The Nation Newspaper

Tag: assets

  • IFC: Nigeria contributes to $42.6tr emerging market bank assets

    Global Progress Report on Sustainable Banking Network says Nigeria remains a major contributor to the $42.6 trillion bank assets by 34 emerging markets.

    The report released by the International Finance Corporation (IFC) of the World Bank Group, said the figure represented more than 85 per cent of the total bank assets in emerging markets in the world.

    It named Nigeria a major force in its support towards development and fights against climate change, in line with objectives of the Sustainable Development Goals.

    “Some of the 34 countries are wealthier than others, but all of them have made progress in advancing sustainable finance reforms. Eight countries include Bangladesh, Brazil, China, Colombia, Indonesia, Mongolia, Nigeria and Vietnam reached an advanced stage. “This is because they have implemented large-scale reforms and put in place systems for results measurement,’’ it stated.

    The report further mentioned that there were practical indicators for countries to apply such reforms to their own domestic markets, regardless of their size or stage of development.

    The IFC commended the endorsement of the Nigerian Sustainable Banking Principles by the Central Bank of Nigeria, to ensure a strong level of involvement from 34 national and international banks.

    The report suggested that to continue to advance in growth of sustainable finance, the country’s banking principles should integrate guidelines related to green financial flows and provide financial or non-financial incentives.

  • Banks set to raise stakes in pension assets

    Banks set to raise stakes in pension assets

    Banks are making fresh moves to deepen their stakes in Pension Fund Administrators (PFAs). The new interest among top-tier lenders followed huge returns being posted by the PFAs as they explore new investment opportunities in fixed income securities, which are turning a gold mine for discerning investors. The growth of pension assets to N6.02 trillion since the Pension Reform Act of 2004 points to the rising liquidity and business opportunities in the sector, writes COLLINS NWEZE.

    INVESTING in segments of the economy that present huge returns on investment is not strange in banking industry. The banks always have with eyes in the future, many say, as they also consider security of investment and impact on the economy.

    As obtained in other developed economies, the Nigerian pension industry has been tipped to rival the banking sector in terms of size and economic importance over the next decade.

    Interestingly, the Pension Fund Administration (PFA) is now the next investment destination for many discerning lenders because it is not only making huge returns for discerning investors but has huge impact on the economy. The banking sector has seen the First City Monument Bank (FCMB) Group’s increased investment in Legacy Pension, one of the PFAs.

    The FCMB Group Plc decided to increase its stake from 28.2 per cent to over 88 per cent equity holding in the company. Investigation showed that other top-tier lenders are already preparing grounds to take major stake in PFAs.

     

    How it all started

     

    Pension remains invaluable source of income for the retired. To ensure that the pension funds remain secured, the Federal Government introduced the Pension Reform Act of 2004. And 13 years its introduction, the asset under management in the pension industry has grown to N6.02 trillion. The rate of growth is quite remarkable when compared to the 125-year-old banking industry that stands at slightly over N30 trillion.

    Michael Stevenson, an equity fund manager based in Lagos, said aside the rapid growth of the sector, the PFAs have also delivered on the expectations of their retiring beneficiaries. He said that what stands out about Legacy Pension Limited is its adherence to set rules and sound business practices. He said FCMB’s decision to raise its stake in the firm remains wise investment.

    Also, Market Opinions’ Analyst, Emefu Ibeayoka, said the FCMB Group’s history from City Securities Limited and FCMB to its current form of a diversified financial services group shows it has deep knowledge and experience in the investment space.

    He said the announcement on the floor of the Nigeria Stock Exchange (NSE) of its intention to increase participation in the pension industry seems a natural next step for the group as the pension industry is set to rival the banking sector in terms of size and economic importance over the next decade.

     

    General investment principles

     

    According to the National Pension Commission (PenCom), led by its Director-General, Funsho Doherty, the PFAs are to invest pension fund assets with the objectives of ensuring safety and maintenance of fair returns.

    By virtue of Section 10 (2) of the Pension Reform Act 2014, all interests, dividends, profits, investment and other incomes accruable to pension fund and assets shall not be taxable. PFAs are expected to recruit and retain highly skilled personnel in their investment departments.

