Unity Bank Plc posted gross earnings of N78.8bn and a profit after tax of N4.6bn compared to gross earnings of N77bn and PAT of N10.6bn in 2014.
The bank said the 2015 performance was achieved in spite of the challenging operating environment characterised by a continued lull in the economic activities in the country as well as major regulatory headwinds that impacted earnings during the year especially the Treasury Single Account.
The bank also said its performance was attributed to its repositioning strategy, in which, its assets were critically stressed-tested resulting in major impairment charges of N27bn for 2015 as against N17bn in 2014, representing a growth of N10bn on asset charge over the previous year 2014.
It said, “The new management inherited huge legacy Non-Performing Loans from the general commerce and manufacturing subsectors and believes that the impairment charge in Year 2015 was necessary in order to give new breath of life to the institution.
“The enormous task embarked upon by the new management is to position the bank for proper clean-up and de-risking of its balance sheet, thus paving way for sustainable business in its overall transformation initiatives.”
The bank said it grew its assets by seven per cent from N413bn in 2014 to N443bn in 2015, amid shrinking economic indicators, measurement and regulatory policies that affected deposit portfolio during the year under review.
Commenting on the result, the Managing Director/CEO of Unity Bank Plc, Mrs. Tomi Somefun, noted that “with the Bank’s repositioning efforts and consistent focus to tap into the emerging opportunities in the enlarged economic space within Nigeria, Unity Bank is poised to deliver quality banking service to emerging sectors in retail/Small and Medium Enterprises, commercial and the agricultural value chain.
“The bank is building strong infrastructure for retail banking and attracting youths for its sustainable banking business by developing customer-centric products to meet the needs of its esteemed customers and build new clientele base. With the bank’s capital raising exercise, the year ahead is bright as the effects of the on going transformation initiatives will surely consolidate Unity Bank as a retail bank of choice, culminating in superior financial performance and values to all stakeholders.”
Zenith Bank Plc and the French Development Agency (Agence Francaise de Development (AFD), operator of France’s bilateral development finance mechanism have signed a $100 million power sector credit facility to boost new investments in the capital expenditures of distribution companies (DISCOS).
The signing of the facility which took place in the inner chambers of the Aso Rock Villa in the shadow of the security summit was witnessed by the visiting French President Francois Hollande and President, General Muhammadu Buhari.
The facility will be a reprieve for the electricity distribution companies (DISCOs) that are currently weighed down by debt burden with historic debtors made of mainly government establishments, including the military and security agencies alone accounting for over N93 billion.
Leading the team of the bank’s top executives to the bilateral session where the pact was sealed was Chairman of Zenith Bank Plc, Mr. Jim Ovia, while Mrs. Laurence Breton-Moyet, Chief Operating Officer and Member of the Executive Board from the AFD Headquarters in Paris, led the agency’s team.
Under the loan arrangement, a maximum of $50 million can be on-lent to any single borrower at single digit interest rate for a tenor of between seven and 12 years, with a moratorium of 2 – 3 and half years, depending on the project’s cash flow.
The facility, according to a statement is aimed at reinforcing, rehabilitating and modernizing the existing distribution networks with the sole target of stabilising the grid. The loan arrangement also provides for technical assistance and other advisory services, both to the benefiting DISCO and the partnership bank.
Zenith Bank Plc has remained, not only a leading financier of investments aimed at developing the power/energy sector in the country, but also a key player in many other sectors of the economy including; oil and gas, agriculture, manufacturing, communication, transportation, real estate and construction, among others. In the financial year ended December 31, 2015, Zenith Bank reported a profit after tax (PAT) of N105.66bn – the highest in the Nigeria banking industry for the year; with total assets at over N4trn.
FCMB Group Plc has posted gross earnings of N34.4 billion and profit before tax of N2.2billion in its first quarter operations.
Specifically, the bank’s unaudited result for the first quarter ended March 31, 2016 showed gross revenue of N34.4, as against N39.3 billion recorded within the same period in 2015.
The bank’s profit before tax stood at N2.2 billion, compared to N5.8 billion for the first quarter of 2015.
Net interest income stood at N17.2billion, a decline of five per cent Year-on-Year from N18.1 billion achieved during the same period prior year.
