Category: Equities

Union Bank of Nigeria (UBN) Plc on Thursday announced a dividend recommendation of about N7.3 billion for the 2019 business year, its first dividend payment in 11 years. Shareholders will receive a dividend per share of 25 kobo.

The dividend was a major highlight of considerable improvements in the commercial bank’s top-line and bottom-line. Key extracts of the audited report  and accounts of UBN for the year ended December 31, 2019 released yesterday at the Nigerian Stock Exchange (NSE) indicated that gross earnings grew by 14 per cent from N140.1 billion in 2018 to N159.9 billion in 2019. Interest income had grown by 11 per cent from N104.8 billion to N116.5 billion. Non-interest income also rose by 23 per cent from N35.3 billion to N43.3 billion.

The report further showed that operating expenses declined marginally from N71 billion to N70.8 billion. Net operating income increased from N89.7 billion to N95.5 billion. Profit before tax grew by 33 per cent from N18.7 billion to N24.7 billion. Profit after tax also rose by 32 per cent from N18.4 billion to N24.4 billion.

The balance sheet also emerged stronger. Gross loans rose by 20 per cent from N496.8 billion in 2018 to N595.3 billion. Customer deposits increased by 5.0 per cent to N886.3 billion in 2019 as against N844.4 billion in 2018.

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Mr. Emeka Emuwa, said the bank’s strong overall performance has paved the way for a critical milestone with the declaration of its first dividend in more than a decade.

He noted that the returning value to shareholders has been at the core of Union Bank’s transformation and continuous drive to become a leading financial institution in Nigeria.

He pointed out that the 2019 performance reflected strong growth in the bank’s underlying business operations and enhanced profitability while it also demonstrated the impact of some of the key operational and cost saving initiatives that have been implemented to accelerate growth and profitability.

He explained that the important part of the bank’s earnings has been the conscientious growth of its loan book noting that the bank booked N98 billion in new loan assets in the course of the year reflecting a 20 per cent growth to close at N595.3 billion in gross loans.

He outlined that in line with the bank’s vision to be Nigeria’s most reliable and trusted banking partner, it is optimising its business model to focus solely on Nigeria where it continues to invest and thrive. As such, the bank has made the strategic decision to divest from its UK subsidiary, Union Bank UK which will enable it focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.

“In 2020, we will continue to focus on bottom-line initiatives that will build on our success in 2019. We are promoting synergy across our businesses and functions to ensure alignment with and on our strategic objectives,” Emuwa said.

Chief Financial Officer, Union Bank of Nigeria (UBN) Plc, Joe Mbulu said the group numbers reflected the classification of its UK subsidiary as a discontinued operation in line with IFRS 5, which is reflected in both 2018 and 2019 numbers.

“We are proud of the top-line and bottom-line numbers the bank delivered in 2019, owing largely to operational efficiencies and a laser focus on key deliverables. Through our LEAP initiative, our focus on discretionary cost discipline led to a reduction of N2.4 billion on related cost lines driving overall expenses down. Consequently, our cost-income ratio declined to 74.1 per cent from 79.2 per cent in 2018. Our total customer deposits grew by 5.9 per cent to N886.3 billion from N844.4 billion as at December 2018 with low-cost deposits up by 7.7 per cent and now accounting for 74 per cent of total customer deposits compared to 71 per cent in 2018,” Mbulu said.

 

 

Stanbic IBTC Holdings Plc recorded a net profit of N75.04 billion in 2019 as the financial holding company sustained steady growths across key performance indicators.

The board of the holding company yesterday indicated that it has recommended payment of N21 billion as dividend for the 2019 business year, implying a dividend per share of N2, 33.3 per cent increase on N1.50 per share paid for the 2018 business year.

Key extracts of the audited report and accounts for the year ended December 31, 2019 showed that gross earnings rose from N222.36 billion in 2018 to N233.81 billion. Profit before tax increased from N88.15 billion in 2018 to N90.93 billion in 2019. Profit after tax also improved marginally from N74.4 billion to N75.04 billion. Earnings per share however dropped from N7.04 in 2018 to N6.92 in 2019. The decline in earnings per share was due to additional shares due to cash-to-scrip dividend conversion policy of the company.

