FBN Holdings Plc wednesday announced its results for the full year ended December 31, 2017, showing a growth of 179 per cent in profit after tax (PAT) to N47.8 billion, up from N17.1 billion in 2016.
In the audited results, FBN Holdings Plc ended the year with gross earnings of N595.4 billion, up marginally by 2.3 per cent from N581.8 billion in 2016. Net interest income rose by 15.9 per cent from N405.3 billion to N331.5 billion, while non-interest income fell by 31 per cent from N165.5 billion to N113.7 billion.
Impairment charges for credit losses also dropped by 33.5 per cent to N150.4 billion, from N226 billion in 2016.
The financial institution tried to curtail operating expenses, which grew by only 7.7 per cent to N238 billion, from N221 billion the previous year. Consequently, profit before tax jumped by 147.6 per cent to N56.8 billion, compared with 22.9 billion in 2016. But PAT grew fast by 178.9 per cent to N47.8 billion from N17.1 billion in 2016. Earnings per share improved from 39 kobo to 121 kobo. The directors are recommended a dividend of 25 kobo per share.
A further analysis of the results showed non-performing loan ratio improved from 24.4 per cent to 22.8 per cent, just as liquidity ratio reduced from 52.7 per cent to 51.1 per cent. Capital adequacy ratio stood at 17.1 per cent compared with 17.8 per cent in 2016. Commenting on the performance, the Group Managing Director of FBN Holdings Plc, Mr. UK Eke, said the initiatives they put in place were producing encouraging results ahead their projections.
“It is noteworthy to highlight that this progress has not been detrimental to our commitment to cost containment, illustrated by the 7.7 per cent increase in opex which is significantly below the headline inflation rate of 15.4 per cent. This result was also made possible by the successful implementation of our digitisation initiatives, that have allowed us to serve our customers in a more efficient and effective way.”
Despite the improved performance, Eke said they recognised the need for accelerated resolution of their legacy assets to demonstrate sustainable improvement in asset quality.
“This was largely as a result of the impairment of 9mobile, which was across the industry, as well as the foreign currency translation impact on our existing portfolio. These are one-off events and we assure that appreciable progress would be made on NPL in 2018 in line with our three years strategic plan.
The ability to support risk asset creation in the real sector will differentiate winners from losers in the Nigerian banking industry over the next three years. This is according to a report from one of the leading research houses in Nigeria – Coronation Research (a part of Coronation Merchant Bank Group).
While the quality of asset in the industry is generally improving, the firm believes the best capitalised banks will move well ahead of their competitors. According to the Head of Research, Guy Czartoryski, “For two years, Nigerian banks have had an easy time, earning good income on risk-free government-backed, Naira-denominated securities. That era is drawing to a close as T-bill rates fall. Asset yields are trending south, and it is almost impossible to re-price liabilities to match. So, banks must either find other sources of income or face an average 15% drop in their Profits Before Tax expectation for 2018. For the banks to replace the portion of income threatened by declining yields on securities, they must grow risk-weighted assets. This means a 6-12% rise in customer loans in 2018.”
The report categorises banks into three tiers; Group A, Group B and Group C. Banks in Group A, being the most well capitalised, have the biggest opportunity to increase consumer lending. According to the report, Group A includes Zenith Bank, GT Bank and Stanbic IBTC, which have the ability to significantly expand their loan books by 69%, 82% and 182% respectively. Group B, including UBA, Access Bank and Fidelity Bank, have moderate capital levels and some ability to expand loans books but may also pursue tier II capital raise in the form of long-term subordinated debt. Group C, including FBNH, Diamond Bank and Sterling Bank, in the short to medium term have limited ability to expand their loans books and will most likely focus on dealing with capital issues and might attempt to raise long term capital from the capital market.
According to Coronation Research, “if equity markets are sufficiently strong, some banks might attempt equity capital increases (Tier-I) this year. However, currently we have market valuations so low as to make equity capital dilute the interest of existing shareholders. So, the preferred capital-raising route is likely to be long-term subordinated debt (Tier-II). We expect market share in customer lending to flow from banks in Group C towards those in Group A. With banks in Group B we see some, but perhaps not significant, market share gains.”
