FIRST BANK OF NIGERIA PLC

ANNUAL REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2010

FIRST BANK OF NIGERIA PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 31 DECEMBER 2010 TABLE OF CONTENT PAGE

Directors' report

Directors' responsibility

Report of the Independent auditors

Report of the Audit Committee

10

Statement of significant accounting policies

11

Profit and loss accounts

18

Balance sheets

19

Statements of cash flows

20

Notes to the financial statements

21

Financial Risk Analysis

59

Maturity profile

63

Capital adequacy ratio

67

Statement of value added

68

Five-year financial summary

69

FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES FOR THE YEAR ENDED 31 DECEMBER 2010 The principal accounting policies adopted in the preparation of these financial statements are set out below: 1 Basis of preparation These financial statements are the consolidated financial statements of First Bank of Nigeria Plc, a company incorporated in Nigeria in 31 March 1969, and its subsidiaries (hereinafter collectively referred to as the Group ). The financial statements are prepared under the historical cost convention modified by the revaluation of certain investment securities, property, plant and equipment, and comply with the Statement of Accounting Standards issued by the Nigerian Accounting Standards Board. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the directors best knowledge of current events and actions, actual results ultimately may differ from those estimates. 2 Basis of consolidation i Subsidiaries Subsidiary undertakings, which are those companies in which the Bank, directly or indirectly, has an interest of more than half of the voting rights or otherwise and has power to exercise control over their operations, have been consolidated. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Bank. Separate disclosure is made for minority interest. The acquisition method is used to account for business combinations. The cost of an acquisition is measured as the market value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their market values at acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the value of the Group s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the value of the net assets of the subsidiary acquired, the difference is recognised directly in the profit and loss account.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred.

ii Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group s share of its associates post-acquisition profits or losses is recognised in the income statement; its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.

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FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) 3 Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns different from those of segments operating in other economic environments. Segment information is presented in respect of the Bank s and Group s business and geographical segments. The business segments are determined by management based on the Companys internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 4 Foreign currency translation i Reporting currency The consolidated financial statements are presented in Nigerian naira, which is the Bank s reporting currency. ii Transactions and balances Foreign currency transactions are translated into the reporting currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account. iii Group companies The results and financial position of all Group entities that have a currency different from the reporting currency are translated into the reporting currency as follows: Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet. Income and expenses for each profit and loss are translated at the closing exchange rate. All resulting exchange differences are recognised as exchange difference reserve on the balance sheet. On consolidation, exchange differences arising from the translation of the investment in foreign entities are taken to shareholders' funds. When a foreign operation is sold, such exchange differences are recognised in the profit and loss account as part of the gain or loss on sale. 5 Income recognition i Interest income and interest expense Interest is accrued on daily balances on all assets and liabilities to which interest is applicable. Interest overdue by more than 90 days is suspended and recognised only to the extent of cash received. ii Fees, commission and other income Fees and commissions, where material, are amortised over the life of the related service. Otherwise fees, commissions and other income are recognised as earned upon completion of the related service. iii Lease finance income Income from advances under finance leases is recognised on a basis that provides a constant yield on the outstanding principal over the lease term. iv Dividend Dividends are recognised in the income statement when the entitys right to receive payment is established. v Custody fee income This is recognised on accrual basis when the service is rendered and is recorded net of taxes. vi Financial advisory This is recognised over the period for which the service is provided.

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FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) 6 Provision against credit risk Loans and advances are stated after the deduction of provisions against debts considered doubtful of recovery. Loans are classified as performing and non-performing, and are considered non-performing when principal and/or interest repayment obligations are in arrears for over three months. Specific provisions are made on non-performing accounts as follows:

Interest and/or Principal outstanding for: Over 90 days but less than 180 days Over 180 days but less than 360 days 360 days and over

Classification: Substandard Doubtful Lost

Provision 10% 50% 100%

However, provisions for microfinance are made in line with the Central Bank of Nigeria s Regulatory and Supervisory Framework for Microfinance Banks in Nigeria, December 2005, from a specific assessment of each customer s account. Non-performing loans are classified as follows: When a loan is deemed not collectible, it is written off against the related provision for impairments and subsequent recoveries are credited to the profit and loss account. Interest and/or Principal outstanding for: Between 1 and 30 days Between 31 and 60 days Between 60 and 90 days 91 or more days and for restructured loans Classification: Pass and watch Substandard Doubtful Lost Provision 5% 20% 50% 100%

In addition, a provision of 1% minimum is made for all performing accounts to recognise losses in respect of risks inherent in any credit portfolio (currently not mandatory). When a loan is deemed not collectible, it is written off against the related provision for impairments and subsequent recoveries are credited to the profit and loss account. Risk assets in respect of which a previous provision was not made are written directly to the profit and loss account when they are deemed to be not collectible. 7 Advances under finance lease Advances to customers under finance lease are stated net of unearned income. Lease finance is recognised in a manner which provides a constant yield on the outstanding net investment over the lease period. Provisions are determined from a specific assessment of each customer s account and relate to advances considered doubtful in line with the Central Bank of Nigeria Prudential Guidelines for Licensed Banks. A general provision of 1% is made on advances which have not been specifically provided for. Income arising there from is allocated to each year on the basis of the annual finance charges that are equivalent to implicit interest rate agreed on the facility. 8 Offsetting Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Investments The Group categorises its investments into the following categories: short-term investments and long-term investments. Investment securities are initially recognised at cost and management determines the classification at initial investment.

i Short-term investments Short-term investments are investments held temporarily in place of cash and which can be converted into cash when current financing needs make such conversion desirable. In addition, management intends to hold such investment for not more than one year. Short-term investments in marketable securities are stated at net realisable value. The gain/loss on revaluation is credited/charged to profit and loss account during the year/period. The amount by which cost exceeds market value (unrealized loss) is charged to the profit and loss account for the period. 13

FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) ii Long-term investments Long-term investments are investments held by management over a long period of time to earn income. Long-term investments may include debt and equity securities. Long-term investments are carried at cost less impairment. An investment is impaired if its carrying amount is greater than its estimated recoverable amount. The amount of the impairment loss for assets carried at amortised cost is calculated as the difference between the asset s carrying amount and the net realisable value. Interest earned while holding investment securities is reported as interest income. Dividends receivable are included separately in dividend income when a dividend is declared. A change in market value of investment securities is not taken into account unless it is considered to be permanent. 10 Investments in subsidiaries Investments in subsidiaries are carried in the Company s balance sheet at cost less provisions for impairment losses. Where, in the opinion of the directors, there has been impairment in the value of an investment, the loss is recognised as an expense in the period in which the impairment is identified. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit and loss account. 11 Managed Funds Managed fund relates to investments of funds received from third parties to be managed in accordance with mutually agreed terms on behalf of the clients. The fund represents investment held by management over a long period of time to earn income. These investments are carried at cost less impairment. An asset is impaired if it's carrying amount is greater than it's estimated recoverable amount. 12 Investment properties An investment property is an investment in land or buildings held primarily for generating income or capital appreciation and not occupied substantially for use in the operations of the enterprise. A piece of property is treated as an investment property if it is not occupied substantially for use in the operations of the Group; an occupation of more than 15% of the property is considered substantial. Investment properties are carried in the balance sheet at their market value and revalued periodically on a systematic basis at least once in every three years. Investment properties are not subject to periodic charge for depreciation.

When there has been a decline in value of an investment property, the carrying amount of the property is written down to recognise the loss. Such a reduction is charged to the profit and loss account. Reductions in carrying amount are reversed when there is an increase, following a revaluation of the investment property, or if the reasons for the reduction no longer exist. An increase in carrying amount arising from the revaluation of investment property is credited to owners equity as revaluation surplus. To the extent that a decrease in carrying amount offsets a previous increase, for the same property that has been credited to revaluation surplus and not subsequently reversed or utilised, it is charged against that revaluation surplus rather than the profit and loss account. An increase on revaluation which is directly related to a previous decrease in carrying amount for the same property that was charged to the profit and loss account is credited to the profit and loss account to the extent that it offsets the previously recorded decrease. Investment properties are disclosed separately from the property and equipment used for the purposes of the business.

13 Property and equipment All property and equipment are initially recorded at cost. They are subsequently stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the assets. Subsequent costs are included in the asset s carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial period in which they are incurred. Construction cost in respect of offices is carried at cost as work in progress. On completion of construction, the related amounts are transferred to the appropriate category of property and equipment. Payments in advance for items of property and equipment are included as prepayments in other assets and upon delivery are reclassified as additions in the appropriate category of property and equipment. No depreciation is charged until the assets are put into use.

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FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) 14 Depreciation Depreciation is provided to write off the cost of fixed assets over their estimated useful lives on a straight line basis at the following annual rates: Asset Class: Motor vehicles Office equipment Furniture and fittings Computer hardware and equipment Plant and machinery Freehold buildings Leasehold buildings Depreciation rate: -

25% 20% 20% 33.33% 20% 2% 2% for leases of 50 years and above Over expected life in case of leases under 50 years Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount. The recoverable amount is the higher and losses on value less costs to sell and value in use. Gains of the asset s disposal are determined by comparing proceeds with carrying amount. These are included in the profit and loss account for the year. On revaluation of property and equipment, an increase in the net book value is credited to a revaluation surplus reserve. A decrease in the net book value is used to reduce the amount of any existing revaluation surplus on the same item before it is charged to the profit and loss account. 15 Cash and cash equivalents Cash comprises cash on hand and demand deposits denominated in naira and foreign currencies. Cash equivalents are short-term, highly liquid instruments which are: i. readily convertible into cash, whether in local or foreign currency; and ii. so near to their maturity dates as to present insignificant risk of changes in value as a result of changes in interest rates.

16 Borrowed funds Borrowed funds are recognised initially at their issue proceeds and subsequently stated at cost less repayment. Transaction costs where immaterial are recognised immediately in the profit and loss account. Where transaction costs are material they are capitalised and amortised over the life of the loan. Interest paid on borrowing is recognised in the profit and loss account for the period. 17 Provisions, contingent liabilities and contingent assets Provisions are liabilities that are uncertain in timing or amount. Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are normally made for restructuring costs and legal claims. A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or the Group has a present obligation as a result of past events but is not recognised because it is not likely that an outflow of resources will be required to settle the obligation; or the amount cannot be reliably estimated.

Contingent liabilities normally comprise legal claims under arbitration or court process in respect of which a liability is not likely to occur. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Contingent assets are never recognised, rather they are disclosed in the financial statements when they arise.

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FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) 18 Retirement benefits The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors, such as age, years of service and compensation. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. For defined contribution plans, the Group makes contributions on behalf of qualifying employees to a mandatory scheme. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. Payments are made to PFA companies who are appointed by respective staff of the Group.

19 Taxation i Income tax. Income tax is provided on taxable profit at the current statutory rate. ii Deferred taxation Deferred taxation, which arises from timing differences in the recognition of items for accounting and tax purposes, is calculated using the liability method. Deferred income tax is provided using the liability method for all timing differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes.Currently enacted tax rates are used to determine deferred income tax. The principal timing differences arise from depreciation of property, plant and equipment, provisions for pensions and other post-retirement benefits, provisions for loan losses and tax losses carried forward. The rates enacted or substantively enacted at the balance sheet date are used to determine deferred income tax. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither occounting nor taxable profit nor loss. Deferred tax assets are recognised where it is probable that future taxable profit will be available against which the timing differences can be utilised. 20 Ordinary share capital i Share issue costs. Incremental costs directly attributable to the issue of new shares or to the acquisition of a business are shown in equity as a deduction, net of tax, from the proceeds. ii Dividends on ordinary shares Dividends on ordinary shares are appropriated from the revenue reserve in the period they are approved by the Bank s shareholders. Dividends for the period that are approved by the shareholders after the balance sheet date are dealt with in the subsequent events note. Dividends proposed by the directors but not yet approved by members are disclosed in the financial statements in accordance with the requirements of the Companies and Allied Matters Act 21 Off balance sheet transactions Transactions that are not currently recognised as assets or liabilities in the balance sheet but which nonetheless give rise to credit risks, contingencies and commitments are reported off balance sheet. Such transactions include letters of credit, bonds, guarantees, indemnities, acceptances, and traderelated contingencies such as documentary credit, etc.