Chief Executive Officer, Stanbic IBTC Holdings Plc, Yinka Sanni, said the financial results were largely in line with market guidance as the company achieved double digit growth in both assets under management and loans.

He pointed out that loan-to-deposit ratio was 67.5 per cent, above the regulatory minimum of 65 per cent as at the year end while non-performing loans ratio was 3.9 per cent, similar level with prior year and within acceptable limit of 5.0 per cent.

“The group’s total assets grew by 13 per cent aided by the growth in loans and financial investments portfolio. Our personal and business banking division contributed to profit yet again with a significant improvement in profit after tax year-on-year. Cost of risk was 0.2 per cent compared to the writeback in prior year due to a nonoccurrence of a significant recovery, however it is still well below our guidance of 3.0 per cent. Our sustained focus on cost containment coupled with revenue growth during the year yielded an improvement in cost-to-income ratio of 50.4 per cent from 52.9 per cent in 2018,” Sanni said.

While acknowledging that the regulatory and economic environment could sometimes be challenging, Sanni said the company remained resolute in its target to emerge as Nigeria’s leading end-to-end financial solutions provider.

“While we look to 2020 with great optimism, we are fully aware of the challenging macro-economic and regulatory headwinds that we must contend with as we enter a new decade. Nonetheless, our strategic journey towards becoming the leading end-to-end financial solutions provider by 2023 continues as we leverage our universal capabilities whilst focusing on cost management, digitisation and client centricity in accelerating growth in 2020,” Sanni said.

 

Suspended Director General of Securities and Exchange Commission (SEC), Mounir Gwarzo and Principal Manager, National Identity Management Commission (NIMC), Jamila Muhammad have pleaded not guilty to allegations of corruption filed against them by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) at a High Court of the Federal Capital Territory (FCT), Apo, Abuja.

They were arraigned before Justice Olukayode Adeniyi on a 14-count charge bordering on gratification and abuse of office. However, when the charges were read to them by an official of the court they both pleaded not guilty.

In his ruling, Justice Adeniyi granted the defendants bail noting that bail was not meant to set the defendants free but to ensure their attendance in court to face trial.

The judge said pointed out that defendants were statutorily entitled to bail under the provision of the Administration of Criminal Justice Act (ACJA) 2015. He therefore granted each of the defendants bail at N10 million with one surety in like sum.

The surety, the judge said, must be a resident of the FCT and a civil servant on the employment of either the Federal Government or any of its agencies or FCT Administration or any of its agencies. Justice Adeniyi adjourned the case till April 22, 2020 for trial.

It was alleged that Gwarzo on or about December 28, 2016 while serving as SEC DG knowingly held a private interest as a director and shareholder of Outbound Investment Limited, a company which was awarded a contract to supply and install 12 units of air conditioners and four units of refrigerators at SEC Lagos zonal office at the sum of N3.499 million by SEC and thereby committed an offence contrary to and punishable under Section 12 of Corrupt Practices and Related Offences Act, 2000.

Gwarzo was said to have also used his position as SEC DG to gratify himself when Outbound Investment Limited was awarded the contract to supply and install 12 units of air conditioners and four units of refrigerators at SEC Lagos zonal office by the Commission, thereby committed an offence contrary to and punishable under Section 19 of the ICPC Act.

Muhammad on her part, was accused to have on or about November 15, 2015, while being a public officer used her position as Principal Manager at NIMC to gratify herself when Outlook Communications Limited, where she was a shareholder and director was awarded a contract to air a 60-minute awareness campaign radio jingles on e-dividend in the North-East region for the sum of N798,360 by SEC thereby committed an offence contrary to and punishable under Section 19 of the ICPC Act.

 

 

 Taofik Salako, Capital Market Editor

 

ARDOVA Plc, formerly known as Forte Oil Plc, recorded impressive growths in the top-line and bottom-line in its first audited results after the divestment by its former majority core investor, Mr Femi Otedola.

Ignite Investments and Commodities Limited led by Prudent Energy Services Limited had in June 2019 completed the acquisition of 74.02 per cent majority equity stake in Forte Oil from the company’s erstwhile chairman, Mr. Femi Otedola. The transaction was valued at about N64 billion. The company subsequently changed its name to Ardova.

