First HoldCo Plc (FIRSTHOLDCO) Earnings Call Transcript & Summary

Okay. It's 3:05. And so once again, good day, everyone. And thank you for joining the FBN Holdings Full Year 2023 and First Quarter 2024 Financial Results Conference Call. We appreciate the time you spent in joining us on this call and for your continued interest in FBN Holdings. My name is Tolu Oluwole. And as typical, we will commence this session with an overview by the Group Managing Director of FBN Holdings, and then this will be followed by a Q&A session. Please raise your hand electronically, to be identified, and once identified, your microphone will be unmuted. And once called upon to speak. We'll take the questions as typically 2 or 3 batches. And if you have any follow-up, please do let us know by indicating. Again, your microphone will -- please ensure that your microphone is always muted when not speaking. And on that note, I'll just hand over the call now to the Group Managing Director of FBN Holdings, Mr. Nnamdi Okonkwo. Please go ahead, sir.

Thank you very much, Tolu. So good day, ladies and gentlemen. I welcome you to today's call where we'll be discussing our full year 2023 numbers and first quarter 2024. I would like to start with speaking to operational highlights, if you go to Slide 4. And I dare to say that 2023 was a pivotal year for us, which marked significant financial and operational progress. So I'll discuss further, starting with financial highlights. We recorded a remarkable 95.7% in gross earnings to NGN 1.6 trillion. This was driven majorly by 74% year-on-year growth in interest income to NGN 960 billion. And that represents 60.2% of gross earnings, excuse me. So the performance continued into Q1 as gross earnings grew 181.4% year-on-year to NGN 730 billion, also driven by 153% growth on interest income. So the growth in interest income was underpinned by improving business fundamentals, a strong rate environment, which resulted in increase in earnings yields to 10.7% in financial year 2023. And this is up from 8.8% in prior year, and grew further to 14.2% when you now look at the Q1 numbers. So as a result, net interest margin improved to 6.1%, and by Q1, it has further improved to 7.1%. So net interest income grew 153% year-on-year and 63.8% year-on-year growth in net fees and commissions. So excluding trading and mark-to-market gains, noninterest revenue grew 52% year-on-year, which underscores the strength of our core banking and related offerings. I'll then go to speak on costs. OpEx have been elevated as a result of when we had inflationary environment and pass-through effect of currency devaluation. Notwithstanding this, the increase in operating expenses, which is more than offset by stronger growth in operating income even as we successfully exited cost containment practices. So these dynamics resulted in the cost income ratio of 49.1%, and that came down from previous 61.7% in 2022, and for that drop to 43% by the time we got into Q1. So we remain committed to -- remain committed and continue to further enhance efficiencies across our businesses. So overall, what I have just been describing related to the profit before tax of NGN 358.9 billion, and that represents the year-on-year growth of 127%. For NPL was -- at 4.7% is well within the regulatory requirements and further down to 4% in Q1, despite the devaluation and changing macroeconomic environment. Coverage improved to 91% in 2023. These results are testaments to the strong risk management architecture and asset quality of the group. Okay. So earlier in the year, you will recall that we announced our plans to risk capital. And we're going to do this through a public share offering or private share sale locally and internationally. And this was to further support operations. Now we are pleased to report that these plans are well in progress. The capital raise is expected to significantly enhance Group's overall performance and the ability to pursue strategic initiatives, investments as well as ensure compliance with Central bank's new capital requirements. So in summary, we are seeing that our capital raise plan is still progressing, and we are very confident to meet the CBN requirements ahead of time. Now I speak on governance, and it's important to pause for a minute here to just speak to developments in the bank recently positive. As you are aware, Mr. Segun Alebiosu has been appointed as acting Chief Executive Officer of FirstBank. This followed retirement of Dr. Sola Adeduntan. Additionally, Mr. Ebenezer Olufowose was appointed as the new Chairman of the Board of Directors of FirstBank. Ebenezer replaces Mr. Tunde Odukale, who retired after clocking the statutory 12 years on the Board, and I want to take this opportunity to thank Sola for the wonderful job he did leading the team up to this point, and also Mr. Hassan-Odukale for his leadership of the Board. I then go to Slide 5. And on Slide 5, we are basically saying that you can see we are likely on track to deliver on our strategic priorities in 2024. Our first strategic priority has been on enhancing revenue and profitability. So over the past years, we had laid foundation for that by implementing efficient methods driven by technology and innovation. So our focus includes monetizing analytics and data, optimizing business development opportunities and driving new customer acquisition. We're also committed to proactively revamping our digital product development and delivery methods. There has been an increased focus globally on leveraging advanced analytics and we're implementing this to gain deeper insights into our customers' behavior, and that allows us to tailor our offerings more effectively. So additionally, our focus on digital transformation enables us to streamline operations and improve customer experience, ultimately boosting revenue and profitability. On our second strategic priority, it has been to strengthen our value proposition. So we aim to continue enhancing the value created and consistently build on our brand value as well as increasing synergies across the group entities. In doing so, we strive to [indiscernible] the customer journey across both physical and digital channels, locally and internationally. We refine and align our value proposition as well as reassess our business portfolio and continue to explore variable adjacencies. Lastly, but this is certainly not least, is our focus on optimizing operational efficiency. Over the years, this has been a key objective for us as we continuously refine our processes and levering to capitalize on skill advantages that we have. We are committed to refining our business delivery models and governance structure to ensure maximum efficiency and effectiveness. So furthermore, we are concentrating on business opportunities where our resources can generate the greatest returns. We'll keep integrating collaborative measures and maximizing operational synergies to enhance overall performance. The 2024 targets highlighted on the right side of the same slide, it shows the progress we have made so far. We have already achieved 3 of these targets, namely ROE; CIR, cost-to-income ratio; as well as NPL targets. Our cost of risk has clearly increased, given the current macro backdrop as we focus to ensure a comfortable coverage ratio. So in conclusion, I'm very pleased with the remarkable performance of 2023, and I thank the team for their outstanding contributions. All our operating companies and their leadership, we thank you for the numbers we're seeing. In 2024, we look forward to exceeding last year's performance going by Q1 results, which we just released. I'll remain confident in successfully navigating the current challenging operating environment while delivering sustainable value to our stakeholders. So on that note, let me thank you for taking time to listen to me. I will now hand over to Tolu to moderate the Q&A. So Tolu, let me hand over to you now. Thank you.