Outstanding and unexpired commitments at year end in respect of these transactions are shown by way of note to the financial statements. Income on off balance sheet engagements is in the form of commission that is recognised as and when transactions are executed. Such commission is included in the commission income in the profit and loss account. It comprises:

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FIRST BANK OF NIGERIA PLC STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (cont'd) i Acceptances Acceptances are undertakings by the Bank to pay bills of exchange drawn on customers. The Bank expects most acceptances to be settled simultaneously with the reimbursement from customers. Acceptances are accounted for and disclosed as contingent liabilities. The income and expense relating to these acceptances are recognised and reported net in the financial statements. ii Guarantees and performance bonds The Bank provides financial guarantees and bonds to third parties on the request of customers in the form of bid and performance bonds or advance payment guarantees. These agreements have fixed limits and generally do not extend beyond the period stated in each contract. The amounts reflected in the financial statements as contingent liabilities for bonds and guarantees represent the maximum accounting loss that would be recognised at the balance sheet date if counterparties failed completely to perform as contracted. Commissions and fees charged to customers for services rendered in respect of bonds and guarantees are recognised at the time the services or transactions are affected. iii Commitments Commitments to extend credit or deliver on sales or purchases on foreign exchange in future are recognised as contingent liabilities. Commissions and fees charged to customers for services rendered in respect of commitments are recognised at the time the services or transactions are affected. 22 Sale of loans or securities A sale of loans or securities without recourse to the seller is accounted for as a disposal and the assets excluded from the balance sheet. Profits or losses on sale of loans or securities without recourse to the seller are recognised by the seller when the transaction is completed. The Group regards a sale of loans or securities as without recourse, if it satisfies all the following conditions. Any sale not satisfying these conditions will be regarded as with recourse: - Control over the economic benefits of the asset must be passed on to the buyer. - The seller can reasonably estimate any outstanding cost. - There must not be any repurchase obligations. A sale or transfer of loans or securities with recourse is when there is an obligation to, or an assumption of, repurchase and is not treated as a sale, and the asset remains in the Group s balance sheet, with any related cash received recognised as a liability. Profit arising from sale or transfer of a loan or securities with recourse to the seller is amortised over the remaining life. However, losses are recognised as soon as they can reasonably be estimated. Where there is no obligation or assumption of repurchase, the sale should be treated as a disposal and the asset excluded from the balance sheet, and any contingent liability disclosed. 23 Fiduciary activities The Group acts as trustees and in other fiduciary capacities that result in the holding or placing of assets on behalf of individuals, trusts, retirement benefit plans and other institutions. These assets and income arising thereon are excluded from these financial statements, as they are not assets of the Group. 24 Earnings per share The Group presents basic earnings per share for its ordinary shares. Basic earnings per share are calculated by dividing the profit attributable to ordinary shareholders of the Bank by the weighted average number of shares outstanding during the period.

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FIRST BANK OF NIGERIA PLC Profit and Loss Accounts For the year ended 31 December 2010 Group Bank 9 Months to 12 Months to 9 Months to 12 Months to 31 December 31 December 31 December 31 December 2009 2009 2010 2010 N million N million Note N million N million Gross earnings Interest and similar income Interest and similar expense Net interest income Fees and commission income Fees and commission expense Net fee and commission income Foreign exchange income Income from investments Other income 5 3 4 230,606 174,040 (52,578) 121,462 45,160 (105) 45,055 10,160 513 733 11,406 Operating income Operating expenses Group's share of associate's results Provision for losses 7 17 14 177,923 (116,530) 1,496 (21,590) 41,299 1,889 43,188 (9,777) 33,411 33,411 193,966 162,041 (65,884) 96,157 28,120 (56) 28,064 4,128 (1,182) 859 3,805 128,026 (75,841) 1,736 (40,624) 13,297 13,297 (8,396) 4,901 4,901 207,524 158,866 (45,940) 112,926 35,580 (105) 35,475 9,508 3,570 13,078 161,479 (107,392) (22,596) 31,491 2,046 33,537 (6,601) 26,936 26,936 175,390 145,100 (56,167) 88,933 24,603 (56) 24,547 3,025 1,855 807 5,687 119,167 (70,016) (41,462) 7,689 7,689 (6,414) 1,275 1,275

Profit before exceptional item and taxation Exceptional item 9 Profit before taxation Taxation Profit after taxation Profit attributable to the group Appropriated as follows: Statutory reserve Small & Medium Scale Industries Equity Investment Scheme (SMIEIS) Reserve Retained earnings reserve

33 33 33

4,070 29,341 33,411

236 64 4,601 4,901 17 17

4,040 22,896 26,936 83 83

191 64 1,020 1,275 4 4

Earnings per share (basic) (kobo) Earnings per share (diluted) (kobo)

38 38

102 102

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FIRST BANK OF NIGERIA PLC Balance Sheets As at 31 December 2010 Group 31 December 31 December 2010 2009 Note N million N million Assets Cash and balances with central bank Treasury bills Due from other banks Loans and advances Advances under finance lease Investment securities Investment in associates Investment in subsidiaries Managed funds Other assets Investment property Deferred tax asset Property and equipment 10 11 12 13 15 16 17 18 20 21 22 29 23 75,517 23,769 550,414 1,143,614 7,581 345,157 6,456 1,000 37,917 51,299 8,420 128 53,986 2,305,258 Liabilities Customer deposits Due to other banks Liability on investment contracts Other borrowings Current income tax Other liabilities Deferred income tax liabilities Retirement benefit obligations 24 25 26 27 8 28 29 30 1,450,567 148,286 95,352 124,617 9,136 119,998 11,778 4,898 1,964,632 Equity Ordinary Share capital Share premium Statutory reserve Exchange difference reserve Retained earnings Reserve for small scale industries Revaluation reserve (property) Total Equity Total equity and liabilities Acceptances and guarantees 34 31 32 33 33 33 33 33 16,316 254,524 27,730 3,597 26,887 9,193 2,379 340,626 2,305,258 1,022,950 14,504 254,524 23,660 3,962 2,261 9,980 2,379 311,270 2,174,058 972,601 16,316 254,524 27,516 2,836 27,971 9,193 2,379 340,735 1,957,258 334,126 14,504 254,524 23,476 2,836 9,789 9,980 2,379 317,488 1,772,456 431,316 1,346,573 173,280 148,224 35,473 19,625 128,277 10,612 724 1,862,788 1,330,771 55,165 124,617 4,238 86,310 10,877 4,545 1,616,523 1,244,030 65,087 35,473 14,948 84,742 10,144 544 1,454,968 70,332 14,219 514,193 1,078,452 10,835 286,600 4,960 84,630 55,226 6,631 47,980 2,174,058 74,894 23,599 383,893 1,017,411 7,581 317,073 2,224 31,416 46,551 52,616 1,957,258 67,576 14,219 255,903 1,022,486 10,835 271,250 2,224 30,416 51,245 46,302 1,772,456 Bank 31 December 31 December 2010 2009 N million N million

The accompanying statement of significant accounting policies and notes on pages 20 to 58 were approved by the Board of Directors on 24 March 2011 and signed on its behalf by:

Prince Ajibola Afonja Chairman

Onasanya, Stephen Olabisi Group MD/CEO

Adelabu, Adebayo Adekola Chief Financial Officer

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FIRST BANK OF NIGERIA PLC Statements of cash flow For the year ended 31 December 2010 Group Bank 12 Months to 9 Months to 12 Months to 9 Months to 31 December 31 December 31 December 31 December 2010 2009 2010 2009 Note N million N million N million N million OPERATING ACTIVITIES Cash generated from / (used) in operations Tax paid Value added tax remitted Net cash (used in)/from operating activities FINANCING ACTIVITIES Dividend paid to shareholders (Note 33) Proceeds of new borrowings Repayment of borrowings Net cash generated/(used) in financing activities INVESTING ACTIVITIES Purchase of long term investment securities Redemption / Sale of investments Investment income - Dividend received Additional investment in subsidiaries Additional investment in associates Additions to investment property Purchase of property, plant and equipment Proceeds from sale of property and equipment Net cash used in investing activities (Decrease)/Increase in cash and cash equivalents Analysis of changes in cash and cash equivalents At start of the period At end of the period 39 384,996 448,351 63,355 905,667 384,996 (520,671) 324,110 458,116 134,006 652,291 324,110 (328,181) (16,467) 1,752 513 (1,000) 24 (1,789) (14,874) 538 (31,303) 63,355 (24,608) 3,803 1,316 1,510 (364) (533) (14,164) 273 (32,767) (520,671) (24,501) 524 3,570 (1,000) (14,513) 308 (35,611) 134,006 (20,685) 3,803 1,876 (1,990) (13,505) 245 (30,256) (328,181) (2,902) 91,553 (2,409) 86,242 (33,565) 431 (33,134) (2,902) 91,553 (2,409) 86,242 (33,565) 431 (33,134) 37 8 24,663 (15,218) (1,029) 8,415 (450,351) (3,064) (1,355) (454,770) 96,515 (12,112) (1,029) 83,374 (262,118) (1,318) (1,355) (264,791)

23

(Decrease)/increase in cash and cash equivalents

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FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 1. General information The Bank commenced operations in Nigeria on 31 March 1894 as a branch of Bank of British West Africa Limited (BBWA), and was incorporated as a private limited liability company in Nigeria in 1969. It was converted to a public company in 1970. The Bank's shares are quoted on the Nigerian Stock Exchange. The Bank engages in the business of commercial banking whilst its subsidiaries carry on the business of commercial banking, registrars, trusteeship, capital market, pension fund custodian, mortgage financing, insurance brokerage, management of SMIEIS fund investments, small-scale banking and bureau de change activities respectively. The Bank has eleven subsidiaries as listed below: FBN Bank (UK) Limited FBN Capital Limited First Pension Custodian Nigeria Limited First Trustees Nigeria Limited FBN Mortgages Limited FBN Insurance Brokers Limited First Registrars Nigeria Limited FBN Bureau de Change Limited FBN Micro - Finance Bank Limited First Funds Limited FBN Life Assurance 2. Segment analysis (a) By geographical segment The Group s business is organized along two main geographical areas. i. Nigeria ii. United Kingdom Transactions between the business segments are on normal commercial terms and conditions. Funds are ordinarily allocated between segments, resulting in funding cost transfers disclosed in operating income. Interest charged for these funds is based on the Group s cost of capital. There are no other material items of income or expense between the business segments. Internal charges and transfer pricing adjustments have been reflected in the performance of each segment. Revenue sharing agreements are used to allocate external customer revenues to each segment on a reasonable basis. United Kingdom N million % Holding 100 100 100 100 100 100 100 100 100 100 65

Nigeria N million i. At 31 December 2010 External revenues Operating income Profit before tax Income tax expense Profit for the year Total assets Total liabilities Depreciation 21 217,491 169,280 39,188 (8,627) 30,561 1,974,966 1,634,340 8,344

Total N million

13,115 8,643 4,000 (1,150) 2,850 330,292 330,292 51

230,606 177,923 43,188 (9,777) 33,411 2,305,258 1,964,632 8,395

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements Segment analysis (contd.) United Kingdom N million 7,361 3,435 166 (50) 116 272,703 248,458 79

Nigeria N million ii. At 31 December 2009 External revenues Operating income Profit before tax Income tax expense Profit for the year Total assets Total liabilities Depreciation (b) By business segment The Group is divided into the following business units: 186,605 124,591 13,131 (8,346) 4,785 1,901,355 1,614,330 5,467

Total N million 193,966 128,026 13,297 (8,396) 4,901 2,174,058 1,862,788 5,546

Retail and Corporate Banking: Offering a comprehensive range of retail, personal, commercial and corporate Banking services and products to individuals, small business customers, corporate, medium and large business customers. Investment and Capital Market Operation: This provides Investment and Capital Market services to both individual and institutional investors. It also provides registrar services to both listed and private companies. Asset Management and Trusteeship: This provides individuals and financial institution with assets management and advisory services Mortgage Banking: Offers mortgage and home ownership banking services to individuals and corporate institutions. Others: Services under this include insurance brokerage functions, private equity and venture capital, and bureau de change business functions. Retail & Corporate Banking N million i. As at 31 December 2010 External revenues Operating income Profit before tax Income tax expense Profit for the year Total assets Total liabilities Depreciation 216,203 166,516 36,577 (7,745) 28,832 2,125,780 1,786,643 8,056 Investment Asset Mortgage & Capital Management Management Markets N million N million N million 8,617 6,334 2,688 (830) 1,858 94,480 82,829 148 2,174 2,110 2,898 (785) 2,113 60,675 78,994 35 861 497 62 (23) 39 15,538 13,180 55 Others Total

N million 2,752 2,466 963 (394) 569 8,785 2,986 100

N million 230,606 177,923 43,188 (9,777) 33,411 2,305,258 1,964,632 8,395

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FIRST BANK OF NIGERIA PLC Notes to the Financial Statements Segment analysis (contd.) Retail & Corporate Banking N million ii. As at 31 December 2009 External revenues Operating income Profit before tax Income tax expense Profit for the year Total assets Total liabilities Depreciation Investment Asset Mortgage & Capital Management Management Markets N million N million N million Others Total