Key extracts of the audited report and accounts of Ardova for the year ended December 31, 2019 showed that turnover rose from N134.71 billion in 2018 to N176.55 billion in 2019. Gross profit declined slightly from N11.33 billion to N11.28 billion. Profit before tax however rose by 351.5 per cent from N1.03 billion to N4.65 billion. Profit after tax also jumped by 520 per cent from N631.47 million in 2018 to N3.92 billion in 2019. With these, earnings per share increased from 48 kobo in 2018 to N3 in 2019.

Chairman of Ignite Investments and Commodities Limited and founder and chief executive officer of Prudent Energy Services Limited, Mr Abdulwasiu Sowami, has said the acquisition was a strategic investment in his company’s quest to continuously add value to the Nigerian oil and gas industry.

Sowami, who took over from Otedola as chairman of then Forte Oil, said next phase of Ardova’s growth will focus on increasing volumes, diversifying business operations, widening distribution networks and extracting potential synergies with partners.

The Nigerian Stock Exchange (NSE) had on February 24, 2020 formally subscribed Ardova as the listing and trading name for the petroleum-marketing company, completing a process that started in December 2019 when shareholders at their extraordinary general meeting approved the new name.

Ignite Investments and Commodities Limited had immediately after the June 2019 acquisition taken over the management of the company. The new core investor had changed the board of the company to reflect the new ownership structure.

Shareholders of the company also approved resolutions that would enable the company’s new core investor to consolidate its downstream assets through acquisition and transferred of existing downstream assets by the new core investor.

 

 

 

Taofik Salako, Capital Market Editor

 

 

THE board and management of Vitafoam Nigeria Plc yesterday reassured shareholders and other stakeholders that the company would continue to be innovative in delivering quality products and services to customers in order to ensure sustainable growth.

The reassurance came as shareholders yesterday at the annual general meeting in Lagos approved 68 per cent increase in dividend payout. Shareholders approved a dividend per share of 42 kobo or N525.35 million for the 2019 business year as against 25 kobo per share paid for the 2018 business year.

The new dividend represented a significant growth for shareholders given that the company had also distributed bonus shares of one share for five shares for the 2018 business year, which automatically increased shareholders’ holdings by 20 per cent. The 42 kobo per share will be paid on both the previous and bonus shares.

Key extracts of the audited report and accounts of Vitafoam Nigeria for the year ended September 30, 2019 showed that profit before tax rose by 339.5 per cent while net profit grew by 296.3 per cent. With the dilution, basic earnings per share rose by 219.3 per cent. The company’s top-line had grown by 14.1 per cent, implying that bottom-line performance was driven by growing sales, improved financial management and enhanced operating efficiency.

Read Also: NSE praises Vitafoam’s diversification

Group turnover rose from N19.53 billion in 2018 to N22.28 billion in 2019. Profit before tax surged to N3.49 billion in 2019 from N793.85 million in 2018. While tax expenses leapt from N191.92 million in 2018 to N1.03 billion in 2019, net profit jumped from N601.9 million in 2018 to N2.39 billion in 2019. Earnings per share increased from 57 kobo to N1.82 per share. The dividend payout represents 23.1 per cent of the earnings per share, a considerable improvement on a payout ratio of 53.2 per cent in 2018.

Shareholders commended the company’s board and management for the good performance and urged the directors to continue to explore ways to improve performance.

Shareholders advised the board and management to strengthen the subsidiaries in order to expand the company’s revenue base.

Addressing the shareholders, Chairman, Vitafoam Nigeria Plc, Dr Bamidele Makanjuola, said the performance of the company was due to leadership ingenuity, innovation and passion of its young managers despite the inclement operating environment.

“Our outstanding performance is not just because we utilised the loans we took from the Bank of Industry and other banks to create value for shareholders but ingenuity of the company’s leadership. Vitafoam is blessed with level headed, innovative and passionate youths that form the core of our managers. The board also comprises wise elders who are always willing to assist the management, “Makanjuola said.

He said the remarkable improvement in performance reflected the effectiveness of improved funding efficiency and impact of the strategic initiatives implemented to address the protracted challenge of low margins in the business.

According to him, the company leveraged the Bank of Industry’s long -term loan facility and other flexible financing windows by negotiating better trade terms with foreign suppliers of raw materials, thereby sidestepping the middle men. The resulting reduction in the cost price of raw materials impacted positively on gross margin.

