Saturday, 18 November 2017
Business and Economy

Business and Economy (725)

CENTRAL Securities Clearing System Plc (CSCS)  recorded total revenue of  N5.17 billion in its 2012 operations, against N4.19 billion achieved in 2011.

Also, profit after tax increased from N1 billion to N2.58 billion during the period under review.

The percentage increase in revenue is 19 per cent while profit grew by 158 per cent.

CSCS, which is the financial market infrastructure responsible for  the clearing and settlement of all traded securities in the Nigerian capital market, also witnessed 77 per cent growth in profit before tax, from N1.73 billion to N3.06 billion in 2012.

Speaking at the 19th yearly general meeting of the company held in Lagos recently, the Chairman of CSCS, Oscar Onyema said apart from the growth in profitability, total assets also rose from N13.64 billion in 2011 to N15.43 billion in 2012.

According to him,  in consideration of the company’s  commitment to shareholders value and bearing in mind the cost implications of its future strategy, the board of directors recommended  a dividend of  N750million, up from N500 million the previous, which  translated to 15 kobo per share due to every shareholder of the company.

He disclosed that in furtherance of its growth objectives, CSCS benchmarked its process and risks framework against the Committee on Payment and Settlement Systems and the International Organisation of Securities Commissions (CPSS-IOSCO) principles, which provide globally acceptable standards for assessment of financial market infrastructure.

The outcome of the exercise, he said, led to the establishment of an Enterprise Risk Management department.

Onyema added that during the year under review, CSCS included the provision of Over-the-Counter services to its service offerings in respect of secondary market on shares of unquoted companies.

“With the use of technological innovations, the company improved its process thereby reducing market infractions while maximising efficiency in its services,” the chairman said.

Speaking on the company’s performance, the Managing Director/Chief Executive Officer of CSCS, Kyari Bukar, said   CSCS sustained an ‘A’minus (A-) rating from Thomas Murray Rating Limited of United Kingdom, a foremost Central Securities Depository rating agency.

Bukar disclosed that CSCS expanded its data exchange platform to include modules to cater for settlement banks, stockbroking firms, and custodians. He emphasized that the company place much value on its people and considers them to be the heartbeat of its business.

“We aim to attract, develop and retain the best people treating each other with honesty, compassion and respect,” he noted.

Going forward, the CSS boss said the focus will primarily centre on assets safety and its   clearing and settlement mechanism in the Nigerian capital market.

“We are committed to pursuing our aspiration of seeking avenues to sell our premium services to new prospects. Along this line, we are optimistic that in the current year, we shall fulfill this aspiration by our engagement as the clearing and settlement agency to the NASD Limited, the promoter of the trading network for transactions of unquoted securities," he said.

Posted On Thursday, 27 June 2013 14:05 Written by

APPLICATION list for the N12.5 billion rights issue of Sterling Bank Plc opens today, paving the way for existing shareholders to increase their shareholdings in the high-return bank.

The opening of application list followed the completion of all pre-offer processes including final completion board meeting by board of Sterling Bank and other professional parties, approvals by the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) and unanimous approval of the shareholders of the bank.

Sterling Bank is raising N12.5 billion through a rights issue of about 5.889 billion ordinary shares of 50 kobo each at N2.12 per share. Sterling Bank had traded at a high of N3.05 at the stock market.

The shares have been pre-allotted on the basis of three new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at May 20, 2013. Application list will run till July 31, 2014.

The net proceeds of the rights issue, estimated at N12.13 billion, would be used to finance branch expansion, infrastructure upgrade in support of automated and cashless payment, enhance information technology and additional working capital.

About 35 per cent of the net proceeds, estimated at N4.24 billion, would be used for branch expansion; 15 per cent of the funds estimated at N1.82 billion would be used for infrastructure upgrade, 10 per cent of the funds equivalent to N1.21 billion would be used for information technology and the largest chunk of 40 per cent, estimated at N4.85 billion, to be set aside as additional working capital.

Managing Director, Sterling Bank, Yemi Adeola, said the rights issue would enhance the capital base of the bank and enable it to create additional values for shareholders.

