Archives April 2016

Govt want funds in Excess Crude Account shared

The 36 state governors have told President Muhammadu Buhari to approve the sharing of funds in the Excess Crude Account among the three tiers of government in order to improve the liquidity position of the states.

Currently, the ECA, which was set up when crude oil price was above $100 per barrel to save anything above the budget benchmark price in a special account for use in lean period, currently has a balance of $2.259bn.

The governors, under the aegis of Nigeria Governors Forum, made the request at the Presidential Villa, Abuja on Thursday during a meeting with the President on the current economic crisis facing the states, which has culminated in the inability of the state governments to pay workers' salaries.

The Chairman of the forum and Zamfara State Governor, Abdulaziz Yari, and Governor Nasir el-Rufai of Kaduna State, who chaired the committee that worked on a fiscal restructuring plan submitted to the President at the meeting, asked the Federal Government to do more to help the states financially.

The governors told the President that while they had resolved to take other measures to boost their states Internally-Generated Revenue, the implementation of the plan would help them to deal with the funding problems on short, medium and long-term bases.

They said if the plan was adopted and implemented by the Federal Government, the states would become more financially empowered to fulfil their constitutional responsibilities.

In an interview with State House correspondents, Yari said it was the governors' decision at the NGF meetings that they should meet with the President to table their demands.

He said the states were still facing financial challenges despite the fact that they had received supports from the Federal Government in terms of bailouts, debt restructuring and sharing of 15 per cent of funds in the ECA.

Describing the past supports as temporary measures, the governor said the forum presented short, medium and long-term measures to Buhari, adding that the President accepted the proposals and announced plans to set up a committee to look at the matters, starting with the short-term proposals.

The governors also asked for an 18-month moratorium on their loans.

Yari said, "For the short-term, we are looking at a situation whereby our debts that are hanging from 2005 right from Obasanjo's exit of the Paris Club are paid. There are some money that was not paid before. If it is paid, states that are having difficulties can get money from there.

"We are also looking at loan restructuring, bailout and the ECA. We are asking for an 18-month moratorium before we can start paying, so that we will able to strategize.

"To develop the IGR is not overnight, it is a long-term programme that one has to plan for. Also, our service has exploded and there is nothing we can do about it because people are getting their daily bread from there and we cannot say we are going to cut salaries and wages."

The NGF chairman also said some states had committed their resources to some Federal Government's projects like roads and airports.

He said a committee set up to look into the issue had been urged to hasten the process so that requests could be presented to the President for relief.

Buhari expressed concern that two-thirds of the 36 states of the federation were still having difficulties with the payment of their workers' salaries.

He said the situation had become an issue of great concern for him because it had persisted despite the bailout provided for the states by the Federal Government.

According to a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, Buhari said he was disturbed by the hardship, which the state government workers across the country and their families were facing due to the non-payment of salaries.

To ameliorate the hardship being faced by affected workers, the President said the Federal Government would strive to make more funds available to the states.

This, he said, would be done by expediting action on refunds due to them for the maintenance of federal roads and other expenses incurred on behalf of the Federal Government.

Buhari also said he would constitute an inter-ministerial committee to study a fiscal restructuring plan for the federation, which was presented to him by the governors.

The President said the committee would review the plan to improve the finances of the state governments and make recommendations on how proposals in the plan should be dealt with by the Presidency, the Federal Executive Council and the National Assembly through legislation.

He, however, urged the governors to understand that while he was ready to do all within his powers to help the states overcome their current financial challenges, the Federal Government also had funding challenges to contend with.

"You all know the problems we have found ourselves in. You have to bear with us," he told the governors.

On the recent allegation by a former Minister of Finance, Ngozi Okonjo-Iweala, that state governors did not support savings during the last administration, Yari said the states were only taking 26 per cent of revenues available for sharing, whereas the Federal Government was taking 52 per cent.

He wondered how states could save under such a condition.

On the proposal by labour unions for a new minimum wage of N56,000, Yari said, "Well, they are right because we agree that what they are being paid is too small.