 

 

By Taofik Salako, Capital Market Editor

It was a momentous rebirth for the Nigerian Stock Exchange (NSE) on Tuesday in Lagos as members of the six-decade-old Exchange voted to change its status from a non-profit member-owned mutual company limited by guarantee to a public limited liability company with issued share capital and shareholders.

In probably the most momentous decision after its formation, members of the Exchange at the court-ordered meeting in Lagos endorsed resolutions that sealed the conversion of the self-regulatory organisation to a public limited liability company. The approval was the final and most critical stage of the conversion process, known as demutualisation.

The Federal Government, which holds stake as a founding member of the Exchange, also voted in favour of the conversion. To achieve the demutualisation, not less than three-quarters of the interests of members present and voting either in person or by proxy, must vote in favour of the scheme. Voting at the meeting was by poll with each member representing one interest or one vote for or against the resolution.

Also at the extraordinary general meeting held after the court-ordered meeting, members of the Exchange also approved the first board of directors for the demutualised Exchange as well as endorsed Employee Share Ownership Plan (ESOP).

At the trading floor of the Exchange, the bulls staged a major recovery as bargain-hunters drove the market to a net capital gain of N232 billion. Aggregate market value of all quoted equities on the NSE rose from its opening value of N13.449 trillion to close at N13.681 trillion. The All Share Index (ASI) also rose by 1.70 per cent to close at 26,255.11 points as against its opening index of 25,816.57 points. There were 23 advancers to 12 decliners. With these, the negative average year-to-date return moderated to -2.19 per cent. Turnover also improved to 387.9 million shares valued at N6.08 billion in 4,901 deals

President, Nigerian Stock Exchange (NSE), Otunba Abimbola Ogunbanjo, said the successful demutualisation of the Exchange was one of the main objectives when he assumed the Presidency of the Exchange.

Ogunbanjo, who was appointed as the first chairman of the board of the demutualised Exchange, noted that it was particularly historic that the demutualisation was achieved during the lifetime of Mr. Akintola Williams, the only surviving member of the initial signatories to the founding charter of the Exchange.

“I feel elated that 19 years after initiating the process to demutualize and on the 60th anniversary of the Exchange, we are close to achieving the goal. In telling the story of how we have achieved this milestone, we recognize the efforts of several actors involved in this project – including the management and staff of the Exchange, our members, professional advisers, the Federal Government of Nigeria, the Securities and Exchange Commission (SEC) and other capital market stakeholders – without whom it could not have become a reality,” Ogunbanjo said.

Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr Oscar Onyema, said the positive outcomes of the meetings affirmed the great interest from members to support the pivotal restructuring of the exchange to become globally competitive.

He explained that in rounding off the process, the Exchange would file the necessary resolutions from the court-ordered meeting and all other required documents at the Corporate Affairs Commission (CAC) and SEC, obtain the court order sanctioning of the scheme, complete all necessary registrations and seek the final approval from the SEC to ultimately demutualise.

Onyema, who was reappointed as the first chief executive officer of the demutualised Exchange, said the new board and management will work to ensure effective management of the post-demutualisation activities.

Former president of Chartered Institute of Stockbrokers (CIS) and former council member of the NSE, Mr Ariyo Olushekun, said the conversion was a good development that would enable the Exchange to grow competitively and make returns for all stakeholders.

He noted that while the post-demutualised entity may face the challenge of cultural adaptation because of the long years of running as a non-profit organisation, the new board and management have the capacity to resolve issues that emerge from the process.

Former Director-General of the NSE, Prof. Ndi Okereke-Onyiuke, said the conversion would enhance the competitiveness of the Exchange and the stock market, urging Nigerians to embrace the capital market to benefit from the envisaged growth.

Under the arrangement approved yesterday, the NSE will transit into a holding company, Nigerian Exchange Group (NEG) Plc, which will be the parent company for the Nigerian Exchange Limited, the successor that will carry on the securities trading business of the Exchange, and other subsidiaries. Shareholders will own shares in NEG Plc while NEG will own the main company and other subsidiaries.

According to the scheme of arrangement for the conversion, the post-demutualisation shareholders’ base will consist of 255 institutional shareholders and 177 individual shareholders. The post-demutualisation shareholding arrangement was arrived at by converting the existing dealing members of the Exchange to institutional shareholders and ordinary members to individual shareholders.

