Infrastructure bonds needed for real sector growth, says FBNQuest

FBNQuest has seen the possibility of growing the real estate sector through bond investment.

In a statement, it said infrastructure deficit has remained an impediment to the industrialisation and diversification of the economy.

Infrastructure deficit, it added, has further complicated the ease of doing business in the country and is linked to inadequate public sector financing.

“By its nature, infrastructure is usually capital intensive. In view of this, the Nigeria Mortgage Refinance Company Plc (NMRC) was set up to bridge the funding cost of residential mortgages and promote the availability, as well as the affordability of good housing to Nigerians by providing increased liquidity in the mortgage market through the mortgage and commercial banks,” it said.

Given stricter capital adequacy and liquidity regulations for the banking sector, banks have reduced lending to infrastructure. Moreover, the huge financing requirements for infrastructure cannot be provided by banks alone. Consequently, capital markets, which have pools of long term funds, can provide the required financing for infrastructure.  Capital markets experts have restated their calls on government at various levels to take advantage of the multiple benefits inherent in the nation’s capital market to facilitate their respective infrastructure projects.

According to Head, Debt Capital Markets, FBNQuest Merchant Bank Limited, Oluseun Olatidoye, the Federal Government can tap into the capital markets to fund, using infrastructure bonds and other long term debt securities for the development of various infrastructure such as housing and urban development. This will enable the government to free up cash to be used for public goods.

He stressed that most infrastructure financing through the capital markets involve active participation of private sector operators, which enhances the construction and utilisation process, given the private sector participants’ drive for efficiency and increased productivity.

For instance, over the last two years the FBNQuest Merchant Bank Limited has supported the Federal Government in developing road infrastructure by issuing N200 billion Sukuk, dedicated to rehabilitation and construction of roads across the six geopolitical regions.

The completion of these roads will significantly improve transportation, open up access to hinterlands and enable the agriculture sector by giving farmers and Agripreneurs access to markets.

Jaiz Bank grosses N8.74b as net profit rises by 55%

Image result for Jaiz BankJaiz Bank Plc grew its top-line to N8.74 billion in 2018 as the Nigeria’s first non-interest bank sustained steady growths in operations and profitability. On the back of significant growths in deposits and financing and investment, net profit rose by 55 per cent to N834.37 million.

Key extracts of the audited report and accounts of the bank for the year ended December 31, 2018 showed that gross earnings rose by 11 per cent from N7.86 billion in 2017 to N8.74 billion in 2018. Profit before tax increased from N894.01 million to N897.70 million. After taxes, net profit rose from N537.12 million to N834.37 million.

The balance sheet showed stronger underlying strength during the period. Total assets rose by 24 per cent from N87.31 billion to N108.46 billion. Deposits also grew by 25 per cent from N68.12 billion in 2017 to N85.03 billion in 2018. The non-interest bank expanded its financing and investment activities by 37 per cent to N69.36 billion in 2018 as against N50.79 billion in 2017. Jaiz Bank, as a non-interest bank, makes profit basically from profit-sharing on investments and gains on trading.

Key underlying ratios showed improvements in returns and operational strength of the bank. Return on assets rose by a quarter from 0.6 per cent in 2017 to 0.8 per cent in 2018. While cost-to-income inched up from 85.84 per cent to 87.28 per cent, return on equity improved from 6.54 per cent to 6.85 per cent. Capital adequacy remains considerably above regulatory threshold at 21.13 per cent while liquidity ratio increased by 50 per cent from 18.64 per cent to 27.94 per cent. Staff strength and number of branches also increased by 6.0 per cent and 16 per cent respectively.

Jaiz Bank Managing Director Mr. Hassan Usman said the results further demonstrated that the bank can grow sustainably in line with its strategic vision of becoming the leading non-interest bank in Sub-Saharan Africa by 2022.

He noted that the bank had in 2017 crafted a strategic plan to build on its pioneer status in the country into becoming the leading non-interest bank in Sub-Saharan Africa over the next five years.

According to him, the bank has since been working hard across its business towards the strategic milestones set out for the years while maintaining steady focusing on its business growth.

“The commitment and dedication of our people make me confident that the attainment of this goal is assured. 2018 is the year we demonstrated we have the capacity to grow safely and sustainably. We used a number of measures to spark progress in this regard, some of which include our commitment to the development of micro, small and medium enterprises, focus on unserved markets and the financially excluded, institutional alliances, nimble workforce as well as effective performance tracking amongst others,” Usman said.

He assured that while maintaining steady focus on elements that contributed to improved performance in 2018, the bank shall work harder to optimise its potential in order to deliver better returns in 2019.

He added that Jaiz Bank, as the leader in alternative financing, is committed to ensuring that its engagement with the financially excluded remains boldly innovative as well as transformative.

Jaiz Bank was created out of the former Jaiz International Plc, which was set up in 2003 as a Special Purpose Vehicle (SPV), to establish the country’s first full-fledged non-interest bank. The bank is owned by some 27,000 shareholders including the Islamic Development Bank (IDB). It obtained a regional operating license to operate as a non-interest bank from the Central Bank of Nigeria (CBN) on November 11, 2011 and began full operations as the first non-interest bank in the country on January 6, 2012. In 2016, it obtained the national banking licence from the CBN and started to rapidly spread its network across the country.

Jaiz Bank recorded another milestone on February 9, 2017 as the first non-interest financial institution to be listed on the Nigerian Stock Exchange (NSE) with the admission of the entire issued share capital of the bank to the main board of the Exchange.

Under its five-year growth plan, Jaiz Bank projects to grow its income and profitability consecutively. According to the five-year financial forecast, total income is expected to be about N81.17 billion while profit after tax is projected at N11.09 billion for the five-year period.

