The Nation Newspaper

Tag: Profit

  • Why Nigeria is missing on $20b global miners’ profit chart

    If policy pronouncements were the only drivers of a strong and virile sector, the mining and extractive-related industry would have been sufficiently stimulated to pull the Nigerian economy out the worst recession in three decades.

    More than any other sector, mining has witnessed several policy responses in the Federal Government’s desperate bid to diversify the economy since 2014 when oil prices crashed at the global market.

    The tumbling oil prices resulted into huge revenue losses in Nigeria. The crash in the value of the Naira compounded the economic woes, thus pushing the country into recession.

    But as ambitious as the various policies look, the government has not been able to muster the needed political will to translate them into concrete actions.

    The government’s strategic plan to exploit the enormous but largely untapped potential in the mining industry to diversify the economy raised the hopes of an early rebound of the economy.

    But, despite the launch of the roadmap for the development of the mining sector since April 2012, the document has remained on paper.

    The blueprint was, among others, expected to rebuild the minerals, mining and related processing industry, rebuild market confidence in minerals and mining sector and win over domestic users of industrial minerals that are currently imported. Unfortunately, the strategic actions contained in the roadmap are yet to be implemented.

    The roadmap was not the only policy intervention that put industry operators in an expectant mood, The Nation learnt also learnt that the federal authority has given franchise to states desiring permission to exploit mineral resources in their domains.

    To encourage the states, the Federal Government went a step further, approving the payment of 13 per cent derivation from mining revenue to the 36 states of the federation and a N30 billion intervention fund for the mining sector.

    According to Mines & Steel Development Minister Kayode Fayemi explained that the fund would focus more on exploration, which, according to him, was at the heart of mining.

    He added that the intervention fund was in fulfilment of the administration’s campaign promise to diversify the economy with emphasis on agriculture and mining. The minister has also inaugurated the long-awaited Solid Minerals Development Fund (SMDF) Board. The Board has a mandate to address the barrage of challenges holding the sector down.

    Acting President Yemi Osinbajo also announced a fortnight ago that the Federal Government has initiated the process of raising $600 million for the development of the solid mineral sector.

    Osinbajo, who spoke at the opening of the National Mining Summit in Abuja, said the fund would be raised through the Nigerian Sovereign Wealth Investment Authority (NSWIA) and the Nigerian Stock Exchange (NSE).

    He said: “We are working with the NSWIA, the NSE and others to assemble a $600 million investment fund for the sector. Internationally, we have secured $150 million in funding from the World Bank for the minerals sector’s economic diversification.

    “This will provide technical assistance in restructuring and operationalisation of the SMDF. The SMDF will make finance available to artisanal and small mining operators through mining finance and lease institutions.

    “The mining sector is a priority for the Nigerian Government and a crucial part of our economic growth and diversification agenda. The President (Muhammadu Buhari) has seized every opportunity over the last two years to highlight the diversification vision and central role of the mining sector in it.”

    Observers believe that the intended objectives of the policy responses have not yet manifested because of what they call government’s lack of political will to push the diversification policy through.

    Some industry players and analysts, who spoke with The Nation, expressed concerns that the government’s failure to transform its diversification intention into concrete and practical actions was seriously hurting efforts at riding on the sector’s back to rebound the economy, create jobs and grow the Gross Domestic Product (GDP).

    Obiora Akabogu, a Lagos-based, observed that Nigeria has not been moving fast enough in the area of diversification. Describing the slow pace of diversification anchored on the minerals sector as “suicidal,” he said the requisite political will to translate policy statements into concrete actions was evidently lacking.

    A Partner and Head of Mining, PricewaterhouseCoopers (PwC) Nigeria, a consulting firm, Mr. Cyril Azobu, also said that despite the launch of the roadmap for the development of the mining sector since April 2012, it has remained on paper.

    “It’s time to begin to put these things into action. We have to put some political will around all these. It’s a long term thing, but we have to start now,” Azobu said.

     

    Counting the costs

    Statistics have shown that 44 solid mineral deposits abound across the 36 states, including the Federal Capital Territory (FCT), Abuja.

    According to experts, some of the deposits found to be in commercial quantities include: coal, tin, iron ore, columbite, limestone, gold, gypsum, kaolin, lead, zinc and bitumen.

    They said the government ought to have fast-tracked efforts at exploring and exploiting the mineral resources to exit recession.

    Despite its rich mineral endowment, no Nigeria company was among the world’s 40 largest listed mining countries that returned to profitability in 2016, with an aggregate net profit of $20 billion (about N6.29 trillion).

