FBN Holdings to cut its NPL to 20 pct or less in 2017
FBN Holdings Plc has disclosed it plans to reduce its non-performing loans (NPL) to less than 20 per cent before the year ends.
According to Mr. Urum Kalu Eke, its managing director, who disclosed this at the company’s Facts Behind the Figures at the Nigerian Stock Exchange (NSE) last week in Lagos, the company’s NPL would be less than 20 per cent by second quarter of 2017 against 26 per cent in the first quarter.
He explained that there were five major accounts that constitute the company’s NPL, adding that one of the accounts would drop off by end of this month.
Eke hinted that the company was waiting for government’s assent to drop off the second major NPL account, Atlantic Energy.
He said that the $500 million owed the company by Atlantic Energy would drop off from its NPL once the oil bloc was assigned to a new partner by the government.
The FBN boss assured capital market community that there are no fresh NPLs and that the group is doing everything possible to resolve issues with the five accounts soon.
He said: “There are no fresh NPLs forming in our books, the books are clean and our focus on lending is now on manufacturing sector,” he stated.
Eke added that the company had reviewed its credit process and strengthened governance framework to ensure improvement in asset quality.
He said that the company had recruited a new chief risk officer to drive the new credit architecture and build a robust and sustainable credit underwriting practice.
Eke said that the company had restructured credit terms of obligor with compelling business case to match cash flows.
He said that the company’s NPL would be in single digit by 2019, while cost of risk would be less than two per cent.
Eke said that the company would strengthen digital banking strategy to achieve 25 per cent migration of the bank active customer base to digital channels by 2019.
He, however, assured shareholders of enhanced dividend in the years ahead, noting that the commercial banking arm had not contributed dividend to the holding company in the past two years.
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