By Taofik Salako, Deputy Group Business Editor

Sterling Bank Plc recorded modest growth in the top-line and bottom-line in the first half with net profit rising by 5.1 per cent to N5.7 billion within the six-month period.

Key extracts of the interim report and accounts of the bank for the first half ended June 30 2021 showed that gross earnings grew by 3.1 per cent from of N66.541 billion in first half 2020 to N68.61 billion in first half 2021. Profit after tax also rose from N5.42 billion in the first half 2020 to N5.7 billion in first half 2021.

The bank’s net interest income also appreciated by 2.619 per cent to close at N30.986 billion compared with N30.195 billion for the corresponding period of 2020 while net fees and commission income rose markedly by 57.738 per cent to finish the first half of the year at N8.368 billion as against N5.305 billion in June 30, 2020.

Sterling Bank’s cash and balances with the Central Bank of Nigeria (CBN) stands at N331.748 billion as at June 30, 2021 as against N303.314 billion during the corresponding period in 2020, while loans and advances to customers grew to N646.883 billion as at the first half of this year from N596.827 billion during the corresponding period of last year. Earnings per share (EPS) rose to 20 kobo from 19 kobo, while non-performing loans closed the mid-year at 1.79 percent as against 1.90 percent in 2020.

Managing Director, Sterling Bank, Mr. Abubakar Suleiman said the directors of the bank were confident that barring any unforeseen circumstances, the trend in the first half would be improved upon in the remaining period of the financial year.

Development Bank of Nigeria (DBN) has given out N215.1 billion loan to 136,000 Micro, Small and Medium Enterprises.

This is despite the ravaging effect of Covid-19 pandemic in 2020.

DBN in a statement issued after Agusto and Co rated the bank ‘AAA’ said it will continue to “expand the scope of its operations, onboarding more Participating Financial Institutions (PFIs) and deepening credit penetration in the low end of the market”.

Particularly DBN will target “women entrepreneurs, who represent over 50 per cent of the bank’s ultimate credit beneficiaries”.

According to report, the bank “doubled its loan portfolio to N215.1billion, leveraging its robust risk management practice in deepening credit penetration to over 136,000 MSMEs”.

Explaining how the bank was able to extend such volume of credit to MSMEs, DBN said it “has sustained an outstanding asset quality record of nil delinquency, unique fundamentals which attest to the efficacy of its credit creation model and overall risk management culture.

Notably, the bank maintains a BASEL II capital ratio of 75.2 percent, several multiples of the minimum 10 percent regulatory requirement”.

DBN’s liquidity ratio hovered around 84 percent, compared to the 10 percent regulatory requirement, which means that DBN has the “capacity to sustain the pursuit of deepening credit penetration amongst MSMEs”.

Rating agency, Agusto and Co. has assigned AAA rating to Development Bank of Nigeria Plc.

In assigning the AAA rating Agusto described DBN as “a development finance institution of impeccable financial condition and overwhelming capacity to meet obligations as and when they fall due”.

Agusto highlighted “DBN’s good asset quality, good capitalization, good liquidity, and experienced management team as factors responsible for the positive rating”.

In its credit rating announcement, Agusto noted that DBN’s rating “takes into cognizance the support of the bank’s shareholders – the Ministry of Finance Incorporated, Nigeria Sovereign Investment Authority (NSIA), Africa Development Bank (AfDB) and the European Investment Bank (EIB)”.

AfDB and EIB Agusto said “are both rated ‘AAA’ by Standard and Poors, Moody’s, and Fitch Ratings. Aside from equity contribution, AfDB provides long-term borrowing, technical and business support to DBN”.

 

The rating Agusto added “also considers the support of other international development finance institutions such as the French Development Agency (AFD), KfW – the German Development Bank, and the World Bank, which provides funding and technical support, in addition to strengthening governance.”

Agusto observed that “despite the COVID-19 pandemic, DBN increased its financial support to Micro, Small and Medium Scale Enterprises (MSMEs) and small-sized corporates through participating financial institutions”. Notwithstanding the pandemic”.