[Operator Instructions] So we have the first question from Joshua Arowolo.

I actually -- I realized I did not introduce our team. Apologies for that, ladies and gentlemen. So on this call, let me just -- we have the acting CEO of FirstBank, Olusegun Alebiosu. We have the MD of -- acting MD of [indiscernible]. We have Patrick Iyamabo, CFO of FirstBank. We have Wale Ariyibi, ED Holdco. We have, Tolu as you know, Investor Relations Head. So on that note please go ahead with the question.

Congratulations on the results. So I have 3 questions. The first one is on the dividend. Just to understand the management's decision to cut dividend. Was it prompted by perhaps the back-and-forth with CBN? Was it linked to CAR? So any of your context in that regard would be great. The second one is to just to understand the current structure of the loan book, particularly to understand if all the value of the loans that are currently on the regulatory forbearance and sort of what percentage has been impaired so far? Actually, I'll just pause after those 2 and perhaps come back in the queue for further questions.

Okay. Let's take one more --- or two more questions before we answer and move on.

Okay. In that case, -- so Sodiq has a question. We have Sodiq Safiriyu.

I think I also have about 3 questions for now. The first one is I would like to know from the management's perspective, the sort of opportunities and risks that the management see in the Nigerian banking sector now, considering the changes in monetary policies and volatility in the macroeconomic space. Second question would be that considering the NOP directives from the CBN, how does the bank see it affecting FX revaluation gains on loss and the fair value gains going forward from here? And then lastly, I would like to know the core focus areas for the new CEO at this point? Yes, all the question for now.

Tolu?