According to him, given the fact that Sterling Bank is one of the few financial institutions that have not raised new equity funds in the past seven years, the current fund raising would enhance the performance of the company and returns to shareholders.

“If with the modest capital that we have we were able to stabilise the bank, deliver consistently better returns to shareholders and build up to become the a top tier bank, imagine what we would do with more capital. Our shareholders have no reason whatsoever not to be excited in participating in the rights issue. You can’t regret it,” Adeola said.

He noted that the rights issue marked the beginning of the bank’s capital raising plan, which is meant to put the bank on stronger footing and further position it to compete effectively.

According to him, the bank plans to raise $80 million through the rights issue and $120 million through private placement to shore up the bank’s tier one capital.

He pointed out that the bank is embarking on additional capitalisation because size has become very key and relevant in the banking industry and the bank needs to open more branches and put in place enabling infrastructure for its unique retail banking franchise.

He added that additional working capital would enable the bank to expand the scope of its corporate banking business noting that the bank is currently limited by the single obligor limit, which is a function of available.

He exuded that shareholders have been rooting for the rights issue in demonstration of their appreciation for the bank’s growing fundamentals and returns over the years expressing confidence that the shareholders would all pick up their rights.

He pointed out that the decision to come to the capital market for equity issue was driven partly by overwhelming requests by shareholders for opportunity for additional investments during the capital raising programme of the bank.

Posted On Tuesday, 25 June 2013 12:58 Written by

It’s 10am on a Thursday on Victoria Island, Lagos; the pulse of the Nigerian financial world is racing. Blue-chip boardrooms buzz; so does the traffic. I’ve eased my way to the serene offices of a man who surveys it all from the 12th floor.

 

The view is famed by the Atlantic Ocean to the south and some of Nigeria’s richest buildings to the north. From his vantage point, Jim Ovia can pick out the twin pillars of his success. Across the city is the unmistakable red of Zenith Bank, where he made most of his $825-million fortune. Company insiders say that his wealth is nearer $1 billion after a string of lucrative deals this year. Also on the Lagos horizon are Visafone billboards, his telecommunications business and moneymaker, with a current subscriber base of around 2.3 million.

 

Inside the huge office are shelves of plaques, awards and photographs of Ovia with Bill Clinton, Arnold Schwarzenegger and Goodluck Jonathan, alongside pieces of literature and art.

 

Dressed in a well-cut suit, he greets me like an old friend. They call him ‘the godfather of Nigerian banking’ and in many ways, he is. Banking is where he began life as a clerk; it was also the vehicle that carried him to his fortune. He created West Africa’s largest financial services provider, according to market capitalization and assets.

 

Ovia transformed Zenith from a small commercial bank into a financial services conglomerate, with operations in private and retail banking and investments around the world. After nearly two decades at the helm he stepped down, but he remains its largest individual shareholder with a 15% stake in the company.

 

“When we started Zenith in 1990, it was extremely difficult as the necessary resources and infrastructure to do business, particularly banking, were not in place. There were no ATMs, no mobile phones and ICT was a rarely known concept in the business space,” he says.

 

“When, in 1990, banking licenses were being issued, indigenous private individuals were being offered the opportunity to set up financial institutions, Prior to that, you either needed to be a foreign global financial institution, or a federal or state government institution, to own or set up a bank in Nigeria. Businesses and entrepreneurs could not possibly get these licenses because of the prerequisites attached. It was perceived then, that Nigeria did not have the technical expertise to run or manage banks.”

 

A surge of liberalization soon changed this. On May 30, 1990, doors were opened for Ovia and 119 other hopefuls, who received their bank licenses. It was a long-awaited breakthrough. Ovia and his team got down to work quickly. They commenced operations on July 16 for what proved to be a rocky beginning, with technology very thin in the ground.

 

Improvisation was the way forward. Ovia had to be creative with the sparse telecommunications and financial services on offer. In time, with the help of improved infrastructure, the bank found its feet.