Commenting on the rating action, the Managing Director/CEO, Development Bank of Nigeria, Mr. Tony Okpanachi said, the AAA rating “provides an objective opinion on the bank’s credibility and capacity in meeting short and long-term obligations”.

He added that “this rating action aligns with a recent decision of Global Credit Ratings (GCR), another foremost rating agency that also assigned “AAA” national scale rating on DBN”.

Okpanachi said the bank will “continue to uphold gold standards in risk management and governance practices, and would sustain these well-deserved ratings, which are pertinent to our medium to long-term objectives, as we execute our unique strategies for unlocking credit for MSMEs.”

Speaking on the rating, the Executive Director, Finance and Corporate Services, Mrs. Ijeoma Ozulumba also, noted that, “Agusto’s assignment of “AAA” on the bank is another testament to the strong credibility and capacity of the Bank, as a distinguished development finance institution with an impeccable and overwhelming capacity to meet obligations and deliver on its core mandate”.

DBN she said will “continue to leverage the bank’s balance sheet capacity, global best governance practice, robust risk management framework, and collaborative approach in easing access to credit for growing Nigerian MSMEs, which portend the salient capacity to create jobs, industrialize the economy and drive sustainable growth.”

 

 

The 2021 edition of Nigerian Farmers Radio, the Pan-Nigeria agribusiness-related radio show initiated by Sterling Bank, will focus on product-to-region mapping, value chain focus and access to credit. It is broadcasted in major Nigerian languages, including Pidgin English, to meet diverse demographic needs.

“This edition’s programme adopts a product-to-region mapping and value chain focus in useful content delivery to see the hard work of Nigerian farmers lead to prosperity and food security for themselves, their communities and the nation at large said Abubakar Suleiman, Chief Executive Officer of Sterling Bank.

He added that radio is a vital way of getting information across to those in rural farming communities and more than 90% of people in the rural communities own at least one functional radio.

Their remote locations increase their risk of missing out on new opportunities such as the single-digit interest Sterling Women and Youths in Agriculture Finance (SWAY AgFin) solution for small to mid-scale agribusiness practitioners. The Farmers’ Radio would address any challenge by bringing useful and relevant topics that will improve productivity to farmers. The topics for discussion would be region-specific with solutions proffered to address all challenges farmers are likely to encounter.

Also speaking, Bukola Awosanya, Group Head, Agric Finance and Solid Minerals at Sterling Bank, said that the program is conceptualized to ensure that farmers who operate in remote locations reduce the risk of missing out on new opportunities such as the single-digit interest Sterling Women and Youths in Agriculture Finance (SWAY AgFin) solution developed and distributed in partnership with Mastercard Foundation to help increase the output and profitability of agribusiness by making much-needed capital available to entrepreneurs.

She said that initiatives such as the program remain imperative because the adverse effect of disruptions caused by the COVID-19 pandemic has not only restricted output as well as people’s access to sufficient and nutritious sources of food, but has also slowed down cash flow in the hands of food suppliers and farmers, hindering farmers from returning to farms in due time.

The Group Head, Agric and Solid Minerals Finance with Sterling Bank, said, “For 2021, our approach will be to assess region specific value chains to maximize impact, value of investment and deliver solutions tailored to the most active and valuable produces in the region.”

According to her, the value chain focus for the Northeast and Northwest sub-regions will be maize, rice and sesame with the delivery language as Hausa while in thee southwest will focus on Aquaculture, Poultry, Vegetables and Cassava to mention a few and delivery will be in Yoruba language.

“For North Central sub-region, the value chain focus is poultry,soyabeansand cassava with p while for Southeast and South South, the value chain focus is aquaculture, palm oil and cassava,” Mrs. Awosanya said.

Nigerian Breweries Plc grew its top-line by about 38 per cent in the first half as strategic marketing initiatives strengthened the brewer against tough operating environment.

The interim report and accounts of the brewing company for the six-month period ended June 30, 2021 showed that turnover rose by 37.8 per cent to N209.22 billion in first half 2021 as against N151.80 billion recorded in comparable period of 2020. Profit after tax also grew by 38.8 per cent from N5.66 billion in first half 2020 to N7.86 billion in first half 2021.

