Fidelity Bank Plc. has recorded a profit before tax (PBT) of N4.0 billion and profit after tax (PAT) of N3.6 billion for the first quarter ended March 31, 2016. The PBT showed a decline of 14.6 per cent from N4.7 billion posted in the corresponding period of 2015 while the PAT fell by 10.5 per cent as against N4.0 billion posted in 2015.
However, the bank increased customers’ deposits by 1.9 per cent to N784.5 billion from N769.6 billion, while net loans increased by 2.1 per cent from N578 billion to N590.1 billion. Total equity rose by 1.3 per cent to N187 billion, from N183.5 billion, while total assets grew by 4.0 per cent from N1.232 trillion to N1.284 trillion.
Reacting to the results, analysts at FBN Quest said although loan loss provisions fell by 28 per cent, a 16 per cent spike in operational expenses resulted in PBT declining by 15 per cent.
“A negative result of N3.5 billion in other comprehensive income (OCI) amplified the decline in PAT. Moving back to the pre-provision profits, although funding income grew by 30 per cent, a 35 per cent decline in non-interest income was responsible for the single-digit growth in pre-provision profits. We note that the Q1 quarter marks the third consecutive quarter of decline on the non-interest income line,” they said.
According to FBN Quest, compared with their forecasts, PBT missed by 15 per cent because profit before provisions came in around 11 per cent lower than what they had modelled. “A 96 per cent decline in net foreign exchange gain to N180 million ( N4.1 billion in Q1 2015) was a major driver behind the weakness in non-interest income, most likely due to issues surrounding forex supply which continue to impact banks’ results. We would be looking to management to get more clarity on this line on the bank’s conference call. We would not read too much into the 28 per cent decline in impairment charges at this time, given that these results are not audited,” they said.
Meanwhile, the Nigerian equities market opened the month on a positive note yesterday as the Nigerian Stock Exchange (NSE) All-Share Index appreciated by 3.2 per cent to close at 25,865.50. Nestle Nigeria Plc., Dangote Cement Plc. and Nigerian Breweries Plc were responsible for the growth recorded as they rose 10.3 per cent, 5.0 per cent and 5.0 per cent respectively.
Officials of the Central Bank of Nigeria’s Compliance Unit on Tuesday stormed the headquarters of Fidelity Bank Plc. in Lagos in connection with the ongoing investigations into the $115m (N23bn) scam involving the Managing Director of the bank, Mr. Nnamdi Okonkwo, and the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.
A top executive of the bank confided in our correspondent that the CBN officials visited the bank’s headquarters as part of investigations into the deal.
It was learnt that a committee from Fidelity Bank had already made a comprehensive presentation to the CBN on its involvement in the deal.
This, according to the source, will further help both the apex bank and the Economic and Financial Crimes Commission in the ongoing investigations.
It was gathered that the visit by the compliance unit of the apex bank to Fidelity Bank was to compare transaction documents with the presentation made by the committee.
These, it was learnt, would be compared with the statement made to the EFCC by the embattled managing director.
When contacted, the Acting Director, Corporate Communications, CBN, Mr. Isaac Okoroafor, promised to find out about the visit and get back to our correspondent.
Calls and text messages sent to his mobile phone almost an hour later were not replied as of the time of going to press.
The Board of Directors of the bank had on Monday announced the appointment of the Executive Director, North, Alhaji Mohammed Balarabe, as the Acting Managing Director/Chief Executive of Fidelity Bank with immediate effect subject to regulatory approval.
During the build-up to the 2015 presidential election, Alison-Madueke allegedly invited Okonkwo to help her handle some cash, which would be disbursed to electoral officials and groups.
Meanwhile, shares of Fidelity Bank fell by almost eight per cent to a two-month low of N1.08 on Tuesday, the first day of trading this week
Nigeria’s external reserves diminished by a total of $753 million to close at $27.123 billion as at April 28th, compared with the $27.859 billion it was as at April 1.