Shareholdings will be on equal basis in the immediate conversion period with each institutional shareholder holding 6.01 million ordinary shares of 50 kobo each while each individual shareholder will hold 2.44 million ordinary shares of 50 kobo each.

Thus, each institutional shareholder will hold 0.3 per cent equity stake while each individual shareholder will hold 0.1 per cent equity stake, in line with the current membership-share conversion ratio of 78 per cent for dealing members and 22 per cent for ordinary members.

The NSE will transit into a non-operating holding company with an authorised share capital of 2.5 billion ordinary shares. About 2.0 billion ordinary shares of 50 kobo each are expected to be issued in the immediate period of the conversion.

The NSE will transfer its securities  exchange  licence and other assets necessarily required to carry out the securities exchange function; which will   include human   resources,   securities   exchange   function related contracts, the  trading facilities  comprising of the  trading floors, work stations, telephones and other office equipment such as cabinets and others, quotation board,  stock  price  electronic  display  device,  stock  printers,  inquiry display equipment and other assets to Nigerian Exchange Limited pursuant to the scheme.

According to the scheme, the demutualised NEG will take off with authorised share capital of N1.25 billion comprising 2.50 billion ordinary shares of 50 kobo each, which will be registered with the Corporate Affairs Commission. The NEG will subsequently set aside 2.0 billion ordinary shares of 50 kobo each as issued share capital, which will be registered with the SEC.

A total of 40.08 million ordinary shares, representing 2.0 per cent of the proposed issued shares of NEG will be set aside for allotment to parties that may lay claims to entitlement to shares in the demutualised Exchange. This was pursuant to the provisions of the Demutualisation Act 2018. The apportionment of two per cent as the claims review shares is based on an analysis of the probable quantum of shares that would be required to settle each claim. However, each claimant will be expected to provide irrefutable evidence of membership or circumstance that confers such claim of ownership.

However, in the event the claims review shares are insufficient to satisfy successful claims, additional shares will be allotted from the demutualised Exchange’s authorised share capital.

A total of 1.96 billion ordinary shares, representing 98 per cent of the issued shares, the balance of the issued shares following the reservation of the claims review shares, will be apportioned between dealing and ordinary members on the basis of a ratio of 78:22, respectively.

With the approval of the scheme, all assets, liabilities and undertakings including real property and intellectual property rights of the NSE- with the exception of the securities exchange licence and all assets and appurtenances in relation to the securities trading business of the NSE – shall be retained by NEG.

The NSE will set up a separate company, NGX Regulation Limited (NGX Regulation) that will be charged with the regulatory functions of the Exchange after demutualisation pursuant to an arm’s length agreement. This is in order to safeguard the neutrality of the regulatory system.

With demutualisation, the Memorandum and Articles of Association of the re-registered Exchange will be amended to indicate the new name, NEG, the authorised share capital and all requisite provisions for a public company limited by shares.

Other non-executive members of the new board of the demutualised Exchange approved yesterday included Dr. Umaru Kwairanga, Mrs. Fatimah Bello-Ismail, Mr. Oluwole Adeosun, Mr. Chidi Agbapu, Mr. Patrick Ajayi, Dr. Okechukwu Itanyi, Mrs. Nimi Akinkugbe, Prof. Enase Okonedo, Mr. Ikpobe Oghooritsewarami, and Mrs. Ojinika Olaghere.

Members of the NSE had earlier approved the demutualisation of the Exchange at an extraordinary general meeting in March 2017. This was followed by the signing of the Demutualisation of the Nigerian Stock Exchange Bill into law in August 2018.

Last December, SEC in a “No Objection letter” gave its consent to the NSE to hold the court-ordered meeting and extra-ordinary general meeting that would facilitate its conversion from a not-for-profit entity limited by guarantee into a profit-making, public limited liability company owned by shareholders.

The Federal Government, through the Bank of Industry (BoI), many state governments including Adamawa State and several prominent businessmen and policy experts are among a total of 432 individuals and institutions that will hold shares in the immediate period of the demutualised Exchange. Under the scheme, the Exchange will allocate shares to all members with shares due to deceased ordinary members and expelled or liquidated dealing members being allocated to their legal representatives.