But they must understand the situation the country is in because where we are deriving our resources from is now lower by 60 per cent.

"So, how do we do the magic? But we are going to do our best."

Source:© Copyright Punch Online

Stanbic IBTC Stockbrokers Unveil e-trading Platform on NSE

Nigeria's largest stockbroking firm and member of Stanbic IBTC Holdings PLC, Stanbic IBTC Stockbrokers Limited has launched an online stockbroking service on the Nigerian Stock Exchange (NSE) with real-time processing capacity.

The Stanbic IBTC E-Trade provides investors with real-time market information as well as enabling them give real-time mandates to buy or sell shares on the Nigerian Stock Exchange.

Among its uptakes, the platform is expected to 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.

Chief Executive, Stanbic IBTC Holdings PLC, Sola David-Borha, said the Group is committed to helping 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.

She stated: "In introducing the new platform, the overarching goal is to identify both opportunities and threats in the global marketplace, which is made available to investors in real-time to enable them 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."

Enumerating the benefits of the platform, Chief Executive, Stanbic IBTC Stockbrokers Limited, Titi Ogungbesan, stated that with reliable and timely data, decision making is faster and investors are better able to structure their activities for efficiency, while tapping into opportunities, all of which will positively impact both their portfolios and returns.

Ogungbesan, who said there is no better time to invest in the Nigerian capital market than now when prices of equities are low and consequently attractive, noted that trading on Stanbic IBTC E-Trade is limited to only NSE for now. She highlighted other benefits of the Stanbic IBTC E-Trade to include flexible online trading environment anywhere, 24-hour access to your brokerage account, access to live market data from The Nigerian Stock Exchange 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.

Source:© Copyright Thisday Online

NSE’s All-share index rises by 0.63%

The bulls, upstaged the bears on the trading floor of Nigerian Stock Exchange (NSE) yesterday, following price gains recorded by major blue chip companies, as the All-share index rose by 0.63 per cent.

Specifically, at the close of trading yesterday, the All-share index rose by 155.34 points or 0.63 per cent to close at 24,964.63 compared with 24,809.29 recorded on Wednesday.

Similarly, the market capitalisation inched N54 billion or 0.63 per cent to close at N8.587 trillion against N8.533 trillion achieved on Wednesday.

A breakdown of the price movement chart indicated that Total topped the gainers chart with a gain of N14.13 to close at N154.19 per share.

Nigerian Breweries followed with N4.31 to close at N110.38, while Dangote Cement improved by N2.41 to close at N163.40 per share. Flour Mills added N1 to close at N21 while GT Bank garnered 41 kobo to close at N16.64 per share.

On the other hand, Forte Oil recorded the highest price loss to lead the losers' chart, dropping by N11.87 to close at N225.63 per share. Guinness followed with a loss of N4 to close at N91, while Lafarge Africa dipped N3.67 to close at N70.33 per share.

UACN dropped 80k to close at N18.20 and Okomu Oil shed 50 kobo to close at N29 per share. Also, the volume of shares traded increased by 18.57 per cent with a total of 338.34 million shares valued at N1.99 billion exchanged in 3,428 deals. This was against the 285.34 million shares worth N1.35 billion traded in 3,083 deals on Wednesday.

The banking stocks drove the turnover with FBN Holdings emerging the most traded, accounting for 171.92 million shares valued at N634.94 million. Access Bank followed with an exchange of 24 million shares worth N99.29 million. UBA sold 21.27 million shares valued at N73.31 million.

GT Bank traded 13.46 million shares worth N224.41 million and Fidelity Bank accounted for 12.72 million shares valued at N14.88 million.

Source:© Copyright Guardian Online

Access Bank Shareholders Hail Performance, Approve Dividend

Impressed with the strong financial performance in 2015 despite the difficult operating environment, shareholders of Access Bank Plc. have commended the board and management of the bank.

The shareholders, who gave the commendation at the bank's annual general meeting (AGM) in Lagos on Wednesday, also approved a final dividend of 30 kobo per share in addition to the interim dividend of 25 kobo, which was paid in September 2015.