    A “Mine 2017 Report” released by the PwC’s said the market capitalisation of the top 40 miners rose 45 per cent to $714 billion.

    Energy, Utilities & Mining Industry Leader for PwC Africa, Michal Kotzé, said the report analysed the 40 companies by market capitalisation, and that the financial information for 2016 covered the periods April 1, 2015 to December 31, 2016, with each company’s results included for the 12-month financial reporting period that falls into this time frame.

    He said the rapidly rising commodity prices sparked renewed market optimism and improved credit ratings across the top 40 firms. Valuations also climbed, especially for the traditional miners, with the trend continuing through the first quarter of 2017 even as commodity prices remained flat.

    PwC Assurance Partner Andries Rossouw said: “Mining companies need to combine engineering excellence and know-how with a new open-mindedness to learn from advanced analytics and a need to embrace robotics and platforms that fundamentally challenge decades of doing things the same way …it is as much about behaviour as technology.”

     

    Projected GDP growth threatened

    There are fears that Nigeria may fail to meet some of its projections based on the emergence of a strong and virile mining sector, if the government failed to implement its policies on diversification of the economy to non-oil sectors, especially, mining.

    The solid minerals sector, on the average, contributes a paltry 0.46 per cent to the GDP, according to Azobu. Also, the Nigeria Extractive Industries Transparency Initiative (NEITI) has reported that the sector contributed only N113 billion to the nation’s coffers in five years.

    The sector’s which contributed N52 billion to the GDP in 2010 could only contribute N103 billion five years after.

    Observers say that swelling its GDP contribution by only 12 per cent was a far-cry for a sector that was a major contributor to the economy before the discovery of oil in the 1950s.

    Even with the current target of increasing the sector’s GDP contribution to 10 per cent by 2020, there is nothing to suggest that Nigeria will meet the target.

     

    Dearth of infrastructure as a sore point

    In a paper entitled: “Developing the Solid Minerals Sector: Quick Wins for the New Government”, Azobu listed adequate infrastructure, particularly a well-established transportation network as one of the requirements for a thriving mining industry.

    The facilities, he noted, are necessary for the movement of equipment to mining sites and the evacuation of minerals for sale and export.

    “Infrastructure is a key element for the success of any mining industry,” he said, noting that although, there are a number of infrastructure development initiatives in road and rail being embarked upon by the federal and state governments, such initiatives do not take into consideration planned linkage with existing or intended mining sites.

    Azobu said: “The linkage of mining sites via rail or roads, and the resultant ease of transportation of minerals for sale, would act as catalyst for the development of the solid minerals sector.”

    He further said the required raw materials for infrastructure development (e.g. Bitumen for road construction, iron ore to manufacture steel for rail construction) should be sourced internally.

    According to him, this will aid the development of local markets for these solid minerals. He noted that previous administrations recorded some success with regards to limestone for cement production.

    The PwC Nigeria Head of Mining therefore urged the federal government to take a holistic view regarding infrastructure development and mining sector plan. He also spoke of the need for the federal and state governments to develop and adopt a master plan for roads and rail.

    Azobu said: “All identified mining locations should be considered when drafting this master plan and it should be made mandatory for adoption by any level of government embarking on infrastructure development.”

     

    Hope rising for Itakpe-Ajaokuta-Warri rail line

    The recent developments in the rail sector appear to offer some hopes. Fayemi announced last week that the on-going Itakpe-Ajaokuta-Warri rail line will be ready by December.

    Speaking at the inauguration of the Development Partners and Donor Agencies’ Coordination Group on According to Dr. Fayemi, the project, being handled by the Ministry of Transport, was critical to the Federal Government’s effort to revive the Ajaokuta Steel plant and its iron feeder plant, NIOMCO.

    However, while most industry experts and stakeholders agree with Fayemi that an inclusive, well-articulated roadmap was imperative for rebuilding the mining industry, they argue that the pace of actual implementation of the strategic actions contained in the roadmap has been evidently slow.

    Akabogu said he expected that by now, the Presidency would have forwarded an executive bill to the National Assembly for modification or necessary amendment of the nation’s extant mining laws with a view to removing the hindrances to the maximisation of the potentials of the industry.

    The Petroleum Act 1969, for instance, stipulates “that all minerals belong to the Federal Government.” The 1999 Constitution (as amended) in Item 39 of the Second Schedule also reinforced this position by stating that: “All mines and minerals, including oil and gas fields, belong to the Federal Government.”

