The Nation Newspaper

Category: Equities

  • Safetrust Mortgage Bank strengthens performance

    Safetrust Mortgage Bank Limited braced macroeconomic challenges and industry odds to grow its total assets to N12.6 billion and shareholders’ funds to N2.78 billion in 2013, putting it ahead as one of the most capitalised mortgage banks.

    At the annual general meeting of the mortgage bank in Lagos yesterday, shareholders of the mortgage bank approved the audited report and accounts for the year ended December 31, 2013 including distribution of a gross dividend of about N101.21 million. The breakdown of the dividend indicates a dividend per share of 6.0 kobo.

    In his address at the meeting, chairman, Safetrust Mortgage Bank Limited, Mr. Akin Opeodu, said the mortgage bank surmounted environmental constraints to post a cheery positive performance that ranked among the best in the mortgage industry.

    According to him, the mortgage bank was able to surpass the new industry minimum capital base of N2.5 billion for state operating license by growing its shareholders’ funds to N2.78 billion, thus enabling the company to change its name from Safetrust Savings and Loans Limited to Safetrust Mortgage Bank Limited.

    He outlined that the mortgage bank recorded total deposits of N6.62 billion and grew its interest earnings by 15.2 per cent from N1.85 billion to N2.12 billion while total assets and shareholders’ funds rose from N11.9 billion and N2.02 billion to N12.6 billion and N2.78 billion respectively.

    “As a business, we will continue to focus on key growth sectors of the Nigerian economy and leverage on our enhanced capital position to enrich lives of our various stakeholders in a sustainable manner,” Opeodu said.

    Managing director, Safetrust Mortgage Bank Limited, Mr. Yinka Adeola, said in spite of challenges occasioned by the recapitalization of the mortgage industry in 2013 and adverse effects of many regulatory policies, the mortgage bank was focused on capacity building, competitive advantage over competitors and repositioning itself to leverage on emerging business opportunities.

    He said the bank has already initiated a roadmap to scale up its operations by obtaining a national operating license by increasing its capital base to N5 billion through new issues and inorganic opportunities.

    According to him, Safetrust’s resolve to continue to be a one-stop mortgage banking shop remains unfettered as evident in the substantial strides made by the bank towards human capital development, upgraded service standards and branch networking.

    He outlined that the bank is currently working on expanding its branch network with more branches expected in Lagos State while it will also adopt agent banking model to reach out to more customers.

    “As a dynamic financial institution, Safetrust will continue to anticipate and respond to changes in the industry environment. Safetrust is committed to staying the course, remaining focused, as we chart the path that lies ahead,” Adeola said.

    He said the mortgage bank has concluded on improvements of its service channels with customers now able to avail themselves of electronic banking services such as Automated Teller Machines (ATMs), telephone banking and internet banking while it is working on providing additional e-channel services to its customers.

    Audited report and accounts showed that the bank recorded gross earnings of N2.26 billion while profit after tax stood at N142.70 million.

  • Nestle Nigeria reassures on growth prospect

    Chairman, Nestle Nigeria Plc, Mr. David Ifezu-like, has assured that the company would leverage on its competitive advantages to surmount operating challenges and continue to deliver returns to shareholders.

    In an address at the annual general meeting of the company in Lagos, Ifezulike said though the environment looks to be every bit as challenging in 2014 as it was last year, the current business year will again provide opportunities to the company leverage on its competitive advantages and deliver on its growth targets.

    According to him, Nestle Nigeria’s performance would continue to benefit from the company’s drive for continuous improvement across its business lines while it remains disciplined in driving its performance in line with the Nestle model of profitable growth and resource efficiency.

    He noted that in view of the good performance achieved in 2013 and in line with the board’s commitment to creating value for its shareholders, the company decided to pay a final dividend of N24 in addition to an interim dividend of N1.50, making a total dividend of N25.50 per share for 2013 business year, representing 27.5 per cent increase on the payout for 2012.