The current position of the reserves, which are derived mainly from the proceeds of crude oil earnings represented a decline by $1.855 billion or 6.4 per cent, as against the $28.978 billion it stood at the beginning of this year, according figures gathered from the Central Bank of Nigeria (CBN).
Crude oil prices recorded nearly 20 per cent climb in April to about $46 per barrel. OPEC crude-oil production surged by 484,000 barrels to 33.217 million a day in April, according to a Bloomberg survey.
THISDAY had reported that the external reserves were expected to decline further due to the settlement of large swap positions between the banks and the CBN. According to estimates, the overall swap books of some Nigerian banks were about $5 billion, with most of it to be paid back this year. However, findings showed that there were some 400-day swap deals that were done in the fourth quarter of 2015. A swap is a derivative in which two counter parties exchange cash flows of one party’s financial instrument for those of the other party’s financial instrument.
Analysts at FBN Quest noted the peak in crude oil price from its recent floor in January, saying the budget assumption of $38 per barrel has started to look conservative. They predicted an end-2016 spot price for Bonny Light of $55 per barrel. “They said, the global supply/demand balance for crude is set to remain out of kilter until late 2017. Inventory accumulation, data-driven China worries and an uncompromising Saudi stance militate against an earlier recovery.
“The success of the President Muhammadu Buhari agenda rests upon whether its expansionary fiscal stance will deliver the capital spending and the jobs to make its contribution to a revival in the economy. This, in turn, requires that it comes close to hitting its ambitious targets for non-oil revenue generation.
“These are heady projections and the impact of the 2016 budget will not be felt much before the end of the year. Beyond the fiscal, the FGN would do well to clarify its policies and trumpet its successes, given the limits on the patience of voters and markets. They also predicted that there would be unexciting growth this year and next. Growth of 2.1 per cent year-on-year was recorded in fourth quarter Q4 2015, which was the lowest in the revised series of national accounts.
Analysts also projected that a combination of government spending, sector-specific reforms and a modest rise in oil revenues should deliver unexciting growth of 3.5 per cent in 2017. FBN Quest predicted that devaluation would be the last resort by the central bank.
“The CBN has stiffened its defence of its exchange-rate policy. We see devaluation under duress and a year-end interbank rate of N230. We see further monetary tightening ahead as the Monetary Policy Committee responds in textbook manner to rising inflation. We also see FGN bond yields in the middle of the curve backing up towards the 14 per cent level in the weeks ahead. The budget deficit target requires consistently large sales of bonds at auction,” the firm added.
Renaissance Capital Limited (RenCap) recently stated that it foresees Nigeria’s forex policy becoming more flexible by mid-2016. The firm, in a recent report said it expects the country’s policy-based budget support to spur a change in the CBN’s forex policy.
According to RenCap, this was the case the last time Nigeria sought financing from development finance institutions in 2009. Buhari’s government has described its first budget, which is yet to be signed into law, as reflationary.
It plans to accelerate economic growth by spending N6trillion, up from N4.49 trillion that was planned for 2015. Of this, 30 per cent will go towards capital expenditure, up from 20 per cent in recent years.
Nestle Foods, the world’s leading nutrition, health and wellness company, has unfolded plans for a N15 billion production line expansion for its plants in Ogun State, to be executed in two phases- N6 billion in 2016 and N9 billion in the year 2017.
The company already has some production lines and warehouses in three locations in the state, in Agbara, Sango-Ota and Sagamu-Interchange, on Lagos-Ibadan expressway, where about 2,000 residents of the state were directly employed, in addition to other factory workers sourced from other parts of the country and abroad.
Speaking during a working visit to Governor Ibikunle Amosun in Abeokuta, the state capital, Managing Director and Chief Executive Officer, Nestle Nigeria Plc., Dharnesh Gordhon, disclosed that the expansion drive became necessary in the state, having observed the government’s efforts in terms of security and enabling business environment.
Gordhon, who said the visit was to commend investor-friendly disposition of the government, which has attracted huge investment opportunities to the state, said the state’s industrial policy has inspired the company to propose an investment of N6 billion and N9 billion this year and next year respectively next year, as part of measures to boost the company’s profile.
