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First Bank tickles investors with dividend, bonus shares


July 29, 2007/ Punch




First Bank of Nigeria Plc on Friday surprised shareholders by announcing a dividend of N1 and another bonus issue for the year ended March 31, 2007.


The bank , which has been consistent with its bonus issue, had given a one-for-one bonus last year, which raised its paid shares to 10.4 billion shares.


Some investors were not too sure if the bank would give another bonus, given the fact that its hybrid offer of over three billion shares had just closed. It was reasoned that another bonus issue would further swell its number of shares, thereby making its difficult for the bank to service in terms of dividend payout.


However, the bank announced a dividend of N1 and a bonus of one new share for every six shares already held on Friday. This dividend and bonus followed an improved financial performance for the year ended March 31, 2007, where the bank recorded gross earnings of N90.32bn, up from the N67.44bn posted in 2006.


Profit after tax and extra-ordinary items (amortization of goodwill) rose from N15.4bn in 2006 to N18.4bn. Positive response to the results boosted the share price of FBN by 15 per cent or N6.36 from N40.40 to close at N46.36 per share.


Market operators said that the price of the stock would witness more growth this week due to high demand by investors willing to benefit from the bonus and dividend.


However, only shareholders whose names would be in the bank’s register as at August 20, 2007 would benefit. This implies that those investors who bought the last public offering may not benefit because they are yet to become shareholders of the bank as the offer is still being processed.


Although the results of the bank’s last offer are still being expected, it was said that the offer was highly patronised.


The bank intends to use the net proceeds of N96bn from the offer as follows: Expansion of branch network (N21.93bn); modernisation of branch network (N12.23n); strategic business development (N10.2bn); increase in equity investment in subsidiaries (N11bn);


investment in new subsidiaries (N7bn); increase in working capital (N27.14bn) and expansion and upgrading of IT infrastructure (N6.4bn).


The Managing Director/Chief Executive, First Bank, Mr. Jacobs Ajekigbe, had promised that the bank would not let down, stockbrokers and other stakeholders.


“We will not let you down in terms of your expectation of us. We shall continue to institutionalise corporate integrity, excellent customer service and self-reinforcing wealth creation process. We will also remain committed to the development of the Nigerian economy,” he said.


According to him, the bank has experienced dynamic, focused and competent management team that will make it remain a clear leader in the industry.


“It has wide branch network which cuts across all parts of

Nigeria. This gives the bank access to large market share, un-banked market and cheap funds. It is well diversified into various sub-sectors, thus allowing it to meet the needs of its diverse customers,” he said.

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