    “We believe that companies are only sustainable and successful over the long term if they create value not just for their stakeholders but also for the societies in which they operate. We believe that we can create value for our shareholders and society by doing business in ways that specifically help address global and local issues in the areas of nutrition, water and rural development,” Ifezulike said.

    According to him, Nestle Nigeria pursues its objective of being the reference for financial performance in its industry with its commitment to creating shared value in order to be trusted by all stakeholders.

    He commended the special intervention funds of the Central Bank of Nigeria, which were disbursed through the Bank of Industry (BoI), which have also helped to revive a good number of ailing industries and small and medium enterprises (SMEs).

  • Analysts express fears over N305b police pension

    Financial market analysts have called for a rethink of the planned transfer of N305 billion pension savings of the men and officers of the Nigeria Police Force (NPF) from various pension fund administrators (PFAs) to a proposed government-owned pension administrator.

    A financial analyst, Mr Ayodele Adekunle, in a statement, cautioned against the move by the  National Pension Commission (Pencom) to move  the N305 billion Police pension to the  proposed NPF Pensions Limited noting that such transfer runs contrary to the letters and spirit of the Pension Reform Act 2004 (PRA) and could have unintended negative consequences.

    According to him, the Federal Government should reconsider the move because it does not only pose a threat to payment of men and officers of the NPF but  also  moving the funds from existing PFAs contravenes the extant law on pension operations.

    “We all are living witnesses to the stories about police pensions in this country and the N305 billion has professionally been managed under the pension reform over the years. Changing the status quo has so many risks and I believe the government should consider the demerits of this move before taking further action,” Adekunle said.

    He noted that section 11(2) of the PRA 2004 gives every contributor the right to choose any PFA pointing out that the move by Pencom contravenes this provision.

    “Apart from the fact that moving the funds contravenes that section of PRA 2004, I am suspecting some foul play. The regulator is saying that after the transfer, the police personnel will have the freedom to transfer to their PFA of their choice after two years. To me, there is ulterior motive in this position. Instead of transferring all the pension to a new PFA, the opportunity should be given to  the police personnel right from  day one so that they decide which PFA to use  rather than compelling them to move to a new PFA and after two years they will transfer from the new PFA to any other one of their choice. This will not only be cumbersome but it is also doubtful,” Adekunle stated.

    He urged the government to re-evaluate the implications of the plan for the pension fund industry and future of the personnel of the NPF.

    Other stakeholders in the capital market and pension industry had earlier said the withdrawal may have unintended negative influence on the capital market where the large chunk of the funds are invested while the lack of independence and competition could thwart the laudable objectives of pension management.

    Stakeholders said the negative spillovers may also affect the Nigerian capital market as PFAs would have to adjust their portfolios to meet the exigencies of transfers.

    They urged the government to reconsider the idea and allow independent PFAs to continue to manage Police pension assets while the NPF concentrates on its core duty of protecting the citizenry.

    However, Pencom has assured that the transfer would be temporary and it would not have any negative consequence on the industry.

    Spokesman for Pencom, Mr. Emeka Onuora, said that the licensing of  NPF Pensions Limited to manage the Police pension savings pending the opening of the transfer window would not pose any threat whatsoever.

  • Pfizer to raise AstraZeneca bid again

    Pfizer Inc is planning to sweeten its bid for United Kingdom rival AstraZeneca Plc (AZN) for a second time, people with knowledge of the matter said.

    Pfizer and its advisers are crafting a new offer that would increase the value modestly above the current 50 pounds-a-share, about $84, level while bumping the cash portion, said two of the people, who asked not to be identified discussing private information. Pfizer will probably wait until after U.K. government hearings to raise its bid, they said.

