FBN Holdings expects loan growth at its banking unit to slow to 4 percent this year, down from 23 percent last year, as it shifts focus to short-term trade finance transactions.
Chief Executive Bello Maccido said, on Monday, will be conservative on loans in 2015 after financing power and oil sectors last year but income will rise from short-term lending.
Maccido said he expected FBN Holdings to generate a tenth of its revenues from its investment banking and insurance units combined by 2016, up from around 7 percent now, after it acquired Kakawa Discount House and Oasis Insurance last year.
FBN Holdings with over N2.2 trillion ($11 billion) on its loan book.
The commercial banking arm, First Bank Limited, with over 9.4 million customers in Africa’s biggest economy, accounts for around 93 percent of revenues, Maccido said, adding that the group has applied for a merchant banking license.
FBN Holdings, with interest in lending, insurance and investments, last week reported growth in 2014 pretax profit of 1.7 percent, driven by project and trade finance.
Shares in FBN Holdings, which have risen 8 percent this year, fell 0.1 percent to 9.50 naira each on Monday. The stock fell 46 percent last year.
Maccido said the bank holding company was trading at a discount of 0.6 times book value relative to peers, but expected a rally in its share price this year after a rule restricting pension funds from investing in holding companies was lifted.
FBN Holdings proposed to pay 0.10 naira cash dividend for 2014 with a bonus of one new share for every 10 held, Maccido said because the group planned to retain a greater proportion of its earnings to fund growth rather than raising fresh funds.
The firm paid out cash dividend of 1.05 naira in 2013.
“Capital market conditions are not ideal for raising funds because the market has been bearish over the past one year and going to the market will devalue our shareholders,” he said.
Nigeria’s main share index, which is up almost one percent this year, lost 16 percent in 2014, after foreign investors unnerved by sharp falls in global oil price and the naira currency, sold off shares valued at 846.5 billion naira
