First Bank's profit drops by 91 per cent

So they were not providing for bad loans in the past?

Yet, Lamido Sanusi was First Bank's Executive Director, Risk Management b/w 2005 & 2009, as well as Managing Director 2009 b\f moving to CBN.

Dear Mr Lamido Sanusi, he that lives in a glass house should not throw stones. First in the history of 1st Bank to experience such results - thanks to leadership.Pls resign now. ur sins will find u out.The northern agenda MUST fail in Jesus name.

A whooping =N=20.1billion provision for loan loss in 6 months? So Lamido Sanusi declared tons of paper profits while he was the MD of First Bank. If so much Loan Loss provision is being made in the current year, Sanusi also stands accused, like the other MDs he is currently harrrasing, of not observing the tenets of the Prudential Guidelines. It also calls to question his over-hyped credentials of being one of the best Risk Managers in the country, if under his watch, First Bank recorded so much classified facilities, which needs =N=20.1billion provision. Here lies the hypocrisy of Lamido Sanusi! The wind has blown and we have seen the anus of the Chicken.

God Bless you XQ. Can EFCC and Mr Sanusi also turn their search lights towards the Atuches that existed in First bank between 2005 and 2009. I know that is impossible as FBN's HQ is glass house. I thought First bank did not take part in the Margin Loans saga. Afterall they had a risk expert as CEO. Or did he become a credit expert to please "Oga Go slow". Whatever the case those perpetrators of bad loans in the so called stable banks need to be brought to book as well. The validity of this clean excercise when investigation and harassment includes the CBN officers who inspect these banks and signed off their books along with the Untouchables i.e.Dangotes, Otedolas etce etc

First Bank is not better than Oceanic & Intercontinental. Just like the affected banks, they are making provisions for bad loans. This is just Witch hunting by the Risk Manager.

I don't know what you want from Sanusi. He has told you that it is not an offence to lend bad, but failure to report same is the offence. By the way, how much is 20 billion compared to the capital base of First Bank and more importantly to the big billions given out in the stressed banks? Sanusi, please ride on.

Well this tarnishes Sanusi's alleged reputation of integrity and competence. Clearly we do not have details, but it would appear that he 'under-provisioned' during his tenure as RM and CEO. 20billion is not the end of the world for a bank of First Banks size, but the 'sudden-ness' begs questions of Sanusi's stewardship.

@ Ade,Thank you very much. And to add to what you said some of these loans are 2-3 years old, they are not current. And comparing the provision to the size of First banks loans or capital the company is doing great. It is not a crime to loan money, it is a crime to loan money to yourself using fake names and giving loans to your friends with due process stipulated by the bank itself.

Lets consider the data in perspective: - gross earnings of N128.1 billion, against the N96.9 billion recorded in the corresponding period in 2008. - Profit before tax stood at N3.2 billion compared with N30 billion in 2008; a decrease of 89 percent - Total Assets recorded during the period grew by 14 per cent; from N1.8 trillion in 2008 to N2.0 trillion. All performance indices show positive trend during the half year period. Gross earnings grew by 32.20%, Total Assets recorded a 11% growth rate. And of course, we expect the growth in Assets to come from increase in Advances - which is income yielding. A paltry provision of 1% is expected on these newly created Risk Assets since they are supposed to be performing considering that they were created within the last six months. Then to the big one, a PAPER PBT (which must have been boosted by Under provision for Loan Loss) of =N=30billion in six months ended 30/9/2008 as against the dismal =N=3.2billion for the corresponding period of 2009. With the positive growth recorded in the current year, one would expect a growth in PBT. But what are we being served - a profit showing an inverse variation between the Bank's Asset and Liability growth rate on one hand and Profit on the other hand. What this translates to is that the provisions that were supposed to be made for year ended 31/3/2009 were either omitted or under provided to boost the Bank's profit. That is what the other Banks were accused of and that is what happened under Sanusi Lamido's watch at First Bank.

It is troubling that the current head of the CBN, a Risk Management guru, while heading FBN, failed to be transparent in his reporting of FBN's financial affairs. I do not believe in any Northern agenda nonsense, I do not question the facilities because I do not know the details, but I question his integrity and professionalism. I question the quality of earnings he declared while at FBN. The 20 Billion couldn't have suddenly go bad in the last 6 months. We as investors have been misled with questionable earnings. Sanusi himself I believe has some questions to answer for his stewardship of FBN. The Nigerian Lawmakers need to ask the CBN chief why he failed to practice what he preaches

Dare, great analysis, there is no correlation between the bank's profit and it's drivers, a pointer to earnings manipulation. It's also a means to boost future earnings, when underlying earning are really not that great..

Being a conservative bank by nature, I am surprised to learn that First Bank were not sufficiently providing for bad loans in the past leading to this sudden high provision in excess of the N20.1 billion mandated by the Central Bank of Nigeria. As a shareholder, I am even more troubled. Perhaps not all divisions of the bank behave conservatively.

