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Tag: FBN

  • Fitch Ratings may upgrade FBN Subordinated Notes

    Fitch Ratings may upgrade FBN Subordinated Notes

    Fitch Ratings has placed First Bank of Nigeria’s (FBN) subordinated notes, which are rated ‘CCC’/’RR5′, on Rating Watch Positive (RWP). Placing a debt on RWP means that rating for the instrument may likely be upgraded.

    The FBN notes were issued through FBN Finance Company BV, a special purpose vehicle, which was established to provide funding for the bank.

    FBN’s other ratings are unaffected by this rating action. The rating action follows publication of an exposure draft on December 12.

    The exposure draft, Fitch said, includes a proposal to append ‘+’ or ‘-’ modifiers to ‘CCC’ Long-Term Issuer Default Ratings (and long-term debt ratings) to denote relative status/creditworthiness within this rating level. The subordinated debt of FBN is rated one notch below FBN’s ‘b-’ Viability Rating (VR).

    If modifiers are introduced to the ‘CCC’ IDR category as proposed, the one notch differential would be maintained and FBN’s subordinated debt would be rated ‘CCC+’. The notching from the VR reflects higher-than-average loss severity for subordinated debt relative to senior debt. No additional notches for non-performance risk have been applied.

    The ratings on the subordinated notes are sensitive to a change in FBN’s VR. Fitch expects to resolve the RWP within the next six months upon the conclusion of the Exposure Draft period. If the final criteria are substantially similar to the exposure draft, then the rating on the subordinated notes is likely to be upgraded to ‘CCC+’ after the final criteria are published.

  • FBN: Banks to stabilise 9mobile before sale

    The 13 commercial banks that gave $1.2 billion loan to 9mobile  will try to stabilise the business of the firm  until new  investors step in, First Bank of Nigeria Chief Executive Officer, Adesola Adeduntan, said yesterday.

    The bank chief said  there was no need to impair the loans extended to the telecom firm, because of its cash flows.

    “On the part of lenders, we are trying to reposition the company till we find new investors. With the level of cash flow we believe there will be no need for impairment,” Adeduntan told Reuters.

    Another lender, FCMB, said on Tuesday lenders had agreed to extend a $1.2 billion loan which the mobile operator, formerly known as Etisalat Nigeria, took out four years ago but struggled to repay due to a currency crisis and a recession in Nigeria.

    The Central Bank of Nigeria (CBN) and Nigeria Communications Commission (NCC) stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.

    The local banks which participated in the loan, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.

    Banks involved in the loan deal include: Zenith Bank , GT Bank, First Bank, UBA , Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.

    GT Bank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed. The telecoms group has asked Citigroup and Standard Bank to find an investor to buy into the firm and three companies have shown interest, a banking source close to the deal said.

     

  • FBN Holdings targets non-performing loans ratio of 19% in 2017

    FBN Holdings targets non-performing loans ratio of 19% in 2017

    The management of FBN Holdings Plc on Thursday said it was targeting a Non-performing Loans (NPL) ratio of less than 20 per cent for the financial year ending Dec. 31, 2017.

    Mr. UK Eke, FBN Holdings Managing Director, stated this at the company’s facts behind the figures at the Nigerian Stock Exchange (NSE) in Lagos.

    Eke said that the company’s NPL would be less than 20 per cent by second quarter of 2017 against 26 per cent in the first quarter.

    The News Agency of Nigeria (NAN) reports that the company made impairment charge from credit losses of N226 billion in 2016 and N280m. 8 billion in the first quarter of 2017.

    He explained that there were five major accounts that constitute the company’s NPL, adding that one of the accounts would drop off by June 30.

    Eke stated that the company was awaiting government assent to drop off the second major NPL account, Atlantic Energy.

    He said that the 500 million dollars owed the company by Atlantic Energy would drop off from its NPL once the oil bloc was assigned to a new partner by the government.

    The group managing director expressed optimism that the five NPLs accounts would be resolved very soon.

    “There are no fresh NPLs forming in our books, the books are clean and our focus on lending is now on manufacturing sector,” he stated.

    Eke added that the company had reviewed its credit process and strengthened governance framework to ensure improvement in asset quality.

    He said that the company had recruited a new chief risk officer to drive the new credit architecture and build a robust and sustainable credit underwriting practice.

    Eke said that the company had restructured credit terms of obligor with compelling business case to match cash flows.

