The Nation Newspaper

Tag: financial

  • Financial charges depress Unilever Nigeria’s Q1 performance

    Financial charges depress Unilever Nigeria’s Q1 performance

    Unilever Nigeria Plc witnessed considerable growth in its top-line and effectively curtailed its operating expenses but burgeoning financial expenses undermined the performance of the conglomerate in the first quarter.

    Interim report and accounts of Unilever Nigeria for the three-month period ended March 31, 2015 showed that while sales grew by eight per cent and the group reduced operating expenses by nine per cent, a double in financial charges within the three months overwhelmed the performance of the conglomerate.

    Unilever Nigeria’s pre and post tax profits dropped by 21 per cent each, a situation that simultaneously cut basic earnings per share by four kobo from 20 kobo in first quarter 2014 to 16 kobo in first quarter 2015.

    Key extracts of the unaudited report showed that sales rose to N14.91 billion in first quarter 2015 as against N13.83 billion recorded in comparable period of 2014. Financial charges jumped by 114 per cent from N381.6 million in first quarter 2014 to N817.91 million in first quarter 2015. With this, profit before tax dropped from N1.09 billion to N864.74 million while profit after tax slipped by same margin from N750.63 million to N590.45 million.

    The latest earnings report further raised concerns about the return outlook for the conglomerate after it recent announcement of reduction in dividend payout from N4.73 billion to N378.3 million. Current dividend recommendation released by the board of directors of the conglomerate showed that shareholders would receive a dividend per share of 10 kobo for the 2014 business year as against N1.25 received for the 2013 business year. The reduction highlights the steep decline in the performance of the company last year.

    Key extracts of the audited report and accounts of Unilever Nigeria for the year ended December 31, 2014 showed declines in the top-line and the bottom-line. While sales were tepid, the bottom-line performance was however worsened by significant increase in finance charges.

    Turnover dropped by seven per cent from N60 billion in 2103 to N55.75 billion in 2014. Interest expense, otherwise known as finance charges, however rose by 65 per cent from N1.16 billion to N1.91 billion. This further constrained the profitability of the conglomerate as pre-tax profit dropped by 58 per cent from N6.79 billion to N2.87 billion. After a 78 per cent reduction in tax provisions, net profit after tax dropped by 49 per cent to N2.41 billion in 2014 as against N4.72 billion recorded in 2013.

    Earnings per share consequently dropped from N1.25 in 2013 to 64 kobo in 2014. The contraction also affected the company’s balance sheet as shareholders’ funds dropped by 20 per cent from N9.35 billion to N7.48 billion.

    Shareholders of the company are expected to meet in May to review its performance and consider the recommended payment.

    The earnings reports came on the heels of the move by Unilever Overseas Holdings, the United Kingdom-based foreign core investor, to acquire additional equity stake in the Nigerian subsidiary in a transaction valued at about N43 billion or £144.5 million.

    Unilever Overseas Holdings has already approached the Board of Directors of Unilever Nigeria Plc about its intention to make an offer to increase its equity stake in the Nigerian company from 50.04 per cent up to a maximum of 75 per cent. The foreign core investor promises to maintain Unilever Nigeria’s listing on the Nigerian Stock Exchange.

    Unilever Overseas Holdings has appointed Citigroup Global Markets Limited and Chapel Hill Advisory Partners Limited as its financial advisers on the proposed transaction.

    The Nation had reported that Unilever Overseas Holdings proposes to acquire about 944.47 million ordinary shares in Unilever Nigeria at an intended offer price of N45.50 per share in cash. Unilever Nigeria opened this week at the NSE at N34 per share.

    The proposed offer price represents a premium of 33.8 per cent on the company’s opening price today and a premium of 33.2 per cent on the three-month volume weighted average share price. It is intended that the proposal would be effected by way of a tender offer, by giving any shareholder who elects to sell some or all of their shares in Unilever Nigeria the opportunity to do so.