Leaving capital raising aside, 2018 presents a golden opportunity for the stronger banks to expand loan books and gain market share. Nigerian banks are coming off a low base: lending (when adjusted for currency depreciation) has hardly grown over two years, but the economic conditions look good for renewed loan growth. Loan growth, over the last two years, has been far from impressive and understandably so, since banks have remained cautious as they have grappled with the effects of oil price volatility and its impacts on their loan books.
Even though we believe the underlying pressure on loan assets is getting lighter, there is still IFRS 9 to contend with. We expect a one-off uptick in impairment charges this year, given that banks will start reporting using IFRS 9 this quarter. With oil prices largely stable and our optimistic economic outlook for 2018, we view the risk to banks’ oil portfolios as significantly reduced. Also, the stability in the foreign exchange market, coupled with renewed economic growth, significantly mitigates the risks associated with the trading and manufacturing sectors of the economy.
Coronation Merchant Bank group was established to fill the gap in a long-underserved market segment, seeking to address the need for long term capital across key sectors of the economy. The Group offers investment and corporate banking, private banking/wealth management and global markets/treasury services to its diverse clients. It also offers securities trading/brokerage, asset management and trustees services via its subsidiaries; Coronation Securities Limited, Coronation Asset Management Limited respectively.
Afraid of the potential threatsde-listing quoted companies from the capital market could portend to Nigeria’s economy, the Securities and Exchange Commission (SEC) yesterday disclosed that it had initiated moves to halt the development and encourage listings by more multinational companies in the country.
SEC in a statement said the decision to move to discourage company de-listing was part of what was agreed at the first meeting of the Capital Market Committee (CMC) last week in Lagos.
It explained that it had asked the CMC to look into the real reasons for such development, adding that it would further meet with shareholders groups to determine the reasons for the de-listings.
The statement quoted the SEC’s Acting Director General, Mary Uduk, to have expressed the commitment of the SEC to see an improved listing of multinational companies in Nigeria on the capital market, adding that the practice of de-listing by quoted companies was a threat to the growth of the market.
“Increase in de-listing by public companies pose a threat to the market in view of the fact that quite a number of them are highly capitalised,” said Uduk, who also explained that SEC had mandated the CMC to come up with strategies aimed at tackling de-listing and boosting listing of more multinationals.
She noted that some highly capitalised companies had delisted, thereby, affecting the growth of the market.
According to her, the committee would meet with stakeholders and find out why they are delisting as well as discuss with eligible ones why they are not listed.
Uduk who said some companies had complained of tax issues, however, gave the assurance that the commission would engage the government to address the issue, in addition to expecting the CMC to come up with recommendations on this.
“If they are regulatory issues – more rule amendment – we are open to it, but our rules must be in line with international best practices,” Uduk said.
She gave the assurance that the apex capital market regulator would work in line with the committee’s recommendations, and that SEC was collaborating with the Corporate Affairs Commission (CAC) to obtain the list of companies not yet quoted on any of the exchanges in the country.
SEC also disclosed that it would extend the forbearance window offered to investors with multiple accounts and subscriptions in Nigeria’s capital market to a new date of September 2018, to enable them consolidate their identities for same.
The statement explained that the forbearance would enable investors who bought shares in multiple names to consolidate such multiple shareholder’s identities with the registrars and Central Securities Clearing System (CSCS) into one that bears their official names.
It quoted Uduk to have said during the market boom, some investors bought shares with different names which they had forgotten, hence could no longer access the benefits of such investments.
Based on this, Uduk, asked the affected investors to take advantage of the forbearance window to ratify their accounts.
On the issuance of electronic annual accounts, she said the pilot scheme had begun, adding that the commission had received feedbacks of concerns from various shareholder associations on the electronic annual reports.
She said: “Shareholders expressed concerns of poor electricity supply and internet services in the rural areas. The market would deliberate further on the issue, while the pilot scheme of one year would go on. We are still looking at it but the pilot scheme will go on.”
On e-dividend, she said the technical committee on e-dividend reported that the total and approved mandate currently stood at 2.5 million, thus translating into 466,000 unit investors.