Loans and advances reduced by five per cent quarter-on-quarter (QoQ) to N561.6 billion in March 2016.
However, the Group’s net fees and commissions were up 11 per cent to N3.4 billion, from N3.0 billion during the same period last year.
The bank’s capital adequacy ratio increased to 18.5 per cent, compared to 18.1 per cent for the fourth quarter 2015, just as liquidity ratio rose by 38.2 per cent , as against 35.9 per cent for the fourth quarter of 2015. Operating expenses was flat at N16.5 billion.
Commenting on the results, the Managing Director of FCMB Group, Peter Obaseki explained that the continued lull in the economy, especially international trade, capital flows and government spending weighed on the bank’s group’s Q1 results.
He explained that the bank is actively rebalancing its financial position by reducing wholesale deposits and slowing down loan growth, especially from lumpy sources. He added; ‘‘this approach is complementary to enhancing our capital position, liquidity management and cost saving initiatives.
Core fees and commission which are not tied to loan expansion are showing a strong and sustainable trend, with YoY growth of 11 per cent .
“We expect that subsequent quarterly earnings will improve upon Q1 2016, PBT of N2.2 billion, especially if government rolls out its expansionary budget and subject to well co-ordinated monetary stance.” he added.
The Group Managing Director of FCMB Limited, Ladi Balogun expressed optimism that the bank would witness significant recoveries and reduced cost of risk in subsequent quarters.
“This, in addition to the momentum in the retail banking division, particularly cards and electronic banking as well as rapid growth in current and savings accounts, should fuel stronger performance in the second quarter of the year.” He added.
The Central Bank of Nigeria (CBN) last week sold a total of $130,755,294.59 to 14 commercial banks, four merchant banks and the Bank of Industry (BoI).
The amount was however lower by $5,283,163.58, compared with the $136,038,458.17 the banking sector regulator allocated to the financial institutions in the preceding week.
The amount is expected to reduce further going forward, following the new fuel price regime excluding the funding of importation of petroleum products from the official foreign exchange market.
Returns on forex utilisation published by the financial institutions last week showed that for the first time since THISDAY started reporting their returns, United Bank for Africa (UBA), with $18,500,803.50 got the highest allocation from the central bank.
Forex returns published by the pan-African bank showed that it sold dollars to 224 customers last week. These were made up of individuals and corporates importing raw materials, industrial items and for the payment of school fees abroad.
Of the 224 customers on its list, Dangote Sugar Refinery Plc was its biggest, as it bought $6 million for the importation of Brazilian cane raw sugar. Also, Stallion Motors Limited which bought $1,082,132; NFE Industries Limited – $1,454,269.80 and IATA – $1,500,000, were some of the other institutions that bought huge amount of dollars from the bank.
Coming in second place was Stanbic IBTC which was allotted $17,859,696.51. Just like previous weeks, the publication by Stanbic IBTC showed huge amounts of forex purchased for capital exportation from the equities, bonds and money markets. In all, 134 customers bought the greenback from the bank.
FirstBank of Nigeria Limited was allocated $14,215,272.40 to occupy the third place. The bank, which returns on forex utilisation showed that it sold dollars to 651 customers, also revealed that Dangote Cement Plc purchased $2 million from the bank for the importation of machinery spare parts.
Like the preceding week, Zenith Bank Plc retained the fourth place with a total allocation of $13,236,651.70. Its returns showed that it sold the greenback to 278 customers. Of this number, its biggest customer was Tiger Branded Consumer Goods Plc which purchased $1,285,774.87.
Diamond Bank Plc with $11,489,227 occupied the fifth position, just as its publication showed that it sold the greenback to 177 customers. Its biggest customer was A-Z Petroleum.
Standard Chartered Bank got $10,730,263 to hold on to the sixth position. A total of 222 customers purchased the greenback from the bank. Also, Guaranty Trust Bank Plc (GTBank) was allocated $8,918,388 to occupy the seventh place.
The CEO of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, told THISDAY at the weekend that the NSE was concerned about the volume of foreign portfolio investors’ exit and the potential for capital flight from the market.
