First Bank of Nigeria Plc, Nigeria’s premier and most profitable banking franchise, has reaffirmed its leadership position post-consolidation, with a rating from foremost global rating agency, Standard & Poor’s Ratings Services (S&P), which assigned the Bank the international Long-term rating of “BB-”, the best rating any Nigerian company could obtain, being the sovereign rating of the country.

With this, FirstBank remains a national icon after over a century of operations with significant changes in the operating environment and the competitive landscape.

The ratings of FirstBank, in which it was also assigned a Short-term rating of “B” and a stable outlook, reflect the Bank’s strong market position as Nigeria’s leading financial services provider with robust funding and liquidity profile, sound risk governance, and the benefits derived from its expansion into the fast-developing retail banking market. 

S&P stated that FirstBank’s “position as one of Nigeria’s leading financial services providers is largely due to its extensive branch network and strong franchise, which has also afforded the Bank a robust funding and liquidity profile”.

 “The high credit and operational risks associated with operating in Nigeria are partially mitigated by FirstBank’s sound risk governance, which is progressing toward international standards”, the Agency emphasized.  

The stable outlook, according to S&P, reflects the opinion that FirstBank will maintain a leading position in the Nigerian banking industry, widening its franchise and carving a strong position in retail banking.

It is remarkable that this is the second time FirstBank is being assigned a foreign currency rating, otherwise known as the international rating. Fitch Ratings, one of the world’s foremost rating agencies, had assigned the Bank the international Long-term and Short-term ratings of “B+” and “B” respectively.

In addition, Fitch also affirmed the Bank’s National Long-term and Short term ratings at “A+(nga)” and “F1(nga)”, respectively, the Short-term rating being the highest attainable by any institution.

These ratings are coming on the heels of the National Long-term and Short-term ratings of AA and A1+ assigned the Bank by Global Credit Rating Company Limited, one of the Securities and Exchange Commission’s licensed rating agencies. The Short-term rating is also the highest attainable by any institution.

Overall, FirstBank remains the industry leader and a major private sector participant in the country’s economic re-engineering, having distinguished itself for over a century as the leading financial institution and a major contributor to the economic advancement and development of Nigeria. 

This much has been demonstrated by the Bank’s recognition both locally and internationally in the immediate past year (2006) through, among others, The Bankers’ Committee awards as The Overall Best Bank in Real and Export Sectors Financing, presented by the Central Bank Governor, Professor Chukwuma C. Soludo; and the internationally reputed Global Finance magazine’s awards as The Best Overall Bank, Best Trade Finance Bank and Best Foreign Exchange Bank, presented during the last IMF/World Bank meetings in Singapore.  

FirstBank is indeed a financial supermarket, as it boasts of eight subsidiaries, including a full-fledged bank in the United Kingdom, FBN Bank (UK) Limited, as well as a representative office in South Africa. This global outlook is in sync with its strategy of being a national icon and an international player. 

In response to changes in the economic and business environments, the Bank has at various times embarked on restructuring initiatives. It improved relationship management through a change in its operating model, systematically decentralizing its operations into 29 Business Development Offices and a domestic sales network currently comprising over 400 business locations, thereby increasing the role and profile of the branch as the focal point of strategy execution driving the sale of all products and services. In addition, the Bank launched a new identity in April 2004 to usher in yet a new chapter in its illustrious history - a new corporate identity, logo and official colours.    

The Bank has recorded many firsts in its famous history. Apart from being the first bank to be established in Nigeria and West Africa, it was also the first institution to acquire its competitor, the African Banking Corporation, in 1894. The latter landmark was reinforced in 2005 with the Bank’s acquisition of its merchant banking subsidiary, FBN (Merchant Bankers) Limited and MBC International Bank Limited, following the Central Bank of Nigeria-inspired consolidation of the banking industry. 

Since FirstBank got listed on the Nigerian Stock Exchange (NSE) in March 1971, it has won the NSE’s Annual President’s Merit Award for the best financial report in the banking industry a record twelve times.  

In recent times, the Bank’s strategic growth process has gained momentum, with the establishment of two new subsidiaries, FBN Capital Limited and First Pension Custodian Nigeria Limited.  FirstBank has also signed an agreement with the world’s leading bank, HSBC, an alliance for Nigerian external reserve management, in addition to credit lines with the Export Development Canada (EDC), European Investment Bank (EIB), and other leading international financial institutions. 

With the deepening of the financial market, FirstBank was appointed a primary dealer authorised to trade in government bonds and other money market instruments, an area where the Bank is a major player. It also just set up a global custody desk within the Bank for global custody services, and already has an impressive portfolio with active relationships. In addition, the Bank recently executed the first cross currency swap in the country. 

In pursuit of its retail banking drive, the Bank introduced a suite of 15 consumer and retail banking products under the brand name U-First, gradually shifting towards a high yield diversified portfolio by aggressively targeting the relatively underbanked consumer market. 

In order to improve service delivery and to sustain the Bank’s on-line real time one branch banking initiative, FirstBank has persisted in a programmed acquisition of technological hardware and IT networking equipment. For example, the Bank has substantially migrated almost all of its over 400 branches to Finacle (the Bank’s software) platform.  

The IT platform, together with increased deployment of ATMs and the issuance of debit cards have contributed to reducing waiting time in the Bank’s branches and the levels of cash transaction in the country. The Bank leads the banking industry in terms of value and volume of ATM transactions. Currently, 29% of overall industry ATM cash is disbursed by FirstBank, while handling 21% of overall ATM transactions in Nigeria. FirstBank cardholders execute about 36% of overall ATMC (Quickcash) transactions. To realise the Bank’s strategy of continued service improvement 300 additional units of automated teller machines (ATMs) are in the process of being deployed.  

The consequence of FirstBank’s elaborate transformation is the enviable feat as the most profitable in Nigeria with profit before tax (PBT) standing at N21.91 billion as at March 31, 2006, the latest audit date. The Bank has maintained this enviable position in the past 5 years. The Bank’s performance has continued to improve as indicated in the results for the nine months ended December 2006 which was released at the Stock Exchange yesterday. Profit before tax for the period stood at N19.26 billion, representing an increase of 68.5% over the comparable period of 2005, when last year’s exceptional income is discounted. 

The Bank’s main competitive strength in fulfilling its goal is in its brand and the accompanying goodwill. This is complemented by an extensive reach which has aided its ability to mobilise low-cost stable savings deposits which constitute about 40% of its deposit base, and is responsible for its low cost of funds. The Bank also leverages good corporate governance practices to achieve its goals. FirstBank is consistent with two guiding principles - to pioneer industry best practices in the country; and to commit to delivering value to shareholders over the long term.  

It is noteworthy that FirstBank has won the Nigerian Stock Exchange (NSE) President’s Merit Award twelve times for the best financial report in the banking sector. The Bank is currently the most capitalised company on the floor of the Nigerian Stock Exchange, with a market capitalisation of N387.452 billion as at February 12, 2007. 

FirstBank’s track record of profitability and reliability in sound banking has continually placed the Bank in its leadership position, making it the toast of the stock market, even as investors eagerly await the Bank’s return to the capital market to raise funds.

There are strong indications that the Bank intends to raise close to N100 billion from the market very soon. We gathered from a reliable source that a stakeholders’ meeting of potential advisers will be taking place in the Bank this week to discuss the proposed offer. 

In line with its mission statement to “remain true to our name by providing the best financial services possible”, FirstBank promises to consistently transform itself as it forges ahead in its second century of qualitative banking to the nation.