Uduk, equally disclosed that retail players in the domestic capital market invested N5 billion in the Sukuk bond issued by the federal government last year.The amount, she said represented five per cent of the N100 billion bond with a seven-year tenor, for fixing 25 key economic road projects across the six geo-political zones, with N16.67 billion earmarked for road projects in each geo-political zone.
She noted that the Technical Committee on non-interest capital market reported that the sovereign Sukuk issued in 2017 attracted about 1,600 retail investors.
Following from that success, she stated that the next level of engagements was to work with supra-national entities such as the International Finance Corporation (IFC); African Development Bank (AfDB); state governments; and institutions like the Federal Mortgage Bank to include Sukuk options in their capital investment plans.
The volume and value of trading at the stock market recorded improvement last week as investors staked N30.296 billion on 3.008 billion shares in 24,036 deals. This showed a jump of 105 per cent compared with N14.743 billion invested in 1.415 billion shares exchanged in 20,659 deals the previous week.
However, the Nigerian Stock Exchange All-Share Index (NSE ASI) fell by 0.28 per cent to close lower at 40,814.89, while market capitalisation declined to N14.743 trillion. But the In the same vein, all, NSE Corporate Governance NSE Premium, NSE-Main Board, NSE 30, NSE Banking, NSE Oil/Gas, and NSE Pension indices which appreciated by 1.08 per cent , 1.38 per cent, 0.54 per cent, 0.13 per cent, 2.34 per cent, 0.73 per cent and 1.42 per cent in that order.
Although the benchmark index fell by 0.28 per cent last week, as against a gain of 0.21 per cent the preceding week, analysts at Cordros Capital Limited maintained a positive outlook for the market.
According to them, reiterated their positive outlook for risky assets, amid rapidly declining fixed income yields, relatively lower prices of value stocks, expected positive corporate releases, and strengthening macroeconomic fundamentals.
The market resumed on Monday taking the hit with the index depreciating by 0.97 per cent to close at 40,533.37 due to depreciation recorded in the share prices of GTBank, Nigerian Breweries, FBN Holdings, Double 11 Plc, and Dangote Flour Mills Plc. Similarly, the market capitalisation depreciated by 0.97 per cent to close at N14.64 trillion.
But in terms of activity, volume and value of shares traded increased by 15.2 per cent and 53.3 per cent to 192.5 million shares and N3.1 billion respectively. The top traded stocks by volume were GTBank (37.61 million shares), Japaul Oil and Maritime Services (21.34 million shares) and Fidelity Bank (13.22 million shares). Mixed Sector Performance
Performance across sectors was mixed three sectors out of the five tracked for the day appreciated. The NSE Industrial Goods index led gainers, up 0.5 per cent, followed by the NSE Banking Index with 0.3 per cent. The NSE Insurance Index garnered 0.2 per cent. On the flip side, the NSE Oil & Gas Index was the lone decliner, down 0.7 per cent, while the NSE Consumer Goods Index closed flat.
The market rebounded on the Tuesday, appreciating by 0.63 per cent to close at 40,788.68, while capitalised ended at N14.73 trillion. The boost came from growth in the share prices of in the share prices of GTBank, Nigerian Breweries, FBN Holdings, Access Bank, and UBA, Seplat, Zenith Bank Plc.
Again, the three most actively traded stock came from the banking sector. They were: FCMB (952.58 million shares), UBA (382.46 million shares) and Zenith Bank (65.23 million shares). The number of sectoral indicators that appreciated improved to four on Tuesday.
Only the NSE Insurance Index fell 0.7 per cent. The NSE Oil & Gas Index led with 2.0 per cent as investors took position in Seplat and Oando. Similarly the NSE Banking and NSE Consumer Goods indices rose by 1.3 per cent and 0.6 per cent in that order.
The bears returned on Wednesday, dragging the index down marginally by 0.04 per cent to close at 40,772.26, following depreciation in prices of Lafarge Africa, Nigerian Breweries, and UBA among others. Similarly, activity level dipped as volume and value traded decreased by 85.6 per cent and 60.4 per cent to 230.2 million shares and N4.3 billion respectively.
But the market rebounded on Thursday on rally in Dangote Cement Plc to close 0.25 per cent higher at 40,874.09. In the same vein, activity level strengthened with volume and value of shares traded jumping 221.7 per cent and 106.5 per cent to 740.4 million shares and N8.9 billion respectively. FCMB (204.1 million shares), Oando (185.5 million shares ) and Zenith Bank (70.7 million shares units) were the top traded by volume.