    “PFAs shall not invest Pension Fund Assets in instruments that are subject to any type of prohibitions or limitations on the sale or purchase of such instrument, except for open/close-end/hybrid funds and specialist investment funds allowed by regulation,” the Act said.

    Besides, the PFAs are not expected to trade on margin accounts with pension fund assets.

    It further said: “A PFA shall not engage in borrowing or lending of pension fund assets. PFAs shall not trade in financial instruments with pension fund assets at prices that are prejudicial to the pension fund assets.

    “Pension fund assets shall only be invested in bonds, Sukuk or other debt instruments issued by eligible state/local governments and corporate entities that are fully implementing the Contributory Pension Scheme (CPS)”.

    Other analysts said the Pension Reform Act (PRA) has restored discipline and trust for retirement savers. It has also limited employers’ pension liability and enhanced retirement benefits administration. No pensioner has lost his/her savings due to mismanagement and the industry continues to grow at a healthy pace. A lot of this credit accrues to PenCom.

    A cursory survey of stakeholders in the pension funds’ management would probably rates Nigeria’s pension reform and pension industry performance high. The only complaint seems to be coming from capital market operators and providers of infrastructure, who have been clamouring for pension fund managers to allocate more of their resources to these sectors in need of further development.

    Looking at the volatility of our stock market and the challenges of power sector privatisation (due largely to non-cost reflective tariffs), we must commend the PFAs and their regulator that they have remained conservative in their investment strategy.

    Further reports are quoted to reveal that in spite of the macro-economic headwinds experienced last year, the Nigeria Pension Industry’s Assets Under Management (AUM) grew by 16 per cent (one per cent higher than growth in the previous year).

    Despite the contraction in monthly contributions, growth in AUM was largely driven by the higher yield offered in the fixed income market.

    The figures from May 2017, Nigeria Pension Industry Survey revealed that 12.1 per cent of respondents have decided to move to another PFA when the transfer window opens whilst 35.4 per cent remain undecided. The level of competition amongst PFAs in Nigeria is set to intensify, with the opening of the transfer window and implementation of the Micro Pension Scheme (MPS).

    The intention announced by the FCMB to acquire a super majority of Legacy Pension Limited will broaden its service offerings with the group already offering commercial and retail banking, investment banking, asset management, and trusteeship services.

    The successful completion of this transaction will bring FCMB Group’s shareholding in the company to 88.2 per cent, thus becoming its largest shareholder. The development follows months of negotiations, regulatory reviews, approvals and pending final clearances of all relevant authorities.

    The broadening of FCMB Group Plc, led by its Group Chief Executive (GCE) of FCMB Group Plc, Ladi Balogun, to include a controlling stake in a PFA will certainly open a new vista of growth and stability to its income streams.

    The bank’s reported four million customers, over 200 branch network and strong digital presence are fertile grounds for the rapid growth of this new addition to its portfolio.

    On the other hand, Legacy Pension Managers Limited, whilst being a conservative player with a strong presence in Abuja and the North has steadily grown its assets under management to over N220 billion.

    The company has maintained a strict investment policy and achieved decent returns since inception.

    Also, FCMB Group’s equity mutual fund (known as the Legacy Equity Fund), has been returning 52 per cent. It is expected that FCMB’s over 40 years of investment experience will complement and enhance Legacy Pension Managers proposition to existing and prospective customers.

    With the synergies from enhanced distribution and investment expertise, analysts have hailed the FCMB Group’s to acquire majority stake in Legacy Pension Managers by describing it as a significant development that would not only shake up the pension industry, but also enhance the future performance of the company.

    Analysts anticipate that Legacy Pension Managers will be better positioned to grow its market share, compete effectively upon the onset of Retirement Savings Account portability, and also enter the micro-pensions segment in the informal market that will leverage the distribution and marketing muscle of a commercial bank within the group. These are interesting times for FCMB Group, Legacy Pension Managers and the pension industry as a whole.

     

    Rules of investment

     

    According to regulations on the investment of pension fund assets released by the PenCom, Pension Fund Custodians (PFCs) shall take written instructions from licensed Pension Fund Administrator (PFAs) with respect to the PFAs investment and management of pension fund assets held in the custody of the PFCs on behalf of the contributors.