N million

N million

179,327 119,367 9,580 (6,081) 3,499 1,935,822 1,652,806 5,251

9,877 5,516 1,445 (1,755) (310) 122,010 111,805 118

1,777 1,307 1,452 (206) 1,246 97,624 74,863 54

1,636 487 73 (70) 3 13,106 10,793 40

1,349 1,349 747 (284) 463 5,496 12,521 83

193,966 128,026 13,297 (8,396) 4,901 2,174,058 1,862,788 5,546

23

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 12 Months to 9 Months to 12 Months to 9 Months to 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 3. Interest and similar income Placements Treasury bills and investment securities Loans and advances Advances under finance leases 20,207 41,779 110,488 1,566 174,040 Interest income earned in Nigeria Interest income earned outside Nigeria 161,954 12,086 174,040 4. Interest and similar expense Current accounts Savings accounts Time deposits Domiciliary deposits Inter-bank takings Borrowed funds 16,912 4,928 21,660 1,354 4,779 2,945 52,578 Interest expense paid in Nigeria Interest expense paid outside Nigeria 45,345 7,233 52,578 5. Fees and commission income Credit related fees Commission on turnover Remittance fees Letters of credit commissions and fees Financial advisory fees Gains on disposal of investment properties Commission on insurance premium Commission on western union transfers Other fees and commissions 6,134 15,374 1,880 2,901 3,213 511 1,116 14,031 45,160 4,021 11,462 751 702 778 575 348 725 8,758 28,120 5,933 15,354 1,547 2,022 1,116 9,608 35,580 4,021 9,906 751 702 725 8,498 24,603 17,321 5,363 35,159 1,023 5,473 1,545 65,884 60,170 5,714 65,884 13,116 4,897 19,809 1,354 3,974 2,790 45,940 43,179 2,761 45,940 13,394 5,356 29,181 1,023 5,599 1,614 56,167 54,567 1,600 56,167 33,102 18,330 108,552 2,057 162,041 154,240 7,801 162,041 9,745 38,856 108,699 1,566 158,866 158,492 374 158,866 18,207 18,088 106,749 2,057 145,100 144,660 440 145,100

24

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 12 Months to 9 Months to 12 Months to 9 Months to 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 6. Income from investments Dividend income Profit/(Loss) on sale of investments Total income from investments 7. Operating expenses Staff costs (Note 36a) Depreciation (Note 23) Auditors' remuneration Directors' emoluments (Note 36b) Loss on disposal of property and equipment Deposit insurance premium Other operating expenses 52,138 8,395 193 3,669 67 7,498 44,569 116,530 8. Taxation Charge Current tax Education tax Technology tax Under provision in prior years Income tax charge Deferred tax charge (Note 29) Charge for the period Payable At start of period Reclassifications (Note 29) Tax paid Witholding tax credit utilised Income tax charge At end of period 40,604 5,546 142 599 94 3,671 25,185 75,841 47,313 7,972 135 3,509 81 7,497 40,885 107,392 39,275 5,182 101 395 95 3,671 21,297 70,016 2,195 (1,682) 513 1,316 (2,498) (1,182) 3,524 46 3,570 1,876 (21) 1,855

4,323 109 335 897 5,664 4,113 9,777

3,993 206 107 4,306 4,090 8,396

1,997 335 2,332 4,269 6,601

1,838 76 1,914 4,500 6,414

19,625 (930) (15,218) (5) 5,664 9,136

11,283 7,114 (3,064) (14) 4,306 19,625

14,948 (930) (12,112) 2,332 4,238

7,238 7,114 (1,318) 1,914 14,948

25

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 9 Exceptional item Bank i. Asset Management Company of Nigeria On July 19,2010, the Federal Government signed a bill establishing the Asset Management Company of Nigeria (AMCON) with the objective of acquisition of toxic assets (loans) from the affected banks. In December 2010, AMCON purchased toxic loans worth N10.48billon from First Bank of Nigeria Plc and issued bonds at a discount in exchange for value. The toxic loans had related interest in suspense of N1.66 billion and provision of N4.87bn in the bank s books. Bank Description N'million Face Value of Amcon Bonds (zero coupon) 7,046 Unearned income (1,056) Discounted Value Net value of loans purchased Total Gain On Purchase 5,990 (3,944) 2,046

Subsidiaries ii. Director's Severance Package (N64.5m) - First Funds Limited : During the year, the board of directors resolved that provision be made for the severance of each serving director for the number of years they have served on the board of the company. Provision was made for the present serving directors from year 2004 till date. iii. Compensation for loss of employment (N92.43m) - First Trustees Limited : During the year, management identified staff who as a result of redundancy factors would be relieved of their positions. This amount represents the provision for the redundancy cost. Group Description N'million Gain on Amcon Loans 2,046 Redundancy cost (Note 9ii) (65) Redundancy cost (Note 9iii) (92) 1,889 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 10 Cash and balances with the central bank Cash Operating account with the Central Bank Included in cash and cash equivalents (Note 39) Mandatory reserve deposits with the Central Bank 33,156 31,231 64,387 11,130 75,517 32,746 27,278 60,024 10,308 70,332 32,533 31,231 63,764 11,130 74,894 29,990 27,278 57,268 10,308 67,576

Mandatory reserve deposits are not available for use in the Group's day to day operations. 11. Treasury bills Treasury bills 23,769 14,219 23,599 14,219

Included in Treasury Bills are bills amounting to N13.14billion (2009: N3.28billion) held by third parties as collateral for clearing and collection services provided by the Bank. 26

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 12. Due from other banks Current balances with banks within Nigeria Current balances with banks outside Nigeria Placements with banks and discount houses 84,653 108,990 356,775 550,418 (4) 550,414 12.1 Movement in provision for bank balances At start of period Additional provision Provision no longer required Per profit and loss account (Note 14) Amounts written off 1,509 (1) (1) (1,504) (1,505) At end of period 4 110 1,426 (27) 1,399 1,399 1,509 42,889 47,573 425,240 515,702 (1,509) 514,193 17,629 109,887 256,377 383,893 383,893 14,556 74,234 167,113 255,903 255,903

Provision for balances due from other banks

Balances with banks outside Nigeria include N41.9 billion (Dec 2009: N23.7 billion) which represents the naira value of foreign currency bank balances held on behalf of customers in respect of Letters of Credit transactions. The corresponding liability is included in other liabilities (See Note 28). The amount is not available for the day to day operations of the bank. Included in placements with banks and discount houses are placements with banks within Nigeria of Group N199 billion; Bank N163 billion (31 Dec 2009: Group N176 billion; Bank N152 billion). Included in placements with banks and discount houses are placements with banks outside Nigeria of Group N177.1 bn; Bank Nil amount (2009: Group N200.1 bn; Bank Nil amount) which are non-current placements and do not qualify as cash and cash equivalent.

27

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 13. Loans and advances Overdrafts Term loans Staff loans Commercial papers Money market lines Project finance (Note 35.1) Others 169,370 651,610 8,465 114,522 152,741 105,046 21,208 1,222,962 (54,366) (24,982) 1,143,614 159,140 408,415 15,805 108,690 294,319 87,886 67,280 1,141,535 (55,065) (8,018) 1,078,452 143,384 534,786 8,465 114,522 164,951 105,046 19,622 1,090,776 (49,759) (23,606) 1,017,411 153,424 361,443 8,915 108,690 294,319 87,886 67,280 1,081,957 (52,037) (7,434) 1,022,486

Loan loss provision (Note 13.4a) Interest in suspense (Note 13.4b)

Included in loans and advances is interest receivable amounting to N28.86 billion (31 Dec 2009: N17.94 billion) which have not been debited to customers at balance sheet date. Deducted from loans and advances are interest received in advance of N259.7 million (31 Dec 2009: N1,620 million) from customers which have been debited to the customers but have not been earned. Cash collateral against advances is N6.664 billion (31 Dec 2009: N3.505 billion) Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 13.1 Analysis by security Secured against real estate Secured by shares of quoted companies Otherwise secured Unsecured 131,670 34,807 785,635 270,850 1,222,962 13.2 Analysis by performance Performing Non-performing - substandard - doubtful - lost 1,130,386 1,047,547 1,001,073 993,451 154,326 53,302 602,091 331,816 1,141,535 130,101 27,938 661,887 270,850 1,090,776 149,397 53,084 592,375 287,101 1,081,957

30,794 31,672 30,110 1,222,962

18,515 33,542 41,931 1,141,535

30,737 29,648 29,318 1,090,776

17,279 31,550 39,677 1,081,957

28

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 13. Loans and advances (contd.) 13.3 Analysis by maturity 0 - 30 days 1 - 3 months 3 - 6 months 6 - 12 months Over 12 months 517,601 169,337 44,802 39,747 451,475 1,222,962 13.4 Loan loss provision and interest in suspense a. Movement in loan loss provision At start of period - Non-performing - Performing 591,347 122,045 134,244 38,740 255,159 1,141,535 515,391 96,571 44,293 30,827 403,694 1,090,776 549,927 120,890 133,009 69,847 208,284 1,081,957

55,006 59 55,065

13,005 7,273 20,278

52,037 52,037

11,403 6,736 18,139

Additional provision: - Non-performing - Performing Provision no longer required Charge for the year (Note 14) Amounts written off

18,327 11,304 (7,866) 21,765 (22,464) (699)

52,437 (7,214) (4,863) 40,360 (5,573) 34,787 55,006 59 55,065

15,450 10,011 (5,375) 20,086 (22,364) (2,278) 39,748 10,011 49,759

50,931 (6,736) (4,863) 39,332 (5,434) 33,898 52,037 52,037

At end of period - Non-performing - Performing

43,003 11,363 54,366

b.

Movement in interest-in-suspense At start of period Suspended during the year Amounts written back Amounts written off At end of period 8,018 24,806 (1,742) (6,100) 24,982 3,102 7,274 (3) (2,355) 8,018 7,434 23,935 (1,663) (6,100) 23,606 3,053 6,739 (3) (2,355) 7,434

29

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 13.5 Insider related credits Aggregated amount of insider-related credits Performing Non-performing

169,386 169,386

117,042 125 117,167

169,386 169,386

117,042 125 117,167

13.6 On - Lending facilities CBN/BOI CBN/Commercial Agriculture Credit

8,574 8,735 17,309

CBN/Bank Of Industry Facilities This represents outstanding balance on term loans granted to customers in line with Central Bank of Nigeria (CBN) N200billion intervention fund for refinancing and restructuring of banks loans to the manufacturing sector. The on-lending facilities are for a maximum of fifteen (15) years tenor at 6% interest per annum. CBN/Commercial Agriculture Credit (CACS) This relates to the balance on term loan facilities granted to customers under Central Bank of Nigeria (CBN) Commercial Agriculture Credit Scheme. The facilities under the scheme are for a period of seven (7) years at 9% interest per annum. These balances are included in the loans and advances.

30

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 14. Provision for losses The charge for the period is analysed as follows: Loans and advances (Note 13.4) Provision on advances under finance lease (Note 15.3) Provision/(Writeback) for diminution in value of investments (Note 16.1) Provision for diminution in investments in subsidiaries (Note 18) Provision/(write back) on managed funds Provision for unsubstantiated bank balances (Note 12.1) Provision for other assets (Note 21.1)

21,765 592 (1,949) (1) 1,183 21,590

40,360 (10) 1,592 (2,478) 1,399 (239) 40,624

20,086 592 1,072 846 22,596

39,332 (10) 2,160 23 (43) 41,462

15. Advances under finance lease Gross investment Less: Unearned income Net investment Less: General provision (Note 15.3) 10,262 (1,980) 8,282 (701) 7,581 15.1 Analysis by performance Performing Non-performing - substandard - doubtful - lost 6,585 10,944 6,585 10,944 14,668 (3,724) 10,944 (109) 10,835 10,262 (1,980) 8,282 (701) 7,581 14,668 (3,724) 10,944 (109) 10,835

755 637 305 8,282

10,944

755 637 305 8,282

10,944

15.2 Analysis by maturity 0 - 30 days 1 - 3 months 3 - 6 months 6 - 12 months Over 12 months 1,613 82 346 851 5,390 8,282 1,071 71 185 4,565 5,052 10,944 1,613 82 346 851 5,390 8,282 1,071 71 185 4,565 5,052 10,944

31

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2010 2009 N million N million 15. Advances under finance lease (contd.) Bank 31 December 31 December 2010 2009 N million N million

15.3 Movement in provision for advances under finance lease At start of period - Performing - Non- performing Charge for the year / provision no longer required: - Performing - Non - performing (Note 14)

109

119

109

119

66 526 592

(10) (10) 109 109

66 526 592 635 66 701

(10) (10) 109 109

At end of period - Non - performing - Performing

635 66 701

16.