“We are concerned, we are monitoring the situation, we are talking to investors – both domestic and foreign – we have ramped up our efforts in terms of government relations to report what we are seeing and to look for new ways and solutions that would continue to make our market attractive to all investors,” he explained.
The gross revenue of Seplat Petroleum Development Company Plc, an indigenous independent oil and gas exploration and production company, fell by 26 per cent in the 2015 financial year, figures provided by the oil company showed.
Its gross revenue for the full-year stood at $570m, down by 26 per cent year-on-year. Net profit for 2015 stood at $67m and cash flow from operations before movements in working capital stood at $190m against capital investments of $152m.
The firm’s cash at bank and net debt at year end stood at $326m and $573m, respectively. At the end of 2015, the net Nigerian Petroleum Development Company receivables balance stood at $435m, down from $463m at the end of 2014.
The oil company presented its “facts behind the figures” for its audited full-year 2015 results at the Nigerian Stock Exchange on Monday.
Presenting the details of full-year 2015 performance, ahead of its Annual General Meeting scheduled for June 1, 2016, the Chief Executive Officer of the company, Austin Avuru, and the Chief Financial Officer, Roger Brown, informed stakeholders that working interest 2P reserves at the end of 2015 had increased by 71 per cent year-on-year to 480 million barrels of oil equivalent, with a further 98mboe recognised as 2C resources.
Total reserves were reported as 578mboe. Average working interest production during 2015 averaged 43,372 barrels of oil equivalent per day, ahead of guidance and up 41 per cent year-on-year.
Within this, oil and condensate production accounted for 29,003bopd (up 20 per cent year-on-year) and natural gas production was 86 million standard cubic feet per day (up 119 per cent year-on-year). All of the natural gas production was supplied to the domestic market, the firm claimed.
The company said, “Although financials reflect the low oil price environment, the company remains on a sound financial footing – revenue $570m; net profit $67m; cash from operations (before working capital) $190m.
“2016 production guidance is set at 41,000 to 48,000 boepd and capital expenditure around $130m.”
In a significant step forward for its gas business, during mid-year 2015, Seplat said it successfully completed the Oben gas plant phase I expansion. This expansion saw the company’s overall gross processing capacity double to 300mscfd.
“The Oben gas plant phase II expansion is underway with additional processing modules ordered. Once installed, the additional processing modules will take gross processing capacity to an expected minimum level of 525mscfd. Alongside the significant increase in gas production, the positive financial impact of the company gas business was evident as revenues from gas sales increased 185% year-on-year to $77m,” it added.
Although production was up year-on-year, the significantly lower oil price realisation and downtime of third party operated infrastructure, according to the oil company, adversely impacted revenue, more than offsetting the increased contribution of the gas business.
Further receipts post period end have reduced the net NPDC receivables balance to a current level of around $350m. The board of directors of Seplat, therefore, recommended a final dividend of $0.04 per share, bringing the total dividend payment for 2015 to $0.08 per share. Subject to the approval of the shareholders, the final dividend will be paid on or shortly after the AGM.
Commenting on the company’s 2015 results, Avuru said, “In 2015 we delivered on what was in our control, posting best-in-class reserves and production growth and taking our gas business across a transformational threshold with further expansion still to come.”
The President, Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs has commended the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emiefele, for steps he took to improve the foreign exchange requirement for manufacturers to source for raw materials overseas. Jacobs, who said in Abuja, said: “At present, the CBN is making every effort to satisfy our foreign exchange requirement, though we don’t get exactly what we want, but they have tried to allocate some forex to our members.” Jacobs explained: “At the first quarter, when we met them (CBN) that manufacturers will close shops due to non-availability of raw materials arising from lack of forex, the CBN governor invited me for an meeting. “At the end of that meeting, MAN and CBN, agreed that there was need to ensure that manufacturers are given their foreign exchange even if it is not 100 percent.
He applauded the efforts of the CBN governor, noting that although what the manufacturers are receiving are not exactly what they asked for, “they have been getting something to keep the factories afloat.” Jacobs admitted that his members were aware of the difficulties government was facing on its external reserve. He said: “We understand the difficulties the government is having with the depletion of the external reserves, so that is what is going on now. “As far as we know CBN is being transparent, we cannot accuse them of any corruption in the allocation procedure to our members, but we cannot say same on the parts of the commercial banks. The CBN have been very transparent in the allocation of forex.”
