: N1.20).

Return on shareholders' equity measures the return on shareholders' investment in the business. This enables management to benchmark Group performance against competitors and its own targets. In 2009, the ratio was 3.73% lower than the 10.4% achieved in 2008 – a substantial part of which relates to risk assets impairment recognition.

Total Shareholder Return (TSR) is used as a method of assessing the overall return to shareholders on their investment in FirstBank, and this is defined as the growth in share value and declared dividend income during the relevant period. TSR is a key performance measure in rewarding employees. In calculating TSR, dividend income is assumed to be invested in the underlying shares. The TSR benchmark is an index set for the purpose of comparison with the performance of a group of competitor banks, which reflects the Bank's range and breadth of activities. The Bank aims to be in the top quartile of this index.

Management believes that financial KPIs must remain relevant to the business even though they may change over time to reflect changes in the Group's composition and the strategies employed.