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FBN Holdings targets non-performing loans ratio of 19% in 2017



The management of FBN Holdings Plc on Thursday said it was targeting a Non-performing Loans (NPL) ratio of less than 20 per cent for the financial year ending Dec. 31, 2017.

UK Eke, FBN Holdings Managing Director, stated this at the company’s facts behind the figures at the Nigerian Stock Exchange (NSE) in Lagos.

Eke said that the company’s NPL would be less than 20 per cent by second quarter of 2017 against 26 per cent in the first quarter.

The company made impairment charge from credit losses of N226 billion in 2016 and N280m. 8 billion in the first quarter of 2017.

He explained that there were five major accounts that constitute the company’s NPL, adding that one of the account would drop off by June 30.

Eke stated that the company was awaiting government assent to drop off the second major NPL account, Atlantic Energy.

He said that the 500 million dollars owed the company by Atlantic Energy would drop off from its NPL once the oil bloc was assigned to a new partner by the government.

The group managing director expressed optimisim that the five NPLs accounts would be resolved very soon.

“There are no fresh NPLs forming in our books, the books are clean and our focus on lending is now on manufacturing sector,” he stated.

Eke added that the company had reviewed its credit process and strengthened governance framework to ensure improvement in asset quality.

He said that the company had recruited a new chief risk officer to drive the new credit architecture and build a robust and sustainable credit underwriting practice.

Eke said that the company had restructured credit terms of obligor with compelling business case to match cash flows.

He said that the company’s NPL would be in single digit by 2019, while cost of risk would be less than two per cent.

Eke said that the company would strengthen digital banking strategy to achieve 25 per cent migration of the bank active customer base to digital channels by 2019.

He, however, assured shareholders of enhanced dividend in the years ahead, noting that the commercial banking arm had not contributed dividend to the holding company in the past two years.

Eke said that the capacity of the holding company to distribute dividend would be enhanced by the time the commercial bank started contributing dividend.

He said that the decision of the commercial bank not contributing dividend to the group was strategic to enable the company to clean up its book.

Earlier, Mr Oscar Onyema, NSE Chief Executive Officer, commended the company for using the facts behind the figures platform to engage the market on its strategic and operational development.

Onyema commended the company for churning out strong fundamentals in spite of the challenging operating environment witnessed in 2016 financial year.

He said that the exchange would continue to provide the platform for companies to meet their strategic objectives.




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