The Nation Newspaper

Category: Equities

  • Experts make case for Islamic finance

    Private and public sectors experts have affirmed the importance of the development of Islamic finance to the economy.

    Experts agreed that Islamic finance holds immense opportunities for financing of critical infrastructure and unlocking dormant capital in Nigeria.

    Experts spoke at the inaugural edition of the IFN Nigeria Forum organised by the Nigerian Stock Exchange (NSE) in partnership with REDmoney Group.

    The forum themed, “Harnessing the Islamic finance sector for infrastructure development and economic growth”,  brought together decision-makers, regulators and investors to discuss and share experiences on opportunities in the Nigerian Islamic finance market.

    The IFN Nigeria Forum 2019 featured a mix of panel sessions, onstage interviews and interactive sessions on a number of themes in Islamic finance including corporate financing and capital raising in Nigeria; funding infrastructure and social welfare requirements in West Africa and Islamic finance, investment, banking and takaful in Nigeria.

    Divisional Head, Trading Business, Nigerian Stock Exchange (NSE), Mr Jude Chiemeka, noted that Islamic finance sector has grown noticeably over the years, from about $1.5 trillion in 2016 to about $2 trillion in 2018, driven by growth in Islamic banking assets as well as growth in Sukuk issuances.

    He pointed out that while this growth has largely been concentrated within GCC region and in Asia; recent data suggest that Islamic financing is beginning to take root in Africa, with issuers across Gambia, Sudan, Senegal, Ivory Coast, Togo, as well as Nigeria in more recent times.

    Chiemeka, who represented the Chief Executive Officer of NSE, Mr Oscar Onyema, said Islamic finance marked a turning point and new paradigm for the financing of infrastructure in Nigeria with issuances such as the 2013 raising of N11.4 billion in a seven-year Sukuk by the Osun State Government to finance construction and rehabilitation of 27 schools in the state.

    According to him, the subsequent issuance of two N100 billion tranches of Federal Government of Nigeria Sukuk instruments by the Debt Management Office (DMO) were huge success and the proceeds were also used to finance the maintenance and construction of critical road infrastructure across the six geopolitical zones of the country.

    “The Islamic finance sector presents numerous opportunities for enhancing the economic fortunes of this country. From a domestic perspective, Islamic finance presents opportunities to unlock the dormant pools of capital present within our nation,” Chiemeka said.

    Read Also: ‘Islamic banking can help economy out of recession’

    He added that the development of a viable Islamic economy in Nigeria has far reaching implications within global markets, for investment managers seeking to achieve portfolio diversification.

    According to him, the ability for fund managers seeking Shari’ah-compliant investment products to diversify into the Nigerian markets will facilitate more foreign inflows which has implications for the economy through the attraction of low-cost funds for development.

    He assured that the NSE will continue to work with market stakeholders to ensure the development of a robust Islamic finance sector in Nigeria noting that the Exchange had in 2016 developed and publicized its rules governing the listing of Sukuk and similar debt securities to provide regulatory guidance for issuers seeking to list their instruments on its platform.

    He added that in line with the Securities and Exchange Commission’s (SEC’s) Non-Interest Capital Markets Product Master Plan, the Exchange identified five strategic pillars critical for the growth of the sector including a strong regulatory framework, capacity building, product development, robust primary and secondary markets, and market awareness programmes.

    “We have already started executing on these pillars and recently hosted a training exercise for the market. We will also continue to provide an efficient and liquid market for investors and businesses in Africa, to save and access capital. We promise to continue our collaboration with all market stakeholders, to collectively contribute towards the enhancement of this new asset class, and ultimately towards the growth Islamic finance in Nigeria and Africa at large,” Chiemeka said.

    Other speakers spoke on the opportunities in the Islamic finance sector. Director-General, Debt Management Office (DMO), Ms Patience Oniha, reiterated the commitment of the government to diversify the Nigerian capital market.

    She noted that the government’s issuance of sovereign Sukuk was aimed simultaneously at raising funds to finance critical infrastructure and to develop the domestic capital market.