    Bloomberg reported that Pfizer is putting together a sweetened offer before it considers whether to make a hostile takeover attempt by bringing its proposal directly to AstraZeneca’s shareholders, the people said. Pfizer would prefer a friendly deal since its unsolicited overture already has attracted political scrutiny in the U.S. and U.K. AstraZeneca rejected Pfizer’s second proposal on May 2, valued at 62.6 billion pounds ($106 billion) and made up of 32 percent cash and the rest in stock.

    Ian Read, Pfizer’s chief executive officer, and Pascal Soriot, his counterpart at AstraZeneca, will testify at two separate parliamentary committees this week, as the U.K. government seeks guarantees that Pfizer will preserve jobs and medical research in Britain.

    Pfizer is concerned it’s beginning to lose momentum on the deal, said two of the people, and will be talking further to investors and listening to what comes out of the hearings as it evaluates its next steps.

    Pfizer has said it would move its legal residence to the U.K., gaining a lower tax rate, while the company’s operational headquarters would remain in New York. In doing so, Pfizer would join more than a dozen other companies that have said they are making or considering such transactions since 2012.

    Read has said the tax benefits, the chance to avoid U.S. taxes on $70 billion in cash built up overseas and AstraZeneca’s promising cancer medicines are among the reasons Pfizer is pursuing the deal.

    The tax issue has sparked criticism from U.S. lawmakers, including Senator Ron Wyden, an Oregon Democrat and chairman of the Senate Finance Committee that oversees tax legislation. Wyden said he may take up a proposal that would make it harder for U.S. companies to shift their legal addresses to avoid taxes.

    A deal with AstraZeneca would help Pfizer add early-stage drugs that use the body’s own immune cells to recognize and attack tumors. Atop the list is MEDI4736, AstraZeneca’s immuno-oncology drug expected to compete with experimental therapies from drugmakers including Bristol-Myers Squibb Co., Merck & Co. and Roche Holding AG.

    British lawmakers earlier this month mobilized against Pfizer’s attempt, demanding Business Secretary Vince Cable secure assurances on jobs and research investment. Part of Pfizer’s pitch to British officials is that AstraZeneca is a global company and has substantial operations and people outside the country, said one of the people.

    About 40 percent of AstraZeneca’s revenue in 2013 came from North America, and more than 30 percent from outside of Europe, data compiled by Bloomberg show.

  • NSE summons six stockbroking firms

    NSE summons six stockbroking firms

    The national council of the Nigerian Stock Exchange (NSE) would this week begin a disciplinary hearing on the fate of inactive, illiquid and delinquent stockbroking firms with the first batch of the affected operators expected to appear before the council on Thursday.

    The Disciplinary Committee of the National Council of the NSE has invited six stockbroking firms to appear before it on Thursday to explain why the Exchange should not take disciplinary action against them for failing to activate their dealing member licenses.

    The affected companies included Al-Pina Investment and Trust Company Limited, BBL Asset Management Limited, Integrated and Allied Securities Limited, MultiTrust Securities Limited, Standard Chartered Securities Limited and Trans Lux Services Limited.

    In a notice signed by head, legal department and council secretariat, Irene Robinson-Ayanwale, the NSE indicated that the six stockbrokers were part of a group of stockbrokers that it had earlier queried over their operating status.

    The disciplinary committee is expected to determine the propriety of the dealing licenses of the affected members at the hearing.

    The NSE had in December 2013 commenced a process to determine the propriety of dealing licence of 53 stockbroking firms, a development that may lead to withdrawal of operating licence of erring stockbroking firms.

    A query by the management of the NSE to the 53 stockbroking firms obtained by The Nation directed the stockbroking firms to show reasons why disciplinary actions should not be taken against them for failure to regularize their operating status and other sundry outstanding regulatory issues.

    The query was signed by head, broker dealer regulation, Nigerian Stock Exchange (NSE), Mr. Olufemi Shobanjo.

    A source in the know of disciplinary process of the NSE indicated that the Exchange may withdraw the operating licence of some of the stockbroking firms, which failed to provide tangible reasons to show liquidity, continuous operations and compliance with extant rules on dealing member firms.

