First Bank of Nigeria Plc, the country's biggest lender by market value, reported a sevenfold increase in profit for the first half through June as loans increased.
Net income surged to 25.3 billion naira ($168.2 million) from 3.4 billion naira a year earlier, the company said in a statement e-mailed by the Lagos-based Nigerian Stock Exchange today. Revenue fell 6.7 percent to 122.3 billion naira while loans climbed 20 percent to 1.1 trillion naira. Deposits rose 24 percent to 1.4 trillion naira.
"We have made continued progress in gathering reliable, long-term deposits as Nigerian customers reassess their banking arrangements in the wake of the turbulence in the banking sector," Group Managing Director Bisi Onasanya said in the statement. "This has left us with further scope to increase lending to the real sector of the economy. We expect increased demand for debt financing will see us grow our asset base in the second half."
Consumers in Africa's most populous nation curtailed spending after a debt crisis in the banking industry dried up lending last year. The central bank sacked the chief executive officers of eight of the country's 24 lenders last year over their handling of a debt crisis and injected 620 billion naira into ten lenders following an audit to stave off their closure. First Bank was deemed a healthy lender by the central bank.
Loan Target
Credit to private industry rose an annual 17.7 percent in May, down from 20.1 percent the month before, the Central Bank said on July 7.
"First Bank's 10 percent loan-growth guidance in 2010 is one of the lowest in the sector, albeit from a higher base," analysts at CSL Stockbrokers Ltd., a London-based brokerage, said in an e-mailed note to clients today. "We still believe it's possible" for the lender to meet the target, CSL analysts including Olubunmi Asaolu and Gbenga Sholotan wrote today. CSL upgraded its recommendation on First Bank to "neutral" after the company released first-quarter results that showed profit nearly doubled to 12.3 billion naira.
The stock lost 23 kobo, or 1.7 percent, to close at 13 naira as of 1 p.m. in Lagos.
--Editors: Ana Monteiro, Vernon Wessels.
To contact the reporters on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net; Sam Olukoya in Lagos at Solukoya2@bloomberg.net
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.
To contact the reporters responsible for this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net. Sam Olukoya in Lagos at solukoya2@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
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