 

Ovia saw a silver lining, then noticed the cloud. The introduction of ATMs to Nigeria was not an easy one. It proved difficult to win over people who had grown up with counters and rubber stamps. People worried about fraud and it also took time and feasibility studies to decide where to place the ATMs. Ovia and his team persevered and Zenith blossomed.

 

Banking isn’t Ovia’s only game. He also owns an expansive real estate portfolio with landmark commercial and residential properties. These include the Civic Centre and an exclusive boat club, Aquamarine in Lagos, where Africa’s richest man, Aliko Dangote, is a member. Ovia is known to have a weakness for expensive boats.

 

It is his infectious entrepreneurial passion that paid for this lifestyle.

 

“Your passions are always in sync with opportunities. You’re naturally able to identify them and respond to them as they materialize because of the passion you have for them,” he says.

 

It is an intuition that has driven Ovia through life as an entrepreneur. Choices came early for the young Ovia, who grew up one of many children in a large family in Akbor in Nigeria’s Delta State. As a young man, Ovia pondered what to study. He was encouraged by his uncles, who had run successful businesses, to pursue a qualification in business administration. To this day, for most Nigerian families, business administration, alongside medicine, law, accounting and engineering are the keys to success. Ovia went for it and enrolled for a degree in business administration at Southern University, Louisiana, in the States.

 

“It so happened that halfway through my studies, my keen interest in computer science and information technology was heightened… I couldn’t help it and decided to incorporate computer science into my program. One of my uncles advised me against this, as he reckoned that it was an immature industry at that point. Business administration was the way forward,” he says.

 

Ovia carried on regardless of avuncular warnings.

 

“Like any young man, I was full of hopes… (there were) tremendous opportunities in the future. It wasn’t so much what you studied but what you did with the knowledge that mattered.”

 

Ovia earned an MBA from the University of Louisiana, after which he returned to Nigeria to do his National Youth Service Corps, where he worked with one of the government-owned banks. He secured a job with First National Bank of Chicago–then International Merchant Bank–in Lagos, where he was trained as a financial analyst. This was just one of many strings to Ovia’s bow.

 

“I’ve worked as everything, from a junior clerical officer in a bank to a middle management trainee. I really did work my way up the ladder. I had enjoyed banking as a profession right from the onset and because of the passion I had for it, it became a place that I went to be happy. I worked 16 hours a day and I enjoyed every minute of it,” he says.

 

Many years later, Ovia knew the business inside-out and nurtured his brainchild, Zenith Bank, to rude health. ICT was the next fertile field.

 

“The way I see it, all are seamlessly interwoven. You can’t do telecommunications without combining information and vice versa. As part of my interwoven passions, it became my immediate desire, and the next level of evolution for me was the establishment of a mobile phone company,” he says.

 

Ovia was one of the early players in the internet space and established a company called Cyberspace in 1995, when the internet was almost unheard of in Nigeria.

 

“We were the pioneering set of internet service providers in the country and it was very challenging back then because there were no submarine fiber optic cables to give us the bandwidth and speed we needed to download data. We then had to rely on satellite dishes that would provide this speed to log into any portal out of the country,” he says.

 

As the private sector fought steadily for its place, the government kept a firm grasp on major sectors, especially telecommunications. Nigerian Telecommunications (NITEL) enjoyed a monopoly.

 

“It had the density of only about 0.04 percent, which equated to about 250 entities and homes sharing a telephone line. There were hardly 450,000 existing lines for an entire population of about 120 million Nigerians then. Today, we have about three other submarine cables that enable high-speed broadband technology internet services in the country.”

 

Ovia’s telecommunications company, Visafone, was another testament to his faith in timing and instinct. The Nigerian government, after an apparent communications epiphany, decided to license the Global System for Communications (GSM) services to a few bidders. Ovia didn’t participate in this auction–an opportunity every bidder couldn’t afford to miss back then.

 

“All my attention was focused on building a strong financial institution at that point, I couldn’t afford to be distracted and the timing was unfortunately not good for me. Failure is an opportunity to learn… You can only succeed when you fail, get up and then run again. I was determined to keep running.

 

Ovia’s philosophy on setbacks was useful when a new directive from the Central Bank of Nigeria, on the tenure of bank CEO’s forced him to step down from an organization he had built from scratch.