    Akabogu told The Nation that the extant provisions of the law has put the exploitation of solid minerals on the Exclusive Legislative List, meaning that only the Federal Government has the right to grant approval  for mining licences and to regulate the industry.

    Although, Fayemi said the states have been authorised to explore and exploit their mineral resources, experts insist that there is still the need for a proper review and amendment of the relevant mining laws to truly open up the industry.

    According to them, a review and amendment of the relevant mining laws was not only long overdue, but also a matter of urgent national importance following dwindling oil revenue and the need to diversify the economy away from its over-dependence on oil and gas.

     

    Flip-flop on artisanal mining

    Nigeria’s 0.46 per cent GDP contribution from mining of solid minerals, according to Azobu, is solely from the formal mining sector.

    He said between 80-85 per cent of current mining activities in Nigeria is through artisanal and small scale mining, which is largely informal and fraught with the use of crude equipment and extremely dangerous working practices.

    Besides, the sales channel is largely unofficial, and embedded with smuggling and distribution cartels, which hurts the nation’s economy in the form of revenue loss in taxes and royalties.

    It also exposes miners to uncontrolled risks, even as uncontrolled and non-systematic evacuation results in environmental degradation, erosion and excessive pollution, amongst other negative effects.

    “There is an urgent need to formalise the artisanal and small scale mining by formulating policies aimed at integrating informal artisanal miners into the formal mining sector”, Asobu said.

    He listed some of the benefits of such integration as; training and equipment supply; funding; possible absorption by bigger companies; and enlightenment on safe mining practices.

    During his visit to Rivers State, Osinbajo announced government’s plans to establish modular refineries to engage youths operating illegal oil refinery in the Niger Delta.

    He restated the commitment of the President Buhari-led administration to ensuring properly engaged of youths in the region.

    Observers view the initiative as a masterstroke to sustain the relative peace in the region where Niger Delta militants had disrupted oil production. The planned adaptation of illegal refineries scattered across the region to modular refineries will give the operators a sense of belonging, they said.

    The Chairman of  Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and National Union of Petroleum and Natural Gas Workers & NUPENG) and Petroleum Industry Bill (PIB) Committee, Hyginus Onuegbu, said that on the strength of the planned modular refineries’ proposal, Niger Delta youths have started organising themselves with a view to establishing refineries.

    “When the Acting President came to the Niger Delta, he made a promise about modular refinery. In fact, there was an association of modular refiners in Nigeria,” he told The Nation. A number of investors have reportedly indicated interest in investing in the project, which has prospects of attracting about $160 million investments.

     

    Pulling the rug off investors’ feet.

    As Niger Delta youths and prospective investors in the modular refinery business wait for the government to come out with modalities for the project take-off, the Federal Government backpedaled, declaring that it would no longer allow the proliferation of such refineries across the Niger Delta.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, explained that having such refineries scattered across the length and breadth of the Niger Delta would worsen environmental degradation and gas flaring, which will increase the problems of the region.

    He spoke at the presentation of the report of the New Nigerian Oil and Gas Sector Governance Policy Consultation Workshop held in Aberdeen, Scotland. The workshop was organised by Nigerians in Diaspora Organisation, Europe, United Kingdom and North Aberdeen.

    According to Dr. Kachikwu, the government was considering a situation where modular refineries would be located only in areas where its products would be easily evacuated and where getting feedstock to them would not be cumbersome.

    He stated that the government was commissioning a broad study that would lead to the development of an intelligent plan for the construction of modular refineries in the region.

    The minister said: “It is important to clear a misconception, especially as it has to do with modular refineries. Setting up smaller modular refineries in so many places in the Niger Delta would worsen gas flares in the region and also bring about environmental challenges.

    “It is critical to develop an integrated approach and plan to modular refineries construction in the Niger Delta, ensure that they are properly optimised and are not scattered everywhere.”

    Kachikwu argued that the proliferation of such refineries would not provide significant economic benefits to the country.

    “The relative peace in the Niger Delta was because the Acting President went round the Niger Delta and had a truce with militants. And of course, they are waiting for the Federal Government to fulfil its own side of the agreement, which is the issue around modular refineries”, Onuegbu told The Nation.

    He urged the government to keep faith with its promise on the modular refineries, as according to him, sustaining the peace in the region was necessary to avoid the disruption in oil and gas operations.

     

    Glimmer of hope from coal industry

    The recent developments in the Enugu coal industry have shown that there will be light at the end of the tunnel.