    The Nation’s check showed that most of the queried firms had in September 2013 been suspended for failure to comply with extant operating rule that requires all stockbroking firms to establish compliance department and appoint accredited compliance officers. The suspension by the NSE implies that they will not be  allow to trade at the stock market or act in any issue relating to the capital market, especially as it relates to regulatory approval of the NSE.

    The latest query on regularization of operating status also referred to “all outstanding regulatory issues”, indicating a build-up of the case against the stockbroking firms.

    The queried dealing member firms included Mainstreet Bank Securities Limited, Standard Chartered Securities Limited and First Atlantic Securities Limited, three brokerage firms owned by banks.

    Other queried firms included AAA Securities Limited, Alliance Capital Management Company Limited, Al-pina Investment & Trust Company Limited, BBL Asset Management Limited, BFCL Asset & Securities Limited, BIC Securities Limited, CEB Securities Limited, Colvia Securities Limited, Consolidated Investment Limited, Dakal Services Limited, Decanon Investment Limited, Empire Securities Limited, Enabell Capital & Investment Limited, Epic Investment Trust Limited, Equator Stockbrokers Limited, First Equity Securities Limited, First Express Limited, Folu Securities Limited, Genesis Securities & Investment Limited, Ideal Securities Limited, Indemnity Finance Limited, Integrated & Allied Securities Limited, KFF Worldwide Solutions Limited, Kingdom Securities Limited, Lion Stockbrokers Limited, LMB Stockbrokers Limited, Maninvest Asset Management Plc, Mayfield Investment Limited, Metropolitan Trust Nigeria Limited, Midland Capital Markets Limited, Midlands Investment & Trust Limited and ML Securities Limited.

    Others included Monument Securities & Finance Limited, MultiTrust Securities Limited, Omas Investment & Trust Company Limited, Peninsula Asset Management & Investment Company Limited, Platinum Capital Limited, Professional Stockbrokers Limited, Prudential Securities Limited, Regency Financing Limited, RIV Trust Securities Limited, Riverside Trust Limited, Securities Trading & Investment Company Limited, Sikon Securities and Investment Trust Limited, Trans Lux Services Limited, Transglobe Investment & Finance Company Limited, Tropics Securities Limited, Truebond Capital & Asset Management Limited, WT Securities Limited and Zuma Securities Limited.

     

  • Meristem highlights benefits of Meritrade online portal

    Meristem Securities Limited, a dealing member of the Nigerian Stock Exchange (NSE), at the weekend highlighted the benefits of its newly introduced online trading portal-Meritrade, stressing that the portal will bring the stock market closer to local and international investors to maximize their opportunities.

    Meritrade is an online stock broking platform which allows users buy and sell stocks online through the NSE from the comfort of their homes, offices, cars and mobile devices. The platform defines stock broking in entirely different language and creates a world class experience, bringing the broker to the comfort of investors’ homes and offices.

    Head, stockbroking, Meristem Securities, Mrs. Gbadunola Sokunbi said Meritrade comes with ease and is for the benefit of the retail segment of the Nigerian capital market; thus, making Meristem contribute to the positioning of the NSE to champion the acceleration of Africa’s economic development while creating durable wealth.

    According to her, the Meritrade platform will guarantee investors’ convenience as it will enable retail investors to open stockbroking account without having to walk into a stockbroking house from wherever, whenever and even on the go.

    She outlined that the new portal will allow investors to fund their accounts by making deposits without necessarily walking into a banking hall, place orders for prompt execution and receive contract note instantly.

    “Other benefits of the platform are real-time notification on trade execution, trade the way an investor wants, manage and take full control of investors’ investments at all times as well as explore market data and quality research reports. The development of the new trading platform has become imperative with the NSE’s recent launch of its new trading engine, the X-Gen platform, which enables completion of trading transactions without human intervention,” Sokunbi said.