 

“I immediately took it in my stride and couldn’t find any reason for resistance… I’m in fact glad that decision was made, because it also opened up tremendous opportunities for me and this allowed me to move on to accomplish new things I wouldn’t have had the time for.”

 

With this philosophy in mind, Ovia started anew. Along one of the major roads in Victoria Island, Ozumba Mbadiwe, is the waterfront, which used to be refuse dump. A drive along this road saw the genesis of Ovia’s real estate empire.

 

“I saw an opportunity on this refuse dump and decided to transform it into something else. The result of this foresight is the famous Lagos Civic Centre–a masterpiece event venue on the waterfront. This development immediately opened up other opportunities,” says Ovia.

 

Lagos, a metropolitan mega-city with a population of around 21 million, scores poorly when it comes to hotel rooms per head. Ovia saw the gap. As the result of a multi million dollar deal, the Lagos Marriott Hotel is set to open in December next year.

 

“This is one of the ways to create an enabling environment for the future of tourism in Nigeria,” says Ovia.

 

Philanthropy is equally important to him. He has embarked on the establishment of a free, co-educational high school, James Hope College, in Delta State, the place where he pondered his future as a young man. The school, an 18-month project, launches in September with an initial capacity for 420 students. He is also the founder of Mankind United To Support Total Education (MUSTE), an organization providing scholarships for the underprivileged.

 

“This will provide an opportunity for our future leaders. It is a mission I’m thrilled to drive, as it is a great investment in the future of my country. The first thing you learn in business is to make profit. However, how you choose to spend the profits is just as important. Philanthropy is important to me as I derive more joy from spending mine this way. You need to give back, reach out to the larger society and less privileged,” he says.

 

In the past year, Ovia gave $6.3 million to help the rehabilitation of flood victims across Nigeria. He also runs a non-governmental organization for young Nigerian that drives social change through information and communications technologies. Ovia is a father of five and a family man.

 

“Family is very important and I derive tremendous joy from being with (them). I’ve always been family-focused. My father had three wives and I have almost a dozen siblings but we’ve always been very close-knit,” he says.

 

While he is revered by many, Ovia has also been influenced by a few. One of his inspirations is Akintola Williams, the first African to qualify as a chartered accountant, whose firm, Akintola Williams & Co., was founded in 1952. The company merged with two other accounting firms to create Akintola Williams Deloitte, the largest professional services firm in Nigeria today–a position it has held since 2004.

 

“This 94-year-old man is someone that I have so much respect and gratitude for. He inspired me very greatly, because he’s a man of honour, integrity and an unbelievable level of discipline,” says Ovia.

 

Ovia learned from many to become the fourth richest man in Nigeria and the 19th richest in Africa. I ask him about his fortune but he becomes reticent.

 

“Wealth means nothing to me–it’s what you do with it that is truly important. Yes, I am blessed but there is really nothing special about me. I’m just a regular guy who has a hunch for identifying opportunities and taking advantage of them.”

 

He says that he achieved his success by remaining truthful to every partner and stakeholder.

 

“Honesty and integrity are key. Always honour contracts. That speaks volumes. It’s very important to be of tremendous integrity. There are really no shortcuts. Those who try to take shortcuts will always fail,” he says.

 

When it comes to Nigeria and its entrepreneurs, Ovia is fulsome, believing that with improving infrastructure and the privatization of the power sector, the country is a breeding ground for entrepreneurial spirit.

 

“Nigeria will be a gold mine in the next few years… Every day, international airlines are fully-booked to come to Nigeria and the only reason they do this is because the return on investment here is one of the highest in the world. I’m very proud to be a Nigerian because this country gives… tremendous opportunity to blossom,” he says.

 

Nigeria is a country that rewards hard work and Ovia says that some foreign investors misunderstand the terrain. The solution, he says, is understanding that while the work is tough, it is very rewarding.

 

Zenith has seen the fruits of this kind of hard work. This was reflected in the 2012 financial year, as it achieved $634 million profit after tax, according to reports released by the Nigerian Stock Exchange (NSE) a grand feat that not only saw it become the first bank to cross the 100 billion naira mark within a financial year, but also reflected an impressive 106.7% growth on the $303.2 million profit after tax recorded for the 2011 financial year.