A list of post-demutualisation include Mr Akintola Williams, late Senator Theophilus Adebayo Doherty, the late Sir Odumegwu Ojukwu, late Alhaji Shehu Bukar, late former President Umaru Yar’Adua, late Bashorun MKO Abiola, late Dr Abdul Lateef Adegbite and the late Mr Gamaliel Onosode.

Other individual shareholders will include Chief Ernest Shonekan, Alhaji Aliko Dangote, Alhaji Abdul Rasaq, Alhaji Aminu Dantata, Mr Tony Elumelu, Mr. Oba Otudeko, Mr. Pascal Dozie, Chief Bayo Kuku, Chief Christopher Ogunbanjo, Dr Christopher Abebe, Mr Goodie Ibru, Alhaji Isyaku Umar, Otunba Adekunle Ojora, Mr Phillip Asiodu, Rear Admiral Allison Madueke, Rabiu Gwadabe, Mr Raymond Obieri, Senator Udo Udoma and Senator David Dafinone.

Institutional shareholders will include GTI Securities Limited, CSL Stockbrokers Limited, Capital Assets Limited, Cowry Asset Management Limited, Meristem Securities Limited, APT Securities and Funds Limited, Capital Bancorp Limited, Centre-Point Investments Limited, Chapel Hill Denham Securities Limited, Emerging Capital Limited, Stanbic IBTC Stockbrokers Limited, Trust Yields Securities Limited and Vetiva Capital Management Limited.

The NSE was established as the Lagos Stock Exchange on September 15, 1960 under the Companies Ordinance 1922, with a share capital of £5,000 divided into 500 ordinary shares of £10 each. At incorporation, each of the original subscribers subscribed to five shares in the Exchange.

Subscribers at incorporation included C. T. Bowring & Co. (Nigeria) Limited,Chief Theophilus Adebayo Doherty, John Holt Nigeria Limited, The Investment Company of Nigeria Limited, Sir Odumegwu Ojukwu,  Akintola Williams and Alhaji Shehu Bukar.

The share capital of the Exchange was increased to N20,000 consisting of 1,000 ordinary shares of N20 each, pursuant to an ordinary resolution dated December 2, 1977.

The name of the Exchange was then changed from the Lagos Stock Exchange to the Nigerian Stock Exchange on December 15, 1977.

 

Taofik Salako, Capital Market Editor

 

NIGERIAN equities lost N209 billion on Monday as investors overlooked earnings and dividend yields and opened up market orders to close transactions at lower prices.

With weak macroeconomic outlook and global scare over the Coronavirus crisis, more than three of four transactions at the Nigerian Stock Exchange (NSE) yesterday were closed at lower prices. Benchmark indices indicated average decline of 1.53 per cent, equivalent to net capital depreciation of N209 billion.

Many large-cap quoted companies including Nestle Nigeria, MTN Nigeria Communications, Guaranty Trust Bank (GTB) and United Bank for Africa (UBA) had released their full-year audited results with dividend recommendations. Dividend yields were in double digits for many stocks but these failed to lift the market.

The All Share Index (ASI)- the value-based index that tracks all share prices at the Exchange, declined from its opening index of 26,216.46 points to close at 25,816.57 points. Aggregate market value of all quoted companies dropped from its opening value of N13.658 trillion to close at N13.449 trillion. Average year-to-date return worsened to -3.82 per cent.

With 28 decliners to nine advancers, all sectoral indices closed in the red with the exception of the NSE Insurance Index, which rose by 0.3 per cent. The NSE Consumer Goods Index dropped by 5.19 per cent. The NSE Banking Index declined by 3.66 per cent. The NSE Industrial Goods Index dipped by 1.22 per cent while the NSE Oil and Gas Index slipped by 0.35 per cent.

Nestle Nigeria led the decliners with a loss of N113 to close at N1,017. CAP followed with a drop of N2.45 to close at N22.15. Lafarge Africa dropped by N1.55 to close at N13.95. Unilever Nigeria lost N1.50 to close at N13.50. GTB dropped by N1.10 to close at N22.70 while Berger Paints lost 65 kobo to close at N6.10 per share.

