The directors present their annual report on the affairs of First Bank of Nigeria Plc ('the Bank') and its subsidiaries (together 'the Group'), together with the financial statements and auditors' report for the nine months ended 31 December 2009.
A. Legal Form
The Bank, which commenced operations in Nigeria on 31 March 1894 as a branch of Bank of British West Africa Limited (BBWA), was incorporated as a private limited liability company in Nigeria in 1969. It was converted to a public company in March 1970. The Bank's shares were listed on the floor of the Nigerian Stock Exchange by way of introduction in March 1971.
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B. Principal Activity and Business Review
The principal activity of the Bank is the provision of banking and other financial services to corporate and individual customers. Such services include granting of loans and advances, corporate finance and money market activities. Its major subsidiaries carry on capital market, insurance and trusteeship businesses.
The Bank has 10 subsidiaries, namely: FBN Bank (UK) Limited, FBN Capital Limited, FBN Trustees Nigeria Limited, FBN Mortgages Limited, First Registrars Nigeria Limited, FBN Microfinance Bank Limited, First Pension Custodian Limited, FBN Insurance Brokers Limited, FBN Bureau De-Change Limited and First Funds Limited.
The Bank prepares consolidated financial statements.
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C. Operating Results
Gross earnings decreased by 9.8% and profit before tax of the Group decreased by 58.2% during the year. The directors recommend the approval of a final dividend of N2.9 billion (March 2009: N33.6 billion). Highlights of the Group's operating results for the period under review are as follows:
| |
31 December 2009
N'million |
31 March 2009
N'million |
| Gross earnings |
196,408 |
217,630 |
| Profit before tax |
11,585 |
27,686 |
| Taxation |
(8,396) |
(15,117) |
| Profit after taxation |
3,189 |
12,569 |
| Appropriations |
31 December 2009
N'million |
31 March 2009
N'million |
| |
3,189 |
12,569 |
| Transfer to statutory reserve |
236 |
5,369 |
| Transfer to SME reserves |
64 |
1,754 |
| Transfer to retained earnings reserve |
2,889 |
5,446 |
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D. Directors' Shareholding
The direct and indirect interests of directors in the issued share capital of the company as recorded in the register of directors' shareholding and/or as notified by the directors for the purposes of sections 275 and 276 of the Companies and Allied Matters Act and the listing requirements of the Nigerian Stock exchange is noted:
Directors' holdings
| Name |
Number of ordinary shares held
31 December 2009 |
Number of ordinary shares held
31 March 2009 |
| Otudeko, Ayoola O |
(Direct) 4,763,850
(Indirect) 435,478,666 |
(Direct) 4,083,300
(Indirect) 478,005,813 |
| Onasanya, Stephen Olabisi |
2,716,053 |
2,328,046 |
| Abubakar, Abdu |
(Direct) 1,179,042
(Indirect) 123,958 |
Nil |
| Adesola, Harriet-Ann Omobola |
12,510,465 |
10,723,256 |
| Afonja, Ajibola A |
23,130 |
19,826 |
| Ajumogobia, Ibiai Alaliba |
58,697 |
50,312 |
| Duba, Garba |
13,280,803 |
11,383,546 |
| Hassan-Odukale, Oye |
(Direct) 2,236,112
(Indirect) 41,152,639 |
(Direct) 1,916,668
(Indirect) 37,806,584 |
| Lawanson, Kehinde A |
4,470,165 |
3,831,570 |
| Mahmoud, Abdullahi |
969,494 |
830,996 |
| Ngama, Yerima Lawan |
3,032,888 |
2,459,932 |
| Odunlami, Remi |
115,244 |
14,781 |
| Otti, Alex C |
5,083,683 |
4,357,443 |
| Oyelola, Oladele |
5,295,096 |
4,538,654 |
| Rasheed, Mahey R |
28,061 |
Nil |
| Mutallab, Umaru Abdul |
(Direct) 18,335,282
(Indirect) 322,198,535 |
(Direct) 15,715,956
(Indirect) 276,170,173 |
| Sanusi, Sanusi Lamido |
153,659 |
131,708 |
Mr Oba Otudeko has indirect shareholdings amounting to 435,478,666 through Metropolitan Trust Limited (279,935,098), Honeywell Staff CT & CS (98,811,227) and Orbit International Limited (56,732,341). Mr Hassan-Odukale Oyekanmi has indirect shareholdings amounting to 41,152,639 through Haskal Holdings Limited (12,162,697), LAC Investments Limited (24,220,170) and OHO Investment Limited (4,769,772) while Dr Abdu Abubakar has indirect shareholding amounting to 123,958 through 1st Investment Option Limited.
