The Nation Newspaper

Category: Business

  • GTBank sells GTB Registrars

    Guaranty Trust Bank (GTBank) Plc might have concluded the sale of GTB Registrars, its share registration and management subsidiary, as the bank continues with the divestment from its non-core banking subsidiaries.

    A source close to the bank said it has concluded the sale of GTB Registrars, bringing to three subsidiaries that have been sold in furtherance of the decision of the bank to remain a commercial bank.

    CBN’s Scope of Banking Activities and Ancillary Matters No 3, 2010 requires banks to concentrate on core banking functions. The new model requires banks to either sell non-core banking businesses or form a holding company to hold such non-core banking businesses, including activities, such as insurance, asset management and capital market operations.

    Most banks including GTBank, Access Bank Plc, Diamond Bank Plc, Fidelity Bank Plc, Skye Bank Plc, Sterling Bank, Zenith Bank, Unity Bank and Wema Bank have chosen to divest from non-banking subsidiaries.

    GTB Registrars acts as registrar for GTBank Plc, Mansard Insurance Plc, and GTHomes Ltd. It manages over 400,000 shareholder accounts.

    The share registration firm prides itself as a customer excellence company.

    “Whether providing registration services or handling a specific corporate action project, we work in partnership with our clients and their advisers to understand their requirements and deliver innovative solutions in an effective and efficient manner,” it stated on its corporate information portal.

    GTBank had earlier sold its insurance subsidiary- Guaranty Trust Assurance, which changed its name to Mansard Insurance.

    GTBank’s former wealth and investment management subsidiary, GTB Asset Management (GTBAM) Limited, at the weekend changed its name to Investment One Financial Services Limited following the sale of the investment firm through a management buy out.

    Although the value of disposed GTB Registrars was not available, the source said the bank sold the share registration and management business at a competitive price.

    According to the source, GTBank places emphasis on sustainability of reputation of its erstwhile subsidiaries as providers of excellent services in its consideration of potential buyers. It also seeks to extract the best values from the disposal of assets.

    GTBank had received N11.91 billion from the sale of its majority equity stake in GTAssur. It sold 67.68 per cent equity stake in GTAssur to Assur Africa Holding (AAH). The shares were sold at a price of N1.76 per share for a total consideration of N11.910 billion, approximately $76 million.

    In confirmation of the completion of the deal, a total of 6.77 billion shares of GTAssur worth N11.91 billion were exchanged in 17 deals on the Nigerian Stock Exchange (NSE). GTAssur paid up share capital consists of 10 billion shares of 50 kobo each.

    With GTAssur market price then at N1.32, the selling price represented a premium to GTBank and also indicated that the deal recognised that GTAssur was undervalued by the interplay of market forces at the secondary market.

    AAH was incorporated in the Republic of Mauritius as a special purpose vehicle incorporated for the GTAssur acquisition.The shareholding structure of AAH is made up of six members comprising three international developmental finance institutions – DEG (Germany), Proparco (France) and FMO (Netherlands) and three private equity funds with substantial investments across Africa – ADP I Holding 7, subsidiary of African Development Partners I, LLC and ADP I L.P. (together “ADP I”), advised by Development Partners International LLP (“DPI”) based in the United Kingdom, AfricInvest II LLC and AfricInvest Financial Sector Limited, both advised by AfricInvest Capital Partners (“ACP”) based in Tunisia.

  • ‘Audit committee key to corporate governance’

    The audit committee remains a key pillar of corporate governance in firms, Chairman, Audit Committee Institute of Nigeria, Christian Ekeigwe, has said.

    He spoke at the Annual Audit Committee Roundtable in Lagos.

    He explained that in advanced economies, recommendations of audit committees are implemented as that is the only way of ensuring that management complies with regulatory guidelines.

    He said the Financial Reporting Council Act 2011 recognises the importance of Audit Committees in cooperate governance and there is need to explore the dimensions of audit committee responsibilities to ensure they fulfil their duties diligently.