Am not surprise with the loan non –performing loan of First Banks to the tune of N74 Billion which represent about 8.3% of the total loan and advance .First Bank performance since the past three years is to me nothing to write up about , their return on shareholders fund in the financial year of 2007 , 2008 and 2009 is less than 12% when you compare with GT bank , Zenith bank and UBA on total shareholders fund , but the management of FB have been using Bonus to deceive the investors . If one make further investigation , one will find out that the bad loan , toxic asset or non performing loan as the name implied most of the loan were given to First bank top management staff and their friends and relative . Is time for the CBN to mandate the Nigerian Accounting Board and other relevant bodies to incorporate a law , where all the names of the bank debtors of this non-performing loan will be published along with the annual report .First Banks should tell Nigeria’s and their shareholders who and who took this loan that are not performing . I advise the management of the banks to wake up and improve on their earnings like GT BANK, Zenith bank and UBA have done in the past. Bonus issues every year is not the issue, the issues is performance, good EPS, good returns on shareholders funds, they should do away with too much expenses. They should try and restore investors confidence that they are truly the First , for me for the financial year of 2008 and 2009, First banks have perform below expectation , when compare with other banks and companies such as GT bank, Zenith bank, Oando , Nahco , Nestle , Nigeria Breweries in term of ROCE . is time to wake

Am not surprise with the loan non –performing loan of First Banks to the tune of N74 Billion which represent about 8.3% of the total loan and advance .First Bank performance since the past three years is to me nothing to write up about , their return on shareholders fund in the financial year of 2007 , 2008 and 2009 is less than 12% when you compare with GT bank , Zenith bank and UBA on total shareholders fund , but the management of FB have been using Bonus to deceive the investors . If one make further investigation , one will find out that the bad loan , toxic asset or non performing loan as the name implied most of the loan were given to First bank top management staff and their friends and relative . Is time for the CBN to mandate the Nigerian Accounting Board and other relevant bodies to incorporate a law , where all the names of the bank debtors of this non-performing loan will be published along with the annual report .First Banks should tell Nigeria’s and their shareholders who and who took this loan that are not performing . I advise the management of the banks to wake up and improve on their earnings like GT BANK, Zenith bank and UBA have done in the past. Bonus issues every year is not the issue, the issues is performance, good EPS, good returns on shareholders funds, they should do away with too much expenses. They should try and restore investors confidence that they are truly the First , for me for the financial year of 2008 and 2009, First banks have perform below expectation , when compare with other banks and companies such as GT bank, Zenith bank, Oando , Nahco , Nestle , Nigeria Breweries in term of ROCE . is time to wake

Am not surprise with the loan non –performing loan of First Banks to the tune of N74 Billion which represent about 8.3% of the total loan and advance .First Bank performance since the past three years is to me nothing to write up about , their return on shareholders fund in the financial year of 2007 , 2008 and 2009 is less than 12% when you compare with GT bank , Zenith bank and UBA on total shareholders fund , but the management of FB have been using Bonus to deceive the investors . If one make further investigation , one will find out that the bad loan , toxic asset or non performing loan as the name implied most of the loan were given to First bank top management staff and their friends and relative . Is time for the CBN to mandate the Nigerian Accounting Board and other relevant bodies to incorporate a law , where all the names of the bank debtors of this non-performing loan will be published along with the annual report .First Banks should tell Nigeria’s and their shareholders who and who took this loan that are not performing . I advise the management of the banks to wake up and improve on their earnings like GT BANK, Zenith bank and UBA have done in the past. Bonus issues every year is not the issue, the issues is performance, good EPS, good returns on shareholders funds, they should do away with too much expenses. They should try and restore investors confidence that they are truly the First , for me for the financial year of 2008 and 2009, First banks have perform below expectation , when compare with other banks and companies such as GT bank, Zenith bank, Oando , Nahco , Nestle , Nigeria Breweries in term of ROCE . is time to wake

Again , the issue of First raising N500 Billion Bond , am totally against it .First Banks management should not deceive the public , what returns what they given back to shareholder since their public offer of N33 , how much dividend have they given to shareholders , before thinking of embarking on another Jamboree bond issues , I believe the management understand the implication .A bank that can not manage their risk assets , how can one entrust N500 billion in their hand .to me , first bank performance in terms of returns on capital in the last two years is very poor. The management should wake and enhanced shareholders value and stop using bonus issues to deceived the shareholders .For instance given bonus of 1-6 and paying dividend of 1.35k from capital reserve is not a good omen or performance of a bank. The bank should consecrate in growing their earning to sustain the bonus giving like other banks such as Zenith bank, GT bank is doing. If the performance is ok , there is no need to go for bond , they can still come for public offer or right issues the shareholders will buy despite the present capital market meltdown . We need goods earnings like Oando , Nigeria breweries , Nestles is doing , UAC and not deceiving us with Bonus every year .GT bank still give bonus , but their earning is ok , the non performing loan of the bank is low , the same with Zenith bank , pls am not marketing any banks but I need to say the true ,I have shares in more than 60 companies , but I can not say first bank have given me returns like others do

pls what is the implication of all this. does it mean that first bank will not be declaring bonus and dividend for the year end? am still new in this financial things. please advice.