    She enjoined investors to enjoy the fairly extensive walk-through system and its mobile apps noting that the mobile stock trading experience is second to none in Nigeria.

     

     

     

    The head of stockbroking encouraged investors with smart phones and other devices to take a ride into the world of endless possibilities at www.meritrade.com.

    She added that the Meritrade platform also provides users with market data and information on all quoted companies, spiced with quality research reports that will guide their safe investment decisions.

     

     

     

  • Caverton gets listing date, to add N32b to NSE

    Caverton gets listing date, to add N32b to NSE

    Caverton Offshore Support Group, a leading provider of marine, aviation and logistics services to local and international oil and gas companies in Nigeria, will list its entire issued share capital on the Nigerian Stock Exchange (NSE) on May 20.

    Coming on the heels of the listing of SEPLAT Petroleum Development Company, the first upstream company to be quoted on the NSE, the listing of Caverton will further integrate the oil and gas sector into the Nigerian stock market.

    Having met all NSE and other regulatory requirements, Caverton Offshore Support Group has been given approval to list by introduction on the main board of the exchange. The company’s 3.35 billion shares will be listed for trading at N9.50 per share.

    Caverton Offshore Support Group (Caverton) is the holding company of Caverton Helicopters and Caverton Marine Limited, two Nigerian companies that have within a short period grown dramatically to become industry leaders in the oil and gas aviation and marine sub-sectors, two highly technical and capital intensive areas previously dominated by foreign firms.

    Chairman, Caverton Offshore Support Group, Mr Aderemi Makanjuola, said the listing will usher the company into its next phase of growth.

    “We are extremely pleased as Caverton enters its next phase of growth as a listed company. Leveraging on our expertise and execution capabilities, we plan to embark immediately on fleet expansion and the development of new service areas in the offshore marine and aviation sectors,” Makanjuola said.

    He said the company is keen on exploring entry into new markets while it will create a balanced and diversified portfolio.

    “We are pleased to have strong technical partners on board with us. This is in line with our strategy for sustainable growth and we are confident that the company will continue to achieve its growth aspirations while fostering indigenous participation in the Nigerian oil and gas industry,” Makanjuola said.

    According to him, the listing represents a major milestone for the company in its steady march towards becoming the leading provider of oil and gas logistics services in sub-Saharan Africa.

    “Our past and present speak eloquently for us. But we are not content on resting on our oars. Rather, we are keen on further diversification operationally and geographically. Apart from operating in Cameroon, we have been invited to bid in Ghana and invited to come for discussion in DRC. We are keen on building a world-class company that outlives us and becomes a byword for cutting-edge services and the best of corporate governance not only in Nigeria but in Africa,” Makanjuola said.

    He noted that as a wholly-owned Nigerian company, Caverton has demonstrated that when given the opportunity, Nigerians can compete favourably with the best of foreign nationals adding that the company is desirous of opening the doors of opportunity to many other Nigerians.

    “Becoming a publicly quoted company allows us to do more in this regard and permits us to add more value to the country and its economy,” Makanjuola said.

    Caveton’s rising business profile has been powered by strategic partnerships, highly skilled management and staff, investment in cutting-edge technology and facilities, and strong financial performance. In the 2012 financial year, the company’s turnover rose 47.6 per cent to N16.132 billion, from N10.928 billion in 2011. Profit after tax and exceptional items jumped to N1.035 billion from N60.373 million in the previous year, an increase of 1,625 per cent.

    Even though its operations predated the passage of the Local Content Act by many years, Caverton has been seen as the poster-child of indigenous capacity and ownership since 2010 when one of its subsidiaries, Caverton Helicopters, edged out long-established foreign operators to win a $648 million, multi-year contract from Shell Petroleum Development Company for the supply and operation of seven helicopters. Won after a rigorous competitive bidding process, it is on record as the biggest contract ever awarded by the oil multi-national to an indigenous company.