He said 2,000 residents of the state were directly employed in Nestle’s operation and distribution lines while another 2,000 employees, including workers from other parts of the country and abroad, were also employed, adding that the expansion drive would create further employment opportunities and wealth creation in the state.
The state’s Commissioner for Commerce and Industry, Bimbo Ashiru, said “Nestle is investing over N6 billion in the state this year and between N7 billion and N9 billion next year. So, they are expanding their base, they are creating employment opportunities; they have employed about 2,000 people in this state.
“And we are looking at taking advantage of backward integration, whereby larger percentage of raw materials used will be sourced locally, our focus now is that we must be able to have industries that will be servicing other industries, so that the value chain will be completed, where we have goods being manufactured one company and raw materials being supplied by another factory.
“For example, Nestle has Olam, Olam is a major supply of what they need, Nampak Bevcan is taking another part; they do their packaging. We want our manufacturers to be nearer to their raw materials”, Ashiru added.
Amosun declared that investments worth over N70 billion had been attracted to the state in the last five years, saying that the administration would do more in terms of security, networking, favourable tax policy as well as more provision of enabling business environment for both existing and prospective investors operating in the State.
Amosun, who commended the company’s investment drive in spite of economic challenges confronting the nation, assured the company of further government’s support as it plans to expand its production lines this year and next year, saying that government would continue to collaborate with investors not only for mutual benefits, but to further increase investment in the State.
The Governor, however, enjoined industries in the State to always maintain clean and safe environment and endeavour to source their materials from local farmers, explaining that it would go a long way in promoting grassroots farming and socio-economic development of the people, translating into more wealth and employment opportunities.
Following the arrest of its Managing Director/Chief Executive Officer (MD/CEO), Mr. Nnamdi Okonkwo, by the Economic and Financial Crimes Commission (EFCC), Fidelity Bank Plc monday announced the appointment of its Executive Director North, Alhaji Mohammed Lawal Balarabe, as its acting MD/CEO.
The appointment was announced after a board meeting which ended last night.
A two-paragraph statement at the end of the meeting said Balarabe’s appointment, which took effect last night, was subject to regulatory approval even as the bank assured its stakeholders of continued seamless services.
“In the absence of the Managing Director/Chief Executive Officer, Mr. Nnamdi Okonkwo, the Board of Directors has appointed Alhaji Mohammed Lawal Balarabe, Executive Director North as Acting Managing Director/Chief Executive of Fidelity Bank Plc. with immediate effect subject to regulatory approval,” it said, adding: “The bank reassures all its stakeholders including over 400,000 shareholders and 3.4 million customers of its continued seamless services.”
The EFCC had arrested Fidelity Bank’s MD/CEO for allegedly receiving $115 million in lodgements from the former Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and disbursed the funds to politicians in the build-up to the 2015 presidential election that was lost by former President Goodluck Jonathan.
The bank in a statement last Thursday had explained that the transaction was reported to the regulator and that it was cooperating with the EFCC in its investigations.
Balarabe holds a Bachelor’s degree in Accountancy and Finance from Nottingham Trent University, UK, as well as an MSc in Finance from the University of Lagos.
A dealing member of the Nigerian Stock Exchange (NSE) since 1992, he was an Executive Director with the former Oceanic Bank Plc. He was also a General Manager in United Bank for Africa (UBA) and had been the General Manager and Chief Executive of Newdevco Finance Services Company Limited.
He has over 24 years banking experience across business portfolios in banking.
He was appointed to the Board of Fidelity Bank Plc. in April, 2012.
According to the audited 2015 full year results of the bank, its gross earnings grew from N136.9 billion in 2014 to N146.9 billion in 2015. Profit before tax (PBT) declined by 9.6 per cent to N14.0 billion from N15.5 billion in 2014, while profit after tax (PAT) settled at N13.9 billion compared with N13.8 billion the previous year.
