The Nation Newspaper

Tag: optimism

  • Access Bank’ N53b rights issue closes amidst optimism

    Access Bank’ N53b rights issue closes amidst optimism

    Application list for the N53 billion rights issue by Access Bank Plc closes today amidst optimism that the bank would leverage on its premium brand and recent successes to achieve full subscription. Shareholders of the bank have up till the close of business today to submit their acceptance forms. Also, the Nigerian Stock Exchange (NSE) will hold its last trading session on the rights issue today.

    Access Bank Plc is offering about 7.63 billion ordinary shares of 50 kobo each at N6.90 to existing shareholders on the basis of one new share for every three shares held. The rights issue had opened on January 26, 2015.

    It is however unclear as at press time if Access Bank will seek for extension of the application period. The bank needs to proof to the Securities and Exchange Commission (SEC) that there are exceptional reasons to warrant extension as there were no many public holidays and industrial and civil disturbance during the offer period.

    Market analysts said the bank could achieve its target given its underlying value. Analysts at Afrinvest Securities had said Access Bank Plc has strong potential to generate high capital gains and above-average dividend yields to investors.

    A review of high-value stocks by the investment firm indicated that the bank’s share price could rise to N11.80 per share over the next 12 months. The 12-month target price represents a capital gain of 71 per cent on the bank’s rights issue price of N6.90 per share.

    According to analysts, Access Bank could also deliver above-average returns to long-term investors with its dividend yield at 9.5 per cent.

    Analysts placed the “buy” ticker on Access Bank, implying that investors are encouraged to take position in the bank as its 12-month return will definitely not be less than 25 per cent.

    The net proceeds of the N53 billion offer would be used to upgrade the information and communication technology (ICT) systems of the bank to provide better services and build a more robust ICT platform as well as upgrade the branch network and facilities to serve the growing number of clients and further improve the working environment of staff.

    The bank would also use part of the proceeds to further develop its distribution channel infrastructure to provide better and more efficient services to clients while it would also augment its working capital to expand its loan book in its identified sectors of growth in line with its medium term strategic objectives. Access Bank would also use part of the proceeds to pursue opportunities for international expansion.

    In a strategic preview of the bank, the management of Access Bank outlined that the ongoing recapitalization is part of its strategic initiatives aimed at realizing the bank’s strategic vision of becoming the world’s most respected African bank by 2017 and attain a top three position in any of its chosen market segments, based on all performing metrics.

    The bank stated that it would focus on five key broad initiatives over the next the next three years with each initiative targeted at various areas of the bank’s operations. These included customer relationship, products, delivery channels, relationship management and product pricing.

    The bank stated that its number one priority will be its customers and it will continue to focus on improving and deepening the relationship with the customers by embarking on customer sub-segmentation, which will improve the feedback process and transform the whole customer experience.

    Under the superior product initiative, the bank plans to develop superior banking products, which will act as “game changers”, tailor-made for specific customer needs.

    According to the bank, as the Nigerian banking industry becomes more competitive, it can increase its market share by developing products that offer better value and by showing a better understanding of individual customer needs.

    “The bank is in the process of optimising its services distribution channels. The goal under this initiative is to improve the service delivery channels to customers by providing a wide range of distribution channels, such as mobile banking and mini cash centres, while improving the bank’s operational efficiency by rationalising its branch network,” the bank stated.

    The bank also plans to automate and improve its product pricing to maximize returns and minimise risks, in line with its risk management guidelines. This is expected to boost profitability by improving its return on risk-adjusted capital model for pricing its products and services.

    Under the relationship management initiative, Access Bank aims at maintaining and strengthening its relationship with existing customers, while attracting new customers. The bank plans to attract new customers based on trust and the strong working relationship with existing clients.

    Chairman, Access Bank Plc, Mr. Gbenga Oyebode, noted that in furtherance of the bank’s objective of ranking as one of the top three banks in its chosen markets, it has identified certain sectors and market segments as growth opportunities for the next five years adding that enhancement of the bank’s capital base is critical to the realisation of the potentials in the identified sectors.