    He advised investors to be careful in choosing firms to invest in, saying they should choose the ones that have developed the right environment. “Good governance is a control against fraudulent financial reporting. Firms with good governance would have enterprise risk management framework that helps deter and detect fraudulent financial reporting,”he said.

    He said the Audit Committee Institute is spearheading initiatives to improve the committee effectiveness with the establishment of its Centre for Audit Quality, which would focus on helping organisations and their internal and external auditors to improve the quality of audit judgments as a means of improving the quality of financial reporting process.

    He added that shareholders have a right to expect that Audit Committees are working for their interests because when that happens, shareholder value is protected.

    He said when shareholders’ interests are protected; it becomes easier to attract investments that create jobs and wealth for the economy. He called for reforms in many aspects of corporate governance and audit committees’ regime, financial reporting value chain as well as audit firm governance.

    He said Audit Committee Institute is spearheading initiatives to improve audit quality with the establishment of its Centre for Audit Quality (CAQ), which will focus on helping organisations and their internal and external auditors to improve the quality of audits as a means of ensuring shareholder value assurance.

    In future, professional bodies and audit firms would be invited to affiliate with the centre, in the quest for reassuring audit quality and preventing audit failure.

  • Banks’ imagemakers urge patience on ATM fee removal

    Banks are working out ways for scrapping the N100 charged customers for using other banks’Automated Teller Machine, (ATMs), according to the Association of Corporate Affairs Managers of Banks (ACAMB).

    ACAMB’s President, Mr Tunde Sofowora, said the banks would strive to remove impediments towards the scrapping of the charge.

    Banks’chief executives agreed three weeks ago to scrap the charge to promote e-banking.

    Sofowora said: “The rough edges will be smoothened in a few days and customers will enjoy this,” new freedom of using ATM charge.”

    He urged customers to be patient to allow banks to work out modalities with third party service providers on implementing the scrapping.

    He said the resolution of the Bankers’ Committee is one of the ways that banks would leverage on to give values to their customers.

    “It is also one of the ways of promoting neighbourhood banking to encourage the success of the industry,” he added.

    He said banks have acquired sufficient capacity in infrastructure and manpower to run a seamless cash-less economy.

    According to him, customers among other related parties, must avail themselves of the friendly environment banks have provided to promote their businesses and the economy in particular.

    The ACAMB’s chief said banks are making it easier as much as possible for customers for customers to transact their business from any location in the country, adding that the issue of providing transaction convenience is key to the growth of the economy.

    Sofowora said banks have invested billions of naira to acquire thousands of Point of Sales (PoS), among other channels, to service customers better.

    “To this end, the association urged merchants, traders, supermarket operators, and filling station owners to go to their banks and collect PoS terminals to facilitate electronic payments nationwide.

    “Banks are promoting the growth of electronic payment system, as well as increasing the availability, reliability and security of electronic channels. The use of e-banking will discourage heavy cash usage that attracts deadly robberies and cash related crimes such as kidnapping and money laundering,” he added.

  • Equities make N1.93t gains in 11 months

    •Bulls hit homestretch

    Investors in the equity market have in the past 11 months gained more than N1.93 trillion in capital appreciation as market considerations of quoted companies surge towards their best closing in recent years.

    Despite substantial profit-taking in November, equities surprised many analysts’ predictions of a slowdown with modest gains in the 11th month, pushing the year-to-date return for the period to N1.933 trillion.

    Total market value of quoted equities on the Nigerian Stock Exchange (NSE) closed November at N8.466 trillion, indicating an increase of N43 billion during the month. The All Share Index (ASI), the benchmark index that tracks changes in prices of quoted companies, underlined the positive pricing trend with a modest increase of 0.24 per cent to close at 26,494.44 points.

    Aggregate market capitalisation and ASI had opened November at N8.423 trillion and 26,430.91 points. Both key indices had opened this year at N6.533 trillion and 20,730.63 points respectively.

    The modest gain in the 11th months pushed the year-to-date return at the NSE to 27.8 per cent, underlining the attraction of equities as a real-yield instrument. The Monetary Policy Rate, the benchmark interest rate set by the Central Bank of Nigeria (CBN), stands at 12 per cent while inflation rate stands at 11.7 per cent.