    About a fortnight ago, the Federal Government announced that it had chosen the Simang Group of South Africa to work along with the Enugu State Government to revive the coal industry for the benefit of the Southeast geopolitical zone.

    The investors, led by Dr. Odilim Enwegbara of the Pan Africa Group and Stephen Paddy, Chairman of the Simang Group, explained that the principal objective of the investment drive was to use coal to generate electricity and then spin a chain of allied business activities for the benefit of the local economy.

    Receiving the investors at the Government House in Enugu, Governor Ifeanyi Ugwuanyi said he had always believed that coal would be a major catalyst to economic development of the Southeast in particular and the country in general.

    But observers have described the expected investment in coal as a drop in the ocean considering the quantum of mineral resources in the country. They urged the government to take advantage of the more than 44 minerals across the country to stimulate the economy.

     

    The way out

    Azobu urged the government to revisit the mining sector roadmap and take necessary action to ensure achievement of the set goals. He pointed out that the roadmap appears to have been treated as a theoretical exercise by either not setting realistic targets or not working to achieve them.

    He listed some of the major milestones set by the road map to include: increasing the sector’s contribution to the nation’s GDP from the current 0.46 per cent to 10 per cent by 2020 and facilitating the production of coal needed to fire coal-fired power plants that would contribute 30 per cent of the nation’s power generation by 2020.

  • Law Union declares 100 per cent profit at AGM

    Law Union and Rock Insurance Plc has held its 48th Annual General Meeting (AGM) at the Muson Centre in Onikan, Lagos. The company declared 100 per cent profitability in 2016, while also claiming that the shareholders’ shares rose from N4.458 billion to N5.039 billion, representing 13.03 per cent growth.

    Its chairman and former Minister of State for Finance, Mr Remi Babalola, said the firm achieved marginal increase in its top-line goals, while recording significant growth in the bottom-line objectives last financial year.

    He said the company ended last year with N3.935 billion Gross Premium Written compared to N3.858 billion recorded in 2015. Profit before tax, Babalola said, grew by over 100 per cent from N0.328 billion in 2015 to N0.658 billion. He added that total assets grew by 3072 per cent to N8.58 billion.

    The chairman said the company would maintain its key objective of “unfailing and prompt settlement of all claims”. With Claims Paying Ability (CPA) rating of A-, Babalola said the company paid out N1.454 billion in 2016.

    He said the company obtained requisite regulatory approvals after the shareholders approved its request to raise additional capital by way of private placement to the tune of 1,031,199,000 ordinary share of N0.50 kobo at N0.70 kobo per share.

    He said: “Consequent upon a conditional approval issued by the National Insurance Commission, that the investor’s post-placement position should not exceed 20 per cent of the company’s equity, the placement was 83.3 per cent subscribed, thus bringing the total shares subscribed to 859,000,000 ordinary shares. The additional capital raised is expected to significantly enhance the company’s operations and boost its capacity to play in the oil and gas, and engineering sub-sector of the insurance space.”

    Babalola praised the immediate past chairman of the company, Princess Adenike Adeniran, who retired from the board last year. He said his predecessor elevated the value of the company through the culture of openness and accountability.

    Chief Executive Officer and Managing Director of the company, Mr Jide Orimolade, said the firm’s profitability steadily increased from 2014, noting that repositioning had started in the company to yield more results, especially in the engineering market where the firm has regained dominance.

    Orimolade attributed the company’s success to introduction of strategic initiatives driven by technology. This, he said, gave the company competitive advantage ahead of its competitors and enable it navigate through the turbulent economy with good profitability.

    He said: “Our careful attention on our service delivery to customers’ satisfaction has further given the company respect and recognition in the industry. Our attention would focus on the distribution of our products to the burgeoning middle-class, which has the highest volume. We expect to reap huge premium through retail products, as well as launch new retail products.”

    The AGM featured interactive session between the board of directors and the shareholders. The event also featured election of audit committee members and re-election of directors.

  • Omoluabi Mortgage Bank makes N78million profit

    Omoluabi  Mortgage Bank has declared N78,869,496 as profit  before  tax during  2016 financial  year as against the loss of #168 million recorded in the year 2015. Chairman of the bank, Dr Adebayo Jimoh while reviewing  the bank’s  performance in the 2016 financial year disclosed that “Apart from the PBT of over N78 million, the two weeks  after  its appearance on the floor of the Nigerian  Stock Exchange, the bank also achieved increased in gross earnings  by 42.39 percent  from N214 million in 2015 to N304 million. This is in addition to increase in customer deposit growth by 165 percent  from N165 million in 2015 to N389 million in 2016.”

