As part of its commitment to improve on quality of its loan book and refrain from riskier assets, according to the Group Managing Director, Ade Ayeyemi, the pan-African bank, has also madeplans to focus on return on equity rather than cost, after first three months’ profit after tax dropped by 35 per cent.
Ayeyemi, who stated these while addressing shareholders during the ‘Facts Behind the Figures’ of the bank on the Nigerian Stock Exchange, NSE, over the weekend, explained that the group recorded a decline of 35 per cent in profit after tax from $126 million in the first quarter of 2015 to $82 million in during the corresponding period of this year.
He attributed the decline to high rates and inflation in some Middle African countries, the devaluation of dollar risk; and Treasury Single Account, TSA, reforms in Nigeria, among others.
He, however, expressed optimism that despite the bank’s low performance in some financial indices last year, it is currently well positioned to generate high returns to meet shareholders’ expectations.
“Shareholders of the financial institution are not expected to be delighted about the growing NPL but it is important not to hide to fact in order to recognize where there are problems. Our target at the end of the year is 75 per cent.
“The business environment can be challenging but there are opportunities. The value of mobile phone transactions in Nigeria has been demonstrated and if we can connect that into banking; it means there are a lot we can make,” Ayeyemi said.
He explained that the group NPL has risen to $1 billion in first three months of 2016 from $967 million in fourth quarter of 2015, while its NPL coverage stood at 71.3 per cent in first three months of 2016 as against 67.9 per cent in fourth quarter of 2015.
According to him, the group would sustain a stronger Return on Equity (ROE) to shareholders as it grow to 12.8 per cent in first three months of 2016 from 4.2 per cent in fourth quarter of 2015