    Other speakers at the event included Ms Mary Uduk, acting director-general, Securities and Exchange Commission (SEC),represented by Abdulkadir Abbas; Hajia Aisha Dahir-Umar, acting director-general, National Pension Commission (Pencom), represented by Dr Umaru Farouk Aminu, Head, Research & Strategy Management Department, Pencom; Hajara Adeola, managing director, Lotus Capital; Adeola Sunmola, Partner, Udo Udoma & Belo Osagie and Oluseun Olatidoye, Head, Debt Capital Markets, FBNQuest Merchant Bank.

  • Cadbury shareholders get N471m

    The Board of Directors of Cadbury Nigeria Plc at the weekendassured shareholders that it would continue to work to create more value for investors.

    At the Annual General Meeting (AGM) in Lagos, the board reiterated its commitment to sustaining the company’s dividend policy as shareholders approved the distribution of N471 million as cash dividend for the 2018 business year. Shareholders will receive a dividend per share of 25 kobo for the 2018 business year as against 16 kobo paid for the 2017 business year.

    Chairman, Cadbury Nigeria Plc, Mr. Atedo Peterside, said the company’s positive performance last year was driven by success of its cost-cutting measures, effective marketing strategy, and superlative performance of its various brands.

    He noted that the company re-launched its iconic cocoa beverage drink, Bournvita, with a new improved taste in 2018 in line with consumers’ tastes and preferences, pointing out that feedback from consumers indicated that the new Bournvita has gained wide acceptance.

    Read Also: Cadbury grosses N9.3b in Q1

    “Cadbury Hot Chocolate 3-in-1 brand, our treat portfolio, recorded substantial growth, driven by its unique offering, while our gum and candy brands also recorded success in their respective categories. In addition, we sustained our current price competitiveness, and increased our route-to-market coverage and footprint in 2018,” Peterside said.

    Key extracts of the audited report and accounts for the year ended December 31, 2018 showed that the company’s full-year profit before tax surged by 242.9 per cent to N1.2 billion in 2018 as against N350 million in 2017. Net profit rose by 174 per cent from N299.9 million in 2017 to N823 million in 2018.

    Shareholders commended the company for increasing its dividend payment, urging the board and management to sustain its growth trajectory.

    They charged the company to continue to evolve ways of consolidating on the performance of its brands, while exploring other options including local manufacture of Hot Chocolate 3 in 1, which is currently imported from Ghana, to create more jobs locally.

    Shareholders also commended Mondelez International and the board of directors of Cadbury Nigeria for the appointment of Mrs. Oyeyimika Adeboye as the first female Managing Director of the company, effective April 1, 2019.

    Shareholders said the appointment has restored confidence in the ability of Nigerians to lead multinationals, urging Adeboye to justify her elevation by sustaining the momentum built by the immediate past managing director by taking the company to greater heights.

    Shareholders also applauded the appointment of Mr. Ogaga Ologe, the company’s erstwhile Financial Controller, who was appointed as the new Finance Director.

    Mondelz International, a global snacking powerhouse, holds 74.99 per cent majority equity stake in Cadbury Nigeria, while the remaining 25.01 per cent are held by a diverse group of Nigerian individual and institutional investors.

  • Nigerian equities trading dwindles by N619b

    The momentum of trading on Nigerian equities has slowed down considerably over the past five months as investors continue to weigh potential returns against macroeconomic risks.

    Official data obtained at the weekend at the Nigerian Stock Exchange (NSE) indicated that the value of transactions at the Exchange dropped by 44 per cent or N619 billion in the past five months compared with the corresponding period of 2018.

    Total transactions, in terms of value, for the five-month period ended May 31, 2019 stood at N790.31 billion compared with N1.409 trillion recorded in comparable period of 2018, representing a drop of 44 per cent or N619 billion.

    The report indicated a slowdown in both foreign and domestic participation in the equities market. Total transactions by foreign portfolio investors halved from N697.3 billion in first five months of last year to N376.05 billion in the first five months of this year. This represented a drop of N321.25 billion or 46.07 per cent. Total domestic transactions also declined by 41.8 per cent or N297.92 billion from N712.17 billion recorded in the five-month period ended May, last year to N414.25 billion in the first five months of the year.