    According to him, “The quality of loans and advances portfolio of Omoluabi Mortgage bank plc rose from N365 millions in 2015 to N549 millions in 2016 while the total assets of the bank grew from N2.6 billion in 2015 to N3.3 billion in 2016 while the shareholders  funds grew from N2.3 billion to N2.43 billion in 2016.”

    Adebayo  disclosed that despite the fact that the past year was a very challenging one both for economic and business environment  in the county especially for the mortgage subsector, Omoluabi bank made many changes within the year so as to reposition it for better performance and efficient service delivery

    ‘’Hence, the year saw us strengthen ourselves through a major change to Board, structure and capacity to reflect the current best practices in the industry thereby enhancing it with more experience and capability,’’,he added.

    Meanwhile shareholders of the bank  have commended  the board and management  of the  bank for remarkable turn around in the  fortunes of Omoluabi in the last financial  year but urged the mortgage institution to expedite actions in the payment of dividends so as to compensate their  steadfastness  and  faith they have in the bank. .

    Adebayo  while responding to observations,questions and recommendations  made by shareholders, assured them of the bank’s commitment to dividend payment and also disclosed mid-term plan of the bank to become “a PMI with National License and position itself as key player in the mortgage sub sector along the South-West corridor of Osun, Oyo, Ondo, Ekiti, Kwara and Edo Sates”

    Also speaking at the AGM, the Managing Director of the Bank,Mr Ayo Olowokere called for patience and understanding on the path of the shareholders, as he promised that  the bank is poised for more  transformation and value creation in the next  financial year. He attributed the success recorded by the bank in the last financial year largely to the use of technology which he said has shaped its banking operations especially with the introduction of various e-channels like Autopay, Quickteller, NIBSS instant payment, College pay, Automatic Teller Machine among others.

    Highlight of the meeting was the election  of Mr Akintayo Kolawole  and Dr D. O Yunusa as non Executive Directors of the bank by the after which the meeting invoked provision   section 262 of Companies and Allied Matters  Act(CAMA)1990 to remove former  Comissioner of Finance in Osun State,Mr Wale Bolorunduro from the board.

     

     

  • Jaiz Bank grows Q1 profit by 176%

    Jaiz Bank Plc recorded a well-rounded performance in the first quarter as Nigeria’s first non-interest commercial bank reported top-line growth of 24 per cent and profit increase of 176 per cent in its first report as a quoted company.

    Key extracts of the interim report and accounts of Jaiz Bank for the period ended March 31, 2017 showed that gross income rose by 23.7 per cent to N1.62 billion in first quarter 2017 as against N1.31 billion recorded in comparable period of 2016. Total net income grew by 34.3 per cent from N1.08 billion in first quarter 2016 to N1.45 billion in first quarter 2017. Profits before and after tax rose by 175.8 per cent to N203.68 million in first quarter 2017 as against N73.84 million in first quarter 2016. There were no provisions for taxes as the bank is still under tax waiver as a pioneer.

    The balance sheet size of the bank grew by 34.1 per cent as total assets rose to N78.7 billion in first quarter 2017 compared with N58.67 billion in corresponding period of 2016. Total equity funds also rose by 32.5 per cent from N11.25 billion in first quarter 2016 to N14.91 billion in first quarter 2017.

    Jaiz Bank recorded another milestone on February 9, 2017 as the first non-interest financial institution to be listed on the Nigerian Stock Exchange (NSE) with the admission of the entire issued share capital of the bank to the main board of the Exchange.

    Managing Director, Jaiz Bank Plc, Mr. Hassan Usman, said the secret for the above-peer growth rate of Jaiz Bank lies in the uniqueness of its business management approach.

    “We have set out on a path of reinvention of the banking landscape in the country. This journey over the next few years will focus on changing how banks should operate to better improve the lots of the community, while delivering on their commitments to the shareholders. We are focused on building on our culture of ethics and taking the necessary decisions to align our perspective with client expectations,” Usman said in a broad outline of the people-centred approach of the bank.

    He said Jaiz Bank, as Nigeria’s only fully-fledged Islamic bank, is committed to showing that the non-interest banking model can be implemented profitably in the country.

    He pointed out that the projection for the bank for the next five years indicates a gross revenue of N16 billion by 2021and profit before tax of N7.9 billion.