    The PFCs, in discharging their contractual functions to PFAs, shall not contract out the custody of pension fund assets to third parties, except for allowable investments made outside Nigeria. The PFC shall obtain prior approval from the commission before engaging a global custodian for such allowable foreign investments.

    It said the PFAs, in discharging their contractual functions to contributors, shall not contract out the investment/management of pension fund assets to third parties, except for open/close-end/hybrid funds and specialist investment funds allowed by regulation.

    The PFAs are also expected to maintain a multi-fund structure as provided in this regulation, to govern the investment of pension fund assets of Retirement Savings Accounts (RSA) funds.

    In addition to the requirements of other guidelines issued by the commission on corporate governance, ethics and business practices, each PFA is expected to establish an Investment Strategy Committee as well as a Risk Management Committee, in compliance with Section 78 of the Pension Reform Act, 2014.

    Besides, the Investment Strategy Committee, in addition to other functions specified in the Act, shall formulate internal investment strategies to enable compliance with this Regulation, taking into cognizance the macro-economic environment as well as the investment objectives and risk profile of the respective PFA funds.

  • Unity Bank grows assets to N483.82b

    Unity Bank grows assets to N483.82b

    Unity Bank Plc has grown its total assets to N483.82 billion and gross earnings to N65 billion in the third quarter ended September 30, this year. Its profit before tax stood at N2.72 billion while post-tax profit was N2.45 billion.

    The result also showed that it has sustained a positive, but modest performance across key financial indices in spite of the challenging operating environment. The result, according to the lender in a statement, attests to its ability to remain profitable and deliver good returns on investment to its shareholders and customers. A review of the bank’s performance showed a modest growth across key financial indices by one per cent for gross earnings to N65.03 billion from N64.58 billion in the corresponding period of 2016.

    Operating expenses were down by two per cent to N18.6 billion from N18.9 billion in September 2016. This was due to cost containment initiatives instituted by the management aimed at optimising resources that attract efficiency and effectiveness of the lender’s assets. The bank’s earnings per share for the period under review stood at 20.94 kobo.

    Managing Director/CEO Unity Bank Plc, Mrs. Tomi Somefun,  noted that the bank was in the process of repositioning itself and has tapped into the emerging opportunity in the enlarged economic space, especially in the agriculture and SME value chains.

    The bank is also building strong infrastructure for retail banking and attracting youths for its sustainable banking business by developing customer-centric products to meet the needs of its esteemed customers.

    She noted that the bank is promoting initiatives aimed at unlocking inherent potentials that will enable it to effectively ride on economic headwinds and target opportunities in the markets.

    The bank recently recorded success in the resolution of its legacy Non-performing Loans (NPLs); an initiative now considered as an industry-wide direction in Private Asset Management Company (PAMC) as encapsulated in the new Central Bank of Nigeria’s (CBN) exposure draft for addressing banks’ NPLs challenges. The full impact of the initiative on the account and shareholder’s value is expected to begin to manifest soon.

    Working hand- in- hand with the Federal Government to achieve a reduced dependence on oil revenue, Unity Bank is contributing its quota towards the development of the agricultural sector by developing NIRSAL Farmers Savings Account product; specifically designed for bank customers (farmers) in rural areas.

  • STI grows assets by 3%

    STI grows assets by 3%

    Despite the harsh operating environment during the 2016 financial year, Sovereign Trust Insurance (STI) Plc grew its balance sheet by 3.26 per cent from N9.2 billion in 2015 to N9.5 billion in 2016, its Chairman, Oluseun Ajayi, has said.

    He spoke at the company’s 22nd Annual General Meeting (AGM) held in Lagos.

    The chairman, however, said there was a downward shift in the gross premium written compared to the same period ended December 31, 2015.

    He said the company ended the year with a gross premium written of N6.3 billion as against N7.1 billion in 2015.

    He stressed that the year was very tough for many business operators and the industry with the attendant foreign exchange scarcity which had a negative effect on the value of the Naira.