Investment securities Long Term Investments Debt Securities - at cost Listed (Note 16.4) Unlisted - Seawolf - Rainbow - First Trustees Limited - Others Equity Securities - at cost Listed Unlisted (Note 16.2)

26,122 7,782 4,900 1,825 1,941 23,850 66,420 (4,862) 61,558

9,769 7,781 4,900 3,390 25,865 51,705 (2,739) 48,966

19,351 7,781 4,900 15,000 22,245 69,277 (4,862) 64,415

9,519 7,781 4,900 23,100 45,300 (2,739) 42,561

Provisions for dimunition in value

Short Term Investments Debt Securities Listed (Note 16.4) Equity Securities Listed (Note 16.3)

263,432 45,680 309,112 (25,513) 283,599 345,157

221,863 24,152 246,015 (8,381) 237,634 286,600

247,026 7,714 254,740 (2,082) 252,658 317,073

221,863 7,783 229,646 (957) 228,689 271,250

Provisions for dimunition in value

32

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2010 2009 N million N million 16. Investment securities (contd.) Bank 31 December 31 December 2010 2009 N million N million

16.1 Provision balance is made up of the following; At start of period Charge during the period Write back of provision 11,120 5,005 (6,954) (1,949) (1,949) 21,203 30,374 9,528 3,053 (858) 2,195 (603) 1,592 11,120 3,697 2,062 (990) 1,072 1,072 2,175 6,944 1,537 2,450 (290) 2,160 2,160 3,697

Exceptional item Per Profit and loss account (Note 14) Reclassification At end of period 16.2 Long term investment: Unlisted Equity Securities African Finance Corporation Zain Nigeria Limited Communication Domain Limited Banque Internationale Du Benin, Cotonou Onwuka Hi-Tech Industry Plc Mama Cass Planet One Premium Farms Limited FRED Funds Nigeria Interbank Settlement System Plc African Export-Import Bank, Cairo Consolidated Discounts Limited ValuCard Nigeria Plc ATM Consortium Limited NITEL Plc Capital Alliance Property Investment Company (CAPIC) Niger Delta Exploration Production Plc Food Concepts Plc Interswitch limited Radisson Hotels Limited Others

12,728 2,909 155 3 52 10 15 186 390 2,175 710 32 183 31 299 1,088 20,966

12,728 2,909 194 155 5 450 75 230 2 52 10 15 186 77 2,175 2,116 32 166

12,728 2,909 155 52 10 15 186 390 2,175 710 31 19,361

12,728 2,909 155 5 52 10 15 186 77 2,175 1,031 19,343

531 22,108

33

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2010 2009 N million N million 16 Investment securities (contd.) Bank 31 December 31 December 2010 2009 N million N million

16.2 SMIEIS Investments: - SME Managers Limited - Chase Executive Partners Limited - First Funds Limited - Interswitch limited

969 2,702 3,671 (787) 2,884 23,850

1,025 30 2,671 31 3,757 3,757 25,865

969 2,702 3,671 (787) 2,884 22,245

1,025 30 2,671 31 3,757 3,757 23,100

SMIEIS investments written- off

(i) The Bank makes investments under the Small and Medium Enterprises Equity Investment Scheme (SMEEIS) per the Policy Guidelines for 2001 Fiscal Year (Monetary Policy Circular No. 35). Included in unlisted long term investments are the bank's investment under the Small and Medium Industries Equity Investment Scheme (SMIEIS). A total of N3.7billion (31 Dec.2009: N3.7 billion) have so far been invested under the scheme. During the period, the Bank wrote off part of it's investments in SMEEIS companies. This provision has been charged against the SMEEIS reserve. Due to the effective percentage holding of the bank in these companies, some of them qualify as associates. However, they are not consolidated as the bank is not expected to exercise influence, and control is temporary as the investments are expected to be realised within 5 years. Group 31 December 31 December 2010 2009 N million N million 16.3 Short term investments: Listed Equity Securities Guaranty Trust Bank Plc FBN Heritage Fund SCOA Plc Transnational Corporation Plc Honeywell Flour Mills Plc Other companies 1,360 1,500 32 4,822 37,966 45,680 1,360 2,540 34 250 4,889 15,079 24,152 1,360 1,500 32 4,822 7,714 1,360 1,500 34 4,889 7,783 Bank 31 December 31 December 2010 2009 N million N million

34

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 16. Investment securities (contd.) 16.4 Debt Securities (i) Long term investments Listed Debt Securities - at cost Bonds - Held to maturity (ii) Short term investments Listed Debt Securities Bonds - Held for trading Bonds - Available for sale

26,122

9,769

19,351

9,519

8,842 254,590 263,432

15,050 206,813 221,863

8,842 238,184 247,026

15,050 206,813 221,863

a. Debt securities relates to investment in various Federal Government of Nigeria Bonds and State Government of Nigeria Bonds. The maturity date of these bonds range from December 2011 to June 2028 with interest rates ranging from 4% to 15%. b. Included in Debt securities are pledged bonds amounting to N105. 571billion (2009: Nill amount) held by third parties as collateral. 17. Investment in Associates Opening cost of investments Changes in valuation Share of associates result At end of period 4,960 (24) 1,520 6,456 3,224 1,736 4,960 2,224 2,224 2,224 2,224

The Group s interest in its principal associates, which are unlisted, are as follows: Name Parent company investment in associate: - Kakawa Discount House Limited Subsidiary companies investment in associate: - Kakawa Discount House Limited - Twin Peaks Estate Development Limited Principal activity Cost N million 2224 660 340 3,224 % interest held 40 6 34

Discount house Discount house Real Estate Developers

35

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 18. Investment in subsidiaries FBN Bank (UK) Limited (Note 18i) FBN Capital Limited (Note 18ii) First Pension Custodian Limited (Note 18iii) First Trustees Nigeria Limited (Note 18iv) FBN Mortgages Limited (Note 18v) FBN Insurance Brokers Limited (Note 18vi) First Registrars Nigeria Limited (Note 18vii) FBN Bureau de Change Limited (Note 18viii) FBN Micro Finance Bank Limited (Note 18ix) First Funds Limited (Note 18x) FBN Life Assurance (Note 18xi) % 100 100 100 100 100 100 100 100 100 100 65 1,000 1,000 Diminution of investments - subsidiaries Total Investments - Subsidiaries i FBN Bank (UK) Limited FBN Bank (UK) Ltd ('FBNUK') is a company incorporated in the United Kingdom under the Companies Act 1985 as a UK registered bank authorised by the Financial Services Authiority to accept deposits and undertake banking business. FBNUK was incorporated in November 2002. It is a wholly owned subsidiary of First Bank of Nigeria Plc. The bank has a branch in Paris. ii FBN Capital Limited FBN Capital Limited is a private limited liability company incorporated in Nigeria and commenced operations on 1 April 2005. It is registered with the Securities and Exchange Commission to undertake issuing house business. It is also involved in the business of asset management and financial advisory. iii First Pension Custodian Limited First Pension Custodian Limited was incorporated on 12 August, 2005 and granted an approval in principle by the National Pension Commission on 1 August, 2005 while the operating licence was obtained on the 7 December 2005. The principal activity of the company is to act as a Custodian of Pension Fund Assets in accordance with the Pension Reform Act, 2004. iv First Trustees Nigeria Limited First Trustees Nigeria Limited was incorporated in Nigeria as a private limited liability company on 8 August 1979 and commenced business on 3 September, 1979. The Company was established to engage in the business of trusteeship as well as portfolio management, financial/investment advisory services and loan syndication. 1,000 18,441 4,300 2,000 23 2,100 15 10 500 1,000 2,050 1,000 31,439 (23) 31,416 18,441 4,300 2,000 23 2,100 15 10 500 1,000 2,050 30,439 (23) 30,416

36

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 18. Investment in subsidiaries (contd.) v FBN Mortgages Limited The Company was incorporated on 17 March, 2003 and commenced operations on 1 May, 2004. Its principal activities include acceptance of deposits, provision of mortgage finance for customers and investment in properties. vi FBN Insurance Brokers Limited The company was incorporated under the Companies and Allied Matters Act CAP C20 LFN 2004, as a limited liability company on 31 March, 1994 with the name Trust Link Insurance Brokers Limited". The company prepared financial statements up to 31 March, 1998 after which it became dormant. The company was resuscitated on 1 April, 2000 as FBN Insurance Brokers Limited. The principal activity of the company is insurance brokerage business. vii First Registrars Nigeria Limited First Registrars Nigeria Limited was incorporated on 19 May, 1999 and commenced operations on 1 April, 2000. The company was established to provide share register administration and custodian services. This includes administration and maintenance of company's share registers, share registration, verification of share transfers, transmission, payment of dividend and organisation of annual general meetings. viii FBN Bureau de Change Limited This represents the Bank's 100% holding in FBN Bureau de Change Limited. The Bank obtained approval from the Central Bank of Nigeria to operate a bureau de change on 8 August 2006. During the year, Central Bank of Nigeria withdrew the license of all class 'A' Bureau De Change and advised them to apply for class 'B' in order to continue in business. The Company has applied for the class 'B' license but this is yet to be issued.

ix FBN Micro Finance Bank Limited The Bank was incorporated in Nigeria on 18 March 2008 under the provisions of the Companies and Allied Matters Act CAP C20 LFN 2004 with Registration Number RC 736874. The Bank was licenced to carry on the business of microfinance banking on the 25 August, 2008 by the Central Bank of Nigeria. It commenced microfinance banking business on 19 January 2009. x First Funds Limited First Funds Limited was incorporated on 14 November, 2002. It commenced operations on 1 April, 2003. It is a wholly owned subsidiary of First Bank of Nigeria Plc. Its principal activities is to carry on venture capital and private equity business. xi FBN Life Assurance Limited In February 2010, NAICOM granted operating license to First Bank Nigeria PLC (FirstBank) to establish a life Insurance business in partnership with Sanlam Group of South Africa. Consequently, FirstBank incorporated a subsidiary, FBN Life Assurance Company Ltd to tap into the huge potential of life assurance business in Nigeria which presently is untapped. First Bank of Nigeria Plc has a holding of 65% in the equity of FBN Life Assurance Company Ltd. The requisite approval was obtained from Central Bank of Nigeria in September 2010, however the company is yet to commence operation.

37

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010

19

Condensed results of consolidated entities FBN First First FBN FBN First FBN First FBN Capital Pension Trustees Microfinance Insurance Registrars Mortgages Funds Bureau De Limited Custodian Limited Bank Brokers Limited Limited Limited Change Nig. Ltd Limited Limited Limited N million N million N million N million N million N million N million N million N million Condensed profit and loss Operating income Operating expenses Provision expense (Loss)/profit before exceptional item and tax Exceptional Item Tax (Loss)/Profit for the period Condensed Financial position Assets Cash and balances with central bank Treasury Bills Due from other banks Loans and advances Insurance receivables Investment securities Managed funds Other assets Investment property Deferred tax Property and equipment 6,145 (5,290) 1,195 2,050 (391) 1,659 1,350 (897) 453 (158) 295 2,174 (2,639) 3,456 2,991 (92) (785) 2,114 535 (473) (13) 49 (17) 32 729 (311) (29) 389 (146) 243 2,473 (1,352) (453) 668 (416) 252 861 (869) 71 63 (25) 38 433 (325) (115) (7) (65) (47) (119) 240 (127) 113 (42) 71 9,133 (3,314) (4,694) 1,125 (1,150) (24) 4,194 (1,389) 339 3,144 161 3,305 FBN Bank UK Limited N million Kakawa Twin Discount Peaks House Limited Limited N million N million

1 64,274 806 4,203 425 534 163 70,406

21 2,764 229 41 101 3,156

66 1,892 21,150 37,091 435 7 34 60,675

33 50 30,094 924 172 331 31,604

169 532 515 321 811 70 54 2,472

41,109 2,432 519 63 450 44,573

46 4,526 1,552 45 1,343 7,886 133 15,531

8 337 1,934 16 195 41 2,531

482 269 17 768

45 180,969 131,468 13,660 663 17 106 326,928

205 279 3,802 9,043 126,262 21,774 1,451 353 163,169

413 670 1,083

38

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 19 Condensed results of consolidated entities FBN First First FBN FBN First FBN FirstFBN Bureau Capital Pension Trustees Microfinance Insurance Registrars Mortgages Funds De Change Limited Custodian Limited Bank Limited Brokers Limited Limited Limited Limited Nig. Ltd Limited N million N million N million N million N million N million N million N million N million Condensed Financial position Financed by Bank Overdraft Customer deposits Due to other banks Borrowed funds Tax Payable Other liabilities Staff Pension Provisions on Insurance contracts Deferred income tax liabilities Equity and reserves FBN Bank UK Limited N million Kakawa Twin Discount Peaks House Limited Limited N million N million

