The stock market resumed on positive note on monday as the Nigerian Stock Exchange (NSE) All-Share Index appreciated by 0.05 per cent to close at 41,233.42. Similarly, market capitalisation added N16.6 billion to close at N14.9 trillion. However, the activity level reduced as volume and value traded depreciated 21.9 per cent and 39.3 per cent to 221.4 million and N2.6 billion in that order. The positive performance was largely driven by gains in Dangote Cement Plc and Guinness Nigeria Plc. In all, 21 stocks appreciated, while 18 stocks depreciated.
Eterna Plc led the price gainers with 9.7 per cent, trailed by C & I Leasing Plc with 5.0 per cent. Oando Plc garnered 4.7 per cent. Oando Plc has remained consistent in price appreciation since its technical suspension was lifted last month. Investors’ demand for the stock was reinforced with an improved results for the full year ended December 31, 2017. The company recorded profit after tax of N19.77 billion in 2017, showing a jump of 405 per cent from N3.913 billion in 2016. AIICO Insurance Plc closed as the fourth highest price gainer with 4.3 per cent, while Mutual Benefits Assurance Plc chalked up 3.8 per cent.
Conversely, Unity Bank Plc led the price losers with 5.0 per cent to close at N1.14 per cent trailed by UACN Property Development Company Plc with 4.8 per cent. NPF Microfinance Bank Plc and Linkage Assurance Plc shed 4.7 per cent apiece. First Alumium Nigeria Plc declined by 4.1 per cent among others.
Meanwhile, an analysis of the activity table showed that the top traded stocks by volume were LASACO Assurance Plc (24.3 million shares), GTBank (20.7 million shares) and Sovering Trust Insurance Plc (16.6 million shares ) while GTBank (N937.6 million), Nigerian Breweries Plc (N499.8 million) and Zenith Bank Plc (N292.4 million) were the top traded by value.
In terms of sectoral performance, three of the five tracked closed positively led by the Industrial Goods Index with 0.4 per cent on the back of gains in Dangote Cement Plc. Similarly, the NSE Oil & Gas Index went up by 0.2 per cent, while the NSE Insurance Index appreciated by 0,1 per cent.
On the contrary, the NSE Banking Index fell by 0.3 per cent, just as the NSE Consumer Goods Index went down by 0.2 per cent.
According to analysts at Cordros Capital, Dangote Cement was a major driver of market performance, as the market would have recorded a decline of 0.35 per cent loss without the counter.
“We expect the positive trend in the market to be sustained as the oil and gas space continues to witness rising bullish sentiments towards its counters,” they said.
The Board of Directors of Nigerian Aviation Handling Company Plc (NAHCo) has recommended a dividend of N406 million for the year end December 31, 2017. The dividend, which translates to 25 kobo per share, is expected to be approved by shareholders at the forthcoming Annual General Meeting (AGM).
NAHCo, which provides aircraft, passenger and cargo handling services and other related services surmounted challenges in 2017 to end the year with higher profit after tax (PAT). The company recorded a turnover of N7.926 billion in 2017, compared with N7.956 billion in 2016. Finance cost was reduced from N545 million in 2016 to N213 million in 2017, while PAT rose from N581 million in 2016 to N776 million in 2017, showing an increase of 34 per cent. Earnings per share improved from 36 kobo to 48 kobo. Hence, the board of directors recommended a dividend payment of 25 kobo, which is higher than the 22 kobo paid the previous year.
In the same vein, NAHCo has started 2018 on a very bright note, recording significant growth in PAT for the first quarter (Q1) ended March 31, 2018. The reported a turnover of N2.188 billion in Q1 of 2018, up from N1.786 billion in the corresponding period of 2017.
Finance income improved from N30.916 million to N64.495 million, while the company was able to reduce finance cost to N44.536 million, from N55.715 million in 2017.
Profit Before Tax jumped to N117.405 million in 2018, compared with N1.026 in 2017, while PAT followed similarly trend to hit N97.566 million, compared with N1.026 million in 2017.
The Q1 results are the first set of results produced by the Managing Director/CEO, Mr. Idris Yakubu, who was appointed in November 2017.
Stock market operators said with the Q1 performance, Yakubu, a former banker, who has an extensive experience in delivering agreed strategic business imperatives, is bringing his experience to bear in the company to the delight of all stakeholders.
Shareholders of NAHCo had last year commended the board and management for the improved results despite the challenging operating environment. They pledged their support for better future results and urged the board and management to sustain the performance.
Chairman of NAHCo, Usman Bello had informed the shareholders that in spite of the recession and the global weakness in the aviation sector, the company’s performance was commendable.
Speaking on the diversification programme, Bello noted that NAHCoFree Trade Zone (NFZ) that was approved by shareholders in 2011 as a subsidiary of the company had achieved some milestones.
