FBN Holdings Plc, the parent company of First Bank Limited said it would cut jobs and focus less on providing loans to the oil industry in a bid to reverse last year’s 82 percent slump in profit.
First Bank Limited Managing Director/Chief Executive, Mr. Adesola Adeduntan, disclosed this in an interview with Reuters. He said the bank plans to boost its return on equity, a key measure of profitability, to between 11 per cent and 14 per cent in 2016 from last year’s “really bad” figure of 3 per cent.
The bank is also targeting a cost-to-income ratio of 55 per cent in two years time from 59 percent, he said. “ROE will be much better than last year,” Adeduntan said.
“At a minimum, we should triple it. We do not shy away from taking difficult decisions. We used to have above 8,000 people. We’ll push it down, gradually, to 7,000.”
A source within the bank confirmed to Vanguard that the process of pruning the staff to 7000 commenced last year. “It is not that we plan to sack 1000 staff at a go. It was part of the measures taken last year to enhance the profitability of the bank. So the pruning will be gradual and it started last year”.
FBN Holdings’ Net profit fell to N15 billion ($76 million) from N84 billion naira in 2014, as impairments soared and Africa’s biggest economy slowed amid a crash in the price of crude, the biggest source of government revenue and export earnings.