The Nation Newspaper

Tag: capital base

  • Unity Bank grows capital base to N80b

    Unity Bank Plc’s capital base has hit N80 billion, up from N31 billion in 2014, its former Chairman, Board of Directors, Thomas Etuh, has said.

    Etuh, the immediate past board chairman of the bank said in a post-retirement interview with News Agency of Nigeria (NAN) that the growth was recorded under his watch, between 2014 and 2017.

    He retired as the bank’s board chairman a fortnight ago and explained that the lender was able to achieve the feat because of its “agric business” banking. “You know Unity Bank is number one in agriculture, in terms of agric lending to small holder farmers; we also have a product for youths because youths own this generation. I came into Unity Bank in time of recapitalisation under Sanusi  Lamido Sanusi as the Central Bank of Nigeria Governor and we recapitalised the bank to get it to a national bank where it is today.

    “Interestingly, we are leaving the bank in the capital excess of N80 billion from the N31 billion that we met it,” Etuh said.

    According to him, “the successes recorded by the bank did not come without the contributions of its two major co-shareholders, former President Olusegun Obasanjo and ex-military President Ibrahim Badamasi Babangida.

    He said: “Obasanjo and Babangida came up with that name `Unity’ after the merger of some southern and northern banks. The merger means a lot for Nigeria’s unity. So, having nine banks from different entities, it behoves on the board to also merge the different banks culture into one; and that, we did to make it a national bank”.

    “You can see that the bank has flourished in various products which have brought it to stability, and it was a collective effort of the board and management”.

  • Jaiz Bank hits N15billion capital base

    THE Managing Director of Jaiz Bank, Malam Hassan Usman, yesterday in Kano, said that the bank’s capital base has hit N15 billion, with a projection of meeting the trillion naira deposit regime in the next five years. Usman, who spoke to reporters said that the Islamic bank which started operation in 2012, with an initial capital of N5 billion has shored up to N15 billion, within five years.

    He added the bank is growing at an annual rate of 30% which make it one of the strong players in Nigeria`s banking industry, and planning to be one of the leaders in the market in the next five years. Usman further stated that the balance sheet of the bank as at June 2017 stood at N100 billion, which made up of N60 billion as deposit base and N40 billion as assets within five years of operation. According to him, “I am proud to tell you that we started operation in 2012 as a regional bank with only three branches in the North-West, but today, I can tell you that we now have 30 branches across the country, making us a national bank.” He said that, “the bank does not generate interest; because we avoid interest as such we don’t deal on items or goods and services that are harmful to Islamic banking rights.”

    He said, “all we do with the N40 billion created as assets is to go on real financing such as investments in customers’ growth, creation of wealth by transactions on property leasing and other services that will build customers’ confidence in our bank.” Usman said that the vision of the bank considering its size is that, “we want to a leader in the sub-Saharan region by being a strong player in the system in the next five years through an established strategic system for the shareholders across the country and religious divide.” He said that currently, the bank has a customer base of 250, 000 in which 70 per cent of them are active, adding that, “in respect of social responsibility of the bank, we have continued to touch people’s life through the Jaiz Bank Foundation.”

  • SEC extends capital base deadline to September

    SEC extends capital base deadline to September

    • 262 operators meet  December deadline

    The board of Securities and Exchange Commission (SEC) has extended the deadline for compliance with the new minimum capital requirements for various capital market functions from December 31, this year to September 30, next year.

    A circular released yesterday by SEC stated that the extension was granted in view of considerable efforts by operators to meet the new capital base and the prevailing global economic situation.

    According to SEC, the extension was approved by its board after a review of its status report during which the board found the efforts of operators to be satisfactory, with particular commendation to those who have complied with the new requirements.

    “The board however took cognizance of the effect of the global economic situation and approved an extension of the deadline for compliance with the new minimum capital requirements by nine months, to 30th September 2015,” SEC stated.

    SEC commended the commitment of all stakeholders to building a world class capital market that enables Nigeria realise its aspiration of a prosperous and peaceful nation.

