Category: Investors

Director-general, Securities and Exchange Commission (SEC), Mallam Lamido Yuguda has decried Nigeria’s policy environment as a disincentive to investors.

Yuguda stated this when a team from the Nigerian Economic Summit Group (NESG) visited the Commission in Abuja.

He said the capital market can actually do more in the areas of provision of necessary infrastructure for the country in a bid to support the government in its developmental efforts.

“Our collective economic power is bigger than the government and in many countries you find out that the capital market is actually funding the government. When you save, the finance is used to create economic value that actually enhances your standard of living and this is a win-win. You get financial returns and also get utility from the investments and this is actually achievable.

”On the capital market, it is a welcome development that we are talking with the NESG for there is something that really needs to happen in this country. When you look at our policy environment, in many areas it is not conducive for the return of capital to investors and we are working hard to tackle this,” Yuguda said.

He noted that the telecommunications companies are successful because no one is getting the services for free as everyone pays.

“We all pay for the services no one is getting the services for free, but when we move on our roads, we say no we do not want to pay for it. In other countries people pay for their roads and they are happy doing that, because the roads are good.

“We need to have a collaboration with a group like NESG. Once we are able to put things right, investors will be willing to put in money and there will be returns,”  Yuguda said.

Chief Executive Officer, NESG, Mr. Laoye Jaiyeola, expressed worry that the banking sector is being over stressed, urging governments and corporate organisations to look towards the capital market for their funding needs.

Jaiyeola stated that transactions could be restructured to raise bonds, bills and all of those things that would fund whatever it is that needs to be funded without going through banks.

“The securities market needs to take the bull by the horn otherwise we are going to be in perpetual debt as a Nation and that will not help us. That is one of the reasons we say let’s re-engage, how can we get an Investments and Securities Act that will ensure that the needed funding for development in Nigeria is given priority and then we can fund Nigeria for a longer term. The short term funding cannot help us; we need to begin to move to long-term. We are passionate about it and we need to raise these funds for the needed development funding for Nigeria,” Jaiyeola said.

The telecommunication sector remains robust and there is no threat to its profit margin.

A review by Cordros Group concluded that without downplaying the impact of rising smartphone and broadband penetration, a faster replenishment rate for data bundles has  contributed to the rapid expansion in data revenue in the past three years.

“In our view, this lends credence to healthy margins in the face of rising cost pressures. With data revenue not showing any signs of weakness, we do not see any threat to industry margins in the near term,” the review based on possible impact of tariff hike stated.

The report noted that while the prerogative to hike telecom tariffs resides with the Nigerian Communications Commission (NCC), the body language of NCC does not show any inkling for an upward review of telecom tariffs in the meantime.

“However, we think mobile network operators have tactically passed on some portion of the cost burden to subscribers through a marginal increase in the depletion rate of data bundles,” the report stated.

Telecommunication companies under the aegis of the Association of Licensed Telecoms Operators of Nigeria (ALTON) had proposed a 40 per cent increase in the cost of calls, SMS, and data services in the country. However, the NCC rejected the request by the telecom operators, noting that such a decision must be fair to the subscribers and engender healthy competition among service providers.

Though it remains unclear whether the proposed hike in tariffs will be eventually implemented, the Cordros Group review examined the broad range of issues surrounding the development and the implications for mobile network operators.

The details of ALTON’s proposal revealed that the price floor of voice calls would increase from NGN6.40 to NGN8.95 while the price cap of SMS will increase from NGN4.00 to NGN5.61. On data services, ALTON stated that the NCC should implement the recommendations from the August 2020 KPMG report on the determination of cost-based pricing for wholesale and retail broadband services. The review noted that the proposal by ALTON must have been induced by the rapid increase in the cost of providing telecommunications services in the country.

Rand Merchant Bank Nigeria Limited has listed two series of commercial papers worth N20 billion on FMDQ Securities Exchange.

Rand Merchant Bank listed its N4.50 billion Series 1 and N10.50 billion Series 2 Commercial Papers (CPs) under its N80 billion CP issuance programme on the Exchange.