However, performance across sectors was largely bearish as the NSE Industrial Goods Index emerged the lone gainer, up 0.8 per cent propelled by gains recorded in the shares of Dangote Cement Plc and Lafarge Africa Plc.
Conversely, the NSE Insurance Index led the losers with 0.8 per cent, trailed by the NSE Oil & Gas Index with 0.6 per cent. The NSE Consumer Goods Index and NSE Banking Index shed 0.3 per cent and 0.1 per cent respectively.
The market fell by 0.14 per cent on Friday to bring the total decline for the week to 0.28 per cent.
Meanwhile, an analysis of the activity chart showed that the Financial Services Industry led with 2.539 billion shares valued at N23.510 billion traded in 13,179 deals. The sector thus contributed 84.43 per cent and 77.60 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 273.443 million shares worth N2.358 billion in 3,735 deals. The third place was occupied by Consumer Goods Industry with a turnover of 60.840 million shares worth N2.654 billion in 3,141 deals.
Trading in the top three equities namely – FCMB Group Plc, United Bank for Africa Plc, and Oando Plc accounted for 1.816 billion shares worth N9.599 billion in 3,851 deals.
Also traded during the week were a total of 177,144 units of Exchange Traded Products (ETPs) valued at N2.809 million executed in six deals, compared with a total of 616,587 units valued at N9.185 million that was transacted the previous week in 21 deals.
A total of 13,735 units of Federal Government Bonds valued at N14.128 million were traded last week in 16 deals, compared with a total of 2,500 units valued at N2.367 million transacted two weeks ago in 10 deals.
Price Gainers and Losers
In all, 36 equities appreciated in price during the week, lower than 37 in the previous week, while 33 equities depreciated in price, lower than 38 equities of the previous week.
Oando Plc led the price gainers with 39.1 per cent to close at N9.60 per share. Jaiz Bank Plc trailed with 21.1 per cent, while Skye Bank Plc and Julius Berger Nigeria Plc chalked up 14.8 per cent.
Other top price gainers included: Unity Bank Plc (14.4 per cent); Northern Nigeria Plc (9.6 per cent); N.E.M Insurance Plc (9.1 per cent); regency Alliance Insurance Plc (7.1 per cent); and Ecobank Transnational Incorporated (5.9 per cent).
Conversely, A.G Leventis Nigeria Plc led the price losers with 14.1 per cent, trailed by Double 11 Plc with 14.1 per cent. Mutual Benefits Assurance Plc shed 12.1 per cent, while Niger Insurance Plc went down by 8.8 per cent.
Other price losers included: Presco Plc (8.3 per cent); UACN Property Development Company Plc (7.8 per cent); Livestock Feeds Plc (7.7 per cent); First Aluminium Nigeria Plc (7.5 per cent); Continental Reinsurance Plc (7.4 per cent) and NASCON Allied Industries Plc (5.8 per cent).
Zenith Bank Plc has reported a profit after tax (PAT) of N47.079 billion for the first quarter ended March 31, 2018, showing an increase of 26 per cent from N37.449 billion recorded in the corresponding period of 2017.
The financial results released yesterday showed gross earnings of N169.192 billion, indicating a growth of 14 per cent from N147.736 billion in 2017.Net income increased by 35 per cent from N70.604 billion to N95.898 billion in 2018.
Fee and commission income reduced from N21.128 billion to N20.837 billion. In a bid to reduce cost, personnel fell from N18.166 billion in 2017 to N15.566 billion. However, operations expenses rose from N26.991 billion to N43.917 billion. Impairment charges fell by 42 per cent from N7.886 billion to N4.573 billion.
Consequently, profit before tax rose by 22 per cent from N44.2 billion to N54 billion, while PAT grew faster by 26 per cent from N37.449 billion to N47.079 billion in 2018. Market analysts said with the improved profit, shareholders would receive higher dividend if the performance is sustained throughout the year.
Zenith Bank Plc of the bank last week approved the proposal of the board to pay a final dividend of N2.45 per share for 2017. In all, the shareholders received a total dividend of N2.70 per share for the year.