    Fixed-income rates generally showed out equities’ return as substantially attractive. Three-month tenor deposit rate of banks stands at 8.69 per cent, 91-day Nigerian Treasury Bill (NTB) carries 12.4 per cent while average monthly prime lending rate currently stands at 16.48 per cent.

    The performance of the stock market was swelled by impressive bullish run in the third quarter, which scooped N1.4 trillion capital gains to investors during the three-month period.

    The third quarter posted the biggest rally in recent periods with a quarterly return of 20 per cent during the three-month period ended September 30, 2012. Total average year-to-date return then closed the period at 25.47 per cent.

    Aggregate market capitalisation of all equities, which had opened the third quarter at N6.895 trillion, closed the period at N8.282 trillion. This represented an increase of N1.39 trillion. The ASI jumped from its index on board of 21,599.57 points to 26,011.64 points, an increase of 20.43 per cent.

    The market had closed the first half with a marginal gain of 4.19 per cent. ASI closed the first half at 21,599.57 points as against its year opening index of 20,730.63 points. Aggregate market capitalisation of all quoted equities also showed modest increase of 5.54 per cent at N6.895 trillion by June compared with its value on board of N6.533 trillion for the year.

    The market had closed the first quarter with a negative year-to-date return of 0.38 per cent as declines in share prices of highly capitalised stocks overwhelmed the market situation. ASI closed first quarter at 20,652.47 while aggregate market capitalisation of all equities closed the first three months at N6.550 trillion.

    The bullish rally has re-infused confidence into the stock market and set out the market for its biggest gain in the past five years.

    Market value of all quoted companies had dwindled by N1.38 trillion in 2011 as uncertainties in the banking sector and monetary tightening policies of the CBN deflated initial optimism that had seen the market with double-digit gain in the early part of the year.

    Aggregate market capitalisation of all quoted equities slumped to N6.533 trillion at the end of last trading session for 2011 as against the year’s opening value of N7.914 trillion. The ASI fell to 20,730.63 points from its 2011’s value-on-board of 24,770.52 points. Altogether, the benchmark index indicated a negative return of 16.31 per cent, which translated to almost N1.4 trillion loss.

    The downtrend in 2011 had been pervasive as all other key group indices showed negative returns. From the petroleum-marketing sector to banking, insurance and food and beverages sectors while the bears rattled all cadres of stocks from penny stocks to mid-cap and high cap stocks.

    The upswing in 2012 has also been pervasive and market-wide with key group indices showing double-digit returns. The NSE 30 Index, which tracks the 30 most capitalised stocks, showed 11-month year-to-date return of 36.24 per cent; the NSE Consumer Goods Index posted 33.68 per cent while NSE Banking Index returned 11.19 per cent. But the beleaguered oil and gas and insurance sectors remained under sell pressures with negative returns of -29.32 per cent and -20.53 per cent.

  • CBN may create Collateral Registry to promote lending

    TO ensure a vibrant lending system, the Central Bank of Nigeria (CBN) is planning to create a collateral registry.

    The registry will keep all documents relating to the collaterals used by borrowers to obtaind loans.

    CBN is collaborating with the World Bank to create the registry.

    The Bank of Ghana created a collateral registry and registered 72,703 collaterals from 197 lenders between February 2010 and September 2012.

    The Director of Communication, CBN, Mr Ugochukwu Okoroafor, said the bank was working out modalities for creating the registry to improve lending.

    CBN, he said, was working with the World Bank to ensure the success of Financial System Strategy (FSS) 2020. He said efforts were on-going to strengthen the capacity of banks to lend.

    He said: “We are going to work on collateral registry for the banking industry. We do not have registry for people to access facilities and further protect credits offered them to develop their business.

    “By collateral registry, when you buy a land and you want to take loans, that land will be registered. If you want to collect loan, and you use your land to borrow money, that should be referred to as collateral registry.”

    He explained that the registry is in form of guarantees provided to secure facilities granted by the banks.

    According to him, the structural changes that have taken place in the recent times attest to the fact that the industry has stabilised. He foresees a more improved and value added industry ahead, as CBN continues its proactive measures.