    He said as a result of the increase on  foreign currency and the drop in the consumption of insurance by the insuring public, the company’s profit in the year was  affected.

    From a profit before tax of N454 million in 2015, profit before tax in 2016 dropped to N44.98 million in 2016 while profit after tax was N23.59 million, he added.

    He said the comprehensive income  net of tax rose to N186 million from N19 million in 2015.

    He said their investment income grew from N214 million in 2015 to N281 million in 2016, representing about 32 growth rates.

    He noted that the  economic situation, which affected most  organisations, was beginning to show signs of recovery. He was confident that the company would benefit from the recovery in the year.

    On the company’s outlook,  Ajayi said: “The drive to continue to uphold comprehensive growth strategy still forms the background upon which our company is built. With our updated knowledge and understanding of the domestic business dynamics, our strategic direction will be designed to proactively envisage the likely opportunities that are inherent in the industry and mitigate against possible threats that may adversely affect our operations in the current year and beyond.

    “The expansive economy and growing population offer great opportunities to businesses in the country. The potential of the economy cannot be underestimated even in the face of renewed interest from international investors. All of these, in addition to the low penetration rate of insurance market, are pointers to great opportunities available in our country and industry. We also plan to align with various NAICOM’s growth initiatives in advancing the course of the insurance industry in Nigeria.

    “Resources will be continually deployed in line with our strategic master plan to achieve greater success and take our frontal position in the years ahead. We are currently in the process of initiating another five-year strategic direction that will take the company to the next phase of our growth from 2018 through 2022.

    Technology, no doubt will form the pivotal thrust of this process in ensuring that we remain competitive and relevant in the insurance market space in many years to come.’’  

  • NTDC to promote tourism assets

    NTDC to promote tourism assets

    Nigerian Tourism Development Corporation (NTDC), Director General Mr. Folorunsho Coker has promised to create a brand to promote the tourism assets in Borgu community in Niger State.

    He said new forms of tourism now exist in addition to the traditional ones, hence the need to use technology to drive the promotion and marketing of the Nigerian tourism assets.

    Coker spoke when he received the Emir of Borgu Kingdom, Muhammed Sani Dantoro (Kitoro IV), in his office  at the Corporation’s headquarters in Abuja.

    He expressed the readiness to work with the people in charge of the tourism assets of Borgu to explore the potential, which according to him, will hugely benefit the community, Niger State and Nigeria.

    The NTDC boss, who underscored the importance of Public-Private-Partnership in the bid to promote the Nigerian tourism assets, said: “joint venture is the way forward to sponsoring tourism promotion and development in Nigeria.”

    “We will work towards making Borgu International Dubar live up to its name, while also working on a digital campaign to market the tourism assets of Borgu to tourists, the community and the international community,” Coker noted.

    The Emir of Borgu, HRM Dantoro, earlier in his speech described the appointment of the NTDC boss as apt, saying it came at when the Nigerian government is diversifying the economy of the nation.

    “We know Coker will make the Corporation and the nation proud by improving the lots of the nation’s tourism industry, hence we are here to liaise with the NTDC to explore the tourism potentials in Borgu to the benefit of the community, state and the nation at large.

    “It is of note that Borgu’s landscape is dotted with enviable tourism potentials: It has the first National Park established by the federal government; the only West African English Speaking College of Wide Life School and the landmass is a combination of culture and agriculture. All these are readily available for exploration,” Dantoro said.

    The Emir of Borgu disclosed that the willingness of the Niger State Governor to develop tourism in the state, while he promised to establish a resort to be called Shagunu.

  • Lagos set to recover 100 assets sold illegally

    Lagos set to recover 100 assets sold illegally

    The Lagos State government may seize under-valued properties allegedly sold illegally and prosecute defaulters.

    The Nation learnt that the government is set to implement a far-reaching report on the sale of such assets. The report is said to contain a list of over 100 properties, the names of their buyers and the locations of the assets.

    Sources disclosed that the report  was arrived at after extensive lasting several months by a panel of inquiry set up in late 2016 by Governor Akinwunmi Ambode to “investigate the sale of its assets in prime areas running into billions of Naira”.