    Further analysis showed that domestic investors continued to dominate transactions during the period. Domestic investors contributed 51.02 per cent of total transactions during the period ended May 2019, inching up from 50.53 per cent recorded during the period ended May 2018. Foreign participation dropped slightly from 49.47 per cent last year to 48.98 per cent this year.

    Analysts at Cordros Securities said the outlook for the equities market in the short to medium term remains conservative, citing absence of immediate positive catalyst.

    “We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term,” Cordros Securities stated at the weekend.

    The slowdown in the momentum of transactions partly reflected the bearish pricing trend that had characterised transactions at the Exchange this year. Nigerian equities have traded mostly on the negative this year, although the listing of Nigeria’s largest telecommunication company, MTN Nigeria Communications Plc, provided a breather in May.

    Aggregate market value of all quoted companies at the NSE closed May 2019 at N13.685 trillion, N2.726 trillion above the opening value of N10.959 trillion for the month. The gains of N2.726 trillion included entry listing value of N1.83 trillion added by the listing of the 20.35 billion ordinary shares of MTN Nigeria at N90 per share.

    The benchmark index for Nigerian equities market, the All Share Index (ASI), indicated average return of 6.55 per cent for May 2019, equivalent to net capital gain of N718 billion when adjusted for the unabsorbed effect of the new listing. The ASI, which doubles as Nigeria’s sovereign equities index, rose from May 2019’s opening index of 29,159.74 points to close the month at 31,069.37 points.

    The May rally moderated the negative average year-to-date return, which had opened the month at -7.22 per cent, to -1.15 per cent for the five-month period. The ASI and aggregate market value of quoted equities had opened 2019 at 31,430.50 points and N11.721 trillion.

    Nigerian equities had suffered a major contraction in April as the bearishness at the stock market defied earnings reports and dividend recommendations. Quoted equities had recorded net loss of N714 billion in April. The ASI dropped from April’s opening index of 31,041.42 points to close the month at 29,159.74 points, representing average month-on-month decline of 6.06 per cent. Aggregate market value of all quoted equities also dropped from the month’s opening value of N11.672 trillion to close at N10.958 trillion.

    Nigerian equities had closed the first quarter with net capital depreciation of N49 billion, a sharp reversal from the bullish trading that saw equities with net capital gain of N1.38 trillion in first quarter of 2018. The performance in April further exacerbated the decline at the Nigerian equities market, which had suffered average decline of 17.81 per cent or about N1.89 trillion in 2018.

    With the decline in April, average decline in investors’ portfolio over the past 16 months had stood at 25.03 per cent, with net decline of N2.65 trillion in total market value of quoted equities. Meanwhile, Nigerian equities had recorded net capital gain of N4.36 trillion or average gain of 42.30 per cent in 2017, implying considerable upside for investors despite the decline in the past 16 months.

    The ASI opened 2018 at 38,243.19 points while aggregate market value of all quoted equities at the NSE opened 2018 at N13.609 trillion.

    Further analysis showed that the market started the year with a loss in January, rallied to appreciable recovery in February and relapsed into negative again in March.

    Nigerian equities lost N326 billion in January 2019, with average decline of 1.82 per cent. The ASI and market value of equities had closed January 2019 at 30,557.20 and N11.395 trillion.

    In February, investors in Nigerian equities netted N433 billion in capital gains as the stock market staged a major recovery. Average return for the month stood at 3.80 per cent. The ASI and market value of quoted equities had closed February higher at 31,718.70 points and N11.828 trillion. The market rounded off the first quarter with a net loss of N156 billion and average decline of 2.135 per cent in March, this year.

  • CAP optimistic as shareholders get N2.03b

    Chemical and Allied Products (CAP) Plc is optimistic that improved economy will lead to increased returns in the current business year. The board of directors yesterday assured shareholders that the company will take advantage of emerging opportunities to improve performance in 2019.

    The assurance came as shareholders yesterday at the annual general meeting in Lagos approved the payment of N2.03 billion as cash dividends for the 2018 business year. Shareholders will receive a dividend per share of N2.90 kobo for the 2018 business year.

