First Bank says process digitisation will not lead to job losses

•Withholds dividend payout to shareholders for 2017
•Targets 35% customer growth, to reduce NPLs to 10% by 2019

Contrary to speculations, First Bank of Nigeria Limited has said its huge investments, running into millions of dollars in new technologies and digitisation of its processes will not lead job losses as feared.

Rather, the bank said the process will lead to what it described as, “massive redeployment across job functions and realignment,” that will affect about 70 per cent of its workforce.

The Managing Director/Chief Executive Officer, First Bank, Dr. Adesola Adeduntan, who made the clarification at a media parley in Lagos last week, also noted that about 75 per cent of its staff are younger than 40, and as such, are being groomed to take over the bank’s operations.

He said: “We recognise the criticality of IT and People, and we are achieving our transformational objectives across these areas,” adding that, “FirstBank remains Digital First in our thinking. We are embedding this mindset across the entire operating model – from customer processes through enterprise middle office and back office.

“We have also now realigned our execution framework along business and functional work streams. Digital product drive for Retail is critical to achieving lower cost-to-serve, and improving customer experience; “Retailisation” of Wholesale Banking value; and Digitisation of IGR is invaluable to support Public Sector customers.”

Besides, he disclosed that the bank had even recruited more, including engaging someone from JP Morgan to strengthen its risks management and corporate governance.

The explanation comes even as the bank insisted it would not be able to pay dividend to shareholders for the 2017 financial year, in line with the Central Bank of Nigeria (CBN’s) directive barring banks with low capital adequacy ratio (CAR) and high non-performing loans (NPLs) from sharing their profits with shareholders.

Adeduntan explained that First Bank would rather “retain the profit for capital purposes and buffer its books,” even as it plans to prune its NPLs to less than 10 per cent, and cost to income ratio to 50 per cent by 2019. The bank however explained that the fact that it will not be paying dividend does not mean its holding company, FBN Holdings Plc, will not be paying dividend, as some subsidiaries under the group will declare dividend.

He continued: “Overall, we are accelerating our pace of execution and expect significant bottom line upside from these initiatives over the next six – 12 months, with major progress made in cleaning up our loan portfolios.

“We have institutionalise our best practice risk management processes. We are now able to selectively grow our loan portfolio with discipline and confidence in the quality of assets,” he said.

While noting that 2018 is an execution year, the CEO informed that by 2019, it also plans to grow its customer base by at least 35 per cent, and being the No1 in digital and e-Transactions as well as achieving 20 per cent return on equity.

“We stand by our commitment to drastically increase and sustain our shareholder value and value proposition across to all other stakeholders,” he added.

Adeduntan also noted that overall, Firstbank is accelerating its “pace of execution and expect significant bottom line upside from these initiatives over the next six – 12 months.