Category: Capital Market

The Nigerian Exchange (NGX) and CFA Society Nigeria are set to host a series of workshops and trainings aimed at building capacity of market participants and deepening liquidity for derivatives products in the capital market.

The first in the series of workshops, themed “Derivatives and the Nigerian capital market”, will hold on Wednesday, via Zoom.

The virtual workshop will bring together key players across Nigeria’s financial industry including institutional and retail investors, asset managers, PFAs, regulators, banks, and other capital market operators to discuss the role of derivatives in the capital market and how to drive participation of both domestic and foreign investors in the derivatives market. In addition, the workshop will help market stakeholders better understand Exchange Traded Derivatives products as tools for managing price volatility risk in the Nigerian capital market.

Some of the confirmed speakers for the event include Temi Popoola, CEO, NGX; Ibukun Oyedeji, CFA, President, CFA Society Nigeria; Rufus Kariuki Gitau, CFA, Business Development Manager, Nairobi Securities Exchange; Farooq Adedayo Oreagba, Partner, Karaho Capital Partners; Klaus Paester, CFA, Senior Director Institutional Relations EMEA Region, CFA; Jayesh Mehta CFA, FRM, CA (SA) Consultant; Russel Jude, CFA, FRM, CA (SA) Program Head, EDGE Designations and Fola Abimbola, CFA, Frontier Africa Research, Standard Bank Group.

Jaiz Bank Plc plans to grow its domestic home market share and explore opportunities in other countries to become one of the three leading non-interest banks in Sub-Saharan Africa (SSA) in the next five years.

Managing Director, Jaiz Bank Plc, Mr. Hassan Usman, who spoke at a media parley in Lagos, said the bank was investing heavily in technology and expanding its nationwide branch network across the six geopolitical zones to accelerate growth and enhance engagement with customers.

Usman spoke against the background of the commissioning of the latest branch of the bank last week in Akure, Ondo State by Governor Rotimi Akeredolu.

The management of the bank also at the weekend released its forecasts for the second quarter, with profit before tax expected at N1.73 billion within the three-month period ended June 30, 2022.

The three-month forecasts for the second quarter ending June 30, 2022 indicated that the bank plans to achieve gross earnings of N9.15 billion in second quarter 2022 with net operating incomes of N5.88 billion. Profits before and after tax are projected at N1.73 billion and N1.56 billion.

Usman said the bank remains determined to be a major player in the non-interest banking in SSA and would continue to explore partnership opportunities with fintechs to present its unique products and services to customers across the SSA.

“We have virtually all the channels that any conventional bank has, we have internet banking, mobile banking, USSD, POS and ATMs.

“What we are doing now is to see how we can strengthen these channels, expand the capability to have more partnership and strategic relationship with fintech institutions that can support the next phase of our growth and trajectory,” Usman said.

According to him, the bank is currently working with fintechs to strengthen and expand its digital channels as a non interest-banking group to support next phase of its growth trajectory.

“We want to remain on top of the chart in non-interest banking sector in Africa. We want to be a leader in Sub-Saharan Africa. We are adopting strategies to get to other sub-Saharan African countries,” Usman said.

He assured that the bank would continue to support small businesses with working capital and funding for growth and expansion.

He pointed out that 20 to 25 per cent of the bank’s portfolio is made up of small and medium-sized enterprises (SMEs).

He explained that the economy needed financial institutions to support the growth of small businesses.

“We have an ever-growing young population coming with opportunities and the next phase of development for Nigeria is not about people looking for employment, but people becoming employers of labour to grow the economy.

“That’s why we are focusing on SMEs to empower people in order to remain a peaceful nation for growth and development of the economy,” Usman said.

He however noted that for a bank to meet the aspirations of customers in the current milieu, such bank must invest heavily in technology, adding that this understanding explains Jaiz Bank’s investments in technology.

He added that the bank was poised to consolidate and create more resilient digital channels with annual growth rate of 40 per cent  and a balance sheet of N300 billion at the end of 2021 financial year.

On the challenges in the industry, he said the bank’s major challenge in the first five years was absence of the needed infrastructure to support non-interest bank.

He said lack of awareness of the non-interest product was another challenge experienced at beginning.

Usman said the bank had overcome the challenges and would welcome more players in the industry.

Access Bank Plc recorded impressive growths in incomes and profitability in 2021 with pre-tax profit rising by 40 per cent to N176.7 billion.