Access Bank's profit rose from N52 billion in 2014 to N75 billion in 2015. Speaking on the bank's performance, the National Coordinator, Independent Shareholders Association of Nigerian (ISAN), Sunny Nwosu and President, Association for the Advancement of the Rights of Nigerian
Shareholders, Farouk Umar, applauded the bank's remarkable achievements and noted that the dividend payment was an indication of the resilient performance recorded in the year.

"Access Bank has consistently delivered on its dividend payout to shareholders compared to its peers in the banking industry. The bank's performance in 2015 is commendable in view of the difficulties that we had last year," Nwosu noted.

Addressing shareholders at the meeting, Chairman of the bank, Mrs. Mosun Belo-Olusoga, said that the group posted another year of strong earnings in 2015, as revenues grew by 38 per cent to N337 billion in 2015, from N245 billion in 2014. Profit also rose to N75 billion in 2015 from N52 billion in 2014.

"In 2015, we defied the odds and acted decisively to boost our capital, raising N41.7 billion of additional Tier 1 capital which met healthy demand from investors. This, in addition to the $400 million Tier II capital issued in 2014, provides the group with enhanced capacity to leverage market opportunities in target sectors and expand its digital banking capabilities," she said.
Also speaking at the AGM, Group Managing Director/ CEO, Access Bank Plc., Herbert Wigwe, explained that management has made significant strides in delivering on the bank's growth objectives.

"As we remain cautious in growing our existing business across geographies, we will place greater emphasis on expanding our retail business, improving cost discipline, proactively managing risk and strictly adhering to policies guiding our business," he said.

Source:© Copyright Thisday Online

FBN Holdings to Cut Jobs in Bid to Restore Profit

FBN Holdings Plc. plans to cut jobs and focus less on providing loans to the oil industry in a bid to reverse last year's 82 percent slump in profit.

The lender expects to boost its return on equity, a key measure of profitability, to between 11 per cent and 14 per cent in 2016 from last year's "really bad" figure of 3 percent, according to the chief executive officer of FirstBank Nigeria Limited, Mr. Adesola Adeduntan. The bank is also targeting a cost-to-income ratio of 55 percent in two years time from 59 percent, he said.

Bloomberg quoted him as saying: "ROE will be much better than last year. At a minimum, we should triple it. We do not shy away from taking difficult decisions. We used to have above 8,000 people. We'll push it down, gradually, to 7,000."

Net profit fell to N15 billion from N84 billion in 2014, as impairments soared and Africa's biggest economy slowed amid a crash in the price of crude, the biggest source of government revenue and export earnings. Growth decelerated to 2.8 percent in 2015, the lowest level since 1999, and may worsen to 2.3 percent this year, according to the International Monetary Fund.

First Bank's non-performing loans ratio stood at 22 percent at the end of March, compared with 3.8 percent a year earlier. Reducing that figure is the "number one priority," said Adeduntan. The bank will do that by reducing the proportion of its lending to the oil and gas sector, currently at about 39 per cent of total loans, and focusing more on blue-chip companies in other industries, he said.

Adeduntan ruled out any equity raising this year, saying the bank's capital adequacy ratio of 17.2 percent was enough of a buffer and above the central bank's minimum requirement of 15 percent. It would still be adequate if the floor is raised to 16 percent in July for systemically important institutions, including First Bank.

"We continuously evaluate it and the position now is that there's no need for external capital," said Adeduntan who became CEO in January after joining First Bank as chief financial officer in mid-2014. "We generate enough internal capital," he said.

Source:© Copyright Thisday Online

Diamond Bank Profit After Tax Falls by 88% to N5.6 Billion

In line with its earlier profit guidance, Diamond Bank Plc. on Wednesday reported a fall of 88 per cent in profit after tax for the year ended December 31.2015. Although the bank recorded a growth of 4.3 per cent in gross earning, its profit before and after tax fell significantly.