Rand Merchant Bank is an authorised financial services provider and a subsidiary of FirstRand Group Plc. It offers a comprehensive suite of investment banking products and services; advisory, finance and trading solutions; as well as investment opportunities and fund management to its diverse stakeholders.

FMDQ Exchange stated that the CPs, which are co-sponsored by Standard Chartered Capital & Advisory Nigeria Limited – lead sponsor; Rand Merchant Bank Nigeria Limited, Stanbic IBTC Capital Limited, FCMB Capital Markets Limited and FSDH Capital Limited shall be availed all the benefits of FMDQ Exchange’s prestigious listing and quotation service, including global visibility through the FMDQ Exchange website and systems, governance, credible price formation and continuous information disclosure to protect investor interest, among others.

“As part of the Exchange’s commitment to continuously leverage technology to foster innovation, transparency, and time-to-market efficiency in its securities admission service, the Exchange, last October, launched its Securities Admission Portal to automate all stages of FMDQ Exchange’s Securities Admission Service from the application filing to the review and approval stages.

“FMDQ Exchange will continue to provide a dynamic and innovative platform for capital formation, offering institutions the support required to impact their sectors,” FMDQ Exchange stated.

Forte Upstream Services Limited has received the ISO 9001:2015 certification for its quality management system.

The certificate was presented by the Standards Organisation of Nigeria (SON) to the company as a result of the conformity of the company’s quality management system to the requirements of the standard ISO 9001:2015.

According to SON, the systems of Forte Upstream was subjected to rigorous certification assessment by auditors, after which the system was adjudged to have conformed to the requirements of the International Standards.

The certification is in accordance with the companies drive to improve its processes, procedures, and quality delivery of its services and product.

Managing Director, Forte Upstream, Mr. Doyin Ogun said the certification was a confirmation of its  company’s effective quality management system, which has been tested by SON.

“The audit looked at the people, policies that we have, and look at the system that we use to drive them, and put them to test. This essentially factors in what and how in terms of our policy implementation in order to reach quality levels for our stakeholders, current customers, internal stakeholders, and, ultimately, our potential customers,” he said.

“What we believe is that, when clients see the ISO certification, it means our system have gone through the right kind of tests. It gives us impetus to work with people that we would ordinarily have not been able to work with. It also gives us a better selection chance, when we go out there to look for partners.”

Guinness Nigeria, a subsidiary of Diageo Plc, has continued its growth trajectory, posting a revenue of N159.44 billion for its third quarter period ended  March 31, 2022, which represented a 39 per cent growth over the same period last year.

Besides, the company reported a profit after tax of N15.28 billion in the period under review which represented a 731 per cent growth over the same period last year.

The results show an impressive performance and a significant improvement when compared to the same period last year, a testament to  the commitment to meeting consumer demands as well as the company’s resilience in a challenging operating environment.

Managing Director, Guinness Nigeria Plc, Mr. Baker Magunda said in the first nine months of its business year,  the company continued to grow on the back of the strong recovery in the first half of the year.

“The business has delivered growth in the face of the challenging operating environment characterised by rising inflation and forex challenges in the three months ended 31 March 2022. Revenue grew by 39 per cent to N159.4 billion benefitting mainly from price increases across all brands, as well as from favorable brand mix and resilient consumer demand.

“We have delivered revenue growth across all key categories driven by our strategic focus brands, Malta Guinness and Guinness, as well as strong growth in local and imported spirits and the ready-to-drink category. This has further shown that our strategy is sound, and we are unwavering in our commitment to ensuring our long-term competitiveness in Nigeria,” Magunda said.

The statement stated that Gross Profit grew 76 per cent in the period as revenues grew ahead of cost of sales. Cost of sales increased by 24 per cent, largely due to inflationary pressure, sales volume growth, forex devaluation impacting imported materials, air freight cost increase and a shift towards more expensive can products. The company also noted that its marketing expenses increased 68 per cent versus last year as it increased its marketing investments.