So, thank you. We take this question. So we've -- the questions from Joshua and Sodiq.

Okay. I'll answer this and then we'll continue. Do you want -- in which case, -- the first one had to do with why we paid NGN 0.40 dividend. And then also he asked about loan impairment, correct? So I'll give -- by the way, on dividend, we have to pay NGN 0.40 but in summary, as you know, we are planning to raise capital and by way of rights issue and other methods. And we actually did that to reduce in pressure on our existing shareholders when it comes to a rights issue. I'll give -- question was the question on loan impairments from Joshua, and then we go to Sodiq's opportunity. Sodiq, set of opportunities and risks we see. Segu will also take that. And then Patrick would respond to NOP and how it affects us and then we'll move on. Thank you.

Patrick?

Good day, ladies and gentlemen. I will be responding to the question around the opportunity and risks that at least from a FirstBank perspective that we see in the market. So I just -- put them in maybe in 3 buckets. The impact of the inflation and see through to yield, volatility in similar currency space, and then we just a quick comment on regulation and impact as well. In terms of yields, the yield environment, yields have gone up. And as you would recall, we've always explained on this call, FirstBank tends to do more favorably when yields move up are involved because we do have the capacity to reprice our assets at a faster rate than our funding. And so on other prevalence -- the constants and all the way to the end, we do see opportunities to add this yield environment. And this yield opportunity is coming through loans and treasuries. If you decompose our results as of Q1 and you will notice first of all the significant increase in net interest income. But when we decompose that further, you'll find that, that is driven by volume. Yes, exchange rate but also yield and the big source of yield is coming to treasury. So -- and the outlook for us from a yield's perspective is positive. In terms of volatility, we'll see out there. A lot of that volatility is coming through FX. As most of you would know, volatility increase translates -- this currency volatility in some trades translates into opportunities and profits. And so the currency volatility particularly the up and downstream in either direction [indiscernible] and so we looking forward to seeing -- happen to the trading opportunities it these offers. And of course, if you're just looking at the currency devaluation of lone asset most higher overall because we've got a portion of our asset base in FCY, the translational impact is positive for us. We look at our trade income, and I'm talking about international trade because a lot of that is structured in foreign currency as the Naira devalues is positive for us. So again, do you think through the insurance yield, inflation environment, you think through the currency permutations in the market, they actually accrete value for FirstBank. And just to kick off a couple of specific regulatory considerations, penalties. Banks can no longer maintain a long position but they can maintain a short position. And so the typical evaluation gains and the short position is of cost cap like you all know. So the typical devaluation came on the loan positions all got cut out in Q1. And so for most banks, including the FirstBank, for the naira devaluation does not -- would not translate into the devaluation gains you're typically seeing. But interestingly, that is for banks that choose to play that -- to the extent that we can maintain a short position, and they can read the currency properly really means that whenever the naira devalues, we would actually see some banks accretes and devaluation gains out of that position or -- sorry, strengthens with actual [indiscernible] on bank and accretes and gains out of those positions. But that is position that choose between that balance sheet that we reported. I have taken a very prudent viewpoint to the balance sheet and the currency provision. It just means that a lot of those devaluation gains we noticed last year. I noticed Q1, I'd like to repeat again. But that said, the good news, like I mentioned is if you think about Q1 being significantly defined or either being benefiting from the tailwind of -- associated with naira devalue, the remaining 3 quarters will be -- will benefit from the tailwind of the yield environment and in volatility -- core volatility in currency itself. In terms of CRR and cost [indiscernible] mentioned regulation, CRR is going to drive funding pressure where each into the margins or banks from FirstBank, and we already at 45% CRR. So the full impact of CRR is already reflected in our books. We know what that looks like, and it's -- and why effectively and continued while still accreting all the market opportunities before us. MPR ties back to the yield discussion we had earlier. As MRP moves up, it also drags yield along even if not in lockstep but it drags yield along and for financial institutions balance sheet like ours, we get to benefit. So in summary, yes, there's a lot more volatility, consequence on macro events. Yes, the NOP window itself, that has a accrued a lot of value for banks last year, and the Q1 this year largely closed. But the reality is that for a bank like FirstBank with robust balance sheet and very diverse earning sources, we're actually -- we actually see interesting opportunities to accrete earnings in other parts of our books. So overall, not too bad for us to do. Thank you.