The directors, therefore, recommended a dividend of N4.6 billion, thus maintaining a tradition of consistent dividend pay-out for the past six years.
Total equity increased by 6.0 per cent to N183.5 billion from N173.1 billion in 2014 full year, net operating income stood at N83.9 billion, a moderate 12.5 per cent rise from N74.6 billion in 2014 full year, growing the major income lines across the quarters.
Assessing the performance of the bank, analysts at Renaissance Capital said Fidelity’s numbers had shown significant resilience versus its tier two peers, most of which had announced profit warnings for 2015.
Nigerian Breweries (NB) Plc. has posted a revenue of N77.55 billion and profit after tax of N10.45 billion in its first quarter operations.
Specifically, the company’s unaudited result for the first quarter ended March 31, showed 11 per cent increase in revenue from N69.92 billion in 2015 to N77.55 billion in the period under review, while net profit stood at N10.45 billion, a four per cent increase over the N10.10 billion declared in the corresponding period in 2015.
Operating activities of the firm also improved by 10 per cent from N16.37 billion in the first three months of 2015 to N17.99 in the corresponding months in 2016.
According to a statement by NB’s directors, the 11 per cent growth in revenue was a reflection of the company’s strong and effective route to market, increased sales during the Easter period as well as higher number of sales days in the period as against the lower number of days recorded in the corresponding period of 2015 due to the general elections.
It explained that despite the current challenging operating environment leading to consumer down-trading, rising inflation, increased cost of financing due to higher foreign exchange cost and increased input cost amongst others, the company was still able to return the four per cent increase in profit after tax.
It added that the one-off merger costs incurred in the first quarter of 2015 also occasioned the increase in profit.
The statement, signed by the Company Secretary/Legal Adviser, Uaboi Agbebaku, further noted that the board expects the operating environment in 2016 to continue to be very challenging.
He however, added that the company is in a good position to take advantage of any upswing in the market, especially with its agenda of cost leadership and market leadership strategy supported by innovation.
A stockbroking firm and member of Stanbic IBTC Holdings Plc., Stanbic IBTC Stockbrokers Limited, says there is a need to further deepen the Nigerian capital market with a view to providing investors with real-time trading information.
This, according to the firm, informed the launch of its online stockbroking service on the Nigerian Stock Exchange with real-time processing capacity.
The Stanbic IBTC electronic trade provides investors with real-time market information as well as enables them to give real-time mandates to buy or sell shares on the NSE.
Among its uptakes, the platform would help the market regain the confidence of investors by availing them of insight required to act prudently on new investment opportunities in the marketplace via a secure and robust technologically-driven platform, the stockbroking firm explained.
The Chief Executive, Stanbic IBTC Holdings Plc., Sola David-Borha, was quoted in a statement as saying that the group remained committed to deepen the Nigerian capital market by making available to the investing public information, initiatives and strategies that could help them have superior information about developments in both the local and global markets.
“In introducing the new platform, the overarching goal is to identify both opportunities and threats in the global marketplace, which are made available to investors in real-time to enable them to respond as quickly as possible. Our focus is on attracting investment to the Nigerian economy. The Stanbic IBTC e-Trade platform is targeted at all retail investors,” David-Borha said.
Enumerating the benefits of the platform, the Chief Executive, Stanbic IBTC Stockbrokers Limited, Titi Ogungbesan, stated that with reliable and timely data, decision making would be faster and added that this would enable investors to structure their activities for efficiency.
Ogungbesan, who said there was no better time to invest in the Nigerian capital market than now when prices of equities were low and attractive, noted that trading on Stanbic IBTC e-Trade was limited to only the NSE for now.
She highlighted other benefits of the e-Trade platform as flexible online trading environment anywhere; 24-hour access to your brokerage account; access to live market data from the NSE for instant investment decision, convenience, transparency and control over your investment. Others are instant email notification on your transactions, automated contract note and trade notification delivery system.
The Stanbic IBTC Group said it had in recent past launched several products and services to deepen growth of the Nigerian financial services market.