With 51 per cent growth in net profit after tax to N160.2 billion, the board of directors of the bank has recommended distribution of N35.6 billion to shareholders as cash dividends for the 2021 business year. Shareholders will receive a final dividend of 70 kobo per share, in addition to interim dividend of 30 kobo per share paid earlier in the year, bringing total dividend per share for 2021 to N1.

Key extracts of the audited report and accounts of Access Bank for the year ended December 31, 2021 showed that gross earnings rose by 27 per cent from N764.7 billion in 2020 to N971.9 billion in 2021. A breakdown indicated that the core business interest incomes accounted for 62 per cent while non-interest income contributed 38 per cent. Profit before tax grew by 40 per cent N176.7 billion in 2021 as against N125.9 billion in 2002. After taxes, net profit leapt by 51 per cent from N106 billion to N160.2 billion.

The balance sheet also improved considerably with total assets rising by 35 per cent from N8.7 trillion in 2020 to N11.7 trillion in 2021. Customer deposits also rose from N5.6 trillion to N7 trillion. Net loans and advances increased from N3.6 trillion to N4.4 trillion. The credit risk management of the bank remained increasingly efficient with the ratio of non-performing loans to gross loans and advances dropping from 4.3 per cent in 2020 to 4.0 per cent in 2021.

Further analysis showed Return on Average Equity (ROAE) of 17.8 per cent. The bank also sustained robust capital and liquidity positions, well above regulatory levels with a Basel II Capital Adequacy Ratio of 24.5 per cent and a Liquidity Ratio of 51.0 per cent.

Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe said the last year’s results underscored the fact that the bank’s diversified business model has continued to yield positive sustainable results.

According to him, guided by a robust risk management framework, the bank continued to grow its business cautiously while recording sound prudential ratios.

“This year’s results reinforce our resolve to generate sustainable returns despite challenging market conditions,” Wigwe said.

He noted that the bank’s strong balance sheet positions it to support customers across various markets and adequately execute its expansion strategy.

He outlined that in order to actualise its vision of becoming the world’s most respected African bank and Africa’s payment gateway, the bank has taken strategic strides to create indelible footprints across the African continent. These footprints include most recent additions in South Africa, Botswana, and Guinea. It also strengthened its business in Mozambique and Zambia, with noticeable improvement in rankings and market share.

He pointed out that in 2021, the bank successfully issued the first Additional Tier 1 (AT1) Eurobond out of Nigeria, a $500 million instrument that enhanced the bank’s capital ratios and provided significant headroom for growth and the execution of its strategic objectives. The bank also issued a $500 million Senior Unsecured Eurobond in 2021, elongating the duration of its foreign exchange balance sheet and strengthening its liquidity.

“2022 is pivotal for our franchise, as we conclude our 2018-2022 corporate strategic plan. In the year, we will focus on a disciplined implementation of our strategy to drive efficiency and operational excellence across all segments, expand revenue and increase profitability, with enhanced focus on risk management practices and a disciplined cost containment structure.

“As we go into our next five-year strategy cycle, we are realigning the franchise for growth, by transitioning into a holding company (HoldCo). This will enable us to unlock and capture available non-banking opportunities in the market, that would lead to the diversification of our earnings, drive efficiency, and grow scale while maintaining our moderate risk management approach.

“Having met regulatory requirements and obtained the court sanction, we expect the HoldCo to become operational is the first half of 2022. This will lead to the delisting of Access Bank Plc’s shares on the Nigerian Exchange (NGX) and listing of Access HoldCo shares,” Wigwe said.

 

Finance and economic experts have expressed optimism on the economic outlook of the country in spite of uncertainties moderating the performance of the economy.

Experts, who spoke at the fourth Coronation Merchant Bank’s interactive session series said the  economic outlook is positive, although there are uncertainties that need to be addressed.

The theme of the virtual event is: “Nigeria’s economic landscape – a blend of optimism and uncertainty”.

Speakers included Dr. Biodun Adedipe, founder/Chief Consultant, Adedipe Associates; Dr. Andrew Nevin, Advisory Partner and Chief Economist, PwC Nigeria; Chinwe Egwim, Chief Economist, Coronation Merchant Bank and Prof. Joseph Nnanna, Chief Economist, Development Bank of Nigeria.

Giving his economic prediction for the year, Nevin expressed optimism noting that Nigeria has a bigger economy and more economic activities than being thought.