On the prospect for manufacturers with the economic hardship, he expressed optimism that with the implementation of the budget, things will begin to take good shape. “I believe that when they begin to implement the budget we will now have a direction in terms of policy thrust as MAN members have been able to key in. Advertisement
“I’m very hopeful that manufacturing will prosper because the N350 billion that will be released into the system for capital expenditure is going to help empower the populace in terms of buying power and they will be able to patronise the manufacturing sector as they produce and this will get better in this second quarter.” he said. He said MAN is happy about the recent petrol pump price modulation and partial deregulation of the downstream petroleum sector, stating it was what MAN had been clamouring for. Jacobs added: “This is what we have been advocating for along that the subsidy should be removed because, if that is done the prices will come down though in the short-run it might be high but on the long and as time goes on the law of demand and supply will bring prices down.
“Because, it happened with automotive gas oil (diesel). Look at the prices of diesel and today we are enjoying more stable prices on diesel and if we do same on petroleum, the perennial problem of PMS scarcity, black market or hording and all other vices will stop.” According to the MAN boss, “Already the current prices of petrol across the country is even more than N145, it is only in Abuja and Lagos that you get it at the controlled price. “Even at that controlled price, you cannot even get it now. In other parts of the country people have been buying at N150 per liter and above.
“I don’t agree with that argument that it will drive prices up, if it was going to drive prices up, it would have done that a long time ago when we were buying fuel at about N180 to N200 per litre. He said MAN is exploring avenues to ensure it resolves its pending court case with the with the electricity distribution companies and the Nigerian Electricity Regulatory Commission (NERC). The court case, he said, arose as a result of non-adherence to due process in tariff adjustment and therefore MAN had to approach the court to obtain injunction banning the DISCOS from implementing the new tariff. “We are trying to negotiate to find a common ground and see if we can resolve the matter out of court. We know what is happening in terms of the low generation of power and distribute.”
The International Organisation of Securities Commissions has opened the public sessions of its annual conference in Lima focusing on small and medium enterprise financing, investor protection and education, and the opportunities and challenges of new financial technologies.
The public conference comes at the conclusion of IOSCO’s private meetings in which members discussed responses to the challenges facing markets regulators, according to a statement by the body.
During the four-day meeting, the IOSCO Board, the Growth and Emerging Markets Committee, the four regional committees and the Affiliate Members Consultative Committee discussed policy initiatives to strengthen securities market resilience and ensure that securities markets continue to be sustainable sources of finance.
Members discussed how best to make use of the expertise and knowledge of IOSCO’s diverse membership, including measures to further the integration and enhance the participation of the GEM committee members.
On enforcement cooperation, IOSCO’s committee presidents approved the text of an enhanced Multilateral Memorandum of Understanding on cooperation and the exchange of information. This followed detailed discussion at the GEM committee, regional committees and the board.
The enhanced MMoU, which is aspirational in nature, provides for the additional powers that IOSCO believes are necessary for its member regulators to ensure their continued effectiveness in deterring cross-border misconduct and fraud in securities markets.
It builds on the success of the current MMoU on cooperation and exchange of information, while taking into account technological and regulatory developments since the launch of the original MMoU in 2002.
The enhanced MMoU sets out five new powers in addition to those in the current MMoU:
It was resolved that arrangements for implementation of the MMoU will be developed by the board in consultation with the regional and growth and emerging markets committees with a view to approval by the Presidents Committee by the end of 2016.
On policy work, the IOSCO Board progressed its work on asset management by focusing on liquidity risk management and leverage. Additionally, it considered how to address gaps in asset management data collected by securities regulators, and will publish a statement in this regard shortly.
As part of its effort to improve audit quality, the board approved publication of the survey report on audit committee oversight of auditors.
The board also endorsed the following mandates relating to retail investors: to review industry practices regarding senior investor vulnerability; to apply insights from behavioral economics to investor programmes and initiatives; to design and coordinate a pilot IOSCO world investor week campaign in 2017.