    The proposed acquisition is however still subject to the prior approval of the Nigerian Stock Exchange and the Securities and Exchange Commission (SEC).

    While noting that it has not reached any definitive agreement to proceed with the proposal, Unilever Nigeria has indicated that the formal offer documentation will be posted to shareholders as soon as the approvals of all the regulators are obtained.

    Unilever Overseas reserves the right not to proceed with the proposal or to vary the terms of the proposal in any way and no binding offer will be made in respect of any securities until Unilever Nigeria has announced its final results for the year ended December 31, 2014 to the public.

     

  • United Capital unveils financial markets report

    United Capital unveils financial markets report

    United Capital Plc has released its Nigerian Economy and Financial Markets 2015 report. The report provides a detailed review of the Nigerian market in 2014 with projections for the year.

    It discusses the outlook for different sectors, inherent opportunities as well as strategies for navigating the financial market. The report is an invaluable tool for investors covering  Global economic review and outlook, Africa update and outlook, oil price dynamics and Nigeria 2015 outlook, domestic macro-economic trends and outlook, capital market review and outlook as well as specific sector reviews and recommendations.

    “We are pleased to release the Nigerian Economy and Financial Markets 2015 report at United Capital. The report contains extensive research on capital markets, providing an in-depth analysis of various market groupings and industry trends that have shaped our predictions,” Group CEO of United Capital Plc, Toyin Sanni said.

    The report, he said, investigates the impact of the global economic and trade activities within advanced economies. It further dissects the impact of global financial activities on the Nigerian economy which is set to face one of the most difficult times in history, as global crude oil prices, a key anchor for fiscal strength and macroeconomic stability, continues on a downward trajectory in 2015.

  • Financial regulators mull capital, credit risk changes for banks

    The Basel Committee on Banking Supervision on Monday published a consultative paper on the design of a capital floor framework based on standardised, non-internal modelled approaches. The Committee also simultaneously released a consultative document on revisions to the standardised approach for credit risk.

    According to the report, the Committee’s proposed floor would ensure that the level of capital across the banking system does not fall below a certain level. The floor is also meant to mitigate model risk and measurement error stemming from internally-modelled approaches. It would also enhance the comparability of capital outcomes across banks.

    “As noted in the Committee’s November 2014 report to the G20 Leaders, the Committee is taking steps to reduce variation in capital ratios between banks. Today’s consultative paper is part of a range of policy and supervisory measures from the Committee that aim to enhance the reliability and comparability of risk-weighted capital ratios,” the Committee stated.

    The Committee is simultaneously revising the Basel framework’s standardised approaches for regulatory capital and the proposed capital floor framework will be based on the finalised versions of these standardised approaches, and would replace the existing transitional capital floor based on the Basel I framework.

    However, the floor’s calibration is outside the scope of the current consultation. The Committee will consider the calibration of the floor alongside its work on finalising the revised standardised approaches to credit risk, market risk and operational risk, taking into account its ongoing review of the capital framework and its balance of simplicity, comparability and risk sensitivity.

    The consultation is expected to continue through the first quarter of 2015.

    Under the revisions to the standardised approach for credit risk, proposed revisions seek to strengthen the existing regulatory capital standard in several ways. These included reduced reliance on external credit ratings; enhanced granularity and risk sensitivity; updated risk weight calibrations, which for purposes of this consultation are indicative risk weights and will be further informed based on the results of a quantitative impact study; more comparability with the internal ratings-based (IRB) approach with respect to the definition and treatment of similar exposures; and better clarity on the application of the standards.

    According to the Committee, it is considering replacing references to external ratings, as used in the current standardised approach, with a limited number of risk drivers that provide a meaningful differentiation for risk. These alternative risk drivers vary based on the particular type of exposure and have been selected on the basis that they are simple, intuitive, readily available and capable of explaining risk across jurisdictions.

  • Financial crimes’ body tightens rules on company ownership

    New guidelines by the Financial Action Task Force (FATF) on preventing the misuse of corporate vehicles to hide true company owners, has been inaugurated.