It listed the products as the Purchasing Managers’ Index; a composite index to measure private sector activities to provide an early indication of business conditions in the country; the Stanbic IBTC Exchange Traded Fund 30 (ETF 30); an index built on the NSE 30 Index that tracks the 30 most capitalised companies on the NSE; and the Securities Lending Product, which involves the temporary transfer of securities from one party (the lender) to another (the borrower) for a fee.
Stanbic IBTC Stockbrokers is a wholly-owned subsidiary of Stanbic IBTC Holdings, a member of Standard Bank Group.
The company was set up to provide world-class stockbroking services to local as well as foreign investors in the Nigerian capital market.
A member of the NSE, Stanbic IBTC Stockbrokers is licensed by the Securities and Exchange Commission and is the largest stockbroking house in Nigeria.
The slump in the prices of crude oil has continued to take its tolls on companies’ financial results as Chevron Corporation at the weekend reported a loss of $725 million for first quarter 2016, compared with earnings of $2.6 billion in the 2015 first quarter.
Though the company reported production increases from project ramp-ups in the United States, Nigeria and other areas, it added that these increases were offset by what it called the Partitioned Zone shut-in and normal field declines.
However, foreign currency effects decreased earnings in the 2016 quarter by $319 million, compared with an increase of $580 million a year earlier.
According to the company’s results, sales and other operating revenues in first quarter 2016 were $23 billion, compared to $32 billion in the year-ago period.
Chairman and Chief Executive Officer of the company, Mr. John Watson acknowledged that the company’s first quarter results declined from a year ago.
“Our Upstream business was impacted by a more than 35 percent decline in crude oil prices. Our Downstream operations continued to perform well, although overall industry conditions and margins this quarter were weaker than a year ago,” Watson added.
“Our efforts are focused on improving free cash flow. We are controlling our spend and getting key projects under construction online, which will boost revenues. We announced first LNG production and first cargo shipment from Train 1 at the Gorgon Project in March. Production from the Angola LNG plant is imminent and a cargo shipment is expected in May. Earlier in the year, we started up production at the Chuandongbei Project in China, and we continue to ramp up production in the Permian Basin and elsewhere,” Watson explained.
“We continue to lower our cost structure with better pricing, work flow efficiencies and matching our organizational size to expected future activity levels,” Watson added. Our capital spending is coming down. We are moving our focus to high-return, shorter-cycle projects and pacing longer-cycle investments,” he added.
Worldwide net oil-equivalent production was 2.67 million barrels per day in first quarter 2016, compared with 2.68 million barrels per day in the 2015 first quarter.
According to Chevron, production increases from project ramp-ups in the United States, Nigeria and other areas, and production entitlement effects in several locations, were offset by the Partitioned Zone shut-in and normal field declines.
The results showed that the US upstream operations incurred a loss of $850 million in first quarter 2016 compared to a loss of $460 million from a year earlier.
The decrease was due to lower crude oil and natural gas realisations, partially offset by lower operating expenses.
The company’s average sales price per barrel of crude oil and natural gas liquids was $26 in first quarter 2016, down from $43 a year ago.
The average sales price of natural gas was $1.32 per thousand cubic feet, compared with $2.27 in last year’s first quarter.
Net oil-equivalent production of 701,000 barrels per day in first quarter 2016 was up 2,000 barrels per day from a year earlier.
International upstream operations incurred a loss of $609 million in first quarter 2016 compared with earnings of $2.02 billion a year earlier.
The decrease was due to lower crude oil and natural gas realizations, the absence of a first quarter 2015 reduction in statutory tax rates in the United Kingdom, and lower gains on asset sales.
Partially offsetting these effects were higher lifting and lower exploration expenses. Foreign currency effects decreased earnings by $298 million in the 2016 quarter, compared with an increase of $522 million a year earlier.
The average sales price for crude oil and natural gas liquids in first quarter 2016 was $29 per barrel, down from $46 a year earlier.
The average price of natural gas was $3.91 per thousand cubic feet, compared with $5.01 in last year’s first quarter.