Consequently, basic earnings per share increased to 97 kobo in first half 2021 as against 71 kobo recorded in first half 2020.

The report also showed that cost of sales increased significantly from N92.67 billion in 2020 to N131.34 billion in 2021 while marketing, distribution and administration expenses increased by 31.8 per cent from N44.32 billion in first half 2020 to N58.42 billion in first half 2021.

The company indicated that it also recorded a strong balance sheet despite the impact of COVID-19 on businesses.

In a statement, Nigerian Breweries however decried the huge impact of excise duty increase as well as an all-time high inflation figure recorded by the Nigerian economy, although these could not unduly affect its improved performance during the period under review.

According to the company, the operating environment remains challenging with the imposition of tariff and increase in Value Added Tax from 5.0 per cent to 7.5 per cent which put huge pressure on revenue and profitability of the business.

The company meanwhile assured its stakeholders that it would continuously monitor and evaluate its financial position and performance in the light of the pandemic and would report thereon as may be appropriate.

The management of the company said it would continue to place utmost priority on the health, safety, and welfare of all employees, customers and partners while focusing on efforts to mitigate the impact of the pandemic on the business.

Nigeria’s premier non-interest bank, Jaiz Bank Plc recorded impressive growth in profitability in the first half as increasing corporate efficiency nudged the margins, placing the bank on a good stead to surpass its full-year projections.

Interim report and accounts of Jaiz Bank for the half-year ended June 30 2021 showed that profit after tax rose by 70.6 per cent from N1.17 billion in June 2020 to N1.99 billion in June 2021. Total Income had grown by 42.1 per cent from N6.23 billion in first half 2020 to N8.86 billion in first half 2021.

Managing Director, Jaiz Bank Plc, Hassan Usman said that the bank’s consistent growth in earnings is a reassurance to all stakeholders and the investing public, while it reinforces the status of the bank as the pioneer and leading non-interest bank in Nigeria.

He assured that the bank is determined to maintain the remarkable earnings growth for the rest of the year by leveraging on technology and the expansion of its retail banking portfolio.

The first half performance places the bank in good stead to surpass its full-year projections for 2021. Jaiz Bank had in a five-year projection made available earlier to the investing public forecasted that it would grow its income and profitability consecutively over the five-year period, with pre-tax profit for the period expected to be about N15.86 billion.

The management of the bank had outlined the five-year growth plan of the pioneer non-interest bank, with an assurance that it would sustain year-on-year growth over five-year period.

Usman had explained that the overall vision of the bank was to become the leading non-interest financial institution in Sub Saharan Africa.

He said the bank has been positioned to sustain its growth trajectory, pointing out that the bank has the necessary resources to achieve its growth targets.

According to the five-year financial forecast, total income was expected to be about N81.17 billion while profit after tax was projected at N11.09 billion for the five-year period. Gross income was expected to rise to N10.07 billion in 2018 and subsequently to N12.59 billion, N15.73 billion, N19.27 billion and N23.51 billion in 2019, 2020, 2021 and 2022 respectively.

Profit before tax was projected to rise to N1.33 billion in 2018 and grow consecutively to N2.03 billion, N3.01 billion, N4.03 billion and N5.47 billion in 2019, 2020, 2021 and 2022 respectively. After taxes, net profit would rise to N927 million in 2018 and grow further to N1.42 billion in 2019. Profit after tax was projected to jump to N2.11 billion in 2020 and rise consecutively to N2.82 billion and N3.83 billion in 2021 and 2022 respectively.

Balance sheet of the bank was also expected to increase over the years. Total assets was projected at N123.61 billion in 2018 and subsequently to N150.5 billion, N182.6 billion, N220.02 billion and N262.80 billion in 2019, 2020, 2021 and 2022 respectively. Deposit was projected to rise consecutively to N88.55 billion, N113.34 billion, N142.81 billion, N177.09 billion and N216.05 billion in 2018, 2019, 2020, 2021 and 2022 respectively. Shareholders’ fund was projected to rise to N28.6 billion in 2018 and grow consecutively to peak at N35.23 billion by 2022.