Thank you, Patrick. Segun, take your own set of questions.

Thank you, GMD. The structure of the loan book, is such that it's diversified. But forborne loans are lightly in oil and gas sector, upstream and services/midstream, and that impairment is in line with the terms of forbearance itself. And I'm sure we all know that aim of forbearance actually is to allow these firms to quickly column and then structure themselves in line with the cash flows that they have. We all know the oil and gas upstream, no one does that in 5 years anyway in the world. And therefore, the country has just come to realization of the fact that will get financed. It's not a short-term transaction. And as long as these oil companies do have good reserves, of course, and they have assets to take care of that, cash flow will be assured over a long period, they will amortize the exposures over time. So we're just learning that oil and gas as a country is more for manufacturing. We see reality and we're dealing with that. So I need that to be clear, focus of new CEO, I would say that is, continuity. So we have our strategic plans. There will be no deviation from that. So it's continuity. So if you look at management, we are all intact. So exactly what we have done in the past is what we'll continue to do essentially. Growth, strong financial performance, stability and governance, and that will just be the focus. And looking at the operating environment, I'm sure we are worried about the interest rates, the CRR and what the -- I mean, customer will be going through. I can assure you that there's a lot of opportunities in non-oil exports at this time because, of course, exporters are able to get good value for what they export. So dollar coming in is transparent. So you can say whatever it is, they take it. So allows me to understand that [indiscernible] where they are and so transparency is there. So people are trying to do. I can see order from [indiscernible] kind of things that are going on in Nigeria, and you see how we're able to export and get value for that. So also construction. I'm sure you know that construction is booming across the country, and that is allowing for growth for structure development. And so these opportunities are also coming up. And I'm sure by next quarter, even more opportunities that are out there. Thank you.

Thank you, Segu. Tolu, more questions?

Yes. So we have a question in the chat room and this is a major constituent of NIR is fair value gains on financial instruments at fair value through P&L. Can you specify what investments this relates to? And if this equity instruments held in FCY? And then the second question is, with the plan to raise capital, what time frame will you be looking to complete capital raise and via which option? And then with the massive increase in gross loans, what was the organic loan growth and what is the bank's loan growth guidance for 2024? I think those are 3 questions for now.

The first two questions, Wale Ariyibi, the ED and CFO, I mean, ED Finance in [indiscernible] will answer and then Segu will speak to the one about loan portfolio growth. So Wale, you will go first.

Thank you GMD, and thank you for the question. Please let me confirm that you can hear me and I'm very audible.

Yes. We can hear you.

So I will address the question on capital raise. The question is saying NGN 150 and the time frame for achieving the capital raise. The situation today, when we said we wanted to raise NGN 150 billion, that was before the CBN circular debt that bank with international authorization should increase paid-up capital i.e., share capital, share premium to NGN 500 billion. As you must have been aware, our crown jewel, FirstBank of Nigeria Limited has international transition for banking license and therefore, should go to NGN 500 billion in line with CBN regulation. Where you were asking for NGN 150 billion and we were going raise NGN 150 billion just for business exigencies, what we felt that was needed for the bank. But today, with the announcement, we will raise that to about double or even more. The options will be from right issue for existing shareholders, there will be private placements and also public offering, so that we can raise once and for all, what we need for bank and for expansion. In terms of timeline, our plan is that before end of 2024, December 2024, we will have concluded capital so that when we are holding this call next year, i.e., full year 2024, December 31, we will be telling you that our crown jewel, FirstBank had achieved the minimum capital -- recapitalization requirement of NGN 500 billion. So that's the plan. And we focus on that and as time goes on, we see announcements to this effect, and now we intend to achieve this. But in summery is to do a right issue for existing shareholders, we have about 1.2 million shareholders in our register and then do private placement and public offering. So I will let Patrick, the CFO of the bank, answered the question on the fair value through profit or loss and equity instruments or whether it's financial equity or debt, and also the loan growth for shareholders [indiscernible] Segun and Patrick. Thank you.