    A report obtained from The International Banking Operations, quoted crime prevention specialists as saying the new guidelines will help countries struggling to meet international standards on anti-money laundering and terrorism financing.

    The FATF last year removed Nigeria from the list of countries identified as jurisdictions with significant deficiencies in their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regimes.

    The action was taken following the country’s full implementation of the mutually agreed Action Plan and the exhibition of a clear political commitment to continue the development of its AML/CFT regime.

    In a statement in Paris, France, the FATF expressed satisfaction with the political will displayed by Nigeria in improving its Global AML/CFT compliance. Accordingly, the FATF voted unanimously to expunge Nigeria from the list of jurisdictions.

    The Presidential Committee on Financial Action Task Force headed by Stephen Oronsaye, said the FATF took the decision at the end of its plenary meeting held in Paris, France, between October 14 and 18, last year.

    Oronsaye noted: “In the recent past, Nigeria has received technical assistance from the IMF to develop a risk-based approach to AML/CFT supervision.  This has resulted in the development of similar procedures across all regulatory authorities as well as the financial intelligence unit, namely the Central Bank of Nigeria, the Securities and Exchange Commission, the National Insurance Commission and the Nigerian Financial Intelligence Unit.’’

    Nigeria issued the Terrorism Prevention (Freezing of International Terrorist Funds and Other Related Measures) Regulations 2011.

    The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) said Nigeria has also addressed a deficiency relating to Recommendation five of the revised FATF Standards.

    This criminalises terrorist financing, including the financing of a terrorist organisation and an individual terrorist, and covers issues relating to terrorist funds, use of funds, intentional elements of the terrorist financing offence, location of the offender, ancillary offences, predicate offences of money laundering, liability of legal persons, and sanctions.

  • Financial phishing on rise, experts warn

    Financial phishing on rise, experts warn

    Experts have warned about a substantial increase in the number of global financial phishing in spam and other online security breaches.

    Phishing is technically referred to as ‘the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers, online’.

    Chief Executive Officer, New Horizons, Tim Akano had earlier warned that there will be seven biggest and most dangerous information technology (IT) security threats this year.

    He said: “They are malware, ransomware, advanced persistent threats, spear phishing, social network attacks, cyber attacks on banks and telecoms, and cloud backlash. When a user receives an email with a link to download an attachment and the user activates and clicks the download, from that moment, the user device has been compromised.”

    Data released at Kaspersky Laboratory lamented that there was a 7.9per cent increase in number of scam emails the used the names of reputable banks and other institutions.

    Security Solutions Director at Westcon, Andrew Potgieter said: “Recent data released from Kaspersky Lab suggests that there was recently a 7.9 per cent increase in the amount of scam emails that make use of the names of reputable banks, payment services, online stores and similar organisations. The figures are staggering and the team advises that these messages represent nearly 42 per cent of all phishing messages. The hardest hit has been PayPal and references to the company have triggered the most dramatic increase in alerts from Kaspersky Lab’s anti-phishing.”

    In addition, the Labs indicate that overall, the share of spam in overall email traffic has increased by 2.2 per cent in July, bringing it to 67 per cent. The United States (U.S.) is the leading country of origin for unsolicited email: one sixth (15.3 per cent) of all global spam was sent from the U.S. Russia keeps its long-standing second position in this ranking with 5.6 per cent of all spam; this, however, is 1.4 per cent less than in June. China remains in third place, supplying 5.3 per cent of global spam.

    According to biztechafrica.com, the long hot summer in the Northern Hemisphere left its mark, adding that in particular, the Russian segment of the internet saw a surge of spam messages advertising sun protection and items to battle the heat. Also in July, Kaspersky Lab’s experts recorded an increase in the number of spam emails offering a variety of summer goods like air conditioners, cooling fans, sunscreen films for windows, bottled water and sunglasses.