    Acting Chairman, Chemical and Allied Products (CAP) Plc, Mr. Solomon Aigbavboa said the Nigerian economy was expected to gain traction this year, on the back of stronger household consumption and public spending.

    “Your company is closely following developments at all levels and is prepared to key into opportunities that will be created. We are equally poised to take advantage of other structured reforms of the Federal Government, which might impact the housing and real estate sector,” Aigbavboa said.

    He said the company will respond appropriately to emerging paint market trends and different economy scenarios through many initiatives including opening new Dulux colour centres, business development, increasing volumes and consistent engagement with professionals and specifiers.

    He added that the company will also complete upgrade of more Dulux colour centres, introduce new products and value added services, launch virtual Dulux colour centre, entrench presence in the standard market, build people capabilities while implementing impactful marketing initiatives to ensure effective customer engagement.

    Aigbavboa noted that despite the challenging operating environment in 2018, the company ended the year with an impressive performance.

    He pointed out that the company recorded a turnover of N7.76 billion, representing a growth of nine per cent over the previous year while the operating profit was N2.28 billion, a growth of 15 per cent over 2017.

    Shareholders commended the company for its consistent dividend payment noting that the company has been consistent in delivering good results.

    One of the shareholders, Ajayi Oluwafemi lauded the company for good showing in 2018 and for doing the needful to the shareholders.

    He commended the company for improving the gross earnings and the bottom line.

    Mr. Odunlami Afolabi, another shareholder, expressed confidence that the firm remains in good stead to deliver good returns to shareholders in the future and congratulated the board and management for remaining strong and growing deposits even in the midst of economic challenges.

     

  • Shareholders laud Stanbic IBTC over improved performance

    Shareholders of Stanbic IBTC Holdings Plc have commended the financial holding group for its financial performance in the 2018 financial year.

    Key extracts of the audited report and accounts for the year ended December 31, 2018 showed that the group grew its top-line earnings to N222.4 billion in 2018 compared with the N212.4 billion in 2017. Profit before taxation rose by 44 per cent to N88.2 billion as against N61.2 billion while profit after tax rose by 54 per cent to N74.4 billion in 2018 as against N48.4 billion in 2017.

    The balance sheet showed that group’s total assets grew by 20 per cent to N1.66 trillion in 2018 compared with the N1.39 trillion in 2017. Customer deposit grew by seven per cent to N807.7 billion from N753.6 billion. Gross non-performing loans decreased by 50 per cent to N17.7 billion in 2018 compared with N35.3 billion. This decrease impacted positively the gross non-performing loan to total loan ratio, which improved to 3.9 per cent, well below the regulatory threshold of 5.0 per cent and 8.6 per cent recorded in 2017. The non-performing loans figure became more impressive when viewed against the 14 per cent increase in gross loans and advances from N403.9 billion in 2017 to N458.9 billion in 2018.

    Shareholders unanimously approved the company’s dividend per share of N1.50 for the 2018 business year.

    At the annual general meeting in Lagos, shareholders said the performance of the company in 2018 was even more impressive considering the difficult operating environment in 2018.

    President, Trusted Shareholders Association, Muktar Muktar, said the performance of the company was impressive and a good value creation for shareholders.

    While thanking the shareholders for their commendation, Chief Executive, Stanbic IBTC Holdings Plc, Mr Yinka Sanni, assured that the company will not relent in its efforts to continue to deliver value to shareholders and other stakeholders.

    “We will continue to leverage on our universal financial services capability, unrelenting focus on cost control, digitization and client centricity while operating as an ethical organisation to ensure that we continue to grow our capacity to provide incomparable high quality end-to-end financial solutions to our customers in a sustainable manner and remain profitable as a group,” Sanni said.

    Sanni said the company’s balance sheet size was impacted by growth in risk assets and financial investment portfolio, a reflection of the group’s investment expertise and quality management.

    According to him, strong growth in fees and commission income as well as write-backs, which resulted from recoveries made on previously written off loans and reversals on some non-performing loan, contributed to the strong showing.