 

Zenith is now Nigeria’s largest bank. It recently listed $850-million worth of shares on the London Stock Exchange at $6.80 a share, to improve its liquidity through Global Depository Receipts (GDR). It has a current market capitalization of around $4 billion, according to the NSE.

 

In recognition of his accomplishments in the banking sector, Ovia was conferred with the national award of the Commander of the Order of the Niger (CON) in November 2011.

 

From these achievements, it may seem to many that Ovia has reached his zenith with a sharp mind that once saw value in a refuse dump.

 

• Culled from FORBES Africa.

Posted On Sunday, 23 June 2013 19:50 Written by

In an effort to strengthen market competitiveness, ensure growth and profitability, Champion Breweries plc has concluded required processes towards recapitalization, Shuaibu Ottan, Chairman of the company said at the company’s 2011 and 2012 combined annual general meeting in Lagos.

 

He said that refinancing of existing debt through conversion to equity and injection of fresh cash to the company through rights issue were key success factors that must be embarked upon; adding that efforts were being made to secure the cooperation and commitment of major shareholders to participate in the refinancing programmes.

 

Giving accounts of the 2011 financial year, Ottan disclosed that the company recorded a loss of N1.8 billion, stressing that the huge down-turn was principally due, in part, to the N603.5 million committed to the overhauling of the company’s production equipment to enhance improved capacity to function efficiently and achieve its set production targets.

 

Other factors that contributed to the loss, according to the chairman, were interest cost of N517 million arising from the company’s accumulated debt burden, and the N716m on depreciation occasioned, partly by the evaluation of assets during the year.

 

According to him, the trading results for 2012 continued on the negative trend as in previous years. He noted that turnover remained stable at N1.8 billion; while loss of N1.3 billion was recorded for the year. Interest cost of N707 million and depreciation charge of N782 million resulting mainly from asset revaluation, are major contributing factors to reported loss.

 

He pointed out that efforts must be geared towards resolving the issues surrounding the planned debt re-financing as well as improvement on the utilization of installed capacity of the brewery towards positive turnaround of the business performances.

 

Ottan further explained that with the support of professional advisers, the various restructuring options were fully considered before the company resolved to go for the following order of refinancing; debt-to-equity conversion, allotment of shares on deposit for shares account balances and right issue.

 

In the board meeting of 7th of June, 2012, he disclosed that the board approved a share conversion price of N1.85 per share for the debt-to-equity conversion. He said this was based on the fact that valuation methods such as discounted cash flow do not ascribe value to the company’s shares in view of its huge debt and interest burden.

 

After taking into consideration the recently concluded acquisition by Consolidated Breweries Plc of the 57 per cent shareholding in Champion and the regulatory filings for the transaction, which included a price of N1.85 per share, he said the price range for the debt-to-equity conversion of 50 kobo to N1.85 per share was considered.

He said, ‘’this means that 3.1 billion ordinary shares will be allotted to Consolidated Breweries to reduce the company’s debt with N5.735 billion’’. The board also resolved to propose an increase in the Authorized Share Capital.

Posted On Wednesday, 19 June 2013 12:51 Written by

Fund managers and investors are wondering if the biggest one day drop in Nigerian equities is the start of a bear market, or just a healthy correction after the huge run up in share prices year to date.

The equities market created a historical record last Thursday as Nigeria’s All-Share Index (NSEASI) declined by 3.88 percent on speculation that foreign investors exited the world’s fifth-best performing exchange this year, on concerns that global stimulus measures may ease.

“Ex-Dangote Cement {DANGCEM} the market return would have dipped by 5.32 percent. Neither of which has been recorded in the last  six years, even during the peak of economic recession in 2008,” said Meristem securities analysts in an equities market update.

A bear market is a general decline in stock prices of 20 percent from its most recent highs, while a stock market correction, or pullback, is when the stock market declines 10 percent or less in a relatively short period of time.