Thank you very much. So I think this is just really speaking to the fair value through P&L. Essentially, what you see there is really coming from debt securities and derivatives, so that accounts for the bulk of that. Indeed, speaking to fair value through P&L for securities, if you do look at our OCI, and you would actually notice that we did book about the NGN 165 billion gain in fair valuation on our equity portfolio, where we took that through OCI. If you were to have accounted for that through P&L, our profits would have been higher accordingly. So the short answer to the question, what you really have there are securities and the derivatives -- debt securities and derivatives. Thank you.

Thank you, for the question. Loan growth for the year, so far, about 20% of that actually organic growth. The other translation impact, you know rate moved from about 900 to 1,300 as of March. So on our target for the year is 10% of loan growth. But with translation impact, you've seen movements. But again, we have basically reward also for same bank.

Thank you. Tolu, I hand back to you.

Thank you, GMD. We have another question -- yes, okay. So from Ngozi Odum.

I have a couple of questions, so I'll ask a please indulge me. I don't know if it's been answered, but I wanted to kind of get a sense of why we've seen such a delay in the publication of your full year 2023 results. Please close out when we should be expecting full year -- sorry, first half results? So I just wanted to get the sense of what the delay was in terms of the publication for the year 2023, if you had anything to do with regulators on the assessment of your financials? And then also speaking to your NOP position and the CBN directive, I wanted to get a sense of what was your full year 2023 net open balance? And when it was unwound or how this was reflected in your performance for Q1 2024? And then on the loan growth I wanted to get a sense of your organic loan growth for Q1. You've spoken through what happened in full year 2023 but I wanted to get an expectation on what you've already recorded as of Q1 in loan growth for the first quarter and then also your guidance for the full year? Yes. And then lastly, on your capital adequacy ratio. We saw a very close to the threshold, and I know there are plans for raising capital and so on. I don't know if you've mentioned the time line for the capital raise? And how this would impact capital adequacy ratio going forward? Will you be able to raise additional capital this year and if not, considering also that we've seen some devaluation in the naira for this year, how do you expect this will impact your results as of full year -- sorry, as of each one? I'm sorry, I think those are my questions.

Thank you, Ngozi. Patrick?

Okay. Thank you, Ngozi, for the questions. So the first question has to do with delay in publication. That was really operational, and we apologize for that delay, and it has been dealt with, and we are convinced that going forward, results will be released more timely. And to the hint, you mentioned around this relating to CBN, it's not about CBN. To the second point around NOP, we've typically not disclosed NOP. But as it is right now, it's even much less relevant because banks are no longer permitted under regulation to maintain a long NOP. The regulation required all banks in any case, to shut down all long positions in February and in line with the regulation we compiled, so that was embedded in Q1. So a lot of revaluation gains, like I mentioned earlier, that banks are typically -- banks typically recognized in 2023 and in Q1 of 2024 have faded away because that NOP is closed. Again, you can have a short position to a limit and if the bank chooses to play with the short position in anticipation of the naira appreciation, you could see those gains come through the books, but banks -- the long position banks have held have not been part of trading, but just simply maintaining the FX FCY position that have had. So it is safe to say that with a long position closed and we need to mitigate any risk from a short position revaluation gain, loss figures will be reasonably muted for banks going forward. The question of organic loan growth, I'll leave that for the Executive Officer and not sort of speak to that, but I can point out that most of the loan growth seen in Q1 were really consequent upon naira devaluation [indiscernible] similar to that. In terms of our CAR, there are 2 elements to further -- actually 3 elements further strengthen CAR. The first is the use of modulating risk-weighted assets and the use of risk mitigants. In other words, collateralization of the loans. So that has this implication on the CAR and by increasing CAR accordingly because risk weighted assets are reduced to the extent of the risk mitigants. The other two is really related to capital injection, which is both Tier 1 and Tier 2. Wale spoke on our Tier 1 capital raise plans, and the goal is to close our Tier 1 this year. We also hinted on the kind of figures we are looking at. We also have the opportunity to throw in Tier 2 and we have actually signed up Tier 2 capital raise. The drawdown of that Tier 2 capital raise is really up to us. The Tier 1 alone if we keep -- I mean once we raise that Tier 1, the Tier 1 capital as planned, we can easily see our CAR exceeding 20%. You throw in the Tier 2, which further leverages that, and the CAR goes even higher. So from where we are sitting, the CAR discussion is not really about having a comfortable buffer not but it's really about having the capital base to allow the institution carry out some of the transformational growth that we see opportunities for and we really want to capture. And we are very convinced that with that capital increase and those growth opportunities we are pursuing and the earnings that we accrete, and shareholders will be even much better than they are today. So of course I will hand over to the CEO, who used to be the CRO, to speak on the loan growth. Thank you.