“The official number from National Bureau of Statistics is about N20 trillion in the fourth quarter which understates the economy perhaps as much as 25 per cent. We also have a smaller population than estimated, so we are actually richer than we think,” Nevin said.

Delivering her macroeconomic presentation, Egwim said on the back of specific factors, there could be upward pressure on prices.

“Overall, consumption patterns are relatively better and are almost mirroring pre-pandemic levels. However, we must note that consumer pockets are still steadily being rebuilt,” Egwim said.

Speaking further on the economic landscape ,  Adedipe noted the pattern in the last 10 years of non-oil sectors accounting for between 77 per cent and 82 per cent in terms of contribution to Gross Domestic Product (GDP), while the oil sector has repeatedly accounted for less than 10 per cent.

“It is obvious that what drives the economy is the non-oil sector and that is where we will have to pay a lot of attention. Looking at this in the context of where we are, I see an economy that will grow very strongly, and I expect growth to be sustained this year,” Adedipe said.

Nnanna added that Nigeria needs to restructure its economy by moving from the factors of production within and across different sectors towards high productivity so that diversification can be achieved through encouraging private investments, foreign investments and improving infrastructure, among others.

Managing Director, Coronation Merchant Bank, Banjo Adegbohungbe, outlined that there were some factors, both positive and negative that are expected to influence the macroeconomic landscape in the year.

“The lessons learnt on resilience as Nigeria embarked on a recovery path in 2021 will be critical in shaping the business and macroeconomic environment this year,” Adegbohungbe said.

He assured that the bank will continue to hold sessions on topical issues relevant to the markets and the economy.

 

Access Bank Plc is concluding arrangements for its transition from a commercial banking group to a holding company (holdco).

In a regulatory filing at the weekend, Access Bank confirmed that the Federal High Court (FHC) has sanctioned the scheme of arrangement for the transition.The sanctioning of the scheme by the court rounded off the approving phase of the scheme, allowing the bank to conclude the transaction.

The transition to holdco had earlier been approved by shareholders of Access Bank at a combined physical and virtual court-ordered meeting. The bank had also secured the “no-objection” approval of the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN).

The transition will enable the group to invest in non-banking subsidiaries, a move that places the first tier bank in a pillar position to expand into a global one-stop financial services group.

Under the transition arrangement, the entire issued share capital of Access Bank comprising of 35.545 billion ordinary shares of 50 Kobo each will be converted into same shares of holdco and distribute to all shareholders of Access Bank on the basis of one share of Access Bank in exchange for one share of the new Access Holdings Plc.

Thereafter, Access Bank Plc will be delisted and Access Holdings Plc will be listed on the Nigerian Exchange (NGX). The immediate members of the holdco will be Access Bank and its subsidiaries including Access Bank (Gambia) Limited; Access Bank (Sierra Leone) Limited; Access Bank (Rwanda) Plc; Access Bank (Zambia) Limited; Access Bank (R.D Congo) S.A.R.L; Access Bank (Ghana) Plc; Access Bank (Guinea) S.A; The Access Bank (UK )Limited; Access Bank (Mozambique) S. A; Access Bank Kenya Plc; Access Bank (South Africa) Limited; and African Banking Corporation of Botswana Limited.

The holdco is, however, expected to make new major investment moves in the next few months, according to insiders with knowledge of board and management strategies.

Chairman, Access Bank Plc, Dr. Ajoritsedere Awosika, said the restructuring of the banking group into a holdco will enable the group to have a structure like that of some major global financial institutions, including those that Access Bank considers to be its peers and competitors.

According to her, the Board expects that the restructured group will have greater flexibility to adapt to future business opportunities, market and regulatory changes than is the case.

She outlined that the restructuring was necessitated by several rationales including the need to comply with regulatory requirements, growth and expansion, diversification, risk management, ease of funding, capital allocation, and speed of decision making.

According to her, the holdco structure ensures full compliance with CBN’s Regulation on the Scope of Banking Activities and Ancillary Matters (Regulation 3), 2010, which repealed the Universal Banking Guidelines and limited the ability of banks to undertake non-banking business, as well as Guidelines for Licensing and Regulation of Financial Holding Companies in Nigeria, 2014.

“Due to its oversight function, the holdco structure will facilitate the business growth of the banking group and expansion of services into underpenetrated regions in Nigeria, Africa and beyond.

“The holdco structure will enable Access Bank to diversify its business portfolios into new areas within the financial service industry that are permissible by the CBN holdco regulation.

