Nigeria’s First Bank says on track with loan

October 16, 2011 63 Views Comment Off

First Bank Nigeria

LAGOS (Reuters) – Nigeria’s First Bank said on Friday it was on track to achieving a 15 percent target on loan growth before year-end and hoped to take advantage of the higher interest rate environment to increase its treasury revenues.

Chief Financial Officer Bayo Adelabu told Reuters the lender grew its loan book by 13 percent in the nine months to September.

“We guided 10-15 percent at the beginning of the year and we have achieved 13 percent in nine months, so we are on target,” Adelabu said in an interview, discussing their nine-month results.

First Bank, the West African country’s oldest lender, on Thursday said its pretax profit for the nine months to September grew by 20 percent to 49.01 billion naira while revenue rose 19 percent to 211.16 billion naira.

Adelabu said income from treasury activities increased by 15 percent to contribute to revenue growth while loans grew by 8 percent to 105 billion naira during the period. He forecast this revenue mix to continue to the end of the year.

Nigeria’s central bank has been raising its benchmark interest rate as it tries to curb inflation and support a weakening naira currency.

It hiked rate again by an aggressive 275 basis points to 12 percent last Monday, driving up treasury bill and bond yields across the board.

The 3-year bond traded at 15.74 percent on Friday from 12.87 percent before Monday’s rate hike while the 91-day treasury bill climbed to 15 percent from around 10.23 percent.

Adelabu said First Bank was reviewing several credit applications which will enable it meet its loan target for the year and will deploy extra funds to treasuries to benefit from a higher interest rate environment.