    Usman said Jaiz Bank has developed a bouquet of products and services that has increasingly endeared it to Nigerian businesses and depositors.

    According to him, the bank had focused on building well-diversified investment portfolios across several sectors of the economy including general commerce, real estate and construction, agriculture, education, manufacturing, information and telecommunication and oil and gas among others.

     

  • GTB Posts N165b Profit Before Tax, says Agbaje

    GTB Posts N165b Profit Before Tax, says Agbaje

    •‘We’ve simplified banking processes’

    Guaranty Trust Bank has posted a Profit before tax  N165.14 billion, in its 2016 operating year, the Managing Director/CEO, Segun Agbaje, has said.

    Agbaje, who made this known yesterday at a press parley in Lagos, said the profit  represented a growth of 37 per cent over the N120.69 billion recorded in the corresponding period of December, 2015.

    He said the bank’s loan book grew by 16 per cent from N1.373 trillion recorded as at December 2015 to N1.59trillion in December 2016, with corresponding growth in total deposits, which he added, increased by 29 per cent to N2.111 trillion from N1.637 trillion in December 2015.

    The bank’s balance sheet, Agbaje stated, remained strong with a 19.7 per cent growth in total assets and contingents, as the bank closed the year ended December 2016 with Total Assets and Contingents of N3.70 trillion and shareholders’ funds of N504.9 billion.

    Agbaje yesterday said the lender gives priority to simpler and faster banking, which have helped it grow and retain its customers.

    He said the lender has in the last five years, tripled its customer base to 9.68 million as at December 31, 2016.

    “As part of our strategy to grow our retail business, we are continuously making our banking processes and touch points simple, easier, and faster irrespective of where our customers choose to bank,” he said.

    Agbaje said the bank has expanded the range of functionality it offers on internet, mobile and USSD banking platforms, ensuring better experience in its branches and providing more intelligent Automated Teller Machines (ATMs) to allow customers save time through efficient self-service.

    He said the bank has also seen tremendous growth in customer adoption of its digital services. “We are investing and building our digital capabilities, and also actively seeking to collaborate with FinTech companies.

    “Whether we compete or collaborate, we will be aggressively pursuing these digital opportunities, to strengthen our traditional businesses, and going beyond being a bank to becoming a platform that enriches the lives of all customers that it serve,” he said.

    GTB posted N165 billion Profit Before Tax (PBT) in its audited financial results for the year ended December 31, 2016.

    A review of the results showed positive performance across all financial indices, reaffirming the bank’s position as one of the most profitable and well managed financial institutions in Nigeria.

    Gross earnings for the period grew by 37 per cent to N414.62 billion from N301.85 billion reported in the December 2015 review period. The performance was driven primarily by growth in interest income as well as foreign exchange income, Agbaje said.

    He said the bank’s non-performing loans remained low and within regulatory threshold at 3.66 per cent, with adequate coverage of 131.79 per cent. Increase in collective impairment was borne out of the prudent stance of the Bank, while Capital remains strong with CAR of 19.79 per cent.

    On the backdrop of this result, Return on Equity (ROAE) and Return on Assets (ROAA) closed at 35.96 per cent and 5.85 per cent. The bank is proposing final dividend of 175 kobo per unit of ordinary share held by shareholders in addition to interim dividend of 25 kobo per unit of ordinary share,  thus bringing total dividend for 2016 financial year to N2 per unit of ordinary share.

    Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth.

    “We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices”.

  • UBA profit after tax hits N72b

    UBA profit after tax hits N72b

    •Shareholders to get 55 kobo per share

    United Bank for Africa (UBA) Plc, a pan-African financial services group operating in  19 African countries,  has released its audited 2016 full year results.

    In the results released at the weekend at the Nigerian Stock Exchange (NSE), covering the period January to December, the group earned N91 billion as profit before tax.

    This is 32 per cent higher than N68 billion profit recorded over the same period in 2015.

    Its profit after tax grew by 22 per cent to N72 billion, from N60 billion recorded the previous year.

    A statement from the bank said the results showed a significant growth in the group’s gross earnings and profits – “an attestation to its resilience, enhanced productivity and geographic diversification, evident in the impressive contribution from its African subsidiaries”.

    The group recorded a 22 per cent growth in gross earnings to N384 billion, as at December  2016, from N315 billion at the end of the 2015 financial year.

    This illustrated the bank’s ability to grow profitability despite the difficult macro-economic environment.