     

     

  • SEC okays Lagos Commodities Exchange to start operations

    NIGERIA’S apex capital market regulator, Securities and Exchange Commission (SEC) has finally approved the commencement of operations of the Lagos Commodities and Futures Exchange (LCFE) as a full fledged commodities and futures market.

    The final approval followed the initial approval-in-principle granted by the Commission to LCFE. With the latest approval, the commodities and futures market is set to leverage the assembled best talents to commence operations as an influential brand, established to unlock its true potential in the financial market.

    LC FE plans to trade on four broad ranges of assets that promise to open up enormous wealth across the country. These include agricultural commodities, currencies, solid minerals and oil and gas. The LCFE is being promoted by the Lagos State Government and Association of Securities Dealing Houses of Nigeria (ASHON).

    Besides, SEC has also approved the appointment of the top management team to drive the operations of the new Exchange.

    According to a letter of approval, signed by SEC’s Head of Department, Registration, Exchange and Market Infrastructure, Mr. Emomotimi Agama, on behalf of the Acting Director General of SEC, Ms Mary Uduk, the final approval took effect from June 14, 2019.

    “In the exercise of the power conferred on it by the Investment and Securities Act (ISA) No 29 of 2007 and the rules and regulations made there-under, the Commission has granted your company, registration to perform the function of a Commodities and Futures Exchange in the Capital Market with effect from June 14, 2019. By virtue of this registration, you are authorised to perform the function for which you are registered,” SEC stated in the approval letter addressed to LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu-Ale.

    Read Also: IoD probes Oando-SEC crisis

    Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Patrick Ezeagu said SEC has shown a commitment to open up the commodities market ecosystem for ASHON’S initiative of floating LCFE to come to fruition.

    “Congratulations to the market, the operators and the economy. We are really grateful to SEC, shareholders, and all our partners-Nigerian Stock Exchange (NSE), Central Securities Clearing System (CSCS), technology providers and all others that collaboratively birthed this new baby,” Ezeagu said.

    As a collective endorsement of the new organization which has opened more opportunities for diversification of their businesses,  stockbrokers had early this year converged at the corporate office of LCFE for on-the-spot assessment and appreciation  of the facilities for trading. They commended ASHON for the initiative and registered their loyalty to the new trading platform. Also, many professional and technical groups have been identifying with the management of LCFE.

    Analysts said the Nigeria’s capital market was long overdue for a thriving commodities exchange in view of the ongoing occasional shocks in the international oil market and the federal government’s resolve to give agriculture a pride of place as the country’s major income driver.

    The top management team of LCFE include Mr Ige Lawrence Ifedayo, the Compliance Officer while Dr Umunnaehila Allwell Iheanyi and Mr Omowale Rotimi Solomon are Principal Officers.

  • Oando: Pressure mounts on SEC over due process

    NIGERIA’S apex capital market regulator, Securities and Exchange Commission (SEC) has come under pressure to review the process of its investigation, adjudication and conclusions on the alleged corporate governance abuses at Oando Plc.

    SEC had on May 31, 2019 released a statement indicting the management and board of Oando of sundry corporate governance abuses and infractions of the relevant capital market laws. SEC barred the Group Chief Executive Officer (GCEO) and the Deputy Group Chief Executive Officer (DGCEO) of Oando from being directors of public companies for a period of five years. SEC also ordered certain members of board of directors of Oando to resign.

    SEC also directed the payment of monetary penalties by the company and affected individuals and directors, and refund of improperly disbursed remuneration by the affected board members to the company. SEC directed the convening of an Extra-Ordinary General Meeting on or before July 1, 2019, to appoint new directors.

    According to the SEC, following the receipt of two petitions by the Commission in 2017, investigations were conducted into the activities of Oando. Certain infractions of relevant laws were observed. The Commission further engaged Deloitte & Touche to conduct a Forensic Audit of the activities of Oando.

    But shareholders and stakeholders have faulted the process adopted by SEC, accusing SEC of bias and lack of fairness.

    Chief Olatunde Okelana, a concerned minority shareholder, said he was concerned about the processes that SEC followed.

    Speaking at the annual general meeting (AGM) of Okomu Oil Palm Plc attended by a representative of SEC in Abuja, Okelana said that an accused person is always entitled to a fair hearing before judgment is passed.