80 27,301 31,961 598 2,197 225 846 7,198 70,406

379 315 2,462 3,156

62,576 862 556 (3,319) 60,675

34 690 29,797 15 39 16 1,013 31,604

248 121 811 685 7 600 2,473

20,500 1,701 17,866 4,506 44,573

420 11,615 88 1,032 27 2,349 15,531

16 151 79 3 2,282 2,531

42 126 3 597 768

138,229 142,576 11,710 811 10,988 22,613 326,927

17,570 109,538 259 22,510 13,292 163,169

1,083 1,083

Condensed cash flows Net cash from operating activities Net cash from financing activities Net cash from investing activities Increase\(Decrease) in cash and cash equivalents At period start Movement in cash and cash equivalent At period end (22,478) (1,465) 257 (163) (18) (11,621) 14,936 (3,280) (235) (11) (68) 361 (100) (159) (2,367) (401) (168) 1,861 (48) (0) (114) (32) (1,324) (63) (95) (6) 3,527 (1,171) (92) 112,078 (117,302) -

(23,943) 88,137 (23,943) 64,194

76 2,709 76 2,785

35 31 35 66

(314) 660 (314) 346

102 599 102 701

(2,936) 23,545 (2,936) 20,609

1,813 2,338 1,813 4,151

(1,470) 1,815 (1,470) 345

(164) 646 (164) 482

2,264 1,671 2,264 3,935

(5,224) 9,509 (5,224) 4,285

39

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 20 Managed Funds Bank balances Quoted investments: First Trustees Nominees (market value N nil; 31 Dec 2009: N8.53 billion) FBN Sinking Fund (market value N154 billion; 31 Dec 2009: N79 billion) FBNI/UNIPORT Sinking Fund (market value N6.04 million; 31 Dec 2009: N4.89 million) Others (market value N6.11 billion; 31 Dec 2009: N6.26 billion) Treasury bills Bankers acceptance Government bonds Managed real estate invesments Others 23 24 -

66 10 5,404 4,000 26,600 6 1,080 728 37,917 37,917

29,551 66 10 7,511 209 65,602 22 650 13 103,658 (19,028) 84,630

Provision for diminution in value of investments

Managed funds represents investment made using funds and deposits received from corporate and individual clients for there investments, under mutually agreed terms 20.1 Movement in provision for diminution in value of inevstments At start of period Write back/ provision no longer required At end of period 19,028 (19,028) 21,506 (2,478) 19,028 -

21

Other assets Fraud and loss suspense Interest and fee receivable Prepayments Premium debtors & receivable from underwriters Accounts receivable Deferred acquisition expenses Open buy back Treasury bills Inventory - Consumables BDC Trading stock Other receivables Deposit for investment by subsidiaries Deposit with the Nigerian Stock Exchange Mandatory deposit with CBN NDIC deposit insurance premium 2,084 2,069 5,359 579 22,021 12,364 1,868 184 8,705 15 1 30 55,280 (3,981) 51,299
40

1,570 13,628 6,011 429 14,010 12,012 3,277 1,479 125 5,354 2 30 97 58,024 (2,798) 55,226

2,084 1,679 4,340 20,134 12,345 1,814 7,602 49,998 (3,447) 46,551

1,570 13,187 5,124 12,100 11,997 3,277 1,461 5,130 53,846 (2,601) 51,245

Provision for doubtful receivables (Note 21.1)

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2010 2009 N million N million 21 Other assets Cont'd Bank 31 December 31 December 2010 2009 N million N million

21.1 Movement in provision for doubtful receivables: At start of period Additional provision Recoveries Per profit and loss account (Note 14) Amounts written off At end of period 22 Investment property Opening net book amount Additions and capital improvements Disposal of investment property Closing net book amount 6,631 2,528 (739) 8,420 6,098 2,409 (1,876) 6,631 2,798 1,256 (73) 1,183 3,981 3,113 (226) (13) (239) (76) 2,798 2,601 846 846 3,447 2,720 (43) (43) (76) 2,601

This represents the Group s investment in landed property held for the purpose of capital appreciation. Investment property of N7.89 bn (2009: N6.15 bn) represents un-developed land acquired for the purpose of subsequent disposal in the near future. While the balance of N534m (2009: N482m) represents investments which were acquired during the year ended 31 March 2009, the Directors are of the view that their carrying values as at 31 December 2010 do not differ in any material respects from their market values. A revaluation is due within three years from the date of purchase. Investment property are not subjected to periodic charges for depreciation.

41

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 23. Property and equipment Group At period start N million Cost / Revalued Amount Leasehold improvements 29,703 Leasehold land and buildings 1,452 Motor vehicles 8,426 Office equipment 23,445 Computer hardware 12,842 Furniture & fittings 5,313 Work in progress 27 81,208 At period start N million Accumulated Depreciation Leasehold improvements Leasehold land and buildings Motor vehicles Office equipment Computer hardware Furniture & fittings 1,964 313 5,036 12,465 10,194 3,256 33,228 Net Book Value Leasehold improvements Leasehold land and buildings Motor vehicles Office equipment Computer hardware Furniture & fittings Work in progress 27,739 1,139 3,390 10,980 2,648 2,057 27 47,980 27,467 6,424 3,063 12,189 2,583 2,229 31 53,986

Reclassification N million (309) (83) 19 1 372 -

Additions N million 19 5,860 1,471 5,323 1,651 546 4 14,874

Disposals/ Exchange Write-offs difference N million N million (4) (6) (806) (2,801) (1,759) (659) (6,035) (3) (2) (3) (8)

At period end N million 29,406 7,223 9,089 25,986 12,735 5,569 31 90,039 At period end N million 1,939 799 6,026 13,797 10,152 3,340 36,053

Reclassification Depreciation Disposals/ Exchange Charge Write-offs difference N million N million N million N million (73) (9) 14 68 53 495 1,545 3,951 1,714 637 8,395 (4) (553) (2,633) (1,756) (619) (5,565) (1) (2) (2) (5)

42

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 23. Property and equipment (contd.) Bank At period start N million Cost / Revalued Amount Leasehold improvements 1,410 Leasehold land and buildings 29,262 Motor vehicles 7,664 Office equipment 23,358 Computer hardware 11,584 Furniture and fittings 4,534 77,812 At period start N million Accumulated Depreciation Leasehold improvements Leasehold land and buildings Motor vehicles Office equipment Computer hardware Furniture and fittings 277 1,878 4,657 12,446 9,260 2,992 31,510 Net Book Value Leasehold improvements Leasehold land and buildings Motor vehicles Office equipment Computer hardware Furniture & fittings 1,133 27,384 3,007 10,912 2,324 1,542 46,302 876 32,672 2,728 12,289 2,319 1,732 52,616

Reclassification N million (309) (83) 19 1 372 -

Additions N million 5,860 1,294 5,279 1,588 493 14,514

Disposals/ At period Write-offs end N million N million (6) (635) (2,625) (1,719) (624) (5,609) 1,101 35,033 8,323 26,031 11,454 4,775 86,717

Reclassification Depreciation Disposals/ At period Charge Write-offs end N million N million N million N million (73) (9) 0 14 0 68 21 492 1,389 3,907 1,592 571 7,972 0 0 (451) (2,625) (1,717) (588) (5,381) 225 2,361 5,595 13,742 9,135 3,043 34,101

Certain land and buildings (own premises only) with a net book value of N187.7 million were professionally valued at N1.18 billion on 31 December, 1990 by Messrs Jide Taiwo & Co. and Diya Fatimilehin & Co., Estate surveyors and valuers on the basis of open market value between a willing seller and buyer. The sum of N448.152 million was then recognised as revaluation reserve in the financial statements. During the year ended 31 December, 1995, selected land and buildings (own premises only) including those revalued at 31 December, 1990, were professionally re-valued at N5,056.4 million by Messrs Jide Taiwo & Co. and Diya Fatimilehin & Co., Estate surveyors and valuers on the basis of open market value between a willing seller and buyer. In compliance with the Central Bank of Nigeria's guidelines on recognition of revaluation reserve on own premises, the sum of N1,931 million was then incorporated in the account. This represents the revaluation surplus of N4,291.4 million discounted by 55%. Revaluation of land and buildings is carried out at the discretion of the directors and it is considered as and when necessary.

43

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 24. Customer deposits Current deposits Savings deposits Term deposits Domiciliary deposit Electronic purse 607,724 387,808 276,250 177,497 1,288 1,450,567 24.1 Analysis by maturity 0 - 30 days 1-3 months 3-6 months 6-12 months Over 12 months 513,139 359,641 210,026 220,445 147,316 1,450,567 25 Due to other banks In Nigeria Inter-bank takings Outside Nigeria Due to banks outside Nigeria 481,647 270,919 336,817 127,840 129,350 1,346,573 480,305 305,243 197,076 220,445 127,702 1,330,771 440,741 264,726 311,445 112,969 114,149 1,244,030 537,169 265,833 424,050 118,189 1,332 1,346,573 574,415 386,913 190,658 177,497 1,288 1,330,771 515,284 265,488 343,737 118,189 1,332 1,244,030

148,049

106,191

54,928

40,912

237 148,286

67,089 173,280

237 55,165

24,175 65,087

26. Liability on investment contracts Managed funds Details of managed funds: Long-term clients Short-term clients Guaranteed fixed income Guaranteed principal liabilities At end of period 95,352 148,224 -

20,804 42,599 31,949 95,352

39,111 44,041 35,072 30,000 148,224

Managed funds represent monies administered by the Group under trust contracts. Some of the investors in the trust product are guaranteed principal and interest.

44

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 27. Other borrowings FBN Capital Finance Company Cayman Island (Note 27.2) European Investment Bank (Note 27.3) Standard Chartered Bank (Note 27.4) On-lending facilities from financial institutions (Note 27.5) Borrowings from correspondence banks

26,352 6,991 52,704 25,905 12,665 124,617

25,734 9,739 35,473

26,352 6,991 52,704 25,905 12,665 124,617

25,734 9,739 35,473

27.1 Analysis by maturity Within 12 months Over 12 months

20,012 104,605 124,617

35,473 35,473

20,012 104,605 124,617

35,473 35,473

27.2 Facility represents dollar notes issued by FBN Capital Finance Company, Cayman Island on 30 March 2007 for a period of 10 years. Interest on the notes is payable at 9.75% per annum. The loan is repayable at six monthly intervals over a period of 5 years commencing from 29 March 2012. The loan is a subordinated debt and is noncallable in the first 5 years. 27.3 Facility represents medium term loan (callable notes) secured from European Investment Bank. The loan is divided into tranche A of Euro 35 million for a tenure of five years and tranche B of Euro 15 million for a tenure of 8 years, which qualifies it as Tier II capital. Interest is payable half-yearly at 2% and 3% above LIBOR rate for tranche A and tranche B respectively. The facility was secured by negative pledge. 27.4 Facility represents medium term loan (dollar notes) secured from Standard Chartered Bank in February 2010 for a period of 3 yrs with a moratorium of eighteen (18) months. The interest on the loan is payable half yearly at 4.25% above LIBOR rate. The loan is secured by the N27 bn worth of FGN bonds investment as at year end. 27.5 Included in on- lending facilities from financial institutions are disbursements from banks within Nigeria of N18.807 bn guaranteed by FBN for specific customers. These facilities include the BOI funds and CACS intervention funds. i CBN/ BOI facilities The Central Bank of Nigeria (CBN) in a bid to unlock the credit market approved (CBN guideline of 16 April 2010) the investment of the sum of N200 billion debenture stock to be issued by the Bank of Industry (BOI) which would be applied to the re-financing/restructuring of banks loans to the manufacturing sector. On 26th July 2010 and 17th August 2010, the Bank of Industry (BOI) disbursed N5.656 billion and N4.097 respectively totaling N9.753 billion to First Bank of Nigeria Plc (the Bank) under the N200 billion CBN Intervention Fund. The fund disbursed is for a period of 15 years effective from disbursement date and subject to 1% p.a management fee. The Bank (FBN) had disbursed the sum of N8.574 billion to its customers, which was included in the loans and advances, while N82 million has been repaid by customers at year end.

45

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 27 Other borrowings (Cont'd) ii CBN/CACS Intervention funds The Central Bank of Nigeria (CBN) in collaboration with the Federal Government of Nigeria (FGN) represented by the Federal Ministry of Agriculture and Water Resources (FMA & WR) established the Commercial Agriculture Credit Scheme (CACS). Under the scheme, the Bank signed a participation agreement dated April 29, 2010 where in the CBN shall release through the Bank to various State Government and Federal Capital Territory (FCT) for on-lending to Farmer Cooperative Societies in their respective states and other local investment areas as specified by the guidelines. During the year, First Bank received N9.135bn for on-lending to customers as specified by the guidelines. Loans granted under the scheme are for seven (7) years period at an interest rate of 9 percent per annum. The amount disbursed under the scheme was included in the loan and advance in the financial statement.

Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 28. Other liabilities Deferred income for fraud Customers' deposit for letters of credit (Note 12) Deposit for foreign currency Interest payable Account payables Unearned discounts Proceeds from public offers Provision and accruals Bank cheques Provision on losses for off balance sheet items Collection on behalf of third parties Premium payable Trade creditors Clients' dividend (Note 28.1) Sundry creditors 2,084 41,885 1,780 266 17,892 2,270 806 6,014 14,268 39 4,193 685 8,208 17,027 2,581 119,998 28.1 Clients' dividend This represents dividend due to shareholders of the various clients of First Registrars Nigeria Limited as at the balance sheet date. 29. Deferred taxes 11,778 10,612 10,877 10,144 1,574 23,728 889 256 12,512 10,607 996 6,697 18,637 39 3,637 615 15,645 19,144 13,300 128,277 2,084 41,885 1,780 197 13,552 2,270 5 4,014 14,268 39 4,193 2,023 86,310 1,570 23,728 889 254 12,461 10,128 15 4,482 18,629 39 2,765 9,781 84,742

29.1 Deferred tax liabilities Movement in deferred taxes: At start of the period Reclasification to accounts payable Reclasification to tax payable (CIT) Charge/(credit) At end of the period 46

10,612 (4,005) 930 4,241 11,778

13,634 2 (7,114) 4,090 10,612

10,144 (4,466) 930 4,269 10,877

12,758 (7,114) 4,500 10,144

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 29.2 Deferred tax assets Movement in deferred taxes: At start of the period Charge/(credit) At end of the period 29.3 Reclassifications to tax payable This represents reclassification to income tax payable for tax liability that crystallized during the period. 128 -

128 128

47

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2009 2010 N million N million 30. Retirement benefit obligations Defined contribution scheme Defined benefit schemes (i & ii) 225 4,673 4,898 Movement in the defined contribution liability recognised in the balance sheet: At start of the period Charge to profit and loss Payments to ex-staff Contributions remitted At end of the period 333 1,899 (2,007) 225 332 2,183 (200) (1,983) 332 153 1,824 (1,806) 171 202 1,934 (1,983) 153 332 392 724 171 4,374 4,545 153 391 544 Bank 31 December 31 December 2009 2010 N million N million

The Group and its employees make a joint percentage of basic salary, housing and transport allowance to each employee s retirement savings account maintained with their nominated Pension Fund Administrators.

Movement in the defined benefit liability recognised in the balance sheet: (i) Gratuity scheme At start of the period Charge to profit and loss Payments in the period At end of the period

392 7,417 (3,136) 4,673

517 2,956 (3,081) 392

391 7,073 (3,090) 4,374

516 2,956 (3,081) 391

The Group operates a gratuity scheme where qualifying employees receive a lump sum payment based on the number years served after an initial qualifying period of 5 years and gross salary on date of retirement. (ii) Defined benefit scheme At start of the period Charge to profit and loss Payments in the period At end of the period

1,200 (1,200) -

1,200 (1,200) -

An actuarial valuation of the old Defined Benefit scheme, discontinued in 2001, was conducted by HR Nigeria Limited. A shortfall of N5.2billion was established. The deficit arose from the meltdown in the Capital Market. The bank is under obligation to fund the deficit, and has elected to do this over the next five years commencing Jan 2010 with an annual contribution of N1.2 billion. The principal actuarial assumptions used were as follows: - discount rate - average rate of inflation - future salary increases

10% 10% Nil

10% 10% Nil

10% 10% Nil

10% 10% Nil

48

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2009 2010 N million N million 31. Share capital Authorised 50 billion ordinary shares of 50k each (2009: 30 billion) Issued and fully paid: Number Millions 29,008 3,624 32,632 Group N million 14,504 1,812 16,316 Bank N million 14,504 1,812 16,316 Bank 31 December 31 December 2009 2010 N million N million

25,000

15,000

25,000

15,000

At start of period Transfer from bonus issue reserve At end of period

At the 41st Annual General meeting held on 27 May 2010 the shareholders approved the increase in authorises share capital from N15 bn to N25 bn by the addition of 20 bn ordinary shares of 50kobo each ranking pari-passu with the existing shares of the company. Also, the shareholders approved the capitalisation of the sum of N1.812billion standing in the Bonus Reserve to shareholders whose names appeared on the Register of members at the close of business on 30 April 2010 on the basis of one new ordinary shares for every eight ordinary shares held by them on that day. Group N million 32. Share premium At 31 December 254,524 254,524 Bank N million

The share premium was as a result of the 2007 hybrid offer by the bank and all necessary charges and deductions have been made in arriving at the balance

49

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 33. Reserves Group

Statutory reserve N million

Exchange Retained difference earnings reserve N million N million 3,962 3,962 (365) 3,597 549 1,712 2,261 (1,812) (2,902) 29,341 26,887

Revaluation reserve (property) N million N million 9,980 9,980 (787) 9,193 2,379 2,379 2,379

SMIEIS reserve

Total

N million 40,530 1,712 42,242 (1,812) (2,902) (365) (787) 33,411 69,787

At start of period Adjustment to opening reserves: Share of profit on investment in associate Adjusted opening reserves Transfer to share capital Dividend paid Net change due to exchange rate movement SMEEIS investments written - off Transfer from profit and loss account At end of period

23,660 23,660 4,070 27,730

In respect of the current year, the Directors propose that a dividend of 60 kobo per ordinary share be paid to shareholders. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Dividend to shareholders is now accounted for on the date of declaration as they do not meet criteria of present obligation in Statement of Accounting Standard 23. The proposed dividend is subject to withholding tax at the appropriate tax rate and is payable to shareholders whose names appear in the Register of Members at closure date. The total estimated dividend to be paid is N19.58billion.

50

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 33. Reserves Bank

Statutory reserve N million

Exchange difference reserve N million 2,836 2,836

Retained earnings N million 9,789 (1,812) (2,902) 22,896 27,971

Revaluation reserve (property) N million N million 9,980 (787) 2,379 9,193 2,379

SMIEIS reserve

Total

N million 48,460 (1,812) (2,902) (787) 26,936 69,895

At start of period Transfer to share capital Dividend paid Provision for doubtful SMEEIS investments Transfer from profit and loss account At end of period

23,476 4,040 27,516

Nigerian banking regulations require the bank to make an annual appropriation to a statutory reserve. As stipulated by S16(1) of the Bank and Other Financial Institutions Act of 1991(amended), an appropriation of 30% of profit after tax is made if the statutory reserve is less than the paid-up share capital and 15% of profit after tax if the statutory reserve is greater than the paid up share capital. The SMEIS reserve is maintained to comply with the Central Bank of Nigeria (CBN) requirement that all licensed banks set aside a portion of the profit after tax in a fund to be used to finance equity investments in qualifying small and medium scale enterprises. Under the terms of the guideline (amended by CBN letter dated 11 July 2006), the contributions will be 10% of profit after tax and shall continue after the first 5 years but banks contributions shall thereafter reduce to 5% of profit after tax. However, this is no longer mandatory. The small and medium scale industries equity investment scheme reserves are nondistributable.

51

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 34. Contingent liabilities and commitments a. Legal proceedings The Group in the ordinary course of business is presently involved in 232 litigation suits amounting to N4.117 bn (31 December 2009 - N647,615,276) none of which may give rise to any material contingent liability. The Directors are of the opinion that none of the aforementioned cases is likely to have a material adverse effect on the bank and are not aware of any other pending or threatened claims and litigations. b. Capital commitments At the balance sheet date, the bank had capital commitments amounting to N3.30billion (31 Dec 2009: N4.212 billion) in respect of authorized and contracted capital projects." c. Operating lease commitments As at 31 December 2010, the group was committed to making the following future repayments in respect of operating lease for land and buildings. The lease is expected to expire in June 2016. Group 31 December 31 December 2010 2009 N million N million Within one year Between one year and five years More than five years 168 594 165 927 160 620 155 935 Bank 31 December 31 December 2010 2009 N million N million -

d. Off balance sheet engagements In the normal course of business, the Group is party to financial instruments with off-balance sheet risk. The instruments are used to meet the credit and other financial requirements of customers. The contractual amounts of the off-balance sheet financial instruments are: Group 31 December 31 December 2010 2009 N million N million Performance bonds and guarantees Letters of credit Forward and swap contract Bankers Acceptances Guaranteed commercial papers Treasury bills intermediation and others 184,657 155,888 1,402 166,146 514,857 1,022,950 306,802 242,837 152,667 20,697 249,598 972,601 Bank 31 December 31 December 2010 2009 N million N million 181,387 151,337 1,402 334,126 155,062 242,837 20,697 12,720 431,316

52

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 35. Related party transactions A number of banking transactions were entered into with related parties in the normal course of business. These include loans, deposits and foreign currency transactions. The volumes of related-party transactions, outstanding balances at the period-end, and related expense and income for the period are as follows: (a) Risk assets outstanding as at 31 December 2010 Direct credit assets Included in loans and advances is an amount of N169.386 billion (Dec 2009: N117.2 billion) representing credit facilities to companies in which certain directors and shareholders have interests. The balances as at 31 December 2010 are as follows:
Name of company/individual Relationship Facility type N million Status Security status Legal mortgage on property, cross guarantee, lien on assets Cross guarantee, lien on assets Cross guarantee, debenture Cross guarantee, debenture Cross guarantee, counter indemnity Trust deed managed by First Trustees Ltd Trust deed managed by First Trustees Ltd Debenture on fixed and floating assets Mortgage debenture Mortgage debenture All assets debenture All assets debenture All assets debenture Lien on shares, personal guarantee Charge over asset financed Charge over asset financed Legal mortgage on property, domiciliation of salary Legal mortgage on property, domiciliation of salary Legal mortgage on property, domiciliation of salary Lien on assets Deposit of C of O on property

Honeywell Group Limited Honeywell Flour Mill Ltd (B&G) Pivot Engineering Ltd Pivot Engineering Ltd (B&G) Broadview Engineering Ltd (B&G) Airtel Networks Ltd Airtel Networks Ltd (B&G) Anchorage Leisures Ltd Fan Milk Plc Khalil & Dibbo Transport Ltd P.W. Nigeria Limited P.W. Nigeria Limited (B&G) Dangote Flour Mills Leadway Capital and Trusts Ltd Seawolf Oilfield Services Seawolf Oilfield Services (B&G) Remi Odunlami Kehinde Lawanson Otti C. Alex Ngama Yerima Lawanson Mahey Rafindadi Rasheed

Chairman Chairman, NonExecutive Director Chairman Chairman Chairman Chairman Chairman Chairman, NonExecutive Director Chairman Chairman Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Executive Director Executive Director Executive Director Executive Director Non-Executive Director

Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan Loan

16,909 643 2,676 3,634 7 18,391 6,455 3,223 316 231 605 10,536 819 175 95,280 9,300 21 132 6 3 24

Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing Performing

169,386

53

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 (a) Risk assets outstanding as at 31 December 2010 (contd.) 35.1 Project finance - Seawolf Oil Field Services Limited The Bank in July 2007, committed to jointly (with other financial institutions and investors) finance construction of oil rigs through SeaWolf Oil Field Services Limited for servicing oil companies based in Nigeria. The Bank initially disbursed the sum of $260 million to the company and in view of the project potentials, continued to fund the project when the other parties could not meet up with the funding agreement due to the economic meltdown and cash constraints. The project is now operational and has commenced repayment of the finance facilities granted. The Bank has put in place adequate safeguards to ensure full repayment of the facilities as and when due. All relevant regulators have also been notified of this transaction which qualifies as a related party transaction as the Chairman and three other Directors of the company were also Directors of the Bank as at December 2010. The facility exceeded the single obligor limit of the Bank set at 20% of the shareholders funds (N68.3 billion) as at 31 December 2010, as a result of reclassification of commercial paper balances to balance sheet in accordance to CBN circular BSD/DIR/GEN/CIR/03/018 of July 2009. However, the Bank obtained a waiver from the Central Bank of Nigeria via memo dated 3 December 2010 to exceed single obligor limit for the facility and to regularise same by 30 September 2011. The bank is taking active steps to bring the exposure within the bank's single obligor limit within the year.