Thank you, Ngozi. As I said earlier, 80% loan growth in Q1 was a result of translational impact. 20% of that -- remain 20% was organic loan growth. Thank you.

Tolu?

We have more questions. Okay, we take one each from chat room and then one live as well. So Gloria Fadipe asks that she didn't get the explanation around the dividend. Given the retained earnings don't count towards capital expected to be raised. So how does paying your dividend reduced the strain on shareholders? So that's one. And then the second one from Ifeanyi. So can you explain the foreign exchange loss in FY '23? How did that come about? And the CBN's policy of reducing LDR to 50 as significant implications. Could the new CBN policy be -- could the new CBN policy on the revision LDR ratio down to 50 influence the Bank's outline for loan growth this year?

Okay. Why don't we take [indiscernible] to takes Ifeanyi question. Thank you.

Further explanation on the issue of dividend. With respect to capital, we are dealing 2 issues. Number one is paid up capital, which is separate from capital adequacy ratio. Now especially for FirstBank, the dividend upstream to HoldCo was deliberately muted so that we can boost capital adequacy ratio. That's the point we're trying to say with respect to lessen the burden on shareholders. What would have had to send as HoldCo to FirstBank would have higher but if you check over the years, we are deliberately -- the impact on earnings retention in FirstBank to boost capital irrespective and despite the legacy issue that we had to deal with. That's the basis of saying to lessen the burden on ultimate shareholders. Now when you look at what we have paid over the years in terms of dividend, and I would like to point you to the fact that the paying entity is the holding company, so always look at the earnings per share of company. That's where you see what we've paid. So we've paid -- this proposal that would be before the AGM is to pay NGN 0.40 out of available NGN 0.42. So that's the explanation regarding lowering or lessen the burden on shareholders. Yes, CBM has come to say that paid up is the minimum they are looking at. But at the same time, shareholders' fund is used for capital adequacy ratio and retained earnings continue to be better competition for capital adequacy ratio.

Thank you. Patrick, Ifeanyi's questions?

So thanks. I believe Ifeanyi's question was around the foreign exchange and loss recorded in 2023. So Ifeanyi, whether we book a revaluation gain or loss is really a quantum and is really driven by whether we have a long or short position on -- foreign currency position on our balance sheet as of that date. There are different things that can drive with that the position is long or short term. I mean, you just have -- if you go oversold, of course, you will be short. If you overinvested, you will been long. But the way I would advise you particularly you look at our financials is to also look at our derivative gain lines. Part of what we did with our foreign currency balances was to swap them into or take them into derivative instruments, which essentially meant they were no longer on our balance sheet as of that date. And to the extent that we used in excess of the long position for that purpose, you will see a foreign currency revaluation loss. However, that is compensated, indeed, more than compensated for brought by the derivative gain accruing as of that day. So if you put together, just sort of the complete picture, you would need to take a foreign cost revaluation loss, match it against the derivative gain and add the net figure begins to give you a sense of the true value of our loan position, even though the additional alpha from the derivative gains would be in there as well. If you run that analysis for FBN Holdings at the end of March, you will come to about NGN 300 billion figure. So that NGN 300 billion represents the net of revaluation loss and the derivative gain recognized in 2023. Like I said, there's an alpha in there relating to fact that we structure the derivative and instrument but all in all that gives you the full picture of what's going on there. Will that be all for me? Was there another question for me?