    The source, who does not want her identity revealed due to the sensitivity of the issue, said the government decided to investigate the sale of its assets because they were sold below market value.

    According to the source, the loss ran into billions of Naira.

    She said: “The affected assets are located in high-profile areas, where decision-makers, captains of industries, top government functionaries and political actors among others often crave to build their homes and offices.”

    She identified the areas where the assets are to include Ikeja GRA, Magodo, Ikoyi, Lekki and other prime locations.

    She explained that the assets were disposed at abysmal (or give-away) prices and obviously against public interest, which in her words, stoked the interest of the present administration to investigate and review the process by which the assets were sold.

    She disclosed that what eventually culminated in the resolve of the State government to investigate the sale of its assets was overriding public interest, lamenting that some of these assets “were sold as low as N20 million.”

    She added: “Generally, we have a situation where government properties in prime locations were sold at give-away prices. The assets were abysmally under-valued. Besides, the assets were sold below the actual market value”

    The Nation gathered that government took an exception to such transaction, stating that no serious government would allow such sales against public interest to stand.

    It was further gathered the report had indeed been submitted and implementation had begun with review of sales of properties that were sold grossly under market value.

    In one of the test cases under review, it was discovered that two wings of a       five bedroom semi detached house located around Ikeja GRA valued at hundreds of millions of Naira was in 2010 offered to Funmi Smith of Debam Mega Solutions Limited for a sum far less than half of the value, but seven years after the offer barely half of the offered sum has been paid to the State Government coffers by the Company.

    It was reliably gathered that as part of the report’s recommendations, the State Government has been advised to invite the Economic and Financial Crimes Commission (EFCC) to unravel several other transactions that have been identified by the panel of inquiry.

  • CITN backs voluntary assets declaration scheme

    CITN backs voluntary assets declaration scheme

    The Chartered Institute of Taxation of Nigeria (CITN) is fully in support of  Federal Government’s move to promote tax culture and expand the tax base, its President/ Chairman of Council, Cyril Ede has said.

    The support is coming based on the Executive Order signed by the Acting President, Prof. Yemi Osinbajo, which provides a legal framework for the Ministry of Finance to set up the Voluntary Assets and Income Declaration Scheme in collaboration with all 36 states of the federation.

    The scheme, he explained, was meant to bring more taxpayers into the tax net so as to enable them pay all outstanding taxes and the benefit to the tax payer is a waiver of interest and penalty as well as opportunity to pay taxes gradually up to a period of three years. The scheme will run for a nine-month period commencing from 1 July 2017.

    He recalled that the Institute has been in the vanguard of calling the government to declare tax amnesty wherein taxes due on incomes are demanded while the government forgoes the interest and penalties accruing. Such calls are contained in previous Annual tax conference communique and several advocacy efforts of the Institute with other bodies such as the National Association for Small and Medium Scale Enterprises among others.

    “Equally worthy of notice is the opening statement in the executive order acknowledging the duties of the State towards Citizens and their welfare.

    “This announcement, is therefore, a pointer to the fact that the government has a listening ear as it continues to aggregate the position of stakeholders in the tax space with respect to the broader and specific issues affecting poor voluntary tax compliance in the country,” he said.

  • Age and assets: No-go areas?

    It is certainly a curious piece of information that Chief Ricky Tarfa (SAN) allegedly refused to declare his age to the Economic and Financial Crimes Commission (EFCC).

    At an Igbosere High Court, Lagos,  on May 17, according to a report: “A witness, Zakari Usman from the EFCC Special Task Force Unit testified that Tarfa refused to state his age seven times during his investigation for alleged obstruction of the agency’s operatives.”

    The report continued: “The witness testified that the assets declaration form issued to Tarfa by the agency had a column requiring age declaration in seven places, but the senior advocate left all the spaces blank. He said the defendant also failed to declare his assets contrary to Section 7(a) and (b) of the EFCC Act.”

    It is curious that Tarfa, a Senior Advocate of Nigeria, allegedly refused to state his age in a form that required him to do so. Was there something he wanted to hide by not declaring his age? Was there something his age declaration would have exposed?  Since age declaration was not optional in this case, why would a lawyer of his status act as though it was?