    According to him, in this case, the SEC, cannot play the role of both accuser and judge, neither does it qualify to dictate the tone of an appeal.

    He charged the regulatory body to follow the rule of law in exercising its regulatory powers, faulting the last minute suspension of Oando’s AGM by the SEC.

    Also, at the June 2019 Institute of Directors (IoD) Nigeria’s new members’ induction, Chief Executive Officer, Proshare Nigeria Limited, Mr. Olufemi Awoyemi, who was the guest speaker, said the Oando-SEC crisis was further exacerbated by the lack of, absence and the perception that those empowered to exercise such oversights themselves have serious issues of corporate governance to contend with.

    “While this debate struggles with traction, it is my considered view that, Directors are better served by immediately availing themselves with best practices; upgrade their knowledge, understanding and application of their roles and responsibilities to render unto themselves and society a risk-based discharge of their functions. Waiting for clarity brings with it unintended consequences,” Awoyemi stated.

    However, he wants the IoD to retain a watching brief on regulatory developments especially on the SEC-Oando case with a view to coming out with learning guidelines around the pain points of the case study when the dust finally settles.

    The SEC-Oando saga has gained steady momentum since SEC released alleged infractions and sanctions on May 31, 2019. The increasing range of diverse voices that have contributed to the conversation means that this is likely to continue to dominate local and international news.  With the general public waiting with bated breath for the outcome of the court case adjoined to the 24th of June.

     

  • Airtel plans listing on Nigerian, London Stock Exchanges

    Airtel Africa Limited plans a simultaneous listing of its shares on the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE).

    Airtel Africa, a subsidiary of India’s Bharti Airtel Limited, yesterday indicated it would be launching an initial public offering (IPO) on the LSE to raise £595 million, about $749.05 million. Airtel Africa plans to issue about 595.2 million to 744 million new shares at a price range of between 80 to 100 pence per share. The company was valued at between £3.01 billion and £3.62 billion.

    The company said conditional dealings in its shares were expected to begin around June 28, 2019 and the final pricing would be announced the same day.

    The company also confirmed ongoing arrangement for the listing of its shares on the NSE.

    Airtel Networks Limited, Nigeria’s second largest telecommunication company, had said it was considering listing its shares on the NSE as the telco considers various options to further upscale its business.

    Managing director, Airtel Networks Limited, Mr. Segun Ogunsanya, had said the company was looking at every option, including listing of its shares on the NSE and it will take appropriate decision at the right time.

    Ogunsanya, who was one of the speakers at the 2nd edition of the CEO Roundtable organised by the NSE and Bloomberg at the Stock Exchange House, Lagos, had a brief discussion with the chief executive officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, on the prospects of listing during the pre-event session.

    “We are not against listing on the NSE,” Ogunsanya said.

    The recent listing of MTN Nigeria Communications, Airtel’s main rival and Nigeria’s largest telco, has further shifted attention to listing of Airtel.

  • IFC divests 14.1% equity stake in Ecobank

    The International Finance Corporation (IFC), a member of the World Bank Group, has entered into an agreement to divest its 14.1 per cent equity stake in Ecobank Transnational Incorporated (ETI) Plc.

    IFC and its wholly-owned subsidiary, IFC Asset Management Company, which manages investments funds with investments in ETI, have reached advanced discussions to sell their equity holdings in ETI.

    ETI yesterday confirmed the divestment in a notice on material information relating to its ownership structure.

    IFC and IFC AMC have entered into a Share Purchase Agreement with a leading Dutch investment firm Arise B V for the sale of the 14.1 per cent equity stake in ETI. Arise is owned by FMO, Norfund, and Rabobank.

    Completion of the transaction is expected in the coming months, subject to due diligence, internal and regulatory approvals.

    IFC and ETI have worked together since 1993 to broaden access to finance, enhance trade liquidity, and strengthen Ecobank. Since 2009, IFC and the funds managed by the IFC AMC, through their investments, have been supporting Ecobank’s growth strategy across Africa in building a preeminent banking franchise.