    He said that the company’s NPL would be in single digit by 2019, while cost of risk would be less than two per cent.

    Eke said that the company would strengthen digital banking strategy to achieve 25 per cent migration of the bank active customer base to digital channels by 2019.

    He, however, assured shareholders of enhanced dividend in the years ahead, noting that the commercial banking arm had not contributed dividend to the holding company in the past two years.

    Eke said that the capacity of the holding company to distribute dividend would be enhanced by the time the commercial bank started contributing dividend.

    He said that the decision of the commercial bank not contributing dividend to the group was strategic to enable the company to clean up its book.

    Earlier, Mr. Oscar Onyema, NSE Chief Executive Officer, commended the company for using the facts behind the figures platform to engage the market on its strategic and operational development.

    Onyema commended the company for churning out strong fundamentals in spite of the challenging operating environment witnessed in 2016 financial year.

    He said that the exchange would continue to provide the platform for companies to meet their strategic objectives.  (NAN)

     

  • Firm begin insurance awareness campaign in North East

    Firm begin insurance awareness campaign in North East

    FBN General Insurance says it has commenced awareness programmes in the north eastern part of the country to sensitise residents to take insurance cover to mitigate future unexpected losses.

    Mr Bode Opadokun, Managing Director of the company made the disclosure while speaking with the News Agency of Nigeria (NAN) on Thursday in Lagos.

    Opadokun said the campaign, which included a door-to-door campaign, was to sell the essence of insurance and ensure its penetration in the area.

    “We will not be deterred by fears of insurgency, cultural beliefs and other factors that might have stunted insurance growth in the region.

    “We intend to re-orientate the indigenes on insurance products not only in that region but also in some interiors in the west because some believe that the Almighty insures.

    “Some citizens also associate insurance with fraud, believing that the first issue is survival before they consider insurance. This attitude must change,’’ he said.

    The insurance chief said the company, through the awareness campaign, would tackle such perceptions in the region.

    He pleaded with Nigerians to change their negative perception of insurance and support the growth of the industry.

    According to him, the essence of insurance is to help people recoup and survive unexpected losses.

    He called on other insurance firms to pay claims promptly to hasten insurance penetration, so as to entice more people to take insurance cover.

    Opadokun said the campaign to make people accept insurance would not go far if claims were not paid as at when due.

    According to Opadokun, there is no appropriate time to take insurance policies than in a period of economic recession because there is limited cash in circulation.

    He urged individuals who had comprehensive insurance not to abandon it for third party insurance in spite of the country’s economic challenges.

    Speaking on the company’s performance in 2016, Opadokun said a total of N270 million was paid as insurance claims in 2016 as against the N205 million it paid in 2015.

    According to him, the company’s gross premium grew to N2.2 billion in 2016 from N1.8 billion in 2015, indicating an increase of 17.4 per cent.

    The Insurance chief said the company’s total assets also rose to N6.1 billion, an increase of 11.9 per cent from the N5.3 billion it had in 2015.

    “That we paid more claims in the year under review than previous years shows that our customers trust us more and are willing to allow us to bear more of the risks they would normally bear themselves.

    “This lends credence to the fact that a responsible insurer must learn to settle claims promptly to show policyholders that it is committed,” the FBN chief said.

  • FBN General records N2.2b premium in 2016

    The 2016 audited accounts of FBN General Insurance as approved by the National Insurance Commission (NAICOM), has shown a gross a premium income of N2.2 billion, up by 17.4 per cent from N1.8 billion recorded in 2015.
    FBN General Insurance, Managing Director, Bode Opadokun, made this known in a statement made available to journalists in Lagos.
    He said the company’s claims expenses also rose by 24 per cent from N205 million to N270 million in the year under review, stressing that the company’s total assets stood at N6.1 billion, a 11.9 per cent increase from the N5.3 billion it had last year.
    Opadokun attributed the result to direct reflection of shrewd management efforts at expanding her client base, excellent underwriting capabilities as well as increased customer acceptance of the brand.
    He said: “In a year where economic uncertainties badly affected many companies’ asset base, we were able to increase ours by almost a billion naira. This is an indication of our strength in depth arising from a solid heritage and consistent investment in quality staff.
    “Insurance thrives on trust. You will agree with me that payment of claims is perhaps the best way for an insurance company to demonstrate it is worthy of the customer’s trust’’Opadokun reiterated.