On the positive side, Africa Prudential led the gainers with a gain of 15 kobo to close at N4.85. Eterna followed with a gain of 11 kobo to close at N2.10. FCMB and Law Union and Rock Insurance rose by 9.0 kobo each to close at N1.80 and 99 kobo respectively while AIICO Insurance added 6.0 kobo to close at 83 kobo.

 

 

Taofik Salako, Capital Market Editor

 

NIGERIA’S largest financial institution, Guaranty Trust Bank (GTBank) Plc on Monday announced a dividend recommendation of N82.4 billion for the 2019 business year as the bank’s pre-tax profit rose to N231.71 billion.

The board of the bank indicated that shareholders will receive a final dividend per share of N2.50 in addition to interim dividend of 30 kobo paid earlier, bringing the total dividend per share for the 2019 business year to N2.80. The bank had distributed N80.94 billion as cash dividend for the 2018 business year, representing a dividend per share of N2.75.

Key extracts of the audited report and accounts for the year ended December 31, 2019 showed modest growths across key performance indices. Gross earnings rose from N434.7 billion in 2018 to N435.31 billion in 2019. Profit before tax increased by 7.5 per cent from N215.6 billion to N231.7 billion. After taxes, net profit improved from N184.71 billion to N196.87 billion. Earnings per share thus increased from N6.54 in 2018 to N6.96 in 2019.

The balance sheet also indicated improvements in banking and market share. Loans grew by 19 per cent from N1.26 trillion in 2018 to N1.50 trillion in 2019. Customers’ deposits increased by 11.4 per cent to N2.53 trillion in 2019 as against N2.27 trillion in 2018. Total assets and shareholders’ funds stood at N3.76 trillion and N687.3 billion. Full impact capital adequacy ratio (CAR) remained strong at 22.5 per cent.

The proportion of non-performing loan to gross loans improved to 6.5 per cent in 2019 as against 7.3 per cent 2018, implying improvement in the bank’s asset quality. Cost of risk (COR) remained flat at 0.3 per cent. Complementing the improvement noted in non-performing loans, the bank maintained adequate loan loss coverage of 126.6 per cent for lifetime credit impaired loans compared to 105.1 per cent in 2018.

Managing Director, GTBank Plc, Mr. Segun Agbaje, said GTB exists to provide excellent service to its customers and generate the returns that shareholders expect.

He said the bank’s strong financial performance in 2019 demonstrates that it is delivering on customers and shareholders’ expectations.

“We achieved healthy growth across all our major businesses despite varying degrees of uncertainty and volatility, and we are making progress in positioning our business for long-term growth in the face of a rapidly changing competitive landscape,” Agbaje said.

According to him, underpinning the bank’s strong financial performance is its commitment to being there for its customers when it matters most.

“That is why, powered by the fundamental strength of our brand, and guided by our strategy of putting our customers at the centre of everything we do, we will continue to design and deliver financial services that not only solves our customers’ real pain points but also leaves them better after every interaction,” Agbaje said.

He pointed out that the bank continues to be best-in-class in the Nigerian banking industry in terms of financial ratios with post-tax return on equity (ROAE) of 31.2 per cent, post-tax return on assets (ROAA) of 5.6 per cent and cost to income ratio of 36.1 per cent.

According to him, these ratios reflect the experienced management, and efficient balance sheet structure coupled with operational efficiency of the bank.

He noted that in recognition of the bank’s world class corporate governance standards, excellent service delivery and innovation, it has been a recipient of numerous awards over the years including Best Bank in Africa and Best Bank in Nigeria, by the Euromoney Magazine and Best Banking Group and Best Retail Bank Nigeria from World Finance Magazine, all in 2019.

 

By Taofik Salako, Capital Market Editor

United Bank for Africa (UBA) Plc increased dividend payout to shareholders as the pan-African financial group achieved record earnings and balance sheet in 2019. Gross earnings crossed the milestone of N500 billion while total assets crossed N5 trillion for the first time.

The board of the bank has recommended increase in dividend payout to N34.2 billion, implying a total dividend per share of N1 for the 2019 business year as against 85 kobo paid for the 2018 business year. The bank will be paying a final dividend of 80 kobo per share in addition to an interim dividend of 20 kobo per share paid earlier in 2019.