While corrections are often a great place for a value investor to find an entry point, bear markets rarely provide great entry points, as timing the bottom is very difficult to do.

“I think this is a correction, but history warns us that after one of the great crashes (1929, 1973, 2007) there is often another big challenge some eight years later (1937, 1980-82, 2015?),” Charles Robertson, Global chief economist at Renaissance Capital, said in an email response to questions.

“This may come from Fed tightening or problems in the Eurozone. But for now, we assume this is a modest correction and that investors are likely to gently return to the markets in emerging and frontier that have sold off.”

Frontier markets such as Nigeria had until last week been proving resilient to the three-week old selloff that had erased $1.9 trillion of global equity value.

The gauge has gained 37 percent this year, boosted by a 55.4 percent gain in DANGCEM. Nigeria’s economy, which expanded by 6.3 percent last year, is forecast to grow 7.2 percent in 2013, according to the IMF.

However as offshore investors exited the domestic bond market earlier this week, on fears that the Federal Reserves loose money policy is nearing an end, stock market investors seem to have taken a cue and followed suit.

The foreign portfolio inflow in the system is equivalent to 25 percent of current dollar reserves of $48.4 billion, and about 10 percent of that is in fixed income and 90 percent in equity, meaning that offshore money in equities is a sizable $10.89 billion or 14.52 percent of Nigeria’s stock market, valued at $75 billion as at last Wednesday, before the sell off.

The naira, which strengthened 3.9 percent against the dollar last year and was the continent’s best performer, has retreated 1.8 percent this year to N159 per dollar. A drop in the naira erodes the capital gains of foreign investors.

“The key question is whether the NSE can continue to trend higher,” Samir Gadio, an emerging markets strategist at Standard Bank, London said.

“Add to this rising fixed income yields in Nigeria and the upwards pressure on USD/NGN, and one may start thinking that the rally in Nigerian equities is becoming over-extended.”

Nigerian bond yields have been rising as the emerging markets fixed income carry trade unwinds.

The yield on Nigeria’s benchmark ten-year government bond due January 2022 last week rose to their highest since the October addition of  Nigerian bonds to JPMorgan’s emerging market bond index.

The yield on the 2022 securities has risen from a low of 11.68 percent in January to 13.90 percent last Thursday, according to data from the Financial Markets Dealers Association, FMDA website.

Foreign investors accounted for 43 percent of trade on the NSE in March and 61 percent in all of 2012, while net foreign inflows into Nigerian equities amounted to N29.3 billion($182 million) in March, compared with N93.8 billion in 2012,according to data from the bourse.

Posted On Monday, 17 June 2013 10:51 Written by

Nestle Nigeria Plc (NESTLE), the West African nation’s largest food company by market value, headed for its largest retreat on record as investors sold shares on speculation the stock was overvalued, FBN Capital Ltd said. 

The stock fell for a second day, sliding as much as 10 percent, the most on a closing basis since at least Jan. 25, 2002, when Bloomberg started compiling the data. It traded 7 percent lower at 930.01 naira by 1:26 p.m. in Lagos, Nigeria’s commercial capital. About 1.7 times the three-month daily average volume of shares were traded. 

Nestle Nigeria’s shares jumped in May, pushing its relative-strength index above 70, an indication to some traders that the stock may be overbought. The level dropped to 35.6 Thursday as the shares’ decline over the past five trading days extended to 16 percent, the fourth-worst performer on the Nigerian Stock Exchange’s All Share Index. 

“There is a general selloff after the price rally,” Bunmi Asaolu, an analyst at Lagos-based FBN Capital, said today by phone. “Our target price for the stock is 852 naira, based on cash flow.” 

Nestle Nigeria said on May 3 net income for the three months through March declined to 5.99 billion naira ($37 million) from 6.2 billion naira a year earlier. Revenue rose to 30.7 billion naira from 28.7 billion naira, it said. 

The company’s shares rose 29 percent this year, in line with a 29 percent gain in the all-share gauge. 

Posted On Thursday, 13 June 2013 19:33 Written by

Nigerian banks’ ratio of non-performing loans to total credit plunged to 3.8 percent in April from 35 percent in November 2010 as bad debt was shifted to a government-sponsored agency, the central bank said.

