By Ademola Alawiye with agency report

First Bank of Nigeria Plc and Fidelity Bank Plc have said that they intend to grow their loan books this year and to also boost market share in retail and corporate banking.

Bloomberg quoted First Bank’s Chief Financial Officer, Mr. Bayo Adelabu, as saying, “First Bank’s loans advanced six percent in 2010 and the bank will be conservative in its target for 2011 because it doesn’t want to worsen its loan books, but it plans to grow its loans by 10 per cent this year. The bank’s non-performing loans ratio fell to 7.7 per cent in 2010, from 8.2 per cent a year earlier and should decline further this year. “

Adelabu said, “Given changes in Nigeria’s banking industry, including mergers and acquisitions, competition will become more intense because there may not be any small bank anymore. However, First Bank will respond to these changes by taking advantage of its low-cost deposit base that will give it a pricing advantage.”

According to the results posted on the website of the Nigerian Stock Exchange, First Bank’s net income for full-year 2010 jumped to N33.4bn from N4.9bn, while income before tax more than tripled to N43.2bn.

In the same vein, Fidelity Bank said that it would expand lending by 25 per cent this year, after an increase of 13.5 percent in 2010, and cut the rate of non-performing financing.

Bloomberg quoted a statement by the bank as saying, “The bank will sell more debt to the Asset Management Corporation of Nigeria and cut the rate of bad loans to four per cent by the end of this year, from 25 per cent in 2010. The bank plans to boost lending to agriculture, telecommunications, construction, power and energy.”

The company’s stock declined by 0.4 per cent or one kobo to N2.75. The stock has gained 2.2 per cent this year, compared with a 1.5 per cent rise in the NSE’s All-Share Index over the same period.

Deposit Money Banks have started increasing lending after cutting back as they tried to recover from a debt crisis in 2008 and 2009 that threatened the industry with a collapse.

The Central Bank of Nigeria injected N620bn ($4bn) into the industry, and fired the chief executive officers of eight of the country’s lenders.

 

Source: Punch