Okay. Thanks, Patrick. Okay. We'll go to the next question now. This is from Ayodeji Dawodu.

Congrats on the numbers as well. Just confirm, can you hear me clearly?

Yes, yes.

Great. First of all, great to see NPLs below the regulatory threshold. So congrats on that as well. Just a broader question. Post the capital raise and I guess the stronger CAR numbers, I mean, how will the capital be deployed to support long-term growth for the group? And maybe just in relation to that, I mean, should we be expecting a strong Pan African expansion? Or will the focus still largely remain on Nigeria?

Thank you, Ayodeji. Wale, take that question.

Thank you, GMD. Okay. Thank you, Ayodeji. The question is, how we going to deploy capital? As I said earlier on, for business exigencies that we felt were imminent at that point. That was when we were coming to the market for NGN 150 billion, which essentially was going to be the right issue really. Now let me just take this opportunity to also take one question I've seen that, do we have confidence that we're able to raise capital based on valuation and things like that? I will now take the 2 questions. I don't know whether it's on the chart or somewhere to answer your question. So we enjoy support of our shareholders and at NGN 150 billion, in spite of the fact that it was right issue, we were sure, almost certain of the support we were going to get from our shareholders in raising that NGN 150 billion. We had to pause because of the announcement by Central Bank. So today, I think they are requesting for NGN 500 billion paid up capital bank like FirstBank. What we actually need will be about NGN 260 billion something as you must have seen in financials. So to raise that is not a problem but I want to take the opportunity to even do more such that, number one, all the growth opportunities and businesses that because of the fact, as I've mentioned on this call, that our CAR, particularly in FirstBank, is close to the threshold for most of the years that we have had to deal with some legacy issues. That has impacted growth essentially but with this new capital, we're able to take all of those projects, I mean, that are very [indiscernible] attractive and value accretive. Now also, you will recall that on this call, Patrick said, when rates are high, it is more accretive to us as an organization. Therefore, we are able to do even a lot more of arbitrage and making money from treasury. In the presentation, you will see that in terms of where we have made money from is from treasury operations, from corporate banking and from retail banking. So we have to deploy the fuds. It's not a problem at all. All options are on the table and we're going to scan the environment to see. And once again, to reiterate, before the end of this year, 2024, we'll have concluded and[indiscernible] for FirstBank, FirstBank would have gone beyond NGN 500 billion in paid-up capital. Now when you add the other items considering shareholders fund, of course, we will be approaching NGN 1.8 trillion. So with that, we are even in a very good position to do all sorts of things that are still under consideration. But be rest assured, we have to deploy the money, it is not a problem. Support from shareholders is not a problem because we may not even need to -- we may need to actually maybe refund some money at the end of these plans that we have and the assurance we have got it, and to go back. So that's -- I would leave it that. As time goes on, you will see -- you see the announcement, you see how we are tracking. But before the end of 2024, we'll have done the NGN 500 billion of FirstBank. And then we use 2025 before the time line is March 2026, before then, you will have seen the kind of things we have done with the money. But today, we are not able to disclose all of the plan because they have not been concretized yet. But we have clear ideas of how we're going to deploy the money, how we're going to raise the money.

Tolu? Are there more questions?