    Arise BV is a leading equity investor in financial institutions in Sub-Saharan Africa with a combined asset value in excess of $700 million. Arise BV’s mandate is to capitalize and stimulate growth across all financial services sub-sectors and within SSA.

    Through partnering with financially sustainable financial service providers and helping them to become industry leaders in their respective markets, Arise BV aims to contribute to the economic growth potential of Africa, whilst at the same time achieving long-term investment returns.

    In 2018, IFC had delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.

    IFC expects to deliver more than $4 billion in long-term financing in fiscal year 2019 for the Sub-Saharan Africa private sector.

    IFC AMC mobilises and manages capital to invest in businesses in developing and frontier markets. Created in 2009, AMC provides leading institutional investors with unique access to IFC’s emerging markets investment pipeline and investment expertise, while providing positive development impact in the countries in which it invests.

    IFC AMC funds’ investors include sovereign wealth funds, pension funds, and development-finance institutions. It has raised approximately $10 billion across 13 investment funds covering equity, debt, and fund-of-fund products.

  • Shareholders approve Union Bank’s N54.5b capital restructuring

    Shareholders of Union Bank of Nigeria (UBN) Plc have approved a proposal to cancel N54.46 billion accumulated permanent losses in the books of the commercial bank.

    At the extra-ordinary general meeting in Lagos, shareholders authorised the board of directors to reduce the bank’s share premium account by N54.46 billion to net off the legacy deficit, thus removing the main drawback that had disallowed the commercial bank from paying dividends from its net profit.

    According to the resolution, subject to court’s confirmation, the bank’s issued share capital, including for this purpose its share premium account, be reduced by the sum of N54.458 billion, which has been lost or is otherwise unrepresented by available assets and that the credit arising from the reduction be used to eliminate the retained loss in the company’s audited financial statements as at December 31, 2018.

    The bank stated that a review of its financial position as at December 31, 2018 established a deficit of N54.46 billion as accumulated permanent losses from legacy transactions, in addition to the N247.87 billion, which had been approved by shareholders in 2017.

    The bank explained that the proposed balance sheet restructuring will not affect its authorised or issued share capital or regulatory capital, but should result in a reduction of the credit balance in the bank’s share premium account, while leaving the aggregate shareholders’ funds unchanged.

    “It would have no impact on the bank’s creditors, but rather pave the way for the bank’s investors to receive dividends out of the bank’s future profits,” UBN stated.

    The board of directors had proposed a reduction of N54.46 billion from the bank’s share premium account of N187.09 billion, pursuant to sections 106 and 107 of Companies and Allied Matters Act (CAMA). The reserve arising from the reduction of capital would be used to eliminate the negative retained earnings as at December 31, 2018.

    UBN grew its net profit by 39 per cent to N18.1 billion in 2018, but the bank could not declare dividend due to extant rules that disallow companies with retained deficit from dividend payment. Key extracts of the audited report and accounts of Union Bank for the year ended December 31, 2018 showed that gross earnings dropped by 11 per cent from N163.8 billion in 2017 to N145.5 billion in 2018. Net interest income declined by 17 per cent from N66.7 billion to N55.4 billion while non-interest income also dropped from N39.3 billion to N35.2 billion.

    With 113 per cent reduction in credit impairment, net income after impairments increased by 16 per cent from N80.64 billion to N93.5 billion. Profit before tax thus increased by 33 per cent from N13.9 billion to N18.5 billion. Profit after tax also rose from N13 billion to N18.1 billion. Earnings per share, however, declined by 11 per cent from 72 kobo in 2017 to 61 kobo in 2018.

    Union Bank of Nigeria Chairman,   Mr. Cyril Odu, said the bank was focused on delivering value to its stakeholders. “Union Bank is on course towards delivering its 2019-2021 strategic  objectives. As we continue our push towards being Nigeria’s most reliable and trusted banking partner, we remain focused on improving the profitability of our business and delivering value to all our stakeholders – shareholders, customers, business partners and employees,” Odu said.

    According to him, following the successful execution of the bank’s debut local currency bond issue to raise N13.5 billion and the tightening up of its loan portfolio, Union Bank remains well positioned to continue executing key business priorities in 2019 and beyond.