Following the release of FBNH’s audited FY’21 and unaudited Q1’22 results, we had a sit-down with the firm’s management to obtain greater clarity on the strategic thrust of the institution for the next three years. Our interactions with management revealed the following key themes:

  1. Management is keen on changing the narrative following years of underperformance that impaired overall market perception of the bank. It affirmed that its balance sheet repair is substantially complete and that the asset quality indicators observed in Q1'22 are reflective of what to expect by the end of the financial year and beyond
  2. There is now a warm sense of stability at the board and executive management level following the radical leadership and ownership changes witnessed in 2021. In our view, this sense of calm may enable the bank to focus on accelerating strategies that could lead to a complete turnaround in the near to mid-term
  3. FBNH is optimistic it will remain competitive in the dynamic operating environment. It plans to continue leveraging its robust retail footprint, expansive digital and agency banking network, and rising pan-African exposure to drive near to mid-term value
  4. Despite our concerns over the bank’s capital adequacy (i.e., below our comfort threshold of 200 bps + regulatory limit), management prefers to accrete its capital base organically. Capital market opportunities will be considered if there is a need to grow the business much faster than organic capital expansion. For now, the firm is comfortable with a 100 – 150 bps capital buffer 
  5. The bank remains committed to rewarding shareholders as its fortunes improve.