Key extracts of the audited report and accounts for the year ended December 31, 2019 released at the Nigerian Stock Exchange (NSE) at the weekend indicated that gross earnings grew by 13.3 per cent to N559.8 billion in 2019 compared with N494.0 billion recorded in 2018. Total assets also grew significantly by 15.1 per cent to an unprecedented N5.6 trillion in 2019. This is the first time the bank’s gross earnings and assets will cross the N500 billion and N5 trillion marks.

Read Also: UBA posts N89.1bn profit after tax in 2019

Profit before tax rose from N106.8 billion to N111.3 billion. Profit after tax grew by 13.3 per cent to N89.1 billion in 2019 compared with N78.6 billion in 2018. On the cost side, operating expenses grew by 10.1 per cent to N217.2 billion in 2019 as against N197.3 billion in 2018, well below average inflation rate within the period, a reflection of cost efficiency gains.

The results further reflected the bank’s deepening of its pan-African business strategy, given the growth in the contribution of its 19 African subsidiaries to the group’s net earnings and total assets.

Ex-Nigeria’s operations contributed 46 per cent to the group’s pre-tax profit in the year under review. UBA has been deploying innovative lifestyle products to expand its market share across Sub-Saharan Africa, leveraging its presence in the United Kingdom, United States of America and France, to build its Africa’s Global Bank franchise, facilitating trade and capital flows between Africa and the rest of the world.

The balance sheet indicated that UBA recorded 20.2 per cent growth in loans to customers to N2.1 trillion while customer deposits increased by 14.4 per cent to N3.8 trillion compared with N3.3 trillion in 2018.

UBA Mananging Director Mr. Kennedy Uzoka said the  last year was important for UBA Group, as it gained further market share in most of its countries of operation.

He noted that the improvement in the balance sheet reflected increased customer confidence, enhanced customer experience, early wins from the ongoing business transformation programme and the deepening of the bank’s retail banking franchise.

By Taofik Salako, Capital Market Editor

Founder, Investment Banking and Trust Company (IBTC), Mr Atedo Peterside, has identified a low-inflation and stable macroeconomic environment as the major enabler needed to stimulate investors’ appetite and achieve a stable stock market.

Speaking after he was conferred with the Honorary Fellowship of the Chartered Institute of Stockbrokers (CIS) during the induction of 62 newly qualified stockbrokers into associate membership in Lagos, Peterside said a single-digit low inflation rate regime and stable macroeconomic framework would support the growth and stability of the capital market.

He pointed out that the fear of devaluation of the Naira in the wake of 12 per cent inflation rate with potential for further increase had elicited flight for safety, as local and foreign investors were taking short term bet on foreign currency as a hedging strategy.

He urged the Central Bank of Nigeria (CBN) to target a single digit inflation rate of about five per cent for enhanced conducive investment environment, re-build investor confidence and help stockbrokers to overcome market burn out.

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“The problem of the capital market is not the fault of stockbrokers but that of macroeconomic stability framework. In Nigeria, the inflation rate is currently 12 per cent, compared to two per cent in the United States of America. The inflation rate in Nigeria provides incentives for devaluation of the Naira and many investors fear devaluation,” Peterside said.

According to him, the fear of devaluation in itself is pushing many investors towards buying foreign currency as a short term bet to speculate on exchange rate.

He described as punitive the increase in the minimum Loan to Deposit Ratio (LDR) from 60 per cent to 65 per cent by the CBN.

“With the current low interest rate, the policy is punitive.  The CBN should bring inflation down to five per cent to stabilise the economy,” Peterside said.

In his address, President, Chartered Institute of Stockbrokers (CIS), Mr Adedapo Adekoje explained that the institute’s Board of Fellows approved Honourary Fellowship for Peterside in recognition of his intellectual and professional contributions to the growth and development of the capital market and the economy as a whole.

Adekoje noted that Peterside had served Nigeria in various capacities, including chairman of Technical Committee of the National Council on Privatisation which culminated in the landmark privatisation of all electricity distribution companies in Nigeria and chairman of the Committee on Corporate Governance of Public Companies in Nigeria among others. Peterside is currently the Alternate Private Sector Vice Chairman of the Nigerian Industrial Policy and Competitiveness Advisory Council.

Adekoje urged the 62 newly qualified stockbrokers who were inducted as associates to uphold the highest standard of professionalism in their activities.