“The holdco structure would ring fences each business from the risks of the other, by preventing the business performance of one business from affecting the performance and valuation of another, Accordingly, under the holdco structure, the assets of the bank are ring-fenced from the non-banking businesses,” Awosika said.

She added that the new structure will facilitate a consolidated financial strength of the group, which will improve access and ability to raise capital with benefits including lower transactions costs, amidst others.

According to her, the holdco structure will also expedite capital and liquidity, and provide flexibility to accommodate leverage with minimal risk to regulatory ratios.

She pointed out that the new structure would unburden the bank from oversight functions and responsibilities of managing the subsidiaries and ensure the bank is solely focused on its core operations. This fosters faster decision-making and business growth.

“The Board considers the restructure to be the most appropriate approach to create greater strategic flexibility and diversification of the group’s revenues.

“The restructure will result in shareholders holding shares in the holdco in the same proportion as their current holdings in the bank and the bank’s shares being held wholly by the holdco, which will be a regulated entity for CBN purposes.

“The bank will continue to be subject to the full suite of CBN banking regulations and, in all other material respects. The banking subsidiaries will continue to be subject to the oversight of the respective prudential regulatory authorities in their jurisdictions. The group’s firm-wide risk management framework will continue to apply across the entire restructured group,” Awosika said.

She urged the shareholders to approve the scheme document noting that the board considers the terms of the scheme to be fair, reasonable and in the best interests of the shareholders.

 

Directors of Learn Africa Plc have approved resolutions that will enable the education publishing company to combine new organic and inorganic strategies to drive its growth.

A regulatory filing by the company at the weekend indicated that the Board of the company at its meeting last week approved a resolution to table a recommendation to the company’s shareholders seeking their authorisation to raise additional equity capital through rights issuance or other means upon such terms as the Board may deem fit.

The Board also agreed to seek mandate of shareholders to enter into consideration with Hitch Technologies and other targeted company that the board may deem fit for a potential acquisition, subject to due diligence and obtaining approvals from relevant regulatory authorities.

Also, the Board will be seeking shareholders’ consent to appoint such professional advisers and other parties to ensure the successful execution of the fundraising exercise, merger and acquisition and rights issue.

Shareholders are also expected to empower the board to take all such incidental, consequential and supplemental actions and execute all requisite documents, notices, letters, agreements as may be necessary to give effect to the three earlier resolutions, and all such other actions as may have already been taken by the board in furtherance of the above resolutions, prior to the date of this meeting be and are hereby ratified.

Formerly known as Longman Nigeria, Learn Africa was incorporated in August 1961. Its shares were listed on the Nigerian Exchange in July 1996.

Learn Africa’s principal activity is publishing and distribution of educational materials for all levels of learning including nursery, primary, secondary and tertiary education.

FMDQ Securities Exchange Limited (FMDQ Exchange) has admitted for listing on its platform, the Coleman Wires and Cables (Coleman Technical Industries Limited) N6.05 billion Series 3 and 4 Commercial Paper (CP) under its N20 billion CP issuance programme.

The additional working capital, according to the Managing Director of Coleman, Mr. George Onafowokan, would enable the company to increase the capacity of its business.

He said the significance of the new development to Coleman was the fact that it will give the company alternative funding from the debt capital market via Pension Fund Asset (PFA) managers, Asset Managers, and other fund managers.

“The additional working capital available to us through CP will impact our capacity and efficiency that we can then build on as a company to increase the availability of our products across the country at a more affordable price,” Onafowokan said.

In a statement, at the weekend, the Coleman boss emphasised that the Nigerian market as a whole would benefit from the company’s access to alternative funding at a better rate.

“The capital would translate to job creation because Coleman had embarked on the expansion of its capacity in the past year, and the company is expected to open three new factories in Sagamu, Ogun State,” he said, for instance.

Onafowokan said while two of the factories will be for the production of marine cables, one will be for gap cables for transmission. There is also an optic fibre cables factory to be open at Arepo in the next quarter. “We expect over 500 direct jobs and over 20, 000 indirect jobs,” he said.

The Coleman CEO, however, called for more support from the government to the cables industry to boost local local content.

“We expect to see more support from the government to the industry and a better impact on local content as we see with the Nigerian Content Development and Monitoring Board (NCDMB). This should be replicated in other agencies of government that are in power and other industries,” he said.

Onafowokan said he expects to see a lot of impacts from the ministries of Power, Works, and Infrastructure in enhancing the ability to deliver power projects at a cheaper cost to the country.