“We increased marketing investment to support our strategic growth priorities and the recovery of the on-trade. Distribution expenses also increased 36% driven by higher volumes, freight and diesel inflation and extended journey time for road transportation. All of our efforts delivered an operating profit growth of 200% to N22.9 billion.”

Chair, Guinness Nigeria Plc, Dr. Omobola Johnson, also commending the impressive result. “The Board remains confident that our strategy is sound and will continue to support the management to build a business that will consistently deliver sustainable growth for all our stakeholders,” he added.

Marketing communications company, Algorithm Media has launched a renowned data management product, Audience Origin in Nigeria and 11 other African countries.

Audience Origin, a data-driven product owned by WPP’s choreograph is a customer- centric approach to data management, usage and brand growth. It was debuted in Nigeria and other African markets of Cameron, Egypt, Ethiopia, Ghana, Ivory Coast, Kenya and Morocco.

Group Chief Executive Officer, Algorithm Media Seni Adetu, the firm being part of WPP is taking their commitment to truly understanding consumers to a different level by launching Audience Origin.

“Algorithm Media has taken the biggest step anyone in the media industry has taken in terms of servicing our clients and making their businesses stronger with Audience Origin, Adetu said.

Research Director, Audience Origin, Ramona Daniel reiterated that Audience Origin is more relevant and urgently needed in Africa.

Daniel said: “Many advertisers lack robust and reliable consumer research data which is glocal in orientation leaving a gap in harnessing data that can be leveraged from global perspectives, though retrieved from local sources.

“This product makes it possible to o segment consumers using more defined psychographic details such as hobbies, media consumption patterns and consumer touch points. This way the consumer CNA be defined by understanding their behaviours and motivations enabling us to propose viable working solutions to business challenges.

Managing Director, Wavemaker, a subsidiary of Algorithm Media, Mr. Soji Olaogun stated that generating quality insights and data for marketing brands has been a challenge in Nigeria, a country of enormous opportunities.

He said, “with Audience Origin we can use real life data to understand the consumers and create an authentic connection with them and our client’s brands”.

Chief Executive Officer, WPP, Dominic Grainger said: “We are building a much more consolidated WPP offer, I think altogether we have more opportunity to help our clients grow their businesses across the world. As the world becomes even more digital and data driven, we see a massive amount of opportunity for our clients to connect more effectively with consumers as we go forward.’’

Royal Father of the day, Akarigbo of Remo land, His Royal Majesty, Oba Babatunde Ajayi, FCA, commended Algorithm Media for the initiative.

He prayed for its success and assured partners of a robust relationship with the company.

“It’s always a thing of joy when we see growth like this, we have very incredible people in Nigeria and you will not have cause to regret bringing Audience Origin to Nigeria, he said.

Union Bank of Nigeria (UBN) Plc reported growth in the topline but profit dropped in the first quarter.

Key extracts of the interim report and accounts for the first quarter ended March 31, 2022 showed that gross earnings rose to N42.9 billion in 2022 as against N36.4 billion in first quarter 2021. The topline growth was driven by strong earning assets from on-lending to key sectors in the economy

• Net interest income after impairments also rose by 27 per cent o N12.9 billion in first quarter 2022 as against N10.1 billion in first quarter 2021.
• Non-interest income: however dropped by 19.1 per cent to N11.5 billion as against N14.2 billion in first quarter 2021.

Profit before tax also declined by 8.8 per cent to N6.4 billion in first  quarter 2022 compared with N7 billion in  first quarter 2021.

• Operating expenses had risen by 3.9 per cent to N18 billion from N17.3 billion. The balance sheet also weakened. Gross loans dropped to N882.9 billion from N899 billion  in December 2021. Non-Performing Loan (NPL) ratio was flat at 4.3 per cent
• Customer deposits declined by 3.5 per cent at N1.31 trillion from N1.36 trillion last December; due to paying down of expensive time deposits

Chief Executive Officer, Union Bank of Nigeria (UBN) Plc, Emeka Okonkwo, said: “In 2022, we renewed our focus on turbocharging productivity and ensuring we fully leverage the strength of our digital channels, regional network and talent to maximise the bottom line.

