WorldStage Newsonline-- First Bank of Nigeria Plc, Nigeria’s largest bank and the most profitable financial institution on Wednesday denied a report that it was facing liquidity challenges and had stopped lending.
According to a statement signed by Folake Ani-Mumuney, the bank’s Head, Marketing & Corporate Communications, at no time did FirstBank stop lending.
“The primary responsibility of a bank is to stimulate the economic growth of the society and ensure better standard of living of the citizenry. This can only be achieved through lending,” the statement said.
“ After the last Monetary Policy Committee (MPC) meeting and CBN’s recent temporary policy actions, wherein required Cash Reserve was increased by 50 per cent, market interest rates have risen to the highest levels witnessed in over two years.
“FirstBank, thus, needed to respond to the rising interest rates environment and as such, took a few measures to review pricing of assets and liabilities.
“Given the dramatic increase in money market rates, the Bank needed to respond accordingly and thus took a decision to temporarily halt lending, whilst waiting to see where rates would settle before resetting our asset and liability rates, in tandem.
“We have since sensitize our customers on our new rates in line with current market levels, and have resumed normal lending activities at these rates. These are typical actions taken by the Bank in its normal course of business, as part of its asset and liability management process.
“We like to assure all that customers that meet FirstBank's risk acceptance criteria, and fully comply with loan terms and conditions can draw and indeed are already drawing down on approved lines. These terms include, but not limited to pricing, which is a reflection of market development.”
The statement said as at end June 2012, the bank’s loan book grew by 10 per cent in the current financial year and spread across major economic sector, saying the bank has the largest loan book in the industry.
It therefore appealed to the general public to disregard the rumours as they were unfounded and misguided.
The bank’s market value rose on Wednesday to the highest in more than a year on speculation it will continue to increase profit.
Its stock gained 2.2 percent to N12.37 at the close of tradings in the the Nigerian Stock Exchange, its highest since July 2011. First Bank shares have risen by 39 percent this year, compared with an 11 percent increase in the NSE All-Share Index.
Its profit for the six months through June more than doubled to N46 billion from N20.5 billion last year.