    It is also curious that Tarfa allegedly failed to declare his assets as required by law? Was there something to hide? Was there something that would have been exposed?

    It is interesting that, according to the report, “the prosecution also played a video in court, titled: “Rickey Tarfa’s refusal”, which allegedly showed the defendant’s alleged refusal to fill the form.”

    The case: “Tarfa was arrested on February 9, 2016, for allegedly hiding two suspects – Nazaire Sorou Gnanhoue and Modeste Finagnon, both Beninoise – in his Mercedes Benz Sport Utility Vehicle (SUV), thereby shielding them from being arrested and obstructing justice. He was arraigned on March 10, 2016, and pleaded not guilty to a 27-count charge, which was subsequently amended to 26.”

    Further information: “The agency alleged, among others, that the lawyer offered N5.3million gratification to Justice Hyeladzira Nganjiwa of the Federal High Court, Lagos to compromise the judge.”

    It is interesting that Usman was quoted as saying the investigators “wrote a letter to GTBank, and information contained in the bank’s response showed the defendant’s date of birth as February 23, 1950.”

    The public may get to hear from Tarfa why he allegedly refused to declare his age as required, and why he allegedly failed to declare his assets as required. Before that happens, the information in the public space makes him look like a dodger.

  • Osinbajo seeks international collaboration for return of stolen assets

    Osinbajo seeks international collaboration for return of stolen assets

    Acting President Yemi Osinbajo on Thursday in Abuja canvassed robust international collaboration for the return of Nigeria’s stolen assets abroad.

    Osinbajo made the plea while opening a two-day National Dialogue on Corruption, organised by the Office of the Vice President and the Presidential Advisory Committee Against Corruption (PACAC).

    According to him, the effort at fighting corruption in the country was being delayed by the long and complicated response of the international community.

    `The last point I want to make is with respect to international cooperation.

    “I think that one of the critical issues that we have discovered in our fight against corruption is that we need much more robust international cooperation, especially with respect to return of assets.

    “We find that the process of returning assets, aside from the judicial process, is so difficult and so complicated that it could just take you literally years to get assets returned.

    “And I think that it is important for countries of the world where stolen assets are located to really work with us in ensuring that these assets are returned speedily.

    “I know that the United Kingdom is working with us in particular on this issue of beneficiary register.

    “That will be extremely useful for us because we will now be able to discover who is behind some of the names of companies and other shelves that are used to hide stolen assets.’’

    Osinbajo observed that the International Criminal Court was one of the great deterrents for countries with bad leaders as the court was ready to hold people to account.

    He said the international community should work with Nigeria in like manner to end corruption that had been the bane of its development.

    Osinbajo said corrupt practices would be punished wherever they are found, adding that stolen property and assets should be returned speedily.

    The Acting President said that corruption thrives where it is allowed to thrive and affects the social, religious and economic lives of the people.

    Osinbajo said the fight against corruption was also made difficult when the people saw that there were no consequences and hence joined in the ugly trend.

    He suggested that agencies of government should identify models of fighting corruption that had worked in the past and apply them in other anti-corruption programmes or endeavours.
    He called for the partnership of the executive, legislature, judiciary and civil society organizations to end the vice, noting that “our nation cannot survive the level of corruption in the society’’.

    He advised Nigerians to avoid “finger-pointing’’ which he identified as unnecessary.

  • Reps probe PHCN’s non-core assets sale

    Reps probe PHCN’s non-core assets sale

    The House of Representatives has vowed to  expose all unethical transactions in the tranfer of the Power Holding Company of Nigeria (PHCN’s) non-core assets to the Nigerian Electricity Management Company (NELMCO).

    The tranfer was executed by the Bureau of Public Enterprise (BPE) acting under the Electricity Power Sector Reform Act when PHCN was liquidated.

    Speaking during the inauguration of a sub-committee of the joint committee of Power, Public Procurement and Privatisation and Commercialisation that was mandated to carry out the investigation, Wole Oke (PDP, Osun) said it was the determination of the joint committee to comprehensively investigate the status and sale of all non-core assets under the PHCN regime.