Yes. Okay. [Operator Instructions] In the meantime, we have a question from Damilare Asimiyu. So Damilare says, I would like to comment on the management for the fantastic job so far on the turbulent -- given the turbulent position of the group about 6 to 7 years ago. I hear during the response of one of the -- during the response to one of the early questions that within -- that's about the dividend and we've already discussed that in dividend. So I'll take the next question, which is -- yes, can you share more light around -- again we've talked -- he is still talking about the dividend. So the next one is, does FBN Holdings still enjoy the forbearance, intervention and support from CBN? And this is to just discuss the liquidity position as at full year 2023? And there's a question -- most of the questions, we're reading more around dividend, capital and fair value gains, which have been discussed about the last hour. So there's a question here, we talk about, this from Nabila. Are there any plans to improve the contribution of other business verticals going forward? And then just asking to then discuss the area of focus. Otherwise, the other questions are around the capital, dividend, fair value gains, which have been discussed in detail.

All right. So Yes, of course, in our investment banking group, where we're looking to scale up contributions from the pay rate. So I'll leave it at that because the plans are still underway.

[Operator Instructions] Okay. There are no further questions at this time. There's a question from [indiscernible]. Okay. And there's another question. I think this is on Damilare Asimiyu, that was the last question we read other time.

So my second question has not been responded to that one knowing the liquidity -- can I proceed with my question? Just to retreat that the second question I asked has not been answered, and that has to do with knowing the liquidity ratio of the Bank of the group rather as of end of 2023?

Okay. So that was about 34% -- 34.2, about 34%.

And we also have that in the presentation. Thanks, Damilare. Okay. So yes, Tomiwa you have the next question.

I just want to clarify. I'm not sure that this either have been answered. So I want to know in terms of the sector that the bank want to play in 2024 when it comes to credit origination and all. So I want to now in details, which sectors you think we see more opportunity here, considering what has been happening in the economy and [indiscernible] as well.

Thank you. Segu take that.

Yes. I discussed earlier that we are -- our area of interest will be export -- non-oil exports and construction infrastructure, and you can see that. And I said, looking at the exchange rates, certainly positive for non-oil exports. And that I observed that even farmers and exporters of cocoa cashew, sesame seeds and other seeds are richer. And you can see the price of goods items also going up, and we're seeing that because dollars need to coming. And on construction, you can see all the construction going on as well. I'm sure you are aware of different states doing construction, you are federal government doing construction, there is a lot of the things going out there. So these are the 2 main, main areas that we are looking at this year. Manufacturing will always be at play, where we know that largely, most manufacturers are not expanding. They are only getting raw materials to feed their factories to those who come trade and then there'll be no much -- no more activities.

Thank you. Tolu, at this point, I'm finding -- over to you, let's see if you wrap up or it doesn't look like.

Yes. So I think we only have one question here. And that's on Josh Arowolo.

Can you just confirm if you can hear me.

Yes, we can, Josh.

So it's just a follow-on question to get the value of forbearance loan and how much has been impaired if that can be disclosed?

I did explain earlier that the level of impairment is as by time of -- I mean term of forbearance agreed with Central Bank. So I explained that, and it's across the industry. So if you permit me, I won't disclose level of forbearance but there is no change from the position we have in 2022. It's still the same, same names, same account, nothing has changed other than we have seen material progress on these accounts. And I explained that the major problem that we found ourselves in oil and gas upstream, that was force majeure in 2022 and under the IFRS 9 actually, we have [indiscernible] impair an account. So when you have a decision where almost 80% of crude oil product was stolen in the Niger Delta,-- I mean, how will you now impair accounts that produce those good that were stolen. And that was -- I mean they are back now running. And you can see the country itself is making progress on oil and gas upstream, and cash flow is resumed on actually -- on all the accounts actually. And therefore, there's nothing to worry about. Thank you.

All right. Ladies and gentlemen, I want to thank you for participating in this call today. I'd like to also thank my colleagues -- our colleagues in different operating companies and the Holdco for the remarkable results of 2023. We are very confident that 2024 will be better, Q1 has already indicated that. So we'll return to the tranches now and make sure that we deliver an even better asset of numbers 2024. So on that note, I thank you on behalf of my colleagues for participating in this call today and hereby declare this session closed. Thank you.

Thank you, GMD. So on that note, that concludes the FBN Holdings 2023 and Q1 2024 Financial Results Conference Call. Thank you for your participation, and you may now disconnect.