    Summer also means holidays, and since everyone wants to look their best on the beach spammers didn’t forget to offer some help. There were quite a number of spam emails in July advertising all types of skin care cosmetics and seasonal discounts from beauty shops and parlours. Kaspersky Lab’s experts also discovered video tutorials advertised as “beauty secrets” revealed by a renowned stylist.

  • Firm hosts forum on financial literacy

    IN its quest to attract more Nigerians to the capital market, InvestData Consulting Limited, has concluded plans to organise a workshop in Abuja and Lagos respectively.

    Justifying the need for the talk shop, the firm in a statement made available to The Nation said, it is to boost financial literacy in the country and equip Nigerians with knowledge about how they can generate additional income in a changing stock market.

    In line with this goal, the firm said it would on September 27, hold a workshop in Abuja with the theme, ‘Winning strategies for professional traders and investors in good or bad times on the Nigerian stock market.’

    It explained that the theme was chosen “in view of the current market trend and the opportunity of a bullish run.”

    To ensure that the event achieves its goal of attracting more investors to the stock market and equipping them to do business on the Exchange on a sustained basis, top professionals had been invited to provide training for participants.

    Among the resource persons expected at the forum is Head, Capital Market at TRW Stockbrokers Limited, Mr. Abdul-Rasheed Momoh and he is making a presentation tagged: ‘How to make money in equity investment using technical analysis to enter, exit and manage money.’

    Besides, a secondary commodity market analyst, Mr. Ekwueme Anaydibe, who runs a consulting firm in Bulgaria, is expected to speak on ‘How to filter the noise in the market and identify the direction of smart money in the market and specific stocks, using technical analysis.’

    The Chief Research Officer, InvestData, Mr. Ambrose Omordion, is also expected to provide training on how to blend fundamentals and technical analysis to generate income from the changing stock market.

  • State legislators to seek financial autonomy

    State legislators to seek financial autonomy

    State assembly legislators are regrouping to assert their independence, it was learnt at the weekend.

    This may not be unconnected with the alleged sweeping influence of state governments over  assemblies.

    The legislators unfolded a body, the National Association of State Assembly Legislators (NASAL), in Abuja at the weekend to articulate and enforce the views of the lawmakers.

    The Interim National President of the body,  Mr. Valentine Ayika, said NASAL became necessary to liberate the state assemblies from strong personality leadership to build strong institutions.

    He said state assembly legislators were making a strong statement with the inauguration of NASAL that democratic governance based on the rule of law had come to stay.

    Ayika noted that the body would pursue financial autonomy to state assemblies, especially with the amendment of the 1999 Constitution.

    He said: “Individually, a state assembly can be dealt with, but with an association like this, we can surmount any recklessness of the executive.”

    Ayika said financial autonomy was what the state assemblies needed to be independent.

    He said: “Our salaries are paid by the state governments. It is a fact that he who pays the piper dictates the tune.”

    Asked why the state assemblies rejected the autonomy granted them by the National Assembly during the last amendment of the constitution, Ayika said there was no organisation to articulate the feelings of the assemblies then.

    He added: “If the opportunity comes our way again, I am sure we will grab it.”

    Ayika regretted that only about two state assemblies of the 36 voted to deny state assemblies the opportunity to be financially-independent.

    On the gale of impeachment by state assemblies, he noted that “whatever any state assembly construes as gross misconduct remains gross misconduct until the constitution is amended.”

    Ayika listed the vision of NASAL to include “to unify and build an organisation that can forge a strong bond of collaborative engagement in driving state development in the country and contribute in nation building with enhanced grassroots participation.”

  • ‘Nigeria lost over $140b to illicit financial flows in nine years’

    ‘Nigeria lost over $140b to illicit financial flows in nine years’

    Nigeria lost over $140 billion, about N22.81 trillion, to illicit financial flows between 2002 and 2011, a period of nine years, the Director General (DG) of Securities and Exchange Commission (SEC), Ms. Arunma Oteh has said.

