Following our meeting with the Chief Executive Officer of First Bank Nigeria & Subsidiaries and consequently a detailed understanding of the bank’s medium term strategy, we have revised our medium term earnings projections upwards and our target price for FBN Holdings Plc (listed vehicle that owns Firstbank) to N7.34.
This presents an upside of 90.6% to the current price of N3.85. Hence, we upgrade the stock to a BUY rating. Please find below key insights from our meeting with management.
A strong commitment to performance – driven by a new breed of
management First Bank of Nigeria Limited recently filled the position of its Chief Risk Officer (CRO) – after about six months long meritocratic process. The new CRO – Mr. Segun Alebiosu – a seasoned risk officer with significant exposure to qualitative risk management processes at African Development Bank, resumed just weeks after a new CFO – Mr. Patrick Iyamabo – former group
CFO at FCMB joined the bank. The duo of Executive Director Corporate Banking (Dr Remi Oni) and Chief Information Officer, Mr Callistus Obetta has earlier been recruited from Standard Chartered Bank.
The Bank also appointed a Deputy Managing Director for the first time in its history. The new hires completes a new crop of executive management team led by Dr. Sola Adeduntan (FCA), most of whom have had first-rate experience in some of the best institutions in Nigeria and on the African continent.
A new First Bank – a different philosophy to doing business
We summarise this new philosophy in two words – quality and efficiency.
The focus is on repositioning the bank’s risk process and improving efficiency to derive optimum value. Management has introduced additional approval/governance processes to credit origination and considerably tempered its risk appetite and tolerance limits. Emphasis is on quality at entry and portfolio diversification. Deploying technology to drive transparency.