In accordance with the Company's articles of association, the following directors Dr Alex C Otti, Mrs Bola Adesola, Mr Kehinde Lawanson, Ms Ibia Ajumogobia and Prince Ajibola Afonja will retire and, being eligible, offer themselves for re-election; while Alhaji Mahey R Rasheed, OFR, be and is hereby elected as an independent Director of the Company.
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E. Directors' Interests in Contracts
For the purpose of section 277 of the Companies and Allied Matters Act, CAP C20 LFN 2004, none of the directors had direct or indirect interest in contracts or proposed contracts with the Company during the year.
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F. Property and Equipment
Information relating to changes in property and equipment is given in Note 22 to the Accounts. In the directors' opinion, the market value of the Group's properties is not less than the value shown in the financial statements.
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G. Shareholding Analysis
The shareholding pattern of the Bank as at 31 December 2009 is as stated below:
| Share range |
Number of shareholders |
Percentage of shareholders |
Number of holdings |
| 1–9,999 |
1,011,902 |
77.50 |
2,581,723,014 |
| 10,000–50,000 |
247,922 |
18.99 |
4,741,326,429 |
| 50,001–100,000 |
23,553 |
1.8 |
1,632,623,670 |
| 100,001–500,000 |
18,191 |
1.39 |
3,574,932,422 |
| 500,001–1,000,000 |
2,082 |
0.16 |
1,450,294,854 |
| 1,000,001–5,000,000 |
1,663 |
0.13 |
3,249,270,575 |
| 5,000,001–10,000,000 |
198 |
0.02 |
1,376,571,666 |
| 10,000,001–50,000,000 |
194 |
0.01 |
3,724,098,031 |
| 50,000,001–100,000,000 |
29 |
0 |
1,951,814,806 |
| 100,000,001–500,000,000 |
18 |
0 |
3,372,377,926 |
| 500,000,001–1,000,000,000 |
2 |
- |
1,351,263,813 |
| Total |
1,305,754 |
100 |
29,006,297,206 |
| Summary of the above range analysis: |
|
|
|
| Total Nigerian shareholders |
1,300,138 |
99.57 |
28,467,695,211 |
| Total foreign shareholders |
5,616 |
0.43 |
538,601,995 |
| Total |
1,305,754 |
100 |
29,006,297,206 |
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H. Substantial Interest in Shares
According to the register of members at 31 December 2009, no shareholder held more than 5% of the issued share capital of the Bank.
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I. Donations and Charitable Gifts
The Bank made contributions to charitable and non-political organisations amounting to N967.4 million (March 2009: N1.2 billion) during the year.
| |
Amount
N |
| Total |
967,458,884 |
| Imo State Ministry of Petroleum and Environment |
5,000,000 |
| Nigerian International Agribusiness Summit and Expo |
5,000,000 |
| Shehu Musa Yar 'Dua Foundation |
5,000,000 |
| Eko Akete Resorts and Tourism |
5,000,000 |
| Sir Ahmad Bello Memorial Foundation |
5,000,000 |
| 2009 Kaduna International Polo Tournament |
7,000,000 |
| Sponsorship of the Pre-Golden Jubilee Celebrations of Anglo–Nigeria Relations |
7,125,000 |
| Sponsorship of the 2009 Lagos Bankers Nite |
7,500,000 |
| Wole Soyinka's Prize for Literature (Lumina Foundation) |
8,000,000 |
| Sponsorship of Corporate Nigeria 2010 (Corporate Guides International Limited) |
8,662,500 |
| Healer Van for State Universal Basic Education and Double Cabin Air Conditioned for Wheel Drive Vehicle |
9,000,000 |
| The Nigeria Oil and Gas Conference 2010 |
9,503,000 |
| National Pension Commission (Implementation of the Pension Reform) |
9,600,000 |
| Euro-Money Institutional Investor Plc – Navigating the Global Downturn |
9,665,500 |
| 500 Seater Lecture Hall for Federal University of Technology, Minna |
9,987,163 |
| International Gateway Economic Partnership Summit |
10,000,000 |
| Nigerian–South Africa Bi-National Commission |
10,000,000 |
| World Economic Forum |
13,100,000 |
| Sponsorship to Participate as Principal Sponsor in the Proposed US Embassy/Private Sector Forum |
15,702,500 |
| 2008 Edition of Undergraduate Essay and Secondary School Quiz Competition |
15,703,698 |
| St Anne's Nursery and Primary School |
20,000,000 |
| Construction of Students' Hostel for Jigawa State |
20,945,641 |
| Kidz Trust |
21,200,000 |
| Proposed Nigerian Red Cross Clinic Ibadan |
24,860,844 |
| Student In Free Enterprise (SIFE) |
25,000,000 |
| Annual Excellence and Leadership Award (Sar'dauna Magazine) |
25,000,000 |
| University of Ilorin, Nigeria |
25,000,000 |
| Nigeria Leadership Initiative |