    In her presentation as keynote speaker at the 2nd Christopher Kolade Lecture on business integrity held in Lagos, Oteh said: “Nigeria has lost more to illicit financial flows than any other African country between 2002 and 2011, even being listed in the top 10 globally. Within a nine-year period we lost over $140 billion to illicit financial flows.”

    The DG of SEC disclosed thatpoor countries are losing an estimated $1 trillion yearly to such illegal financial activities as money laundering, tax evasion, transfer pricing and embezzlement. “This is money desperately needed for the Millennium Development Goals (MDGs) and could prevent as much as 3.6 million deaths annually in the world’s poorest countries,” she said, adding that in the case of Nigeria, an estimated $50 billion investment is required to ensure stable electricity supply. She said a lot of the illicit outflows was through the illicit commercial activities of multinational companies.

    She said because of such huge illicit outflows, “We now have a situation where these illicit outflows are not only depriving our country of desperately needed capital but are also being used to finance terrorism abroad and within our shores,” she added,  “A security expert who trained my staff at the SEC recently shared some pieces of intelligence with us indicating that Boko Haram received over $70 million between 2006 and 2011 through shady activities like money laundering, oil bunkering, kidnapping and dealing in drugs.”

    Oteh noted that illicit financial flows and corruption are two issues that countries have been battling with. She said Nigeria suffers greatly from both issues. “Corruption has been identified as the second most problematic factor to doing business in Nigeria ahead of factors including access to finance and terrorism,” she stated, adding that this year, the G-20 is focusing on combating illicit financial flows especially considering the fact that poor countries are losing a lot to such illegal activities.

    The DG of SEC however, said thatconsidering the impact of corruption and anti-money laundering violations on Nigeria, efforts have been made to strengthen the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime in Nigeria.“Other countries are also implementing reforms to make it harder for wrongdoers to find a hiding place. The United Kingdom (UK) has the Anti-Bribery Act 2010 that requires companies with any link to the UK to have robust structures to forestall shady dealings. The United States has long had the Foreign Corrupt Practices Act of 1977, which provides for up to $25 million in fines and 20-year jail term,” she said.

  • Walking in financial dominion!

    I welcome you to the month of September. Whatever you missed in the past months, you will, this September, collect them in many folds! This is why the teaching this month is unique – Walking In Financial Dominion!

    Every child of God is ordained to walk, among other high places, in financial dominion.

    This heritage is established but on the following platforms:

    • Salvation: The Bible says that Christ was slain to receive for us power, riches, wisdom, strength, honour, glory and blessing (Revelation 5:12).
    • Connectivity to the Abrahamic covenant: God swore blessings to Abraham, in response to his Sacrifice on mount Moraiah(Gen. 22:18). Also, every child of God is a seed of Abraham. Therefore, everyone that is ‘born again’ is ordained to walk in financial dominion (Galatians 3:29).
    • Access to the blessing of the law: Prominent among the blessings of the law is financial dominion. As it is written: …and thou shalt lend unto many nations, and thou shalt not borrow. And the LORD shall make thee the head, and not the tail; and thou shalt be above only, and thou shalt not be beneath… (Deut. 28:12-13). But the Bible asserts that Christ hath redeemed us from the curse of the law to become partakers of the blessings of Abraham(Gal. 3:13-14).This is what entitles every child of God to enjoy the blessings of the law, among which is financial fortune.
    • As a member of the end-time church: The end-time church is ordained for financial dominion(Isaiah 2:2-3). In addition, according to Haggai, God will be unleashing financial fortune upon the end-time church (Haggai 2:8-9).

    THE LOVE PLATFORM

    Giving is the gateway to a world of financial dominion. Luke 6:38 says: Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give into your bosom. For with the same measure that ye mete withal it shall be measured to you again. In response to our giving, the Bible says: And God is able to make all grace abound toward you; that ye, always having all sufficiency in all things, may abound to every good work: (2 Corinthians 9:8).

