STRONG portfolio underpins First Bank of Nigeria’s push to take on a greater international role

FIRST BANK OF NIGERIA has more branches in the country than any other bank and plans to open branches in the U.S. to serve the Nigerian-American community

First Bank of Nigeria (FBN) was the first bank to be established in the country and is now the largest, with more branches than any other. The bank plays a leading role in the development of the economy and in recent years has been positioning itself as an international player.
FBN was founded in 1894 by Sir Alfred Jones, a British shipping magnate. Initially called the Bank for British West Africa, it was to undergo several name changes until it settled on FBN in 1979.

POTENTIAL investment opportunities are not limited to the energy sector

It now has more than 300 branches throughout the country, as well as one in Britain. Alhaji Umaru A. Mutallab, the Chairman of FBN, says there are plans to open branches in New York, Miami, Atlanta, and Houston to serve the Nigerian-American communities in these cities.

“We want to attract investment in the power and petroleum industry,” he says. “We have very close business relationships with the major downstream companies present here in Nigeria, such as Texaco and Shell.”

Nigeria is one of the major oil-producing countries in the world and FBN has long been associated with the development of the industry. “We have people who run an oil and gas desk, mainly in Port Harcourt, but also at the top level in Lagos,” says Mr. Mutallab.

“We are ready to discuss financing with anyone in the business. Many of the companies we have seen are Nigerian and are contractors or sub-contractors to the main oil-producing companies. We’d like to see more of them.”

Mr. Mutallab, a former Federal Minister and former Executive Chairman and Managing Director of United Bank for Africa (UBA), agrees that Nigeria’s banking sector is not yet fully developed. But he adds: “Nigeria still remains one of the most lucrative in terms of returns. There are risks, but wherever there are risks the returns are greater.”

He regrets the fact that many American banks have not stayed in Nigeria. “A lot of American banks have come here, but practically the only ones remaining are the Bank of Boston and Citibank. All the others have left,” he says.
“The banking industry is an international one and that is why Citibank is one of the most lucrative banks in this country. The more of this kind of bank that come here, the better.”

Last year, the Export-Import Bank of America signed a $500 million master guarantee agreement with six banks in Nigeria, among them FBN, with a view to boosting investment in both countries. Under the agreement, Export-Import Bank guarantees repayment of the principal and interest on loans made to creditworthy foreign buyers to finance their U.S. export purchases.

Mr. Mutallab says the agreement will bring more fruit to bear. “We’re in the oil processing business, soft drinks, construction, and manufacturing, all of which have so much potential for American investment. Yet America’s interest over the years has been concentrated in only two areas, wheat and oil,” he says.Although Nigeria’s economy is still heavily dependent on oil revenues, it is diversifying – and there is a huge domestic market to satisfy. “Our strength lies in our strong presence in many sectors, so if one sector collapses we will still be strong in another,” adds Mr. Mutallab.

“We have a better portfolio than any other bank in Nigeria. This gives us a lot of credibility. We also have a broad deposit base, easily the largest of any bank here. Individuals, states, local and federal governments all feel much more confident putting their money with us.”