Shareholders’ return was also expected to grow over the years. Return on equity was expected to firm up to 4.39 per cent in 2018 and improve consecutively to 4.87 per cent, 6.92 per cent, 8.79 per cent and 11.22 per cent in 2019, 2020, 2021 and 2022 respectively.

By Tofunmi Sanusi

 

Futureview Asset Management Limited has received final regulatory approval from the Securities and Exchange Commission (SEC) to open application lists for two new mutual funds that will further deepen investment opportunities in the Nigerian capital market.

The two mutual funds- an equity-based mutual fund and a dollar-based mutual fund allow investors to diversify their portfolio, hedge against inflation, and enjoy steady income in spite of the tough macroeconomic outlook and challenging returns on investment in Nigeria.

With the approval, Futureview is offering for subscription 5.0 million units of Futureview Equity Fund at N100 per unit and 15,000 units of Futureview Dollar Fund at $100 per unit to institutional and retail investors both in Nigeria and offshore.

Group Managing Director,  Futureview Asset Management Limited, Mrs Elizabeth Ebi said that both funds are open-ended, authorised and registered in Nigeria as unit trust schemes in compliance with the requirements of the Investment and securities Act (ISA) and SEC Rules and Regulations.

Ebi, the first lady stockbroker in Nigeria, said the funds were floated to provide alternative asset classes for investors in this era of macroeconomic vagaries, characterised by relatively high inflation rate and devaluation of naira among others.

She stated that the equity fund requires a minimum subscription of N50,000 and multiples of 50 units thereafter and  the dollar fund, five units and multiples of five units subsequently.

“As part of our professional obligation to create products that meet the needs of diverse investors worldwide, we have floated the Futureview Equity Fund and Futureview Dollar Fund to address the challenges of negative return on investment in the challenging operating environment,” Ebi said.

According to her, most investors are contending with negative return arising from high inflation rate, low Monetary Policy Rate (MPR) and devaluation of the naira.

She noted that the funds have come at an auspicious time in the industry and the economy with the stock market at the bottom level and shares of many blue-chip companies trading below their intrinsic values.

“The funds will not only hedge investors against inflation but guarantee steady return,” Ebi said.

 

Wema Bank Plc yesterday launched a major capacity-building initiative for Nigeria’s small and medium enterprises (SMEs) with the launch of the bank’s SME Business School.

Speaking at the launch at the bank’s headoffice yesterday in Lagos, Managing Director, Wema Bank Plc, Mr Ademola Adebise, said micro, small and medium enterprises (MSMEs) account for over 90 per cent of businesses in Nigeria and are a major contributor to the country’s economy, hence the need for their capacity development.

He said that SMEs deserve the right exposure to entrepreneurship education, access to market and information.

He added that small businesses are necessary for growing the economy and therefore must be positioned for success by providing them with enabling environment, knowledge and structure that they require to thrive.

“The role of SMEs in creating and sustaining national development in relation to employment and job creation has been considered a key tool in alleviating poverty,economic emancipation and promoting total well being.

“We have slots to accommodate SMEs who do not currently bank with Wema Bank. All interested SMEs are therefore advised to respond to a call for entry by filling out application forms as published by the bank’s social media pages,” Adebise said.

According to the Retail Divisional Head, Dotun Ifebogun, the school curriculum is designed to close the knowledge gap that plagues most SMEs in the country, leading to poor business structure and management.

The Head of SME business team, Mr Authur Nkeme added that the business school is fully funded by Wema Bank Plc and will be held twice a year across different regions in the country, starting with Lagos with robust curriculum of marketing and sales, innovation, capital management, to mention a few, with support of the Frankfurt School of Finance and Management, Germany and Development Bank of Nigeria. These courses will also be facilitated by top notch consultant from within and outside Nigeria. There will be online and in-class sessions and attendees will be awarded certificate upon completion.