FBN Holdings shareholders on Friday approved dividend of N7.18 billion declared by the company for the financial year ended Dec. 31, 2016.
The News Agency of Nigeria (NAN) reports that the shareholders gave the approval at the company’s 5th Annual General Meeting (AGM) held in Lagos.
The dividend translated to 20k per share against N5.38 billion or 15k per share paid in the comparative period of 2015.
Mr Sunny Nwosu, the National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN), commended the company for declaring dividend in spite of high impairment.
Nwosu said that the shareholders appreciated the dividend considering the unfriendly operating environment and impairment charge for credit losses.
He urged the company’s board and management to map out strategies aimed at fighting the impairment to improve operating profit.
Nwosu said that the company should go out aggressively to recover the loans for better dividends payment in the future.
He, however, said that this was the best time to buy into the company in order to be part of its success story.
Mr Nona Awo, another shareholder expressed concern over the company’s huge unclaimed dividends figure.
Awo stressed the need for collaboration between the registrars and investor relations officer to drive down the figure.
He added that the company needed to increase its customer deposit base and reduce non-performing loans.
Mr Bayo Adeleke, the immediate past ISAN Secretary said that FBN Holdings was resilient as it had passed through many storms.
Adeleke said that the new leadership of the company had been able to turn things around.
He said that the company needed to support the Small and Medium Enterprises (SMEs) as the nation’s engine of development through lending.
Dr Adesola Adeduntan, the Managing Director, First Bank of Nigeria, assured the shareholders of the bank’s sustainability.
Adeduntan told the shareholders that the bank, a key component of the holding company, had taken cognisance of past events and the need to do things differently.
He said that digital banking was one of its key strategies for growth going forward.
Adeduntan said that the management was migrating the institution from credit lending to transaction lending institution.
He said that the bank was working hard to ensure reduction in impairment as was witnessed in 2016.
“Impairment going forward will remain relatively high but not in the magnitude of 2016,” Adeduntan said.
He said that the board and management had strengthened various risk controls in the bank aimed at lowering risk appetite.
Adeduntan said that the bank’s single limit obligor had been reduced from N90 million to N30 million to reduce risk.
He said that the bank would not do a single transaction more than N30 million going forward to minimise risk and reduce Non-Performing Loans (NPL).
He added that the bank had overhauled the credit and risk management structure, strengthened oversight process and approval process to tackle impairment.
Adeduntan said that a combination of the strategies would ensure that the bank did not create NPL in the magnitude of the past going forward.
Mr U.K. Eke, the FBN Holdings Group, the Managing Director said that shareholders should be optimistic of higher returns on their investment from 2017 financial year.
Eke said that the company in 2016 had to battle escalating operating cost in an inflationary environment and sought to grow operating income in a recessionary environment.
He said that the company allowed the commercial bank to retina its earnings for future growth rather than approaching shareholders for fresh funds.
Eke said that the company took the period of recession inherent in the country to clean up its book for enhanced growth.
The News Agency of Nigeria (NAN) reports that the company posted gross earnings of N581.8 billion during the period under review against N502.8 billion achieved in 2015, an increase of 15.7 per cent.
Profit before tax stood at N22.9 billion from N12.6 billion in the comparative period of 2015, representing a growth of 6.3 per cent.