TrustBanc Holdings Limited and Prima Corporation Limited are raising about N9.4 billion in short term capital through the issuance of commercial papers (CPs).

TrustBanc Holdings is raising up to N4.4 billion under its ongoing series 6 commercial paper. The new issue is part of the company’s N10 billion commercial paper issuance programme.

TrustBanc Holdings is offering 270-day CPs at discount rate of 10.5984 per cent and implied yield of 11.5000 per cent. Application list for the offer opened at the weekend and will close on March 9, 2022.

Prima Corporation is raising up to N5 billion under its series 2 commercial paper (CP) issue as part of its N30 billion CPs programme. The funding date for the application is today.

Prima Corporation is offering 182-day CPs with discount rate of 12.2086 per cent and implied yield of 13.0000 per cent.

Minimum subscription for both offers is N5 million with multiples of N1, 000 thereafter.

Both companies will use the net proceeds of the issuances to fund short-term working capital requirements.

TrustBanc is the holding company for the operations of TrustBanc Financial Group, which  has more than N19.71 billion assets under management and total assets of N31.08 billion. Its portfolio includes asset management, securities trading and microfinance businesses.

Incorporated in March 1974, Prima Corporation commences operations on October 1, 2004.

It is the largest producer of preforms and caps in Nigeria.  Aside Nigeria, the company also exports its products to Ghana, Cameroon, Chad, Niger and Liberia.

This spread makes it the largest distributor of preforms and caps in West Africa. Prima Corporation is owned by Dellano Holdings Limited, which holds 99 per cent equity stake and Jotna Nigeria Limited, which holds one per cent.

Dobi AgriCo has launched 12 new greenhouses to further expand its business operations and meet the growing demand of customers.

Speaking at the launch of the new greenhouses, General Manager, DobiAgrico, Ayodeji Ibosiola, said the expansion was part the company’s overall strategy.

He said the expansion was in line with the overall ambition of the business, its growth strategies as well as its continuous effort to improve the nutritional well-being  of its immediate community and Nigeria as a whole.

“We are excited about this expansion programme because it enables us to meet the market demands while also satisfying out large customer base. With the growing expectations for the future in terms of export, this strategic expansion places us in the right path  towards achieving this feat; without a doubt.

“At Dobi AgriCo, we model our process with cutting-edge technology to cultivate high-quality crop produce. In 2020, we set a goal of expanding our production line, which we accomplished in 2021 by adding 12 greenhouses,” Ibosiola said.

Group Head, Human Resource, LATC, Abayomi Adepoju, said the expansion demonstrated the group’s commitment to positively impacting the agricultural industry and people’s lives through job creation.

“Building on this milestone,  we will expand our agribusiness footprint through a variety of initiatives that will have a long-term impact on food security, business growth, job creation, and nation-building in general,” Adepoju said.

The Board of Directors of Nestle Nigeria Plc has recommended payment of N40.03 billion to shareholders of the food and beverages company as cash dividends for the 2021 business year.

A breakdown of the dividend recommendation indicates that shareholders will receive a final dividend per share of N25.50 in addition to interim dividend per share of N25 earlier paid last December.

The dividend recommendation was almost the full distribution of the net profit after tax of N40.05 billion recorded in 2021.

Key extracts of the audited report and accounts of Nestle Nigeria for the year ended December 31, 2021 showed that turnover grew by 22.6 per cent from N287.08 billion in 2020 to N351.82 billion in 2021. Gross profit rose to N132.4 billion in 2021 compared with N119.2 billion recorded in 2020. Operating profit increased from N64.46 billion to N72.42 billion. Profit before tax increased marginally from N60.68 billion to N61.88 billion while profit after tax inched up from N39.25 billion in 2020 to N40.05 billion in 2021.

Managing Director, Nestle Nigeria Plc, Mr. Wassim Elhusseini described the 2021 results as an impressive performance in a challenging time.

According to him, the results showed the consistent dedication and commitment of employees to ensure that the company continuously delivers value to its shareholders, consumers, and the communities in which it operates.

“In 2022, our focus remains on ensuring the safety and wellbeing of our employees, as well as providing affordable nutrition to enable consumers to nourish their families daily, while we work together to benefit mankind and our planet.

“We will continue to push the boundaries of what is possible with foods, beverages, and nutritional solutions to enhance quality of life and contribute to a healthier future for everyone today and for generations to come,” Elhusseini said.