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By Omodele Adigun and Uche Henry
For the first time in recent months, First Bank of Nigeria (FBN) Limited has outpaced foreign banks in capital importation by receiving the highest investment inflow in the second quarter of the year with $323.13 million, an 18.23 per cent of Nigeria’s $1.03 billion total capital importation which makes analyst worry that capital importation might remain low for the rest of the year.
Capital importation, according to Ayodeji Ebo, former Managing Director of Afrinvest Securities Limited, is financing provided by foreign investors for economic growth and development of a country as it creates foreign exchange (forex) liquidity, funds businesses and generate employment opportunities.
In the latest report by the national bureau of statistics (NBS) which had not featured among the major players, pushed citibank with its $187.77 million (12.23 percent )to second position and Rand Merchant Bank Limited to third place with $126.03 (6.47 percent).
On the converse, Standard Chartered Bank, a known top player, shared the bottom position with Wema Bank plc – posting $1.33 million and $1.08 million respectively – among the top lenders. However, an investment expert attributed the FBN performance to possible increase in remittances made through the bank. He explained that the bank’s increased customer patronage in remittances must have given it an edge over its peers.
It’s parent institution, FBN Holdings, recorded impressive performance in the first six months of the year ended june 30, 2023, according to its interim financial statements at the Nigerian Exchange (NGX) Limited. The group’s profit after tax rose to N187.17 billion from N56.53 billion year-on-year, representing a 232 percent increase – amid a challenging operating environment. during the period, the bank also recorded a significant increase in interest income which jumped by 70 percent to N383.28 billion against N226.35 billion in the 2022 half year.
Like its peers, it harvested bountifully from the forex reclassification windfall of the second quarter which earned it a n301 billion in forex gains against a loss of N2 billion suffered in h1 2022. the cashless policy revenue boom of the period pushed the group’s electronic banking fees to N34 billion compared with N25.53 billion in the equivalent period of last year – a revenue boost of 36 percent.
Also, during the period, the balance sheet expanded by 33.57 percent to n12.79 trillion from N9.58 trillion as of December 31, 2022, suggesting a possible 66 percent growth by year-end.
Lamenting the dwindling fortune of the county’s capital importation figure during his business investment RCCG online radio programme, Ebo said loans accounted for 92 per cent of other investment. “foreign portfolio investment accounted for a meager 10 per cent of the country importation in q2 2023 as against 57.3 per cent in q1 2023. total FDI moderated to $107m in q2 2023, down by 86 per cent year on year from $757m in Q2 2022 and the lowest level since q4 2020. “looking forward, we expect capital importation to remain low for the rest of the year, given the fx backlogs and instability, unclarity in fiscal policy, and lack of a coherent monetary policy direction at the CBN”, he added