On the issue of infrastructure finance, the Board agreed to establish a working group comprised of board members from both advanced and growth and emerging markets that will engage with development banks, institutional investors and other stakeholders to discuss issues relevant to market-based finance for infrastructure development.
Oando Energy Resources Incorporated has announced the closing of its going private arrangement transaction pursuant to which Oando E&P Holdings Limited, a private company incorporated under the laws of the province of the British Columbia as a wholly owned subsidiary of Oando Plc, has acquired all of the issued and outstanding common shares of OER.
This is excluding the common shares held by Oando Plc, those held by M1 Petroleum Limited, West African Investment Limited, and Southern Star Shipping Company, and those held by certain shareholders who are officers, employees or service providers to the OER.
The Chief Executive Officer, Oando Energy Resources, Mr. Pade Durotoye, said, “The completion of this transaction brings us to another pivotal point in our journey as OER. We listed this organisation on the Toronto Stock Exchange in July 2012 and have enjoyed the benefits of being a listed company in this jurisdiction, having always conformed to the highest reporting and corporate governance standards of the exchange.
“However, as a result of the downturn being experienced in the global resource market and the current dip in investor interest in the sector, we have decided to delist our entity in line with cost saving strategies to optimise shareholder value. We retain the option of a future listing whenever we believe there is a more conducive market.”
Oando Plc held, either directly or indirectly, 746,107,838 of the common shares, representing approximately 93.7 per cent of the issued and outstanding common shares immediately prior to completion of the going private transaction.
As part of the transaction, the purchaser also acquired all of the common shares held either directly or indirectly by the institutional shareholders, Oando Plc and management shareholder in consideration for such number of shares of the purchaser as reflects the number of their contributed common shares for the purposes of completing the transactions contemplated by the plan of arrangement.
Shareholders who hold their common shares through a broker or other intermediary may contact that broker or other intermediary for instructions and assistance in receiving the consideration for their shares, the firm said.
Shareholders who hold their common shares in certificated form are required to complete and sign a letter of transmittal and deliver it, together with their share certificates and the other required documents to the depositary, it added.
The stock market will this week see more positive trends with respect to investors’ interest and appreciation, analysts have said.
The market is expected to ride on the back of the recent budget signing and pricing review in the downstream segment of the country’s petroleum industry.
Following the significant gains recorded in the market last week, analysts believe it will start positive this week.
“We expect the market to open to gains in the coming sessions, riding on upbeat investor appetite,” analysts at Vetiva Capital Management Limited said in the company’s weekend report.
However, they said ahead of the release of the April inflation figure scheduled for Wednesday, it was anticipated that there would be some sort of cautious trading with a bearish bias in the fixed income market.
Nigerian equities closed the past week with a bullish bias. Notably, investors looked beyond oil production cuts from militant attacks on major pipelines as the signing of the 2016 budget and the partial liberalisation of the downstream oil and gas sub-sector provided catalysts for gains.
The Nigerian Stock Exchange All-Share Index climbed 288 basis points week-on-week, helped by a sizeable gain on Friday (+223bps), moderating year-to-date losses to 7.7 per cent.
Trading in the Treasury bills market was mostly mixed through the week, albeit with bearish bias as healthy system liquidity supported demand on some maturities and as investors speculation over April inflation figure due for release this week drove yields higher on other maturities.
Overall, yields advanced by 70bps across T-bills maturities. The bond market, however, was largely bearish through the past week as investors maintained a risk-off stance. Bond yields advanced by 62bps week-on-week on average across maturities.
Global markets traded mostly mixed, albeit with a bearish bias, as most bourses recorded more losses in the past week. Notably, a decline in oil prices and weak Chinese data weighed on investor sentiment at last week’s open while a recovery in oil prices sent markets higher on Tuesday.
Global bourses, however, came under pressure Wednesday through Thursday on the back of a number of disappointing earnings releases and weaker Yen despite sustained gains in oil prices.
At week close, Asian markets maintained the downtrend while European and United States markets rebounded as investors eyed a number of positive economic data.
