THE Chief Financial Officer of First Bank of Nigeria Plc, Bayo Adelabu, has advised banks to adhere to the Central Bank of Nigerias (CBN) policy on general provisioning for loans in the interest of the country.Under the statement of Accounting Standards (SAS) 10, paragraph 55, the Nigerian banks are required to make general loan loss provisions of at least/per cent of risk assets not specifically provided for in their performing loans.Speaking specifically on the banks 2010 financials, he explained that for the said provisioning, the banks profit for the period under review would have amounted to N54.5 billion, stressing that with the mandatory provisioning , the bank was now in a better position to declare better result in the coming year.According to him, the banks 2010 financials actively encouraged the management of the bank to tackle the provisioning issue once and for all.The bank had posted N43.18 billion pre-tax profit for 2010, as against N13.29 billion the preceding year, and deposits and liabilities of N1.4 billion, indicating an increase of 24.1 per cent year on year.Said he, our case is very good because we posted a wonderful result despite economic challenges. Profit after tax stood at N33.4 billion for the year ended December 31, 2010, as against N4.9 billion recorded in the nine months to December 2009. Pre-tax profit also rose to N43.2 billion as against N13.3 billion recorded in the nine months to December 2009.We recorded net loans and advances of N1.15 trillion, an increase of 5.5 per cent compared to N1.09 trillion as at December 31, 2009, while shareholders funds stood at N340.6 billion, representing an increase of 9.4 per cent from N311.3 billion as at December 21, 2009. Gross earnings stood at N230.6 billion for the 12 months to December 2009, while total assets and contingents were N3.3 trillion indicating an increase of 5.8 per cent, from N3.1trillion in December 31, 2009.He continued, we have proactively taken the one per cent genera; provision charge (amounting to N11.4 billion) on our performing loan provision in spite of the waiver on the general loan loss provision for banks granted by the NASB for the year ended December 31, 2010- underscoring our return to a strong trajectory of profitability.Based on that, he said that the general provisioning is fundamentally prudential, and was geared towards ensuring that banks provided for unforeseen losses in their performing books.It would be recalled that the banks Managing Director/CEO had stated in the annual report, we have proactively taken the 1 per cent general provision charge (amounting to N11.4 billion) on our performing loan portfolio in spite of the waiver on the general loan loss provision for banks granted by the Nigerian Accounting Standards Board for the year ended 31 December 2010-underscoring our return to a strong trajectory of profitability.Onasanya noted that FirstBank retained its market leading position and continued to grow its loan book while delivering strong profitability and retaining a robust capital position.It would be noted that, NASB in 2009, at the request of the CBN, suspended compliance with this particular policy.However, the two bodies (CBN and NASB) finally agreed for the waiver to continue in 2010.banks will re-commerce the provisioning in 2011 on a quarterly basis.
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