54

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group 31 December 31 December 2010 2009 36. Employees and directors a. Employees The average number of persons employed by the Group during the year was as follows: Executive directors Management Non-management Number 19 114 8,021 8,154 Compensation for the above staff (excluding executive directors): N million 40,675 1,883 9,567 13 52,138 N million 35,086 2,035 3,013 470 40,604 N million 38,324 1,770 7,219 47,313 N million 34,334 1,985 2,956 39,275 Number 17 120 8,620 8,757 Number 5 58 7,540 7,603 Number 8 54 8,159 8,221 Bank 31 December 31 December 2010 2009

Salaries and wages Pension costs Defined contribution plans Defined benefit plans Other retirement benefit costs

The number of employees of the Group, other than directors, who received emoluments in the following ranges (excluding pension contributions) were: Number Number Number Number N300,001 - N2,000,000 517 2,950 65 1,002 N2,000,001 - N2,800,000 1,711 2,705 1,699 1,733 N2,800,001 - N3,500,000 1,564 1,892 1,546 1,462 N3,500,001 - N4,000,000 1,253 545 1,253 1,197 N4,000,001 - N5,500,000 1,917 330 1,903 1,762 N5,500,001 - N6,500,000 26 162 N6,500,001 - N7,800,000 518 117 506 494 N7,800,001 - N9,000,000 3 24 N9,000,001 - and above 626 15 626 563 8,135 8,740 7,598 8,213

55

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 36. Employees and directors b. Directors Remuneration paid to the Group's directors were: Group 31 December 31 December 2010 2009 N million N million 169 29 545 355 450 1,604 184 901 31 3,669 Fees and other emoluments disclosed above include amounts paid to: chairman The The highest paid director The number of directors who received fees and other emoluments (excluding pension contributions) in the following ranges was: Number Below N1,000,000 N1,000,000 - N2,000,000 N2,000,001 - N3,000,000 N5,500,001 - and above
3 16 11 18

Fees and sitting allowances Executive compensation Compensation for loss of office Retirement benefit costs Other director expenses and benefits

599

5 67

5 50

Number 17 17

48

56

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements For the year ended 31 December 2010 Group Bank 31 December 31 December 31 December 31 December 2010 2009 2010 2009 N million N million N million N million 37. Cash generated from operations Reconciliation of profit before tax to cash generated from operations: Operating profit Provision for loan loss Amounts written back on previously provisioned accounts Provision/(write-back) for leases Interest in suspense Loans written off Investment in SMEEIS written - off Change in provision for other assets Change in provision for investment Change in provision for investment in subsidiaries Change in provision for managed funds (Gain)/loss on disposal of fixed assets Adjustment for carrying amount of investment and reserves of previously unconsolidated associates Deferred tax from acquiree Depreciation Dividend income from investments Provision for retirement benefit obligations Provision for value added tax Exchange differences Operating profit before changes in operating assets and liabilities (Increase) / decrease in operating assets: Cash reserve balances Due from other banks (non-current placements) Loans to customers, net of loans in acquiree Advances under finance leases Insurance receivables Short term investments Interest receivable and prepayment Accounts receivable Other receivables, net of sundry receivables in acquiree 43,188 29,631 (7,866) 592 16,964 (22,464) (787) 1,183 19,254 (19,028) (67) (1,520) 8,394 (513) 9,316 1,064 (362) 76,978 13,297 45,223 (4,863) (10) 4,916 (5,573) (1,277) (487) 1,592 (2,478) 94 (1,712) 5,546 (1,316) 5,657 988 3,772 63,369 33,537 25,461 (5,375) 592 16,172 (22,364) (787) 846 3,247 (81) 7,972 (3,570) 8,897 1,064 65,611 7,689 44,195 (4,863) (10) 4,381 (5,434) (1,277) (291) 2,160 23 95 5,182 (1,876) 4,890 988 55,852

(822) 23,081 (81,427) 2,662 (150) (63,097) 12,211 (8,011) 54,576 (60,976)

6,173 (200,160) (377,758) 944 (47) (70,752) (10,045) (736) (40,565) (692,946)

(822) (8,820) 2,662 (25,094) 12,292 (8,034) (10,271) (38,087)

6,173 (376,658) 944 (70,752) (9,315) (21,946) 25,035 (446,519)

Increase/(decrease) in operating liabilities: Customer deposits, net of deposits in acquiree Due to other banks Customers' deposit for foreign currency denominated obligations Insurance contract liabilities Interest payable and unearned income Accounts payable Gratuity payment to staff

103,994 (24,994) 18,157 (52,872) (8,327) (22,153) (5,143) 8,661

152,118 2,870 (22,864) 54,928 5,652 (8,214) (5,264) 179,226 (450,351)

86,741 (9,922) 18,157 (7,915) (13,174) (4,896) 68,991 96,515

172,194 (13,893) (22,225) 3,814 (6,277) (5,064) 128,549 (262,118)

Cash generated from/ used in operations

24,663

57

FIRST BANK OF NIGERIA PLC Notes to the Financial Statements

For the year ended 31 December 2010

38. Earnings per share Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year. The adjusted EPS is calculated using the number of shares in issue at the balance sheet date. Where a stock split has occurred, the number of shares in issue in the prior year is adjusted to achieve comparability . Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. There were no potential dilutive shares in 2010 (2009: nil) Group 31 December 31 December 2010 2009 Net profit attributable to shareholders (N'million) 33,411 33,411 Number of ordinary shares in issue as at period end (millions) Time weighted average number of ordinary shares in issue (millions) Adjusted number of ordinary shares in issue (millions) Basic earnings per share (kobo) Diluted earnings per share (kobo) 39. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents include cash and non-restricted balances with central banks, treasury bills and other eligible bills, operating account balances with other banks, amounts due from other banks and short-term government securities. Group 31 December 31 December 2010 2009 N million N million Cash and balances with central banks (less restricted balances) Treasury bills and eligible bills (less pledged bills) Due from other banks (less non-current placements) 64,387 10,629 373,335 448,351 40 Compliance with banking regulations. The bank did not contravene any regulation of the Banks and Other Financial Institutions Act CAP 3 LFN 2004 or relevant circulars issued by the Central Bank of Nigeria. 41 Events after the balance sheet date The Bank invested a total sum of N31.2m (30m shares @ N1.04k/share) in Interswitch Ltd in 2002 in conjunction with a consortium of Banks. In December 2010, the board of directors approved the disposal of a third of the Bank s holding. (10million shares) in Interswitch at N130 per share. This resulted in a gain of N1.28 billion. The sale was concluded in January 2011. 60,024 10,939 314,033 384,996 Bank 31 December 31 December 2010 2009 N million N million 63,764 10,459 383,893 458,116 57,268 10,939 255,903 324,110 32,632 4,901 4,901 29,008 Bank 31 December 31 December 2010 2009 26,936 26,936 32,632 1,275 1,275 29,008

32,632 32,632 102 102

29,008 29,008 17 17

32,632 32,632 83 83

29,008 29,008 4 4

42

Comparatives The financial statements are being presented in line with the format prescribed for all Banks in Nigeria by the Central Bank of Nigeria with effect from period ended 31 December 2009. Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. 58

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Performing but past due loans Loans and advances less than 90 days past due are considered performing, unless other information is available to indicate the contrary. Gross amount of loans and advances by class to customers that were past due but performing were as follows: At 31 December 2010 Retail N million Past due up to 30 days Past due 30 - 60 days Past due 60-90 days 23,799 7,853 16,570 48,222 Corporate Financial Institutions N million N million N million 39,366 4,614 2,181 46,161 256 560 176 992 15,836 449 631 16,916 SME Total N million 79,257 13,476 19,558 112,291

At 31 December 2009 Past due up to 30 days Past due 30 - 60 days Past due 60-90 days 25,516 8,921 35,110 69,547 26,284 9,423 38,218 73,925 7,819 2,792 11,035 21,646 5,533 1,976 0 7,509 65,152 23,112 84,363 172,627

Non-performing loans by Industry Group 31 December 31 December 2010 2009 N million N million 767 16,061 9,041 13,701 5,204 17,993 16,132 9,604 4,579 4,894 10,005 6,601 124 4,734 22,044 2,597 1,247 2,284 2 1,261 1,644 1,072 1,143 918 285 483 5,073 400 4,228 5,538 11,058 5,846 92,576 93,988

Asset management Personal & Professional Commercial - Non-residential Retail - Others Distributive Trade (General Commerce) Oil & Gas Services Utility - Private Commercial - Residential Construction Manufacturing - Basic Metal Owner Occupier Manufacturing - Paper & paper products Education Other Financial Institutions Oil & Gas - Marketing Others

59

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Non-performing portfolio by Strategic Business Units (SBU) Bank 31 December 2010 N million 10,527 43,481 35,592 103 89,703

CORPORATE BANKING GROUP INSTITUTIONAL BANKING GROUP RETAIL BANKING PUBLIC SECTOR

Concentration of risks of financial assets with credit risk exposure (a) Geographical sectors The following table breaks down the Group s main credit exposure at their carrying amounts, as categorised by geographical region as of 31 December 2010. For this table, the Group has allocated exposures to regions based on the region of domicile of our counterparties.

At 31 December 2010 LAGOS SOUTH WEST NORTH EUROPE

Due from banks N million 0

Loans N million 723,158 152,364 30,072 67,843 135,003 1,108,440

Advances under Debt finance lease instruments N million N million 4,280 2,721 647 635 118,100 5,658 1,806 3,139

Total N million 845,538 160,743 32,525 71,617 135,003 1,245,426

8,283

128,703

At 31 December 2009 LAGOS SOUTH WEST NORTH EUROPE 0 667,150 164,702 76,079 74,785 50,129 1,032,845 3,234 4,535 2,690 485 10,944 107,053 6,132 9,443 2,642 125,270 777,437 175,369 88,212 77,912 50,129 1,169,059

60

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010

(b) Industry sectors

Due from banks N million

Loans N million

Advances under finance lease N million

Debt instruments N million

Total N million

Agriculture Oil and gas Consumer Credit Manufacturing Real estate Construction Finance and Insurance Transportation Communication General Commerce Utilities Retail Services Public Sector

12,546 245,192 104,738 71,086 106,543 5,877 209,155 919 59,914 167,214 156 60,429 64,671 1,108,440

1,356 386 301 527 885 857 1,118 2,853 8,283

20,074 17,360 4,900 2,496 1,500 11,869 19,952 50,552 128,703

12,546 266,622 104,738 88,832 111,443 8,674 211,182 1,804 71,783 188,023 1,274 113,834 64,671 1,245,426

At 31 December 2009 Agriculture Oil and gas Consumer Credit Manufacturing Real estate Construction Finance and Insurance Transportation Communication General Commerce Utilities Retail Services Public Sector 7,488 150,791 77,995 47,788 99,835 5,468 335,818 7,488 27,405 52,793 5,483 143,420 71,074 1,032,846 Analysis by portfolio distribution and risk rating AAA to AA N million At 31 December 2010 At 31 December 2009 122,662 55,691 A+ to AN million 16,986 24,741 BBB+ to BBN million 427,266 470,895 Below BBN million 678,512 617,733 Unrated N million Total N million 1,245,426 1,169,060 3,594 686 435 1,039 737 1,366 784 2,303 10,944 15,056 43,337 5,800 800 3,900 70 27,411 10,171 18,725 125,270 7,488 169,441 77,995 91,811 105,635 6,703 340,757 8,295 56,182 63,748 5,483 164,448 71,074 1,169,060

61

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Liquidity risk Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. The consequence may be the failure to meet obligations to repay depositors and fulfill commitments to lend. Liquidity risk management process The Group s liquidity management process is primarily the responsibility of the Assets and Liabilities Committe (ALCO). Treasury is the executory arm of ALCO and its functions include: a. Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met. This includes replenishment of funds as they mature or are borrowed by customers. The Group maintains an active presence in money markets to enable this to happen; b. Maintaining a portfolio of highly marketable assets that can easily be liquidated as protection against any unforeseen interruption to cash flow; c. Monitoring balance sheet liquidity ratios against internal and regulatory requirements (in conjunction with financial control unit); and d. Managing the concentration and profile of debt maturities.

Funding approach Sources of liquidity are regularly reviewed by Treasury to maintain a wide diversification by currency, geography, provider, product and term.