@Peter Ufot, though I do not go for paying dividend out of Capital reserve, I would say it depends on the direction of the management and board of any organisation. It also depends on what the shareholders want. Nigerian shareholders like to receive bonus and dividend, may be that's why 1st Bank board went for both. They also know that they will raise capital through bond in the nearest future (which they have just done) so the capital reserve is replenished indirectly and through the bond issue, they can finance future growth. While not making excuses for the board and management of First Bank, I believe they did what they felt was right at that time. That being said, I am surprised that you could say that you have 60 shares and First Bank is at the bottom of your list in terms of financial returns. Hmmmm. That is rather shocking to me, or may be you have some axe to grind with some guys at the bank or even Sanusi himself. Let me tell you here, that among all the companies you mentioned, in the last three years,it is probably GT Bank, Nestle and may be Guinness/NB that can be comparable to First Bank. You can always sell your bonus to make money, right. Please do financial analysis before you come to any emotional conclusion. I have shares in some of these companies too and I am rather surprised that you could compare First Bank with Oando or Zenith. A bank like Zenith will pay you dividend and you might never get your money until the following year. It happened to me so I am not making things up.I cannot tell you how much I lost on Oando when I speculated on them some years back. To my other Naija folks criticising Lamido Sanusi, I will like to tell you that his bank has to join the capital market boom in those years when it was happening. All banks were bruised financially. Even the conservative Ecobank got affected. So what are we talking about? I recently finished paying my margin loan at Ecobank/ESL. This is a loan that is more than a year old. But First Bank like a few others is soldiering on. GT Bank's half year result was ok with less loan provision but for the first time since its inception or so, no interim dividend was issued. Finally, I do not know anyone at First Bank, I live abroad and I am a Nigerian CA, so I can analyse numbers. @ Dare Taiwo I know you are a good analyst and I have commended you once in the past, but you have an issue with Lamido. The Nigerian capital market has been in comatose in the last 15 months, was it caused by Sanusi? I have been looking for a stock to buy in the last two months and cannot find any. I am only looking at GT Bank and First Bank and both have been hovering between N14 and N15 a unit. Nigeria capital market is now a funny market. It is not advisable to invest right now. What do you think?

This proves the suspiscion that the banks have been deceiving the public by cooking their books with the connivance of the cbn.The reckless spendind culture of the bank executives,holding executive meetings abroad when their offices are even better furnished than the best hotels in the world,only because they have axcess to peoples money!will they spend their money like that?All these mess began when the banks flushed out their old honest and dedicated staff to bring in their "educated"relatives who are out to take out of the banks all they could just like our rulers are eating up the counntry.God will repay everyone according to their deeds.

please, my dear Dare, lam not a banker and never versed in all these accounting manipulations. i trusted the banking institutions so much that i put all my earnings and substantial gratuity in savings accounts and shares capital market,all because of the calibre of people of high integrity who were managing our banks and stock market.Suddenly in recent years we found a group of nigerian intellectuals n finanacial wizards through heavy manipulations, collapsed the stock

Babs Dodo, thanks for your anaysis ,am not saying first banks does not reward investors like other companies , but as i told you , there are number of parametals your can use to evulate performance of companies , such as EPS , Returns on shareholders funds ratios ,but what am saying is that take a look at First banks in terms of returns on equity compare with Zenith bank , and GT bank , in the past 3 years First bank have only returns less than 13% .Am not aganist First Bank not giving bonus every year , but they should improve on thier eannings in terms of thier EPS insteat of using Bonus to wash our face . I belive with the loan provsion of N74 billion , before the end of 2010 by God Willing , First Banks should realised aleast N50b , but my doubt is that some of this loan may not be recover and may be written off , which may be a loss to the investor and gain to the directors of first banks and thier family . I belive as time goes , the shareholders will like to know who and who are owing this so call bad loan , pls there the CAC , NASB, ICAN , CBN should enact a law where all the list of the debtots of this bank will be poublished in the newspaper and the annual fiancial statement

what we are seen is better transparency than the fraudulent behaviour of financial sectors in nigeria over stating there profits. Ask a question what percentage of nigerians have access to loans? what bussiness does the bank partake in? all of them are fraudulent and many of them need to have guns put to the head of there management teams!!!

I do not think Lamido should be blamed for the poor profit declared by 1st bank, because as it stands now, no outsider can be very definite about the circumstances that led to the huge debt portfolio of the bank. However, we should applaud his courage and effort at sanitizing the entire banking sector. Remember that without his intervention, we might have woken up one day to another agonizing wave of bank failures, with the attendant problems. ONE thing I hope we would all learn from all these, is that there is no sustainable short cut to getting rich. Even the success stories we read of Americas and European millionaires took most of them a lot of hardwork, focus, determination and patience to build..