    Latest update obtained yesterday showed that 262 capital market operators have met their various capital requirements.

    SEC had in December last year announced major increases in minimum capital requirements for capital market functions under a new minimum capital structure that was initially scheduled to take off by January 1 next year. Minimum capital base for broker/dealer was increased by 329 per cent from the existing N70 million to N300 million. Broker, which currently operates with capital base of N40 million, will now be required to have N200 million, representing an increase of 400 per cent. Minimum capital base for dealer increased by 233 per cent from N30 million to N100 million.

    Also, issuing houses, which facilitate new issues in the primary market, will now be required to have minimum capital base of N200 million as against the current capital base of N150 million. The capital requirement for underwriter also doubled from N100 million to N200 million. Trustees, rating agencies and portfolio and fund managers had their minimum capital base increased by 650 per cent each from N40 million, N20 million and N20 million to N300 million, N150 million and N150 million respectively. A  Registrar will now have a minimum capital base of N150 million as against the current requirement of N50 million. While the minimum capital base for corporate investment adviser remained unchanged at N5 million, individual investment advisers will have to increase their capital base by 300 per cent from N500,000 to N2 million.

  • Cadbury Nigeria reduces capital base by N12b

    Cadbury Nigeria reduces capital base by N12b

    Cadbury Nigeria Plc is reducing its capital base by about N12billion under a plan approved yesterday by its shareholders.

    The measure will result in the cancellation of two of every five ordinary shares held by investors.

    At the extra ordinary general meeting in Lagos, 88.14 per cent of shareholders, who accounted for 99.6 per cent of the company’s shareholdings, approved the capital reduction proposed by the Board. Polling results by the registrars to the company, First Registrars, which conducted the voting, indicated that 11.86 per cent of shareholders, accounting for 0.40 per cent equity stake voted against the proposal. Voting was done on one-share-one-vote polling basis.

    Cadbury Schweppes Overseas Limited (CSOL), United Kingdom, the majority core investor in Cadbury Nigeria, holds 74.99 per cent equity stake in Cadbury Nigeria.

    Under the capital reduction plan, Cadbury Nigeria will return excess capital of N11.9 billion to its shareholders by cancelling two out of every five ordinary shares currently held by the shareholders. Consequently, it will reduce the share capital account by an amount equivalent to the par value of the cancelled shares and share premium accounts by about N11.27 billion.

    Also, each shareholder will receive returned capital per cancelled share at N9.50 per share. Meanwhile, the company will use the 30-day volume weighted average price of the stock at the Nigerian Stock Exchange (NSE) to pay for fractional shares that may arise from the transaction. The capital reduction is expected to take effect in the first quarter of 2014.

    Audited report and accounts of Cadbury Nigeria for the year ended December 31, 2012, showed that the balances in the share capital and share premium accounts were N1.6 billion and N11.5 billion respectively.

    While many Nigerian minority shareholders had kicked against the capital reduction, the board of the company said that the capital reduction was necessitated by current cash position of the company in relation to its operations and the need to optimise return on capital.

    In an explanatory note made available to shareholders, directors of the Cadbury Nigeria, who were all present at the EGM, said they had assessed the company’s current financial position including liquidity and amounts due to creditors as well as possible capital investments and near-term growth opportunities and came to the conclusion that the company has more capital than it required now or in the near future.

    The board stated that it then considered three options to deal with the excess capital including retaining the capital for future use, deploying the capital immediately and returning the excess capital to shareholders.

    According to the board, the possibility of retaining the excess capital was ruled out because the excess capital would have to be invested in low-return, low-risk investments in the meantime, which will negatively impact on return on capital.

    The board noted that deploying the excess capital now without immediate value-enhancing opportunities may destroy shareholder value.

    Directors of the company stated that they opted for the return of excess capital to shareholders because they reasoned that each shareholder will be in the best position to determine his risk-return profile as well as the most suitable investments to optimise the value of his capital.