“Our efforts are gaining momentum and notwithstanding a challenging economic climate in Q1 2022, our Net Interest Income after impairment grew by 27per cent compared to the same quarter in 2021 from N10.1 billion to N12.9 billion. Gross Earnings are also up by 18 per cent to N42.9 billion against N36.4 billion in Q1 2021. This was bolstered by improved asset yields, treasury trading income and revenues from our alternate channels. We are steadily seeing increasing customer adoption with a 36 per cent YoY increase in active users on UnionDirect, our agency banking network, and increasing transaction volumes with a 20per cent YoY growth across our digital channels.

“Interest Income grew by 41per cent from N22.2 billion to N31.4 billion as our earnings asset base expanded with a more viable loan portfolio.

“Our NPL ratio is flat at 4.3per cent (from December 2021), within the regulatory limit, while cost to income ratio dropped from 79.4per cent in December 2021 to 73.9per cent in March 2022. We will continue to drive cost optimisation to ensure consistent improvement in efficiencies.

“With a Capital Adequacy Ratio (CAR) of 15.6 per cent, our capital position remains strong.

“On the innovation side, we launched SpaceNXT – a purpose-built hub created to encourage innovation and foster collaboration within the  tech ecosystem. This remains a space where Union Bank desires to maintain a leading position.

“For the rest of H1 2022, we will continue to focus on driving productivity, mining targeted opportunities across regions and optimising our digital platforms to deliver improved customer service and acquisition. ”

Speaking on the results, Chief Financial Officer Joe Mbulu said: “The bank continued to demonstrate resilience in our Q1 2022 results. Headline Gross Earnings increased by 18per cent to N42.9 billion from N36.4 billion in Q1 2021. Net interest income after impairment charges grew by 27per cent driven by 41per cent increase in Interest Income to N31.4 billion from N22.2 billion in Q1 2021. Non-Interest Income declined by 19.1per cent from ^14.2 billion to ^11.4 billion driven by higher foreign currency revaluation loss.

“Operating Expenses increased marginally by 3.9 per cent QoQ, as a result of higher regulatory, diesel, and software expenses. In Q2 2022, we will focus on optimising operating costs by intensifying measures to mitigate the impact of high inflation.

“We will also continue to drive for a more efficient balance sheet by paying down expensive deposits and pricing our risk assets better.”

By Taofik Salako, Deputy Group Business Editor

Financial inclusion is set to receive a major boost with the launch of zero-interest microcredit services to small and medium scale enterprises (SMEs) by Egoras, one of the leading fintech companies in the country.

Justifying the launch, the company said it was to drive financial inclusion and access to funding for Nigerians for personal and business needs.

On the launch of the interest-free loans, Ugoji Harry, the Chief Executive Officer of Egoras, noted that the development reinforced the company’s commitment to catering for the financial needs of Nigerians through leveraging the latest financial technology.

“Our vision as a fintech company is to build a digital ecosystem that thrives on blockchain technology, which empowers Nigerians and small businesses to access instant microcredits. We aim to promote  growth and development across Nigeria, including the continent, through the creative elimination of financial institutions that make access to credit facilities difficult due to high-interest rates. It is on this backdrop that we have developed a unique system that is centred around the exchange of used assets for repayment purposes to support the growth of Nigerian business, particularly the unbanked or underserved communities,” he said.

The Media Director, Egoras, Moses Mudiaga, stated that the adopted business model of the organisation would redefine the operations of the financial ecosystem across the African continent, particularly Nigeria.

“For us at Egoras, we understand the pains of Nigerians, especially small-business owners, who are striving to access microcredits to either cater for their private needs or to upscale their business operations. It is on this understanding that we have designed a bespoke microcredit scheme that seeks to support Nigerians and small enterprises through the provision of zero-interest instant loans with a flexible repayment plan,” he said.

Egoras is a fintech company that is passionate about building sustainable credit systems through utilizsing blockchain technology to facilitate the execution of low-microcredit transactions across Nigeria and other African countries. This is in a bid to enable small businesses to access credit facilities through a decentralised financial process.