First Bank Nigeria Sees Loan Growth Slowing to 10% This Year

FBN Holdings Plc, owner of First Bank Nigeria, the West African nation’s third-largest lender by market value, forecasts slower loan growth of 10 percent for this year on new regulatory requirements.

Loans declined by 1.2 percent in first-half through June due to cuts in retail credit and exposure to downstream oil and gas industries, Chief financial Officer Bayo Adelabu said today on a conference call from the commercial capital, Lagos. Lending rose 23 percent in 2012, he said.

The Central Bank of Nigeria increased the cash-reserve requirement for public funds in banks to 50 percent from 12 percent, Governor Lamido Sanusi said July 23, warning about the risk of excess liquidity in the banking industry. The regulator also directed lenders to lower fees and commissions starting April 1 to reduce conflict with clients.

“We’ll target power, manufacturing and telecommunications sectors for lending in the second half, and do more investment banking to mitigate the impact of regulatory rules,” Adelabu said.

First Bank’s net income for the first-half was little changed at 46.1 billion naira ($284.9 million) from 45.3 billion naira a year earlier, it said yesterday. Revenue increased 8 percent to 194.9 billion naira. Interest expenses climbed 32 percent to 38 billion naira, while impairment charges for loan losses rose 9 percent to 10 billion naira.

The Lagos-based lender plans to increase its revenue as much as 15 percent in 2013, down from 31 percent in 2012, according to Adelabu.

The stock dropped 2.6 percent to 15.75 naira at close in Lagos. It has gained 0.2 percent this year, compared with the 16 percent rise of the Bloomberg NSE Banking Index, which tracks Nigeria’s 10 biggest banks.

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