  • FBN chief advises operators to restrategise

    For the insurance industry to survive crashing oil prices, there is the need to restrategise on product innovation, refocuse distribution strategy and improve service delivery, Managing Director, FBN Insurance Limited, Val Ojumah, has said.

    Ojumah, who spoke in Abeokuta, Ogun State capital, said the crash in crude oil prices was not new, noting that it occurred once in a decade.

    Speaking on non-oil sector and opportunities for insurance, Ojumah said insurance operators must note that economies usually go through a boom-gloom-recovery-boom cycle and as professionals, it behoves them to highlight key trends in each phase for strategic planning purposes “if they want to remain profitable and relevant in our line of business”.

    He said: Crash in crude oil prices is not a new phenomenon as this tends to happen at least once in a decade. Just as in the 80s, crude oil prices have declined from 2014 to 2016, triggering sustained fall in Nigeria’s GDP growth over the same period. Other economic indices too have shown the same decline.”

    He said tough times required smarter and more consumer-focused strategies, adding that one should either innovate or miss out.

    He urged the operators to re-evaluate their distribution strategy or remain stuck in yesterday.

    “Improve your services or lose out to competition. Execution may vary from company to company, but the basics are pretty the same,” he said.

  • FBN Merchant Bank aims high as profit hits N3.85b

    FBN Merchant Bank aims high as profit hits N3.85b

    FBN Merchant Bank Limited, the merchant banking subsidiary of FBN Holdings Plc, has assured that it would consolidate and sustain impressive performance in the years ahead as the wholesale banker doubled pre-tax profit to N3.85 billion in 2015.

    At the first annual general meeting of the company in Lagos, directors of the merchant bank said it has been positioned to improve on its performance and make better returns to shareholders. Audited report and accounts of the FBN Merchant Bank for the year ended December 31, 2015 showed that pre-tax profit rose by 113.1 per cent from N1.81 billion to N3.85 billion in 2015.

    FBN Merchant Bank, formerly known as Kakawa Discount House Limited, started operations in November 2015 following Central Bank of Nigeria (CBN)’s approval of its merchant banking licence and completion of operational prerequisites.

    Managing director, FBN Merchant Bank Limited, Mr. Kayode Akinkugbe, assured the shareholders that the merchant bank is appropriately positioned to ensure commendable dividends in the current financial year.

    He said the wholesale bank will remain committed to building its franchise as the leading merchant bank in Africa by creating opportunities for its clients.

    “This will be the first full year of operation and we are excited to launch the merchant bank on the strong platform of the FBN Holdings Group. We are confident that the management team, with the support of the board, will be able to face the challenges of 2016 and we will work tirelessly to make the belief placed in us deserved,” Akinkugbe said.

    He said the merchant bank intends to approach the market with necessary prudence and hunger, being very mindful of all the risks involved, with the aim to improve the quality of its income and increase its balance sheet while ensuring that it has better results this year.

    In his address, chairman, FBN Merchant Bank, Mallam Bello Maccido noted that the immediate past year was a challenging period for the Nigerian economy due to the election year and the transitional period for the company.

    According to him, while the volatility experienced in 2014 continued into year 2015 and led to spikes in rates and general uncertainty in the market, the purposeful leadership of the FBN Merchant Bank took advantage of the volatilities and rode the economic headwinds profitably within the financial year thereby returning commendable returns to shareholders.

    Group managing director, FBN Holdings Plc, Mr. UK Eke expressed confidence in the merchant bank, noting that it has all the necessary advantages to continue to grow.

    According to him, with the strength of the FBN Holdings Group, more than adequate capitalisation of the merchant bank at over 25 per cent capital adequacy ratio which signifies capacity to prudently sweat the balance sheet, a strong visionary board, and a highly professional and experienced management team, FBN Merchant Bank has been primed to soon dominate the wholesale banking subsector.

  • NSE market capitalisation increases by N66bn

    NSE market capitalisation increases by N66bn

    Transactions at the Nigerian Stock Exchange (NSE), on Tuesday for the second consecutive day maintained an upward trend with the market capitalisation improving further by N66 billion.

    The News Agency of Nigeria (NAN) reports that the market capitalisation, which opened trading for the day at N9.189 trillion, rose by N66 billion or 0.72 per cent to close at N9.255 trillion.