    However, we discover that love is what empowers us to give continuously, tirelessly and sacrificially. For example, the Bible says: For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life(John 3:16).Nothing empowers giving like love. On the other hand, it is the giving grace that empowers us to command financial dominion. As it is written: But thou shalt remember the Lord thy God: for it is he that giveth thee power to get wealth, that he may establish His covenant which he sware unto thy fathers, as it is this day(Deut. 8:18).

    From here, we understand that while love empowers our giving life, it is our giving that empowers us for wealth which ultimately translates to financial dominion. However, not just love, but the love of God burning in our hearts. Remember, it is the love of God that overflows through us to the world around (1 Corinthians 2:9; 1 John 3:14-18). We observe that every testimony of financial fortune is rooted in the sacrificial giving of men.

    But How do we get on this platform?

    First, we must recognize that Love is by choice and not by force.People choose who to love and what to love. Secondly, our love for God can be empowered by the Holy Ghost (Romans 5:5). Again, we also observe that there is the Spirit of love. Paul the Apostle said: For God hath not given us the spirit of fear; but (Spirit) of power, and (Spirit) of love, and of a sound mind (2 Timothy 1:7). 

    This revalidates the empowerment dimension of love. From the above, we understand that it is the Spirit of love that empowers us to love God above all else, including ourselves (Mark 12:30-31).

    Friend, the power and grace to access the wonders in the Word of God, are the preserve of those who are children of God. Are you a child of God? You become a child of God, by confessing your sins and accepting Jesus as your Lord and Saviour. You can be God’s child now, if you haven’t been, by saying this prayer: “Lord Jesus, I come to You today. I am a sinner. Forgive me of my sins. Cleanse me with Your precious Blood. Today, I accept You as my Lord and Saviour. Thank You, for saving me! Now, I know I am born again!”

    I will continue with this teaching next week. Exceeding Grace and the Unspeakable Gifts of God are your portion this month!

    Every exploit in life is a product of knowledge. For further reading, please get my books: Understanding Financial Prosperity, Covenant Wealth and Winning The War Against Poverty.

    I invite you to come and fellowship with us at the Faith Tabernacle, Canaan Land, Ota, the covenant home of Winners. We have four services on Sundays, holding at 6:00 a.m., 7:50 a.m., 9:40 a.m. and 11.30 a.m. respectively.

    I know this teaching has blessed you. Write and share your testimony with me though: Faith Tabernacle, Canaan Land, Ota, P.M.B. 21688, Ikeja, Lagos, Nigeria; or call 7747546-8; or E-mail: feedback@lfcww.org

  • Bank customers urge regulators on financial literacy

    The Bank Customers Association of Nigeria (BCAN) has urged the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) to facilitate the realisation of CBN’s financial literacy/inclusion objective, as well as inculcating appropriate banking habits and culture among the populace.

    A statement from the group stressed its commitment to rallying customers and consumers for the promotion and protection of their interest in the face of daunting challenges against them.

    The body said banking should be conducted based on acceptable values and best practices, adding that it would intensify efforts at fostering mutual understanding, trust and confidence between banks and their customers through education, so as to strengthen and ensure the realisation of CBN’s financial literacy/inclusion and other programmes.

    “The BCAN should also organise awareness programmes in the areas of Guide to Bank Charges, Financial Literacy and Inclusion as well as Banking Policies, Regulations, Products/Services for the benefit of consumers in particular and stakeholders in general. The group should also collaborate and partner with organisations and individuals who share its vision and objectives in order to be able to extend its services to the nooks and crannies of Nigeria, for positive multiplier effect,” it said.

    Continuing, the group said that henceforth, it would create sustainable platform for the provision of advisory and counseling services in banking and finance to its members and the interested public in order to deepen their knowledge and ability to make the right financial decisions and choices.

    The group would also work closely with the regulatory and supervisory authorities to ensure that banks are held accountable for any unethical, unprofessional and risky products, services and practices they introduce into the financial system and to customers/consumers.