    In addition to the rising adoption of electronic banking channels in many of the African markets, where UBA operates, the bank leveraged its strong franchise and geographical footprint.

    The performance was buoyed by considerable growth in both  interest and non-interest income, as well as increasing efficiency gains from cost management initiatives.

    The statement said: “UBA’s subsidiaries outside of Nigeria are increasingly gaining market share, reinforcing the strong and impressive subsidiary contribution to the group, estimated at one-third of profit in 2016, from a quarter in 2015 financial year.”

    Following the performance, its Board of Directors proposed a final dividend of 55 kobo, subject to the approval of the shareholders at the forthcoming Annual General Meeting, scheduled to hold on April 7, at the Eko Hotel and Suites in Lagos.

    The bank had earlier paid an interim dividend of 20k to shareholders, bringing the total dividend for the 2016 financial year to N0.75, an unprecedented yield of 13.9 per cent, based on the stock’s unit price of N5.39 on the floor of the NSE.

  • GTBank posts N165b profit before tax

    GTBank posts N165b profit before tax

    Guaranty Trust Bank Plc yesterday posted N165 billion profit before tax (PBT) in its audited financial results for the year ended December 31, 2016 to the Nigerian and London Stock Exchanges.

    A review of the results shows positive performance across all financial indices, reaffirming the bank’s position as one of the most profitable and well managed financial institutions in Nigeria. Gross earnings for the period grew by 37 per cent to N414.62 billion from N301.85 billion reported in the December 2015. The performance was driven primarily by growth in interest income as well as foreign exchange income.

    Profit before tax stood at N165.14 billion, representing a growth of 37 per cent over N120.69 billion recorded in the corresponding period of December 2015. The bank’s loan book grew by 16 per cent from N1.373 trillion recorded as at December 2015 to N1.590 trillion in December 2016 with corresponding growth in total deposits which increased by 29 per cent to N2.111 trillion from N1.637 trillion in December 2015.

    The bank’s balance sheet remained strong with a 19.7 per cent growth in total assets and contingents as the bank closed the year ended December 2016 with Total Assets and Contingents of N3.70 trillion and shareholders’ funds of N504.9 billion.

    The bank’s non-performing loans remained low and within regulatory threshold at 3.66 per cent with adequate coverage of 131.79 per cent. Increase in collective impairment was borne out of the prudent stance of the Bank, while capital remains strong with Capital Adequacy Ratio of 19.79 per cent.

    Its Managing Director/CEO Segun Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth. We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices.

    “We are transforming our organisation into a platform for enriching lives by positioning ourselves at the centre of an extended ecosystem that offers our stakeholders, benefits beyond banking.

  • GT Bank declares N165.14bn profit in 2016

    GT Bank declares N165.14bn profit in 2016

    Guaranty Trust Bank on Wednesday posted a profit before tax of N165. 14 billion for the financial year ended December. 31, 2016.

    The profit represented a growth of 37 per cent when compared to N120.69 billion recorded in the corresponding period of 2015.

    A statement issued by the bank in Lagos said the bank’s gross earnings for the review period grew by 37 per cent to N414.62 billion from N301.85 billion reported in December 2015.

    The statement said the earnings were driven primarily by growth in interest income as well as foreign exchange income.

    The bank’s loan book grew by 16 per cent to N1.59 trillion from N1.37 trillion achieved in the preceding year, while total deposits increased by 29 per cent to ₦2.11 trillion from N1.637 trillion in 2015.

    It said that the bank’s balance sheet remained strong with a 19.7 per cent growth in total assets and contingents as the bank closed the year with total assets and contingents of  N3.70 trillion and shareholders’ funds of N504.9 billion.

    According to the statement, the bank is proposing a final dividend of N1.75 per unit of ordinary share held by shareholders.

    This is in addition to interim dividend of 25k per unit of ordinary share bringing total dividend for 2016 financial year to N2 per share.

    The statement quoted Mr Segun Agbaje, the bank’s Managing Director, as saying “the financial performance in 2016 demonstrated the fundamental strength of its business to deliver sustainable long-term growth’’.

    Agbaje stated that the bank successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices.

    “We are transforming our organisation into a platform for enriching lives by positioning ourselves at the centre of an extended ecosystem that offers our stakeholders benefits beyond banking.

     

    “We also remain committed to maximising shareholders’ value and delivering superior and sustainable return, guided by our founding values of hard work, discipline and integrity,’’ he stated.