    The All-Share Index also rose by 189.58 points or 0.71 per cent to close at 26,918.22 against 26,728.64 posted on Monday.

    Forte Oil led the gainers’ table with a gain of N18.90 to close at N273 per share.

    It was trailed by Mobil Oil having garnered N10.20 to close at N130.20, while Nigerian Breweries appreciated by N5.80 to close at N121.80 per share.

    Lafarge Africa increased by N1.75 to close at N153 per share.

    Conversely, GT Bank topped the laggards’ chart, dropping by N1 to close at N19 per share.

    PZ lost 67k to close at N28.31, while Port Land Paint and Products dropped by 16k to close at N3.42 per share.

    Zenith Bank declined by 13,000 to close at N13.70, while Transcorp shed 12k to close at N1.33 per share.

    Also, the volume of shares traded closed higher with a total of 397.26 million shares valued at N2.64 billion exchanged in 2,683 deals.

    NAN reports that this was in contrast with 195.98 million shares worth N2.39 billion traded in 2,387 deals.

    Wema Bank was the most active stock, exchanging 161.46 million shares worth N138.89 million.

    Fidelity Bank followed with 60.52 million shares valued at N84.31 million, while GT Bank accounted for 34.35 million shares worth N656.64 million.

    FBN Holdings traded 24.57 million shares valued at N115.41 million and UBA sold 23.81 million worth N84.06 million.

  • ‘Why FBNQuest was unveiled’

    The Managing Director, FBN Capital, Kayode Akinkugbe, has said the introduction of FBNQuest, the new brand identity of FBN Holdings Plc, is to enable the group convey a more unified company vision to customers and build lasting relationships.

    At the 2015 annual FBN Quest Investor Conference, in Lagos, he said the FBNQuest include FBN Merchant Bank Limited, FBN Capital Limited, FBN Securities Limited, FBN Capital Asset Management Limited, FBN Trustees Limited, FBN Funds Limited and FBN Capital Partners Limited. They will now operate under one brand identity.

    “The new brand identity does not alter the existing ownership and governance structures of all the companies within the group. FBNQuest, allows us to offer our broad range of services to our clients in a simplified way. It also conveys a more unified company ethos and vision that seeks to create value-driven connections with clients and build lasting relationships,” Akinkugbe said.

    He said the conference, with  Re-inventing the Nigerian Economy: Beyond the Rhetoric as its theme, was quite topical at this time, particularly with the wind of change sweeping across the country.

    “We want to explore what initiatives and policies are necessary to unlock the inherent potential in the Nigerian market. We want to do more with less and boost revenue whilst instilling fiscal discipline; where we have examples of successful reforms; and how we unlock private sector funding sources,” he said.

  • FBN Capital concludes Cross River bond issuance offer

    CBN Capital Limited has announced the successful conclusion of the Series- One Bond Issuance offer for the Cross River State Government, under its N40 billion bond issuance programme.

    The seven-year tenured bonds with maturity due in 2022 were issued via a Book Building process by FBN Capital Limited, following its appointment as the Lead Issuing House by the state government in May this year.

    The state, in line with its mandate to develop infrastructure, had embarked on several projects, including roads, water and health facilities which were financed through bank loans.

    The proceeds from the Issue were therefore earmarked for refinancing the state’s outstanding obligation to the lending banks. The bonds which were offered at 17 per cent coupon rate (paid semi-annually) proffered a cheaper financing option to the state.

    FBN Capital as Lead Issuing House, led the league of the Issuing Houses to underwrite the transaction to the tune of N6.25billion on a standby basis. The Bond Offer was secured by an Irrevocable Standing Payment Order (ISPO) issued by the Federal Ministry of Finance as a first line charge upon, and payable out of the Statutory Allocation of the state. By this order, a Sinking Fund Account was created and managed by the Trustees to the Issue from which bondholders’ obligation (interest and principal) would be repaid.

    Its Deputy Managing Director,  Taiwo Okeowo, said:  “Despite the market volatility which characterised the bond issuance period, the transaction was closed at a favourable pricing mark, raising N1.75billion over the underwritten sum.

    “FBN Capital leveraged on its distribution relationships to obtain commitment for the transaction, and on conclusion of the offer, a total of N8billion was raised, significantly reducing Cross River State’s outstanding loans to banks and lowering the service cost for the loans,” he said.