     

     

     

    The Shell contract opened the floodgate for Caverton, with more contracts pouring in from other oil majors such as Chevron, ExxonMobil, Total and Addax Petroleum. In 2013, the company commenced its first international operation after it won the contract to provide passenger transfer and pipeline surveillance services to the Cameroon Oil Transport Company (COTCO), a subsidiary of ExxonMobil.

    Caverton’s operations have also been significantly buoyed by the opportunities provided by government’s local content policy. Signed into law by President Goodluck Jonathan on 22 April 2010, the Nigerian Oil and Gas Industry Development Act stipulates that oil and gas companies must give the right of first refusal to competent indigenous companies in their award of contracts. On account of its massive investment in facilities and personnel, verified by the oil majors through audits conducted on the company and Caverton’s strict adherence to standards and safety, the company has been well positioned to benefit from this policy.

    For example, Caverton’s turnover leapt from N7 billion in 2010 to about N17 billion in 2012, an increase of 142 per cent within two years. Another indicator of the dramatic growth is that its staff strength rose from 160 personnel in 2009 to 650 in 2013, an increase of 306 per cent. About 90 per cent of the Caverton’s staff are Nigerians in pursuance of the company’s own commitment to the local content policy. Also, the company has a record of employing and training Nigerian sea-fearers, engineers and pilots, thereby deepening national capacity to operate effectively in the highly technical sector.

     

  • SEPLAT adds N5.78b from oversubscription

    EPLAT Petroleum Development Company Plc, the first upstream company to be listed on the Nigerian Stock Exchange (NSE), has increased its capital base by about N5.78 billion with the absorption of the oversubscription from its recent $500 million initial public offering (IPO).

    SEPLAT at the weekend added about 10.03 million ordinary shares of 50 kobo each to its shares. The company attributed the additional shares to oversubscription and allotment that resulted from the recent IPO.

    After a highly successful global IPO of $500 million, SEPLAT had made history mid April as the first upstream company to be listed on the NSE. It also simultaneously listed its shares on the London Stock Exchange (LSE).

    The initial offer size of the IPO was expected to raise gross proceeds of approximately $500 million, equivalent to £300.9 million and N82.5 billion. SEPLAT had however indicated it intended to absorb over-subscription. According to its IPO report, the over-allotment option in the global IPO shall represent 15 per cent of the final amount allocated to the international offering in the base offer. Thus, the global offer will comprise a base offering and an over-allotment option, consisting of new shares to be issued by the company.

    The listing of Seplat activated the exploration and production subsector of the oil and gas sector of the NSE and added N313 billion to the aggregate market value of quoted companies. About 543.3 million ordinary shares of 50 kobo each were then listed at N576 per share.

    The supplementary listing at the weekend increased SEPLAT’s outstanding shares to 553.33 million ordinary shares of 50 kobo each. SEPLAT’s market consideration closed the weekend at N682.33 per share, indicating an increase of 18.5 per cent on its listing price.

    The company had indicated that it intended to use $48 million from the net proceeds of the IPO to repay in full all outstanding amounts under its shareholder loan from MPI S.A. (MPI) while the balance would be used to acquire and develop new acquisitions or pay down any additional debt raised in connection therewith, of both onshore and shallow offshore acreages, assets or joint venture (JV) farm-ins.

    According to the company, the main source of acquisitions is expected to come from divestitures by various internatioanal oil companies.

     

     

    Chairman, SEPLAT Petroleum Development Company Plc, Dr. ABC Orjiako, had noted that 48 per cent of the investors that invested in the company’s IPO were Nigerian investors assuring that the company will live up to expectations by growing its net value while simultaneously paying dividends to shareholders.

    He said the company would continue to uphold the highest level of corporate governance and ensure that it complies with all post-listing requirements at the NSE.

    According to him, the IPO affords Nigerians to be part of wealth creation engine that Seplat represents.