62

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Maturity profile: On- Balance Sheet - Bank 31 December 2010 Up to 1 month N'million 480,305 21,806 502,111 1 3 months N'million 305,243 55,165 4,337 455 365,200 3 6 months N'million 197,076 4,238 60,167 682 262,163 6 -12 months N'million 220,445 20,012 900 241,357 1 5 years N'million 127,702 78,700 10,877 2,508 219,787 Over 5 years N'million 25,905 340,735 366,640 Total N'million 1,330,771 55,165 124,617 4,238 86,310 10,877 4,545 340,735 1,957,258

Liabilities: Customer deposits Due to other banks Borrowings Current income tax Other liabilities Deferred income tax liabilities Retirement benefit obligations Equity Total liabilities Assets: Cash and balances with central banks Treasury bills and other eligible bills Due from other banks Loans and advances to customers Advances under finance lease Investment and trading securities Investment in subsidiaries Investment in associates Other assets Property and equipment Total assets Gap

74,894 383,893 515,391 1,613 975,791 473,680

900 96,571 82 1,679 99,232 (265,968)

3,350 44,294 346 4,340 52,330 (209,833)

19,349 30,827 851 38,447 89,474 (151,883)

320,564 4,688 227,409 2,084 554,745 334,958

9,766 89,664 31,416 2,224 52,616 185,686 (180,954)

74,894 23,599 383,893 1,017,413 7,580 317,073 31,416 2,224 46,550 52,616 1,957,258 -

63

FIRST BANK OF NIGERIA PLC Financial Risk Analysis Period ended 31 December 2010
Maturity profile: On- Balance Sheet - Group 31 December 2010 Up to 1 month N'million 572,182 93,121 28,331 55,497 749,131 1 3 months N'million 307,904 55,165 41,861 4,337 455 409,721 3 6 months N'million 205,403 9,136 60,167 1,035 275,741 6 -12 months N'million 237,376 25,160 20,012 900 283,448 1 5 years N'million 127,702 78,700 11,779 2,508 220,689 Over 5 years N'million 25,905 340,624 366,529 Total N'million 1,450,567 148,286 95,352 124,617 9,136 120,001 11,779 4,898 340,624 2,305,258

Liabilities: Customer deposits Due to other banks

Liability on investment contracts

Borrowings Current income tax Other liabilities Deferred income tax liabilities Retirement benefit obligations Equity Total liabilities Assets: Cash and balances with central banks Treasury bills and other eligible bills Due from other banks Loans and advances to customers Advances under finance lease Investment and trading securities Investment in subsidiaries Investment in associates

Managed funds
Other assets

75,517 550,414 517,601 1,614 20,977 128 1,166,251 417,120

900 169,337 82 1,679

3,350 44,802 346 4,340

19,519 39,747 851 16,940 43,195

359,855 4,688 255,493 2,085

Investment property Deferred tax asset

Property and equipment Total assets Gap

12,272 89,664 1,000 6,456 8,420 53,986 171,798 (194,731)

171,998 (237,723)

52,838 (222,903)

120,252 (163,196)

622,121 401,432

75,517 23,769 550,414 1,143,614 7,581 345,157 1,000 6,456 37,917 51,299 8,420 128 53,986 2,305,258 0

64

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Maturity profile Off Balance Sheet

(a) Financial guarantees and other financial facilities Performance Bonds and financial guarantees (Note 34), are also included below based on the earliest contractual maturity date. (b) Contingent letters of credits Unfunded letters of credit (Note 34) are also included below based on the earliest contractual payment date. (c) Operating lease commitments Where a Group company is the lessee, the future minimum lease payments under non-cancellable operating leases, as disclosed in Note 34, are summarised in the table below. (d) Capital commitments Capital commitments for the acquisition of buildings and equipment (Note 34) are summarised in the table below. Up to 1 month N'million 13,799 2,034 1,402 17,235 31 December 2009 Acceptances, guarantees and indemnities Bonds and performance guarantees Guaranteed commercial papers Treasury bills intermediation 18,474 2,084 20,496 41,054 88,162 10,109 201 98,472 136,201 19,142 155,343 58,880 58,880 46,461 12,720 59,181 18,386 18,386 242,837 155,062 20,697 12,720 431,316 1 3 3 6 months months N'million N'million 65,853 9,866 75,719 101,735 18,682 120,418 6-Dec months N'million 57,466 57,466 1 5 years N'million 45,345 45,345 Over 5 years N'million 17,944 17,944 Total N'million 181,387 151,337 1,402 334,126

31 December 2010

Acceptances, guarantees and indemnities Bonds and performance guarantees

Forward and swap contract

Guaranteed commercial papers Treasury bills intermediation

65

FIRST BANK OF NIGERIA PLC

Financial Risk Analysis Period ended 31 December 2010
Concentrations of currency risk : On- and Off-balance sheet financial instruments At 31 December 2010 Assets Cash and balances with Central banks Treasury bills Due from other banks Loans and advances to customers Advances under finance lease Investment securities Other assets Total financial assets Liabilities Customer deposits Due to other banks Claims payable Other borrowings Current income tax Other liabilities 1,152,656 55,165 (0) 38,572 4,238 317,412 1,568,043 Net on-balance sheet financial position 169,553 80,560 104,653 354,766 4,215 9,367 13,582 3,609 5,485 9,222 18,316 738 0 1,813 2,551 1,330,771 55,165 124,617 4,238 442,467 1,957,258 Naira Million 65,187 23,599 256,162 800,810 7,580 350,713 63,864 1,567,915 Dollar Million 7,228 98,178 215,028 34,332 354,766 GBP Million 1,405 11,708 469 13,582 Euro Million 1,002 17,041 401 18,444 Others Million 72 804 1,575 100 2,551 Total Million 74,894 23,599 383,893 1,017,413 7,580 350,713 99,166 1,957,258

Off balance sheet Total financial assets Total financial liabilities Net off-balance sheet financial position 2,310 2,310 318,515 318,515 702 702 10,024 10,024 2,575 2,575 334,126 334,126 -

66

FIRST BANK OF NIGERIA PLC Financial Risk Analysis Period ended 31 December 2010 The table below summarises the composition of regulatory capital and the ratios of the Group for the years ended 31 December. During those two years, the individual entities within the Group and the Group complied with all of the externally imposed capital requirements to which they are subject. Group 31 December 31 December 2010 2009 N million N million Tier 1 capital Share capital Share premium Statutory reserves Contingency reserve SMIEIS reserve Bonus issue reserve Retained earnings Less: goodwill and intangible assets Total qualifying Tier 1 capital 16,316 254,524 27,730 9,193 26,887

334,650

14,504 254,524 23,660 9,980 549 303,217

Tier 2 capital Preference shares Minority interest Convertible bonds Revaluation reserve - fixed assets Revaluation reserve investment securities Translation reserve Other borrowings General provision Total qualifying Tier 2 capital Total regulatory capital Risk-weighted assets: On-balance sheet Off-balance sheet Total risk-weighted assets Risk weighted Capital Adequacy Ratio (CAR)

2,379 3,597 33,343 11,363 50,682 385,332

2,379 3,962 35,473 59 41,873 345,090

1,499,264 394,025 1,893,289 20.35%

1,790,146 394,260 2,184,406 15.8%

67

FIRST BANK OF NIGERIA PLC Statement of Value Added - Group For the year ended 31 December 2010 31 December 2010 N'million 230,606 (49,633) (2,945) 178,028 Administrative overheads: - Local - Foreign Value added Distribution Employees - Salaries and benefits Government - Company income tax The future - Asset replacement (depreciation) - Local - Foreign - Asset replacement (provision for losses) - Asset replacement (deferred taxation) - Expansion (transfers to reserves) (52,661) (55) 125,312 100 31 December 2009 N'million 196,408 (64,339) (1,545) 130,524 (31,216) (949) 98,359 100

Group Gross income Interest paid Interest on long term borrowings

52,138

42

40,604

41

5,664

4,306

8,346 50 21,590 4,113 33,411 125,312

7 17 3 27 100

5,466 79 40,624 4,090 3,189 98,359

6 41 4 3 100

Bank Gross income Interest paid Interest on long term borrowings 207,524 (42,996) (2,945) 161,583 (52,211) 109,372 100 175,355 (54,553) (1,614) 119,188 (25,580) 93,608 100

Administrative overheads Value added

Distribution Employees - Salaries and benefits Government - Company income tax The future - Asset replacement (depreciation) - Asset replacement (deferred taxation) - Asset replacement (provision for losses) - Expansion (transfers to reserves and minority interest)

47,313

43

39,275

42

2,332

1,914

7,972 4,269 20,550 26,936 109,372

7 4 19 25 100

5,182 4,500 41,462 1,275 93,608

6 5 44 1 100

68

FIRST BANK OF NIGERIA PLC Five year financial summary - Group Balance Sheet 31 December 2010 N'million Assets: Cash and balances with central bank Treasury bills Due from other banks Loans and advances to customers Advances under finance lease Investment and trading securities Investment in associates Investment in subsidiaries Managed funds Other assets Investment property Deferred tax asset Property and equipment 75,517 23,769 550,414 1,143,614 7,581 345,157 6,456 1,000 37,917 51,299 8,420 128 53,986 2,305,258 Financed by: Share capital Reserves Customer deposits Due to other banks Liability on investment contracts Borrowings Current income tax Other liabilities Deferred income tax liabilities Retirement benefit obligations 70,332 14,219 514,193 1,078,452 10,835 286,600 4,960 84,630 55,226 6,631 47,980 2,174,058 140,403 17,697 764,048 740,397 11,769 196,635 2,884 1,510 36,894 51,884 6,098 39,695 2,009,914 88,351 115,480 560,879 466,096 10,297 154,376 371 60 56,021 44,275 1,974 30,054 1,528,234 61,844 159,832 264,405 217,995 3,043 132,716 74 50 22,070 31,664 186 17,548 911,427 31 December 2009 N'million 31 March 2009 N'million 31 March 2008 N'million 31 March 2007 N'million

16,316 324,310 1,450,567 148,286 95,352 124,617 9,136 119,998 11,778 4,898 2,305,258

14,504 296,766 1,346,573 173,280 148,224 35,473 19,625 128,277 10,612 724 2,174,058 972,601

12,432 324,973 1,194,455 170,410 93,296 35,042 11,283 154,057 13,634 332 2,009,914 696,378

9,945 341,909 700,182 155,109 62,514 29,414 8,986 213,432 6,743 1,528,234 544,959

5,238 78,389 599,689 85,664 22,070 22,101 7,470 88,149 2,657 911,427 344,155

Acceptances and guarantees Profit and Loss Account

1,022,950

12 months ended 31 Dec 2010 Gross Earnings Net operating income Operating expenses Group's share of associate's results Provision for losses Profit before taxation Exceptional item Taxation To shareholders Earnings per share (basic) - Kobo 230,606 177,923 (116,530) 1,496 (21,590) 41,299 1,889 (9,777) 33,411 102

9 months ended 31 Dec 2009 193,966 128,026 (75,841) 1,736 (40,624) 13,297 (8,396) 4,901 17

12 months 12 months 12 months ended ended ended 31 Mar 2009 31 Mar 2008 31 Mar 2007 218,287 160,730 (90,141) (16,790) 53,799 (26,113) (15,117) 12,569 51 155,725 124,156 (33,787) (6,028) 84,341 (11,227) 73,114 267 91,163 72,806 (24,501) (2,021) 46,284 (5,218) 41,066 178

69

FIRST BANK OF NIGERIA PLC Five year financial summary - Bank Balance Sheet 31 December 2010 N'million Assets: Cash and balances with central bank Treasury bills Due from other banks Loans and advances to customers Advances under finance lease Investment and trading securities Investment in associates Investment in subsidiaries Other assets Property and equipment 31 December 2009 N'million 31 March 2009 N'million 31 March 2008 N'million 31 March 2007 N'million

74,894 23,599 383,893 1,017,411 7,581 317,073 2,224 31,416 46,551 52,616 1,957,258

67,576 14,219 255,903 1,022,486 10,835 271,250 2,224 30,416 51,245 46,302 1,772,456

140,353 17,697 510,722 684,107 11,769 185,774 2,224 28,449 48,007 38,320 1,667,422

89,076 147,680 247,059 437,768 10,297 137,905 74 26,949 39,498 29,155 1,165,461

60,881 159,832 137,864 219,185 3,043 127,564 74 7,887 29,701 16,850 762,881

Financed by: Share capital Share premium Reserves Customer deposits Due to other banks Borrowings Current income tax Other liabilities Deferred income tax liabilities Retirement benefit obligations

16,316 254,524 69,895 1,330,771 55,165 124,617 4,238 86,310 10,877 4,545 1,957,258

14,504 254,524 48,460 1,244,030 65,087 35,473 14,948 84,742 10,144 544 1,772,456 431,316

12,432 254,524 84,098 1,071,836 78,980 35,042 7,238 109,796 12,758 718 1,667,422 314,973

9,945 254,524 75,378 661,624 44,281 29,414 5,091 78,492 6,712

5,238 15,858 56,255 581,827 14,448 22,101 5,710 58,773 2,671

1,165,461 198,239

762,881 132,737

Acceptances and guarantees Profit and Loss Account

334,126

12 months ended 31 Dec 2010 Gross Earnings Net operating income Operating expenses Provision for losses Profit before taxation Exceptional item Taxation Profit after taxation Proposed dividend Earnings per share (basic) 83
70

9 months 12 months 12 months 12 months ended ended ended ended 31 Dec 2009 31 Mar 2009 31 Mar 2008 31 Mar 2007 175,390 119,167 (70,016) (41,462) 7,689 (6,414) 1,275 184,536 140,949 (80,880) (13,959) 46,110 (11,036) 35,074 130,600 108,317 (76,116) (5,819) 38,020 (7,547) 30,473 79,299 66,062 (46,484) (2,519) 22,097 (3,742) 18,355

207,524 161,479 (107,392) (22,596) 31,491 2,046 (6,601) 26,936

11

141

223

156