30,186,000 |
| Police Weekly Television Programme Crime Fighter: The Police and You |
45,550,000 |
| Sokoto State Government on Roads Construction |
85,333,333 |
| Cross River State (Calabar Festival) |
100,000,000 |
| Construction of Senate Building for Olabisi Onabanjo University |
100,000,000 |
| Vision 2020 Business Support Group |
110,000,000 |
| Others |
158,833,705 |
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J. Post Balance Sheet Events
Supreme Court Judgement on Former MD/CEO Mr B O Longe
In 2002, the appointment of the then Bank's MD/CEO, Mr Bernard Ojeifo Longe, was revoked by the Board. He consequently instituted a court case challenging the validity of the revocation.
In spite of the Bank's victory at the Federal High Court and the Court of Appeal, on 5 March 2010, the Supreme Court gave a final judgement against the Bank to the effect that Mr B O Longe's removal as MD/CEO was ineffective as it was not in conformity with the provisions of S.266 (3) of the Companies and Allied Matters Act. The Supreme Court neither faulted the reasons for his removal nor the power of the Board to remove him.
Pursuant to the judgement, the Bank had commenced discussion with Mr Bernard Longe with a view to reaching a speedy and amicable final resolution that will translate into payment of financial compensation to him.
SNECOU (Bayelsa State Government)
On 26 January 2010 the Federal High Court of Lagos State gave judgement against the Bank in a case involving the Bank, Bayelsa State Government and SNECOU GROUP (The Plaintiff).
The Court ruled that a total sum of N5.2 billion be paid by First Bank of Nigeria Plc to SNECOU GROUP for failure to honour an Irrevocable Standing Payment Order. The Bank and Bayelsa State Government have, however, appealed against the judgement contesting the ruling. No liability was contemplated in the books of the Bank as at 31 December 2009.
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K. Human Resources
Employment of disabled persons
It is the policy of the Bank that there should be no discrimination in considering applications for employment, including those from physically challenged persons. All employees whether or not physically challenged are given equal opportunities to develop. As at 31 December 2009, 13 physically challenged persons were employed by the Bank.
In the event of members of staff becoming disabled, efforts will be made to ensure that their employment with the Bank continues and appropriate training arranged to ensure that they fit into the Bank's working environment.
Health, safety and welfare at work
Health and safety regulations are in force within the Bank's premises and employees are aware of existing regulations. The Bank provides subsidy to all levels of employees for medicine, transportation, housing, etc.
Fire prevention and fire-fighting equipment are installed in strategic locations within the Company's premises.
The Company operates both Group Personal Accident and the Workmen's Compensation Insurance cover for the benefit of its employees. It also operates a contributory pension plan in line with the Pension Reform Act, 2004, as well as a terminal gratuity scheme for its employees.
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L. Employee Involvement and Training
The Bank ensures, through various fora, that employees are informed on matters concerning them. Formal and informal channels are also employed in communication with employees with an appropriate two-way feedback mechanism.
In accordance with the Bank's policy of continuous development, training facilities are provided in the Bank's well-equipped Training School. In addition, employees of the Bank are nominated to attend both locally and internationally organised courses. These are complemented by on-the-job training.
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M. Auditors
The joint Auditors, Messers Akintola Williams Deloitte and Pannell Kerr Forster, have indicated their willingness to continue in office as auditors. In accordance with Section 357 (2) of the Companies and Allied Matters Act, CAP C20 LFN 2004, a resolution will be proposed at the Annual General Meeting to authorise the directors to determine their remuneration.
By order of the Board
Tijjani M Borodo
Company Secretary
Lagos, Nigeria
March 2010
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