Speaking at the annual general meeting (AGM) in event, the Chairman of the bank, Mr. Jim Ovia, said despite the challenging operating environment, the bank was able to achieve improved performance in its financial results in 2017.
He said profit before tax rose by 24 per cent from N140bn in 2016 to N174bn in 2017, while total assets of the bank grew by 13 per cent from N4.28tn in 2016 to N4.83tn in 2017.
“This translated into an excellent performance that stands as a testament to the durability and resilience of the brand. Clearly, the results are once again a reflection of the exceptional financial health of the bank and the group,” he said. Speaking in the same, the Group Managing Director, Zenith Bank Plc, Mr. Peter Amangbo, said the management of the bank had made progress in its vision to entrench sustainability in its operations.
He had said the management of the bank would increase the quality of its engagement and be more proactive by anticipating fluctuations in the economy and markets.
Wema Bank Plc plans to raise N20 billion from the bond market by July and aims to pay a dividend this year for the first time in a decade, paving the way for an equity sale next year, its Chief Financial Officer, Tunde Mabawonku said.
Mabawonku said the mid-tier bank was focused on selling debt this year after it raised N6.2 billion in its first tranche of a N50 billion ($159 million) debt programme.
He said the bank would start the process next month. “We would want to pay dividends first to existing shareholders before raising equity in early 2019. It could be a combination of rights issues and private placement,” Mabawonku told Reuters.
The debt issue would help Wema boost its capital ratio above its internal guidance of 15 percent, from 14.3 percent, the bank said earlier. The regulatory minimum capital ratio for Wema and its peers is 10 percent.
In July, Wema Bank said it could issue debt assuming government bond yields dropped below 18 percent with falling inflation. Yields are now at around 14 percent.
It also talked about raising equity in 2018 to bolster its capital ratio and cut its operating costs as its new digital strategy gains traction.
Nigerian firms are tapping debt markets this year after the government redeemed some treasury bills, instead of rolling them over, to bring down yields. Analysts expect the central bank to cut interest rates this year as inflation slows.
Wema Bank aims to revive loan growth this year by focusing on small firms after its lending dropped by 4.9 percent last year – despite the bank’s target of 1.5 percent growth. It plans to increase lending by 10 percent in 2018.
Guaranty Trust Bank Plc (GTBank) thursday became the first bank to release its financial performance for the first quarter ended March 31, 2018. According to the results made available through the Nigerian Stock Exchange (NSE), GTBank Plc recorded a profit after tax (PAT) of N44.670 billion, up by from N41.471 billion in the corresponding quarter of 2017. The bank ended the period with net interest income of N59.689 billion, down from N66.129 billion in 2017. Loans impairment charges fell from N3.412 billion in 2017 to N1.639 billion.
Fees and commission income improved from N13.68 billion to N15.22 billion, while profit before tax (PBT) grew from N50.392 billion to N52.624 billion in 2018. A further breakdown of the results showed that deposits from customers rose from N2.062 trillion to N2.214 trillion. However, loans and advances fell marginally from N1.449 trillion to N1.354 trillion.
Commenting on the results, analysts at FBN Quest said the single-digit in PBT growth was driven by a 52 per cent y/y reduction in loan loss provisions and a 41 per cent growth in non-interest income.
“The growth in non-interest income was largely underpinned by foreign exchange (FX) revaluation gains of N5.5 billion (vsN306.4 million Q1 2017). In contrast, funding income declined by 10 per cent. Further down the PAT grew by eight per cent to N44.4 billion, thanks to a lower effective tax rate of 15.1 per cent vs. 17.7 per cent Q1 2017. Sequentially, PBT grew five per cent quarter on quarter (q/q), again, the reduction in loan impairment charges was the major driver. However, PAT fell by 13 per cent q/q because of a 50 per cent q/q spike in taxation. Compared with our forecasts, PBT and PAT beat by six per cent and eight per cent respectively, because non-interest income surprised positively.
They explained that in terms of balance sheet trends, GTBank’s loan book declined by around seven per cent q/q, while deposits grew by seven per cent q/q.