    “We are delighted with the support shown and happy to welcome a range of blue chip investors to our share register. Despite a challenging market for oil and gas stocks, the response has been excellent and demonstrates strong demand in both London and at home for a leading Nigerian exploration and production player,” Orjiakor said.

    He reiterated that the net proceeds of the global offer will primarily be used to acquire and develop new acquisitions, or pay down any additional debt raised in connection thereof.

    SEPLAT was founded in 2009 by Shebah Petroleum Development Company Limited and Platform Petroleum (Joint Ventures) Limited for the purpose of investing in Nigerian oil and gas opportunities. Maurel& Prom, a French independent oil company, subsequently acquired a 45 per cent equity interest in SEPLAT; this interest was later spun-off to form Maurel & Prom Nigeria S.A, which is now known as Maurel & Prom International.

    In July 2010, SEPLAT acquired a 45 per cent participating interest in, and was appointed operator of, a portfolio of three onshore producing oil mining leases-OMLs 4, 38 and 41, which are located in the Niger Delta. In June 2013, the company entered into an agreement for the acquisition of a 40 per cent participating interest in the Umuseti/Igbuku marginal field area located within OPL 283 in the Niger Delta.

    SEPLAT is regarded as one of the leading indigenous oil and gas operators in Nigeria with average gross operated oil production of 51,400 barrels per day (bpd) as at December 31, 2013, a substantial mileage from 13,900 bpd in August 2010. The company’s average gross gas production in 2013 was 99 million standard cubic feet per day (MMscfd).  SEPLAT is targeting gross operated oil production from its existing assets of 85 Mbpd by the end of 2016.

  • Fidelity Bank outlines growth strategy

    Fidelity Bank outlines growth strategy

    Fidelity Bank Plc plans to grow its retail accounts to three million and deepen its deposit base by 20 per cent by the end of this year as it pursues a short-term strategy that focuses on underserved consumer banking segment and small businesses.

    Managing director, Fidelity Bank Plc, Mr. Nnamdi Okonkwo, yesterday at the Nigerian Stock Exchange (NSE) outlined the growth strategy and targets of the bank at a “Fact Behind the Figure” presentation to explain the underlying trends in the bank’s performance to the investing community.

    According to him, the bank is leveraging on emerging consumer credit bureaus and bank-wide risk management framework to provide loan products to grossly underserved consumer banking segment.

    He said the bank would be deepening its retail banking in growing its business in 2014 noting that the target is to grow retail accounts to three million accounts across 230 branches by the end of 2014.

    He pointed out that the bank would focus on strengthening its strategic alliances with various institutions including schools, microfinance banks and supermarkets to increase retail customers’ base.

    He added that the bank is starting aggressive deployment of smaller, cheaper, easily accessible and available branches that will focus on cheap deposit mobilization while it would also strengthen its lending and deposit mobilization in the Small Medium Enterprises (SMEs) and retail segments.

    “We offer these SME’s advisory services in terms of financial, technology and human resources solution.  There are a lot of concerns in these risk areas in the past but the future and success of banking in future goes to the retail and I assure you that we are taking steps to prepare ourselves. We are leaving a lot of returns for the customers because we don’t want to take risk. We have built capacity on this and we have put in place product and proper pricing to improve our bottom-line. We have put in a lot of resources. We are deploying customer relationship management system and business analytics tools to gain deeper customer insights and increased penetration ratio for our branded retail and electronic products,” Okonkwo said.

    He outlined that the bank would continuously increase its operating efficiency through consistent business processes while extending the leverage on the value chain of its corporate banking to extract maximum value from the commercial and retail businesses to achieve a 50:50 loan split between corporate and commercial loan.

    According to him, the bank is targeting between 15-20 per cent on tax rate, 20 per cent average on deposit growth, 15-20 per cent average on loan growth, 30-35 per cent on proposed dividend and 10 per cent growth on Return on investment (ROE).

