Nov. 3 (Bloomberg) -- First Bank of Nigeria Plc, the country’s biggest lender by market value, said first-half profit plunged after it set aside 29.5 billion naira ($195 million) for losses from bad loans.

Net income dropped to 2.16 billion naira in the six months through September, from 23.7 billion naira in the same period a year earlier, the Lagos-based bank said in a statement published on the Web site of the Nigerian Stock Exchange today. Revenue rose to 128.1 billion naira, from 96.9 billion naira, it said.

Nigeria’s banks may have as much as $10 billion of toxic assets, Eurasia Group, a New York-based research company, said in May. Two thirds of that bad debt is partly the result of at least 1 trillion naira of margin loans used to buy equities as they soared almost 13-fold since 2000, according to Bank of America Corp. The Nigerian Stock Exchange’s All-Share index fell 46 percent in 2008 and has lost 31 percent so far this year.

First Bank’s results are “not surprising to anybody given what other banks have been reporting” because of the debt crisis in the industry, Funso Doherty, head of Lagos-based ARM Pensions, a fund-management firm, said in an interview.

Ecobank Nigeria Plc, the country’s fifth-biggest lender by market value, earlier today reported a third-quarter loss after making a 33.4 billion-naira provision for losses from bad loans.

The Central Bank of Nigeria conducted audits of the West African country’s 24 banks earlier this year aimed at stabilizing them. Governor Lamido Sanusi fired the chief executive officers of eight lenders and injected at least 620 billion naira into those and two other banks to boost their capital and liquidity.

First Bank shares have dropped 18 percent so far this year, outperforming the exchange’s benchmark index.

To contact the reporter on this story: Paul Okolo in Abuja at pokolo@bloomberg.net.

Last Updated: November 3, 2009 06:35 EST