“On its Q4 conference call, management had guided to loan growth of around 10 per cent year-on-year (y/y), underpinned by improvements in macro-economic fundamentals. As such, we had expected to see some level of loan growth in Q1 2018. Management had also guided to subdued PBT growth of around 2.4 per cent for 2018E. The Q1 2018 results suggest that it may be tracking slightly ahead of guidance and imply a 2018E Return on average equity (ROAE) of more than 25 per cent,” FBN Quest said.
The Minister of Finance Mrs. Kemi Adeosun and aggrieved shareholder groups yesterday were at daggers drawn over the events in the last one week pertaining to the lifting, reinstatement and lifting again of the technical suspension placed on Oando’s shares traded on the Nigerian Stock Exchange (NSE) and the minister’s subsequent removal of the acting director-general of the Securities and Exchange Commission (SEC), Dr. Abdul Zubair over the fiasco and his replacement with Ms. Mary Uduk at the weekend.
While the shareholder groups have accused Adeosun of “unwholesome interference” in the nation’s capital market and meddling in the operations of SEC, and demanded her immediate sack, the minister has denied the allegations, saying the shareholder groups were speaking out of ignorance.
According to Adeosun, she had to suspend Zubair at the weekend because she had pointedly asked him not to lift the technical suspension on the energy company’s shares the week before last until a committee comprising representatives from her ministry, SEC, the NSE and the Johannesburg Stock Exchange (JSE), where Oando has a dual listing, had reviewed the report of the forensic audit submitted by the team of professionals appointed by SEC to investigate the company.
She said in spite of her directive, SEC still went ahead to issue a memo to the NSE lifting the technical suspension the market regulator had placed on the shares of Oando since October last year.
But in a joint statement in Lagos yesterday, the shareholder groups – Proactive Shareholders’ Association of Nigeria (PROSAN), Trusted Shareholders’ Association of Nigeria (TSAN) and the Oando Shareholders’ Solidarity Group (OSSG) – alleged that in the minister’s desperation to shield Oando from probe, “Adeosun has inevitably caused untold harm both to the independence of SEC and the Nigerian capital market”.
The statement was issued after SEC penultimate week said it had concluded its forensic audit of Oando without making public the outcome of the audit on the energy firm, following which the capital market regulator lifted, reinstated and again lifted the technical suspension placed on the company’s shares in a space of 24 hours last week, culminating in the removal of Zubair by the finance minister, and his replacement with Ms. Uduk.
Oando has been under investigation by the SEC after two major shareholders of the company, in separate petitions submitted last year to the capital market regulator, accused Oando’s management of financial mismanagement, violation of corporate governance tenets and running the company aground.
Following its preliminary investigation of the petitions, SEC appointed a team of professionals to carry out a forensic audit of Oando.
But before the forensic audit could proceed, Adeosun had suspended the substantive director-general of SEC, Mr. Mounir Gwarzo over his alleged award of contracts to firms tied to him and his wife and for approving and paying a severance package of N104 million to himself.
The panel she set up to investigate him subsequently pronounced him guilty of the allegations and recommended his sack and further investigation and prosecution by the anti-corruption agencies.
In his place, she appointed Zubair to act as the director-general of SEC, only for the latter to be ousted for “miscommunication” on lifting the technical suspension on Oando’s shares.
In the statement signed by the National President of TSAN, Alhaji Mukhtar Ismail Mukhtar, the National Coordinator, PROSAN, Mr. Taiwo Oderinde, and the Coordinator, OSSG, the shareholders yesterday criticised the minister for what they described as her “unwholesome and unpatriotic” actions with regards to the probe of Oando and therefore urged President Muhammadu Buhari to as a matter of urgency relieve her of her position in order to prevent further damage to the Nigerian capital market.
“We wish to bring the attention of President Muhammadu Buhari, Vice-President Yemi Osinbajo and all Nigerians to the unwholesome, unpatriotic and strange actions of the Minister of Finance, Mrs. Kemi Adeosun with regards to the probe of Oando Plc.
“You may recall that since early last year, Oando has been enmeshed in a series of crises bordering on abuse of corporate governance and alleged gross financial mismanagement.
“The internal auditors of Oando Plc, Messrs Ernst & Young, in the company’s financial report last year expressed doubts over its ability to continue as a going concern because its liabilities exceeded its assets.