Diamond Bank ended the year with gross earnings of N217 billion, up from N208 billion in 2015. But profit before tax fell from N28.1 billion in 2015 to N7.1 billion, while profit after tax stood at N5.6 billion, down from N25.6 billion. The lower bottom line was affected by high net impairment loss on financial assets, which jumped by 109 per cent from N26.3 billion to N55.2 billion.

In his comments, the Chief Executive Officer of Diamond Bank, Mr. Uzoma Dozie, said: "2015 was undoubtedly a challenging year for us owing to a mixture of external factors not limited to regulatory headwinds and a difficult macroeconomic environment. Whilst this led to additional impairment charges following a prudent review, we have further tightened the criteria for loan originations in order to better align our loan portfolio with the macroeconomic conditions. As a result, we are confident that the overall quality of our loan book remains high."

According to the CEO, a number of mitigating actions are being taken to address and drastically reduce these challenges, thereby putting Diamond Bank in a better position to achieve better results and strong earnings for the shareholders in the current business year.

He highlighted the transformation the bank was going through and remained positive that reliance on innovation, technology and lifestyle priorities will drive banking in the future and Diamond is well positioned to take advantage of this. He expressed optimism about the growth and value to shareholders and restated his commitment to overseeing full implementation of the bank's digital-led retail strategy.

"Importantly, there are clear signs that the new strategy and initiatives to reduce costs are proving successful and are reflected in certain financial indicators. Fundamentally, by taking various mitigating actions and implementing the retail-led digital strategy, Diamond Bank has an excellent platform from which to achieve growth, profitability and shareholder returns in the year ahead. New retail accounts opened has grown more than fivefold and with a network of over 24,000 agents as at December 2015, active account ratio continues to improve. These create a measure of confidence going into the future," said Dozie.

Source:© Copyright Thisday Online

Lagos Completes Restructuring of N167.5bn Bond

Lagos state government yesterday said it had successfully completed the restructuring of its N167.5 billion Programme II, Series 1 and 2 Bonds.

In a statement, the State Commissioner for Finance, Mr. Akinkunmi Mustapha, said the restructuring which was approved by the Securities and Exchange Commission (SEC) last week, was achieved through the finalisation of a process through which the State worked to reach an agreement with its bond creditors, on accelerating repayment terms.

He said the transaction which will generate savings in excess of N40 billion for the state over the next five years was approved by 99.6 per cent of the state's bondholders at an extraordinary general meeting a few weeks ago.
Mustapha said: "We thank all our bond creditors for their continued support of the State Government, in a difficult market environment. This restructuring completed entirely through domestic capital markets, once again underpins the strength of the Lagos State credit story.

"Aside the significant cash savings generated, it also creates additional borrowing capacity to enable the state continue its investments in physical, economic and social infrastructure.

"Much of the significant progress in Lagos State over the last 16 years can be attributed to funding through the debt capital market. Our bondholders' support of this restructuring confirms the level of confidence the market has in the current administration and Lagos State did not partake in the recent bail-outs provided either by the Federal Government DMO or the Central Bank of Nigeria (CBN)," the Commissioner said.

He said the Chapel Hill Denham acted as Financial Adviser to the Lagos State on the restructuring transaction.

Source:© Copyright Thisday Online

Wema Bank blames profit decline on oil slump

Wema Bank Plc. has attributed the drop in its business performance as of year end March 31, 2016 to the challenging environment led by weaker oil prices, a tight monetary policy and rising inflation.

The bank reported a profit of N429.53m between March 2015 and March 2016, a fall of 17.87 per cent year-on-year from N522.99m.

Its profit before tax also fell to N505.32m from N615.28m for the same period.

Commenting on the result released on Wednesday, the Managing Director/Chief Executive Officer, 'Segun Oloketuyi, said, "Considering the challenging operating environment, the bank has been able to deliver top line growth with gross earnings increasing by 6.1 per cent to N11.3bn compared to N10.6bn in the same period last year.