    He outlined that the capital raising is also to stand the bank in good chance in the event of regulatory headwinds.

    According to him, the Central Bank of Nigeria recently designated eight banks, including Access Bank, as Systematically Important Banks (SIBs). SIBs will be required to have an additional one per cent buffer of tier1 capital above the minimum capital required by other banks.

    “These developments make the enhancement of the Bank’s capital base imperative for the realisation of its strategic objectives,” Oyebode said.

    Oyebode noted that the bank has put in place adequate measures to safeguard it against possible headwinds and risks.

    According to him, management of Access Bank has broadly categorised the potential risks into risks to the entire banking industry and risks specific to Access Bank. Potential risks to the entire banking industry include headwinds from regulatory changes. The bank has set comfort buffers above regulatory limits to reduce the impact of any unexpected regulatory changes. Potential risks specific to the bank include, but are not limited to, composition of the bank’s deposits, loan book concentration, and foreign currency risks.

     

     

  • Abubakar’s misplaced optimism

    Abubakar’s misplaced optimism

    •There is little wisdom in exaggerating the unity of this country

     

    General Abdulsalami Abubakar (rtd), former military Head of State reportedly said that nothing can break up this country “because God has brought us together”. He made the comment while fielding questions from newsmen in Makurdi, the Benue State capital. The session with reporters marked the climax of his courtesy visit to Governor Gabriel Suswam, his host.

    His remark was meant to allay fears regarding the lingering security challenges facing the country consequent upon the Boko Haram onslaught in the north. We impute this to also be his retort to sustained calls by some groups and well-meaning citizens for a sovereign national conference to discuss the future of the country’s federation.

    As he succinctly puts it: “…. all the secession threats here and there with the security challenges are mere noise because we have deeply intermingled; wherever you go, you see Yoruba, Hausa, Igbo, Kanuris and others, so there is nothing that can break up this country because God has brought us together”. Further, he speciously believes that “Government alone cannot do it, every citizen must join hands with government to tackle the problem of insecurity”. Like many leaders in his shoes, he forgets that Nigerians can only work with a government that craves their input.

    General Abubakar’s optimism, though curious, according to him, is based on one: The fact that the current trying moments being faced by the nation are a passing phase which he believes would soon be overcome. Two: That Nigerians had intermingled for a long time and lived with obvious developmental challenges, which would make it even difficult for the country to break up.

    The Abubakar sermon has become a cliché, a mantra usually espoused by past leaders that never did anything to assuage the fears of stakeholders in the Nigerian federation while they were in power and in a better position to do just that. It is better if the country’s leaders drop such a conservative mindset as pontificated by Abubakar, that the country will forever remain one indivisible corporate entity.

    Indeed, it is fallacious for anyone to contemplate, not to talk of think that God brought the country together. We know without equivocation that Lord Lugard caused the amalgamation of the Northern and Southern Protectorates of Nigeria in 1914. But since the discovery of crude oil in Oloibiri in 1957, that valuable export has, rather than genuine bonding after independence in 1960, remained the country’s binding factor. And this has continued without much official ado being given to the myriad of injustices that continue to plague the country.

    The country’s leaders should stop appealing to sentiment because this would not take us far if the current defective structure stands. It is trite that no society is indivisible if the right things are not done by those saddled with the responsibility of doing so. The best way out of the current logjam of mutual ethnic suspicion is for all Nigerians, irrespective of ethnic or tribal affiliations, to sit together and agree on how the Nigerian federation should be administered in all spheres.

    This cannot be achieved except the leadership is sincere enough to see the need for such a long over-due conference. No amount of leadership grandstanding can restore the sanity of the nation’s challenged institutions; we believe there should be panacea to continuing electoral injustice; the Boko Haram malaise and the endemic corruption in the country.

    The inevitable truth is that the country must listen to its people if it must remain one indivisible entity that its leadership and statesmen want it to be on paper. It is only a sincerely fearless government that can guarantee this.