     

    Agbaje said that the bank enshrined its position as a clear leader in the industry and in recognition of its innovation and hard work, it received more than 20 international awards in 2016. (NAN)

  • Zenith declares N129.65bn profit after tax in 2016

    Zenith declares N129.65bn profit after tax in 2016

    Zenith International Bank Plc has declared a profit after tax of N129.65 billion and a final dividend of N1.77 per share for the financial year ended December. 31, 2016.

    This is contained in the company’s audited result report released by the Nigerian Stock Exchange (NSE) on Monday in Lagos.

    The News Agency of Nigeria  (NAN) reports that this was in contrast with N105.66 billion posted in the preceding period of 2015.

    The profit represented an increase of 22.7 per cent when compared with figures for 2015.

    Its profit before tax stood at N156.75 against the N125.63 billion declared in 2015.

    The bank’s gross earnings grew by 17.4 per cent to N507. 99 billion compared with N432.54 billion recorded in 2015.

    Its non-interest income increased by 45.9 per cent to N25.59 billion due to an 809 per cent  increase in foreign exchange revaluation gains of N25.6 billion, this however, declined by 10 per cent  from the N8.2 billion reported in nine months of 2016.

    The impairment loss on financial assets rose significantly by 106.4 per cent to N32.35 billion in 2016 and 34.6 per cent  based on quarter-on-quarter to N10.2 billion in the fourth quarter of 2016.

    NAN reports that the board of directors proposed a final dividend of N1.77 per share to all its investors against a final dividend of N1.55 per share paid in 2015.

    The bank had earlier in 2016 paid a sum of 25k as interim dividend, bringing the total dividend in 2016 to N2.02 per share against N1.80 per share declared in 2015.

    NAN  also reports that Zenith Bank is the first bank to declare its 2016 audited result. (NAN)

  • FCMB grows Q3 net profit by 31% to N13b

    FCMB grows Q3 net profit by 31% to N13b

    FCMB Group Plc recorded considerable growths in the top-line and profitability in the third quarter as the financial services group grew net profit by 30.6 per cent to N13 billion within the nine-month period.

    Key extracts of the nine-month report for the period ended September 30, 2016 showed that group gross earnings rose by 29 per cent to N140.7 billion in September 2016 as against N109.3 billion by September 2015. Non-interest income had increased by 128 per cent from N19.6 billion to N44.8 billion. This increase was driven by 612 per cent increase in foreign exchange income from N5 billion in third quarter 2015 to N35.3 billion in third quarter 2016. Profit before tax rose by 19.4 per cent from N14.18 billion to N11.88 billion. Profit after tax also increased to N12.98 billion in third quarter 2016 as against N9.94 billion in comparable period of 2015.

    FCMB Group includes First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited.

    Managing director, FCMB Group Plc, Mr. Peter Obaseki, said the improvements in the key performance indicators of the group to the soundness of ratios, steady buffers against the subsisting adverse operating environment, the group’s sustained revenue momentum and cost optimisation programme.

    He noted that the capital adequacy and liquidity ratios of the bank have held up at 17.6 per cent and 36.8 per cent respectively, adding that the underlying revenue momentum remains strong as the cost optimisation programme of the group led to a marginal drop in operating expenses, despite the inflationary environment.

    “The macro economic conditions in the final quarter remain challenging; we will keep up a conservative stance,” Obaseki said.

    Group managing director, First City Monument Bank (FCMB) Limited, Mr. Ladi Balogun, said the audited results of the bank reveal that the extraordinary performance in second quarter 2016 offset the loss recorded in third quarter of N2.4 billion, thereby resulting in strong year-on-year profit growth.

    He pointed out that in order to avoid an unsustainable, non-cash, spike in earnings from further revaluation gains in third quarter, the bank also significantly stepped up its loan loss provisions as the macroeconomic climate is taking a significant toll on the bank’s borrowing customers across all segments.

    “While our prudential ratios should continue to strengthen into the fourth quarter, modestly buoyed by a tier 2 capital injection of N7.5 billion in November, we do not anticipate improvement in the fourth quarter earnings. Nonetheless, we are pleased with the gains we continue to record in growing our business in areas such as retail banking with a 315 per cent year-on-year growth in profitability and increasing our share of banking activities in the agricultural sector,” Balogun said.

    He noted that in spite of the fact that the banking sector has seen several revenue lines diminish due to external factors; FCMB will be well positioned for a strong rebound in core earnings in the medium term as it builds a more resilient balance sheet.

    “FCMB expects to continue to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of the personal and business aspirations of its customers and all stakeholders,” Balogun said.