The decline followed the takeover of 4.7 trillion naira ($29.7 billion) of poor-quality loans by the Asset Management Corp. of Nigeria, or Amcon, Central Bank of Nigeria Governor Lamido Sanusi said today at a conference in Lagos, the nation’s commercial capital.

Nigeria implemented new banking regulations following a debt crisis in 2008 and 2009. The central bank fired eight chief executives of the country’s 24 banks and created Amcon to buy lenders’ bad debts and stabilize the industry. Amcon spent 5.6 trillion naira in 2011 to acquire the non-performing loans, Chief Executive Officer Mustafa Chike-Obi said in December.

Nigerian banks have seen improvements in risk management and corporate governance following the changes, Sanusi said. Risks to the banking system include “rising flow of hot money into the financial system and terrorism,” he said.

Posted On Monday, 10 June 2013 13:02 Written by

SHAREHOLDERS of FBN Holdings Company (Holdco) Plc, on Friday, endorsed the company’s N33billion dividend, culminating to N1.00 per share due to every shareholders of the company for the 2012 financial year.

The shareholders who spoke at the 1st yearly general meeting of the company in Lagos recently commended the management for the efficient running of the affairs of the group, as well as repositioning it to profitability amid harsh economic environment.

The National Coordinator, Independent Shareholders’ Association of Nigeria, Sir. Sunny Nwosu who commended the management on the inaugural meeting submitted that with capital adequacy of the group which had exceeded regulatory requirement and the current balance sheet  which stood at N3 trillion, the future of the company was secured.

Nwosu, therefore, advised the company to ‘work’ on its savings by accessing cheap fund in order to enhance its operations.

He expressed the need for the company to plan ahead on the removal of Commissions on Transactions (COT) in the next two years, while urging them to ensure that the process involved in disposal of its assets would be done in a transparent manner.

The National Chairman, Progressive Shareholders’ Association of Nigeria, Mr. Boniface Okezie urged the company to consolidate on the performance by ensuring that all the subsidiaries contributed to the overall growth of the company.

“The awards received so far have shown that the bank and the company are doing well. I commend the board for transforming the bank especially in the area of service delivery and I urge you to sustain this aggressive banking to consolidate on the efforts.”

Responding, Chief Executive officer of FBN Holdings,  Bello Maccido said: “I am pleased to present the maiden results of FBN Holdings following its restructuring as a non- operational holding company with oversight of four major business groups; namely, commercial banking, investment banking and asset management, insurance and other financial services. During 2012, the group delivered robust results with a year-on-year increase in gross earnings of 31per cent, while profit after tax rose 306 per cent and the group delivered broad based improvement across all key ratios.

“Having now restructured the business, the focus is on consolidating the group’s leadership position in Nigeria, providing financial solutions to our customers across the entire value chain and growing our different business lines. Strong natural synergies and cross-selling opportunities exist across the group, and we are intensifying our efforts to facilitate the realisation of these synergies, crytallise cross selling opportunities and deepen the relationship with our customers.

“The solid retail platform in the commercial banking business gives us the ability to harness latent growth in our insurance and asset management businesses. We believe the approach of revenue maximisation, underscored by implementation of robust risk management practices, will enhance shareholder value in the medium to long term.”????

He explained that with FirstBank taking a leadership position in sub-saharan Africa, the group had put structures in place that would put other subsidiaries at the fore to contribute to the overall growth of the company.

In readiness for the COT, which would take effect in the next two years, Maccido said that the group had last year reinforced its position as a retail franchise by adding 70 branches to the existing ones, thereby bringing the number of branches to 807.

“This would drive the mobilisation of low cost deposit so that we locate ourselves to other areas and where we loose on COT, we compensate ourselves with volume.”

He said that the group had obtained license to operate on mobile money transfer (First money) without any equity partnership with any telecomm firm in order to derive the benefits inherent in the business.”

Posted On Monday, 03 June 2013 03:40 Written by

THE Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, said that out of the N5.7 trillion bonds, the apex bank is holding N3.6 trillion, under the Special Class bond, which it used as a risk mitigation strategy.