    He added that the bank would also deepen its participation in the fast-growing and key sectors of the economy especially energy, oil and gas and telecommunications by leveraging its enhanced balance sheet and expanded distribution network.

    “If anybody is interested in buying a stock that shows consistent return, stable management, stable liquidity and increased capital base, it is a good time and now to buy Fidelity bank stock because we are taking this bank somewhere,” Okonkwo said.

    He blamed the decline in the bank’s net bottom-line in 2013 on increased costs and constrained income sources noting that a clawback of N4.4 billion on previously sold loans to Asset Management Company of Nigeria (AMCON) and increased levy due to AMCON as well as a one -off additional provision of N1.8 billion in respect of actuarial valuation on gratuity and pension obligation negatively impacted profit.

    Audited report and accounts of the bank for the year ended December 31, 2013 showed profit before tax of N9.03 billion, representing a 57.7 per cent decline from the N21.35 billion recorded in 2012. Gross earnings increased slightly by 6.5 per cent to N126.92 billion in 2013 as against N119.14 billion recorded in 2012.

    Net interest income had dipped by 16.3 per cent to N30.81 billion as against N36.81 billion in previous year, as the bank struggled with spillovers that emanated from tightened monetary conditions, which increased cost of funds. Non-interest income meanwhile recorded a modest growth of 4.0 per cent to N40.66 billion in 2013 compared with N39.10 billion in 2013. This was also impacted by the new tariff regime introduced by the CBN in second quarter of 2013. The report showed that operating expenses rose by 8.1 per cent to N54.82 billion as against N50.71 billion.

    Meanwhile, the balance sheet of the bank firmed up as total assets rose by 18.2 per cent from N914.36 billion in 2012 to N1.08 trillion in 2013. Total customer deposits increased by 12.5 per cent from N716.75 billion to N806.32 billion while net loans and leases grew by 23.3 per cent to N426.08 billion as against N345.50 billion in previous year. Shareholders’ funds closed the year at N163.46 billion.

  • How to make successful investment in Africa, by Oduoza

    How to make successful investment in Africa, by Oduoza

    Group Managing Director, United Bank for Africa (UBA) Plc, Mr Phillips Oduoza, has advised international investors seeking to invest in Nigeria and other African countries to partner with credible domestic partners to navigate the market and understand the intricacies of the local economy.

    Speaking at the panel on pan-African businesses at the recently concluded three-day Milken Global Conference in Los Angeles, California, Oduoza said it is imperative for the investors to partner with local players like UBA that understand the business terrain to help them navigate around some of the seeming challenges of investing in Africa.

    Understanding of the local culture, customization of products and initiatives were identified as critical factors to successfully invest in Africa by the panel which was made up of Oduoza ; Ahmed Heikal of Citadel Group in Egpyt, Pade Durotoye, CEO Oando Exploration and Production Limited and Jonathan Berman of Dalberg Consulting among others.

    The panel also called on prospective investors from developed countries to evolve new financial models that will enable them invest in the ports, transportation and power sectors.

    According to the panel, there is need for more of structured financing and capacity building, more dialogue and engagement of stakeholders by prospective investors and improved focus on Africa by more Export Credit Agencies (ECAs), Development Finance Institutions (DFIs) and Sovereign Wealth Funds (SWFs).

    The panel discussed how entrepreneurs and industry leaders are harnessing the enormous potentials in Africa to transform the continent in diverse fields like manufacturing, technology, real estate, financial services, infrastructure and agriculture.

    The main discussions centered on the questions that confront investors and businesses when approaching the African market, entry strategies as well as obstacles that threaten growth.

    The Milken Global Conference brings together some of the world’s leading thinkers, visionaries and decision-makers to help find solutions to critical issues facing the world. The 2014 Conference was the seventh edition and it brought together more than 3,000 people from around the world — senior leaders with the mind and the means to create positive action for four days of intense discussion.