    Industry observers attributed the CBN’s decision to come up with a registry to the needs to reduce the burdens encountered by banks while trying to recover some of their loans. They said the CBN has learnt its lessons, following the huge debts recorded by banks after the 2009 stress test.

    Former President, Institute of Chartered Accountants of Nigeria (ICAN), Mr Emmanuel Ijewere, said banks recorded huge toxic assets that almost grounded the industry. He said the reforms, which exercise started in 2009, has achieved certain objectives, arguing that the weaker position of some banks would not have been exposed if the CBN and the Nigerian Deposit Insurance Corporation (NDIC) have not conducted an audit test.

    He said the banking watchdog is trying the best it could to protect the depositors fund and further re-invigorate the sector. He said the registry is good, and capable of boosting the growth of the industry and the economy, adding that the more lending improves, the better for the critical sector of the economy.

    He said the agricultural sector has suffered from bad lending in the past, noting that banks’ lending to the industry has grown from the about two to three per cent.

  • Abdullahi seeks autonomy for NPA

    As the nation awaits the passage of the Ports and Harbour Bill by the National Assembly, the Managing Director, Nigerian Ports Authority (NPA) Mallam Habib Abdullahi, has advocated a measure of autonomy for the authority in the bill.

    Abdullahi said if the agency is autonomous, it would perform efficiently.

    “No port in the world can exist and prosper without a measure of independence, therefore, autonomy is strategic and required to ensure efficiency in line with international best practices.”

    He said vessels waiting time is now 19 days instead of 28 and that the channels had been dredged to the required draught.

    Many foreign investors, he said, have indicated interest in ports development in the country. This, he said, came to light during the visit of President Goodluck Jonathan to New York. He explained that this was an indication of the international recognition of the nation’s maritime potential.

  • CBN seeks 40% board, mgt positions for women in banks

    Central Bank of Nigeria (CBN) has urged banks to take steps that would ensure that 40 per cent of women in their employment occupy board and management positions in 2014.

    CBN Governor, Sanusi Lamido Sanusi, who spoke at the annual bankers’ conference in Lagos, said banks should take steps to address challenges being faced by women in the workplace.

    He said men and women are equal and should be treated equally in management institutions.

    “I am not one of those who believe that all men are better than women, or that women are better than men. You need both to have diversity on the board. Any board that has a combination of men and women is better than any one that has men only, or women only,” he said.

    Sanusi explained that the move to empower more women is aimed at boosting Federal Government’s programme on job creation and poverty alleviation. He said the Bankers’ Committee has declared financial period, “a year of women empowerment,” adding that a sub-committee has been formed to enable Deposit Money Banks achieve that objective.

    “The Bankers’ Committee has made 2012 the year of women empowerment. A sub-committee on women empowerment has been formed. We are working at establishing a special fund by the end of the year that will provide credit facilities to women at a single digit interest rate,” Sanusi said.

    Already, CBN data indicates that women already occupy 27 per cent of senior management positions and 15 per cent of board seats in all the banks, the Bankers’ Committee, has observed.

    “We are making serious progress in achieving the set target. Majority of banks are complying and this has led to the positive result we have today,” it said.

    The CBN said interests expressed by banks on the policy has been encouraging, adding that there has been sensitisation and gradual implementation of the policy in majority of the banks.

    The Nation gathered that some banks have started taking census of gender distribution in their banks to avert CBN’s sanctions. Many of the banks have set up committees to decide processes and plans that would assist them address the gender imbalance in the industry.

  • ‘Investing in agric most effective way to eradicate poverty’

    Increasing spending on agriculture is the most effective type of investment for halting poverty across the country, a don, Prof. Abel Ogunwale, has said.

    In an interview with The Nation, Ogunwale, a lecturer in Agricultural Extension and Rural Development, Faculty of Agricultural Sciences, Ladoke Akintola University,Ogbomoso,Oyo State, said investments in agriculture are more effective in lifting people out of poverty than investments in any other sector because they not only drive economic growth but set the stage for long-term sustainable development.