"We have continued to grow our retail volumes in 2016; while the number of new accounts and card activations has increased by over 50 per cent and the deployment of alternative platforms has grown by 15 per cent. We remain focused on keeping our cost profile under check while gradually growing the asset portfolio where we see optimal opportunities.

"While concerns remain as we progress in the financial year around, rising inflation due to the impact of higher energy, transportation prices and a slower Gross Domestic Product growth due to a lack of stimulus, we remain focused on executing our strategies to drive economic production."

Despite these headwinds, the bank said it believed that it would improve its 8.2 per cent growth in interest income over Q1 2015 which it said would translate into improved net interest margins and consequently, improving profitability over the course of the year.

Its Chief Financial Officer, Tunde Mabawonku, was quoted as saying "In spite of the challenging market conditions, the bank grew its interest income by 8.2 per cent to N9.7bn from N8.9bn in Q1 2015. While trading income has not been immune from the larger macro headwinds, our diversification strategies are yielding results as fee and commission income grew by 17.1 per cent to N1.35bn from N1.15bn in the same period last year.

"Our sustained commitment to optimising costs was underpinned by a 2.2 per cent decline in operating expenses to N5.14bn from N5.25bn in Q1 2015 despite inflationary pressures. We experienced a year-on-year four per cent decline in net interest income to N4bn, this was mitigated by a 17 per cent growth in our non-interest income to N1.3bn over the same period."

Source:© Copyright Punch Online

MainstreetBank acquisition may dip Skye Bank’s earnings

Investment analysts have predicted that Skye Bank may witness a dip in its earnings for the 2015 financial year as a result of its acquisition of Mainstreet Bank.

The analysts from Proshare Nigeria, noted that the cost of the Bank’s acquisition, as well as the high cost of integration of its IT platforms and processes would drive up Skye Bank’s operating expenses as reflected in the bank’s high cost-to-income ratio, which was put at above 70 per cent as at the third quarter of 2015.

According to the analysts, Skye Bank had even explained in its profit warning that the growing bad loans in oil and gas and real estate sectors hit the bank’s operations considerably.

Proshare analysts in a report, stated: “Why investors should expect contained earning in 2015 result, the effects of some government policies such as the public sector funds freeze will lead to loss of trading revenues for banks, among others.

“The bank will have to deal with its significant exposure to an elongated commodities-price slump that has sparked defaults for it in the Oil & Gas, Power and Real Estate sectors.”

The financial analysts envisage that 26 per cent of total loan portfolio of the bank in third quarter of 2015 was in Oil and Gas while the same troubled sector owned 28 per cent of total non-performing loans (bad debts) as revealed in its report for the same quarter

According to the report, the crash of price in oil market had made it significantly difficult for risk assets in the sector to perform.

The report further said the Central-Bank and government reform policies, which for years lifted asset prices, are now hurting banks; and in some cases, created disruptions, adding that the impact of economic reforms and policy positions would be revealed in the next few weeks when the banks begin reporting their results.

Source:© Copyright Guardian Online

Enabulele advised to contact registrars directly for his shares/dividends

Following Enabulele’s complaints to The Guardian that he had been unable to get his share certificates from DVCF Oil and Gas Plc. since the company completed its IPO and his inability to get returns from both Beco Petroleum Products Limited and Investment and Allied Insurance Plc., The Guardian contacted the registrars of the concerned companies to ascertain the true position of Enabulele’s case.

Africa Prudential Registrars Plc., 220B, Ikorodu Road, Palmgrove Lagos, telephone 234-7080606400, Email:, which handles Beco register of shareholders, advised Enabulele to contact them (Registrars) directly through the above address for solution to his complaints.

When The Guardian contacted Unity Registrars Limited, a staff of the firm, who identified himself simply as Mr. Ikotun, told The Guardian that Enabulele might have failed to fill e-dividend form or furnish them (registrar) with his latest address, which has made them unable to reach him.

Ikotun entreated The Guardian to tell Enabulele to contact Unity Registrar through Phone: 08085009235, email:, for prompt attention.

Source:© Copyright Guardian Online