“As concerned shareholders, we sent petitions to the Securities and Exchange Commission (SEC) and to the House of Representatives Committee on Capital Market and Institutions.
“The committee mandated SEC to investigate these allegations, culminating in the setting up of a committee by SEC to carry out a preliminary investigation of the company’s affairs.
“SEC’s preliminarily investigation, as disclosed by the commission in a letter dated October 17, 2017 and signed by its Head of Legal Unit, Braimoh Anastasia, unearthed several malpractices in the company.
“These included insider trading, declaration of dividends from unrealised profits, release of false financial statements to the public, and the disposal of assets without the knowledge of the regulatory body in contravention of the Investment and Securities Act (ISA) 2007, among several other infractions.
“These weighty findings compelled the suspension of Oando shares on the floor of the Nigerian Stock Exchange (NSE) and the Johannesburg Stock Exchange (JSE) to pave way for a more thorough investigation via a forensic audit ordered by SEC,” the shareholder groups recalled.
They alleged that the forensic audit has been stalled due to the unwholesome interference by the finance minister to the detriment of Oando shareholders and the entire Nigerian capital market.
They also alleged that Gwarzo and Zubair were removed by Adeosun because they resisted her plan to shield the management of Oando from probe.
“It must concern Mr. President, Mr. Vice President and all Nigerians that Mrs. Adeosun has now removed two SEC DGs from their positions all in a desperate attempt to shield Wale Tinubu and the present management of Oando from probe.
“These men have been sacked from their positions because they refused to stop the probe of Oando.
“Zubair was sacked because he initially resisted Adeosun’s attempt to forcefully remove the suspension placed on the shares of Oando to preserve investors’ funds.
“Unfortunately, she had her way and the lifting of the suspension is part of a grand plan to sweep the weighty allegations against Oando under the carpet.
“This is clearly a negation of the anti-corruption stance of the present administration and a systematic destruction of the Nigerian capital market.
“The show of shame exhibited last week where the Nigerian Stock Exchange was made to implement three different directives with regards to the suspension of Oando shares within 24 hours should worry the federal government and well-meaning Nigerians.
“It sent very bad and negative signals to investors all over the world. The attendant negative impact of Adeosun’s meddlesomeness to protect some entrenched interests will haunt the market for a long time to come.
“Consequently, we believe the sack of the minister by President Muhammadu Buhari is the only way to show that the federal government remains committed to the fight against corruption in all sectors of the economy,” the shareholders added.
When contacted on the issue, Adeosun, in a phone interview from London yesterday, denied the allegations by the shareholder groups.
She informed THISDAY that she was aware of the attempt to lift the technical suspension on Oando’s shares penultimate Friday but instructed Zubair not to do so until a committee comprising representatives from her ministry, SEC, NSE AND JSE had seen the report.
She said Zubair complained at the time that the professional team led by the audit firm Deloitte had not released the report because they had not been paid their fees, following which she gave approval that the fees amounting to N60 million be paid from the Capital Market Development Fund and not by Oando as it was an interested party and the company under investigation.
“However, much to my shock, while I was at the FEC (cabinet) meeting last week where our phones are not with us, an aide came to me to inform me that the technical suspension on Oando shares had been lifted.
“On getting the information, I contacted Zubair, who blamed a deputy director for releasing the letter to the NSE despite my instruction that the technical suspension on the shares should not be lifted.
“That was what led to the lifting, reinstatement and then final lifting of the technical suspension placed on the shares of Oando last Wednesday,” she revealed.
When asked why she did not insist that trading on the shares should remain suspended when she discovered that SEC officials had flouted her instructions, Adeosun said the damage had already been done.
“I am certain some officials of SEC had been induced and went behind my back while I was at the FEC meeting and incommunicado to lift that suspension, and when they heard I had been informed, they rushed again to reinstate it.
“But because of the terrible signals this had already sent to local and international investors, it was decided that the technical suspension should be lifted on Oando’s shares.
“What happened that day was that we had been outplayed because they went against my directive and waited for me to be at the FEC meeting, hence my decision to remove Zubair.
“This, however, will not stop us from the reviewing the report of the forensic audit of Oando, following which the findings will be made public and actions taken against any party found wanting in the management of the company,” she said.