Nestle Nigeria Plc Wednesday announced its financial results for the first quarter (Q1) ended March 31, 2018, showing a marginal growth in performance indications. The company, which recorded a jump of 325 per cent in profit after tax (PAT) for the 2017 financial year , has started 2018 on a slow note as PAT for Q1 rose by a marginal three per cent.
Details of the results showed gross revenue of N67.5 billion in Q1 of 2018, up by 10.7 per cent from N37.7 billion in the corresponding period of 2017. Cost of sales went up by 10.7 per cent from N37.7 billion to N41.7 billion. Profit before tax fell by 4.5 per cent from N14.3 billion to N13.6 billion. A reduction of 15 per cent in tax from N5.9 billion in 2017 to N5.0 billion in 2018, made the company to end the Q1 with higher profit.
Specifically, Nestle Nigeria’s PAT stood at N8.6 billion in 2018, up from N8.4 billion in the corresponding period of 2017. Gross profit margin fell from 38.4 per cent to 38.2 per cent, while net profit margin reduced from 13.7 per cent to 12.8 per cent in 2018. Market operators said if Nestle Nigeria would be unable to improve its performance in the remaining three quarters, it might end the year with lower bottom-line.
The company recommended a total dividend of N33.687 billion or N42.50 per share for the 2017 full year, which represented 99 per cent profit after tax of N33.724 billion recorded for the year.
Nestle Nigeria Plc had reported gross revenue of N244.2 billion in 2017, up 34.2 per cent, from N181.9 billion recorded in 2016.Net finance costs fell by 46.8 per cent from N16.7 billion to N8.9 billion. Profit before tax settled at N46.8 billion, showing a growth of 117 per cent compared with N21.5 billion recorded in 2016. Profit after tax grew faster by 325 per cent from N7.9 billion to N33.7 billion in 2017.
Commenting on the 2017 results, Nestle Nigeria had attributed improved performance to multiple factors such as continued loyalty and trust of its consumers in its brands, the dedication of its people and the efficiency of its distribution network.
“In line with our strategic roadmap, we will continue to invest behind brands and route-to-market activities while proactively managing input cost pressures to stay on the growth path. We will continue delivering value to our shareholders with our commitment to provide high quality nutritious products to meet the needs and preference of our consumers,” the company said.
Domestic investors dominated transactions on the Nigerian Stock Exchange (NSE) in the first quarter (Q1) ended March 31, 2018 as they traded N497.15 billion, compared with the N381.82 billion traded by foreign investors.
Domestic investors, therefore, accounted for 56.56 per cent, while foreign investors were responsible for 43.44 per cent. In all, the Nigerian bourse attracted N878.97 billion in Q1 of 2018, showing a jump of 93 per cent from N454.48 billion in Q1 of 2017. A monthly analysis of the transactions showed that investors staked N394.44 billion in January, N212.05 billion in February and N272.48 billion in March.
However, total domestic transactions increased by 8.88 per cent from N128.83 billion in February to N140.27 billion in March 2018, while foreign transactions increased more significantly by 58.87 per cent from N83.22 billion to N132.21 billion within the same period.
A further analysis of the total domestic transactions indicated that domestic institutional investors remained the dominant players. In the three months under review, the domestic institutional investors traded N288.91 billion, while retail investors accounted for N208.24 billion. The domestic institutional investors staked N121.56 billion in January, N76.08 billion in February and N91.27 billion in March. On the other hand, domestic retail investors traded N106.49 billion in January, N52.75 billion in February and N49 billion in March.
Meanwhile, foreign portfolio investment ( FPI) transactions report showed that foreign investors invested more in equities than they took. The report showed positive net foreign inflows of N30.9 billion compared with a negative net foreign investment position of N86.36 billion in the first quarter of last year. The report obtained at the weekend indicated that foreign inflows and outflows rose to N206.35 billion and N175.47 billion in first quarter, indicating a positive net foreign investment position of N30.9 billion. Total foreign inflow and outflow of N62.35 billion and N148.71 billion were recorded in comparable period of 2017, which left the country with net FPI deficit of N86.36 billion.
These two key indicators-inflow and outflow- are used to measure foreign investors’ participation in the equities market as a barometer for the economy. FPI outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions in the market. The report is regarded as a credible gauge of FPI as it coordinates data from nearly all active investment bankers and stockbrokers.
Monthly analysis showed a positive trend in net foreign investment inflow in the first quarter of the year. Foreign inflow amounted to N91.75 billion in January as against outflow of N74.64 billion. Foreign inflow and outflow stood at N44.89 billion and N38.33 billion in February while foreign inflow and outflow recovered hit N69.71 billion and N62.50 billion in March.
Commenting on the FPI, the Chief Executive Officer, Capital Assets Limited, Alhaji. Ariyo Olushekun, said it indicated confidence in the capital market in particular and economy in general. According to him, the positive trading position of the FPI shows that foreign investors see value in the economy and the stock market, since investors trade for value.
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.
Daily Performance
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.
Market Turnover
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.
