An online publication has alleged that First Bank of Nigeria Plc, Nigeria’s largest bank and the most profitable financial institution is facing liquidity challenges and therefore, has stopped lending. Our response is as
• 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.
• After the last Monetary Policy Committee (MPC) meeting and CBN’s recent temporary policy actions, wherein required Cash Reserve was increased by 50%, 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 riskacceptance 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.
• As at end June 2012, FirstBank’s loan book has grown by 10% in the current financial year and is spread across major economic sector.
• FirstBank today has the largest loan book in the industry.
• We appeal to the general public to disregard this rumours as they are unfounded and misguided.