At the NSE, there were 55 advancers and 17 decliners. Tiger Branded Consumer Goods Plc was the week’s highest advancer with 50.13 per cent week-on-week return, while University Press Plc recorded the highest loss in value, declining by 14.21 per cent week-on-week. Volume traded and market turnover, in comparison to the previous week, jumped by 100.49 per cent and 125.75 per cent, respectively.
Last week, following the meeting held by Vice President, Yemi Osinbajo leadership of the Senate and House of Representatives, the Nigeria Governors’ Forum and labour unions, the conclusion was reached that any Nigerian entity could import Premium Motor Spirit subject to existing quality specifications and sourcing of forex from the secondary market.
Also, the Petroleum Products Pricing Regulatory Agency announced a new retail price band of N135-N145 per litre for petrol effective May 11, 2016.
The NSE implemented its compliance status indicator codes during the week to aid transparency and informed investment activities. The codes are to be displayed on the ticker tape of affected companies.
Analysts at Meristem Securities Limited, in the firm’s weekly analysis, said, “We anticipate increased position taking on counters perceived to be positively impacted by the recent news inflows (budget implementation and new fuel price), including companies within the building material, construction, and oil and gas sectors. We, however, note the possibility of profit taking on counters that have accumulated gains during the week concluded.”
The Debt Management Office conducted an auction during the week on the February 2020, January 2026 and March 2036 bond re-openings. Marginal rates at the auctions were 13.25 per cent, 13.74 per cent and 13.90 per cent in the same order.
FCMB Group Plc has recorded a drop in its gross revenue in the first quarter of 2016. Its financials for the first quarter ended 31 March, 2016 showed a gross revenue of N34.4bn as against N39.3bn recorded within the same period in 2015. The holding company, which consists of First City Monument Bank Limited, FCMB Capital Markets Limited, CSL Stockbrokers Limited and CSL Trustees Limited, attributed the decline partially to non-recurrence of exchange revaluation gains, reducing yields and a marginal decline in earning assets. Going by the details of the results announced on the floor of the Nigerian Stock Exchange, FCMB Group ended the first quarter of 2016 with a profit before tax of N2.2bn, compared to N5.8bn for the first quarter of 2015. Its net interest income stood at N17.2bn, a decline of five per cent year-on-year from N18.1bn for the same period prior year. Loans and advances reduced by five per cent quarter-on-quarter to N561.6bn in March 2016. However, the group’s net fees and commissions were up by 11 per cent to N3.4bn, from N3bn for same period last year. In the same vein, the financial institution’s capital adequacy ratio increased to 18.5 per cent, compared to 18.1 per cent for the fourth quarter 2015, just as liquidity ratio rose to 38.2 per cent as against 35.9 per cent for the fourth quarter of 2015. Operating expenses was flat at N16.5bn. Commenting on the results, the Managing Director of FCMB Group, Mr. Peter Obaseki, was quoted in a statement as saying, “The continued lull in the economy, especially international trade, capital flows and government spending weighed on our group’s Q1 results; we are also actively rebalancing our financial position by reducing wholesale deposits and slowing down loan growth, especially from lumpy sources; as a result, the retail business is getting more pronounced as the real growth driver.” He added, “This approach is complementary to enhancing our capital position, liquidity management and cost saving initiatives. Core fees and commission, which are not tied to loan expansion are showing a strong and sustainable trend, with a year-on-year growth of 11 per cent. “We expect that subsequent quarterly earnings will improve upon Q1 2016 profit before tax of N2.2bn, especially if government rolls out its expansionary budget and subject to well coordinated monetary stance.” The Group Managing Director of FCMB Limited, Mr. Ladi Balogun, was also quoted as saying, “The commercial and retail banking division of FCMB Group witnessed improvements across a number of parameters when compared to prior quarter. We saw marginal improvements in cost to income ratio, net interest income and non-interest income. “Cost of risk rose to 2.2 per cent largely due to delayed salary payments in the public sector and the resultant effect in some of our consumer lending activities and prudent provisioning in our Small and Medium Enterprises loan book for the year. We anticipate significant recoveries and reduced cost of risk in subsequent quarters. This, in addition to the momentum in the retail banking division, particularly cards and electronic banking as well as rapid growth in current and savings accounts, should fuel stronger performance in the second quarter of the year.”