Sanusi made the disclosure in Lagos, at the first National Risk Management conference, with the theme: “Our Ever-Changing Risk Context: New Channels, New Risks.”

Sanusi explained that AMCON, as an agency under the regulation of CBN, did not just purchase non-performing loans, but that it was a measure to fill in the hole that existed because of theft and recklessness in the financial system, leaving a negative networth in many financial institutions.

“The unique thing we did, in recognition of the hole that was created was to have a structure that prevented the loan taken by AMCON from being borne by government and taxpayers and agreed with the banking industry that they will put in the money over 10 years.

“Today, AMCON has bonds with a face value of N5.7 trillion, with CBN holding N3.6 trillion value. This was not the original intent, but also part of the risk management.

“Many banks that got early bonds, did so when interest rate was seven per cent and by the time we completed the capitalization of the other banks, interest rate has moved up with about 500 to 600 basis points. This would have been huge erosion of the capital of those banks and that would have just thrown these banks back to where they were.

“So, CBN swapped the AMCOM bonds for Open Market Operations bills and other instruments that will not carry those market risks and we had N3.6 trillion out of N5.7 trillion. AMCON is expected to pay back N1.7 trillion by December this year or at least refinance it and N4 trillion next year,” he said.

CBN governor said the option of the apex bank’s bond holding was weighed against raising fund through European bonds and domestic capital market, noting that it would have compounded the risks with the economic issues in Europe and the prevailing interest rate of 13 or 14 per cent in the country.

“There was no way AMCON would have paid back in 10 years, unless we doubled or tripled the levy on the banks, which would have been reactionary too. It would have been a situation where banks had to pay one or 1.5 per cent of their balance sheet every year to service an extensive debt.

“We also worked out how much AMCON can pay by December this year. The idea was that if it can stretch itself, it can build up its current N800 billion to about N1.1 trillion, which is enough to pay every holder of AMCON bond maturing in December 2013, except CBN.

“Now, CBN will refinance and restructure the N3.6 trillion bond it invested with a coupon of six per cent. By October 2014, AMCON’s N980 billion bond under series five will mature, which AMCON will pay with sinking fund and recoveries. Actually, after December this year, AMCON will be left with the Special Class bond with CBN only,” he said.

Posted On Monday, 27 May 2013 18:13 Written by

Guinness Nigeria Plc (GUINNESS), the West African nation’s second-largest brewer, said nine-month profit declined 18 percent as weak consumer spending stifled growth.

Net income fell to 7.6 billion naira ($48.3 million) in the nine months through March, compared with 9.3 billion a year earlier, the local unit of London-based Diageo Plc (DGE) said today in a statement on the Nigerian Stock Exchange website. Revenue climbed 3 percent to 94.9 billion naira, while cost of sales increased 7 percent to 48.2 billion naira.

 

Inflation in Africa’s most populous nation raised raw material costs and crimped consumer spending on beer and non-alcoholic beverages, Guiness Nigeria Chief Executive Officer Seni Adetu said on a conference call in February. The company’s management is scheduled to host a call with analysts at 2 p.m. local time in Lagos, Nigeria's commercial capital.

 

“It would appear that the company has not yet recovered from the squeeze on household wallets that affected most consumer names last year and brought about a slowdown in beer consumption,” Tunde Abidoye, a Lagos-based analyst at FBN Capital Ltd., wrote in an e-mailed note today. “In addition, we feel Guinness Nigeria’s beer volumes are seeing increasing competition from both traditional rivals such as Nigerian Breweries Plc (NBL) as well as SABMiller Plc (SAB), which is making in-roads into the low-end segment of the Nigerian beer market.”

 

Guinness Nigeria’s share price was unchanged at 280 naira at 12:03 p.m. in Lagos trading. The stock has increased 1.8 percent this year, compared with a 28 percent gain on the Nigerian Stock Exchange All-Share Index (NGSEINDX).

 

Posted On Thursday, 16 May 2013 13:46 Written by
Page 47 of 52

Newsletter