Adeosun also revealed that the SEC deputy director who sent the initial letter on Wednesday to NSE lifting the technical suspension on Oando’s shares, had been sanctioned.
The Securities and Exchange Commission (SEC) yesterday said it would hold deeper discussions on the implementation of the 10-year capital market master plan as well as other initiatives for Nigeria’s capital market with stakeholders at its forthcoming Capital Market Committee (CMC).
A statement from the SEC in Abuja explained that the CMC meeting scheduled to hold in Lagos would be expanded to accommodate a diverse group of relevant stakeholders in Nigeria’s capital market.
According to it, the 10-year master plan for the Nigerian capital market is expected to refocus the market and help double its size over time as well as grow the economy.
It noted that since it unveiled the masterplan in November 2014, it has vigorously implemented some initiatives in it with the aim of attracting more investors to the market.
“The SEC is set to host the first CMC meeting for 2018. The meeting is scheduled to hold at the Federal Palace Hotel and top on the agenda would be the capital market master plan implementation and other capital market initiatives,” said the statement.
SEC equally explained that some of the initiatives in the masterplan which it has implemented include direct cash settlement; dematerialisation; and e-dividend registration, which it added have promoted transparency; protect and enhance investors’ confidence in the capital market.
“The SEC therefore enjoins all shareholders to take advantage of the initiatives introduced in the capital market aimed primarily at strengthening the market and accelerating economic development.
“This is in consonance with the present administration’s economic strategy focused on deepening the capital market as a vehicle for encouraging a private sector-led economy with enhanced productivity,” it explained.
On the stakeholders expected at the CEC meeting, SEC stated: “Those who have been invited to attend the expanded session are CEOs of all registered capital market firms, i.e. broker dealer capital market solicitors; custodians; fund managers; issuing houses; rating agencies; registrars; reporting accountants; trustees; and consultants.
“Others are Chief Executive Officers of the Nigerian Stock Exchange (NSE); National Association of Securities Dealers (NASD); the Financial Markets Dealers Quotations (FMDQ); Africa Exchange Holdings (AFEX); Nigeria Commodity Exchange (NCX); Central Securities Clearing System (CSCS); Chartered Institute of Stockbrokers (CIS); as well as representatives of relevant financial services’ agencies; among others.”
Indigenous pharmaceutical firm, Fidson Healthcare Plc has reported a 235 per cent growth in profit after tax (PAT) to N1.1 billion for the year ended December 31, 2017, from N317 million in 2016.
Details of the audited financial results showed that Fidson reported a revenue of N14.056 billion, up growth 84 per cent from N7.655 billion in 2016.
Similarly, cost of sales increased by 91 per cent from N3.6 billion in 2016 to N6.9 billion in 2017. There was an increase of a 53 per cent in total overhead (administrative and selling and distribution expenses) from N3.1 billion in 2016 to N4.7 billion in 2017, which is due to an increase in the marketing and distribution expenses. Finance cost also increased by 45 per cent from N690 million to N1 billion in 2017.
According to the company, the increase in finance cost is mainly due to increased working capital to drive growth and a hike in interest rates from financial institutions.
Despite the rise in total cost, the company recorded a 127 increase in operating profit which grew from N1.1 billion in 2016 to N2.5 billion in 2017.Profit before tax (PBT), rose by 256 per cent from N443 million in 2016 to N1.57 billion in 2017, while PAT grew from N317 million to N1.1 billion. This growth led the company to close the year with an earnings per share 71 kobo, up from 21 kobo in 2016.
Following this impressive result, the company would be proposing dividend per share of 20 kobo which is 300 per cent higher than the five kobo paid the previous year.
According to the company, the significant competitive advantage of its World Health Organisation(WHO) certifiable plant is already evident after one full calendar year in operation.
“Products from the new facility as well as volume increase from existing products were largely responsible for this remarkable growth. The plant increased the company’s factory-based revenue by over 200 per cent in 2017, primarily due to an increase in production volumes and the introduction of new product lines. A portion of its new products are medicines that cater to low income earners, with the quality consumers have come to expect from Fidson,” it said.
Fidson said it is highly focused on extensive brand building as part of its long-term strategy and aims to expand its Intravenous fluid lines in order to meet demands.