    According to him, the key challenge is how to build the capacity of small farmers to invest in arable crops and animal husbandry which could become viable rural businesses, particularly for women and young people who are jobless.

    He said revamping agriculture to boost income of farmers involves improving access to and cost of finance, public expenditure in agriculture, research and development, and private sector investment in agriculture.

    He said agriculture-related agencies needed to marshal efforts and resources in partnership to accelerate modernisation and achieve sustainable food security outcomes, reduce poverty and end hunger.

  • Senators laud NPA over facilities

    The Senate Committee on Marine Transport has inspected some facilities at the ports.

    After a two-day tour, Chairman committee of the committee, Hajia Zainab Kure, said they were happy with the usefulness of the funds they appropriated for the Nigerian Ports Authority (NPA), and gave kudos to its management.

    “The level of work done by NPA between last year and this year is encouraging. We are happy,” she said.

    She said the performance of NPA would encourage the lawmakers to ensure that funds were appropriated by the National Assembly for the modernisation of ports’ infrastructure.

    The Niger State-born lawmaker said the committee would also visit the Eastern ports to ensure that the level of compliance in projects’ execution shown by the NPA in Western ports is replicated.

    She defended the projects, especially the rehabilitation of the Quey Apron and Queue walls of the Tin Can Island port, saying wear and tear had set in and that there was the need to rehabilitate them to bring the port to standard.

    She called on the NPA to continue to carry the National Assembly along in all it is doing as it has always done, adding that the issues earlier raised by some members of the committee, particularly the contract sums and the operations of the expatriate firms that NPA is partnership with should be attended to.

    She said if the jobs had passed through the procurement law and the jobs awarded by the Federal Executive Council (FEC), NPA had nothing to do with them.

    The projects the Senate committee inspected were approved last year by the National Assembly and funds allocated for them in this year’s Budget Act.

    Their visit was to see the level of work for further appropriation of funds. NPA partnerships in other specialist international firms had been endorsed by the National Assembly.

    The projects the senators inspected were the modernisation of the NPA headquarters, the Eastwest Moles, Apapa port common user road and the Tin Can Island Ports Quey Apron and Quey wall rehabilitation.

  • Katsina border under surveillance

    The Jibia border in Katsina State has been put under surveillance by the Nigeria Customs Service.

    It was gathered that the rate of smuggling of goods from Niger Republic into the country through the border has reduced.

    Investigation in Katsina revealed that Customs had moved to prevent the importation of rice, illicit drugs, vegetable oil, textile, used clothes, confectionery, juices, used bags and other prohibited items from entering the country.

    When The Nation visited the border last week, it found that the warehouse of the command was filled with seized goods and the border post was more organised.

    With the porosity of land borders, investigation revealed that the Customs at Jibia has increased surveillance with a monitoring team in place.

    The Area Comptroller of the command, Alhaji Yusuf Umar, said the surveillance became possible because of the vehicles given to them by the management of Customs.

    Officers of the command, he said, have arrested suspected human traffickers and handed them to the Nigerian Immigration Service.

    About two months ago, he said the command apprehended about 85 people ranging from five, six, seven, 10 and 15 years old.

    The command, he also said, has intelligent officers who give him information on criminals’ movements.

    “We have officers and men who are happy to carry out their jobs and that is why they have been up and doing. We have re-strategised. Also, our men have received training and we have new arms such as AK47 rifles to carry out our duties. When you see our officers on the road, you will notice that some of them have been trained by the Nigerian Army in Zaria and that is why we are very active and pro-active and that is why we have been able to make the seizure you have seen.

    “If your officers are hungry or uncomfortable, they may not be able to do the job as expected. If the environment is not condusive, you will not be able to get what is expected. The Customs service of today is different from the Customs service of four, five years ago because we have a visionary and focused leadership in Alhaji Dikko Abdullahi.

    “His outstanding leadership covers revenue generation, infrastructure and capacity building, among others.

    “I am doing the same thing where I was posted to; to make sure I copy my boss. Whatever he does, I always follow his foot step,” he said.

    He advised officers and men of the service to be diligent in their duties.