NSE launches multi-asset brand campaign

As part of efforts to boost investor education and increase investor participation in the Nigerian capital market, the Nigerian Stock Exchange (NSE) has launched an above-the-line marketing campaign that amplifies the Exchange’s credential as a leading securities exchange that provides investors with varied investment options.

Besides quoted equities, the NSE is showcasing other investment options such as fixed income, Exchanged Traded Products (ETPs), derivatives and others. Themed “The Multi-Asset Sustainable Exchange”, the campaign will be featured across print, broadcast, outdoor and digital media.

Head, Corporate Communications, Nigerian Stock Exchange (NSE), Mr. Olumide Orojimi, said the campaign was coming against the backdrop of the innovative offerings NSE has birthed since its intentional transformation that commenced in 2011.

He noted that during this period, the Exchange has achieved phenomenal milestones including the deployment of cutting edge technology for trading and the use of artificial intelligence to monitor its market.

He added that the Exchange had also upscale securities in its market with the flagship listing of the first sovereign green bond in an emerging market; establishment of an investors protection fund; launch of a corporate governance rating system and more recently the unveiling of the NSE Sustainability Disclosure Guidelines for quoted companies.

“As the Exchange transits to a demutualized Exchange, its credential as multi-asset securities Exchange will be adequately communicated through series of creative messaging in this campaign. While investors’ appetite for capital market products continues to evolve, this campaign highlights NSE’s offering which transcends stocks,” Orojimi said.

He reiterated the commitment of the Exchange to driving sustainable products, responsible investment in a market that is orderly and transparent whilst leveraging cutting edge technology

Ecobank takes e-payment to Ariaria market

The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has assured businesses in Ariaria Market, Aba of better ease in receiving their payments.

The Ecobank Managing Director who launched the Ecobankpay zone at the market said it will facilitate easy, secure and convenient transactions for merchants within Ariaria and other surrounding markets.

The EcobankPay Zone is a digital payment hub enabling businesses within a location adopt Ecobank’s wide range of digital products for ease of payments for goods and services.

“It is our determination to create ease of payment and boost economic activities most especially in a town like Aba, renowned for indigenous production of shoes and textiles. Our digital offering will be an opportunity for both buyers and sellers to increase their sales in an enhanced and secured way and without fear. The EcobankPay digital hub makes it easy for the seller to be paid instantly and buyers pay with ease and also have rest of mind associated with doing business without carrying cash around. Our Xpress point is also around for you to transact with ease, in as much as you have your phone you can bank with Ecobank”.

“The initiative of the Ecobankpay zone is to deepen financial inclusion in the communities and specifically aid business transactions between merchants and clients. EcobankPay’s unique offering is that anyone from any bank in Nigeria can pay with MasterPass, mVISA and mCASH with any phone by scanning QR code or using USSD”. “if the person that wishes to buy goods from you is coming from a bank that has mVisa and wishes to pay, the same QRcode would accept an mVisa payment and vice versa. That creates synergy between us and the other banks and convenience for the merchants. And as you know, the QRcode is much cheaper than having a point of sale (PoS)”.

CBN, Banks To Support Agric Export with N200bn

By Udo ONYEKA

The Central Bank of Nigeria (CBN) and the bankers committee have approved N200 billion as parts of measures to address challenges confronting exports of agricultural produce in the country.

Speaking to financial journalists after the bankers committee meeting in Lagos yesterday the Managing Director Access Bank Herbert Wigwe said the CBN and banks have come up with an immediate plans  of making fund available for agric export subsectors and its value chain.

The fund according to the banks will be in a single digit with ten year period.

The products that will be targeted according to the committee, includes, Oil Palm, Cocoa, Cashew Nut, Sesame Seed among others. The committee expects the exports of these products which is in abundant across the country to boost our foreign exchange earnings.

The committee also disclosed their plan to also pay attention to the creative industry and ICT. Speaking on this issue Managing Director of United Bank for Africa Plc (UBA, Kennedy Uzoka the banks would release the amount later but said it will be a single digit facility with ten years period.

He said the collateral for the loan would be flexible based on the value chain and the experience of the individual or persons concerned, noting that emphasis will be on practitioners that are in the business full time. The areas are movie, music, fashion and information technology.

The Bankers Committee said after a lot of research it has identified the creative and IT sectors as a critical to support social and inclusive growth in Nigeria, saying they have basically found out that the sector would generate a significant amount of employment given how Nigerians involved in activities such as films and music among others.

On the general economy, Director, Banking Supervision Department, CBN, Mr Ahmed Abdullahi said the confidence in the system and the economy at large is growing by the day. He noted that lending has increased, especially to the manufacturing sector.

According to him between January and March 2019, foreign direct investment that came into the country was $6 billion.

Managing Director GT Bank, Segun Agbaje said there was the need for our economy to leverage export in agric produce, especially as we take steps to process them for more benefit.

He said the support for the export sector was an outcome of the sub- committee setup by the bankers committee on how best to diversify the economy.

According we have policies that would drive the export sector, but implementation has been the major challenge

Other Chief Executive of Banks present at the media briefing include,are Managing Director of Ecobank Nigeria, Patrick Akinwuntan and the Director of Corporate Communication Department of the CBN, Mr Isaac Okorafor.

Companies to receive awards for dividend payment

The board of directors of Third Observers Nigeria Limited has concluded arrangements to present awards to quoted companies that delight investors with good dividend payouts. The awards ceremony is scheduled for next week in Lagos.The theme for second edition of the awards is: How Regulations Protect Investments and Help Secure Dividend. The key presenters of the theme are from the Securities and Exchange Commission (SEC) and Investments and Securities Tribunal (IST).The 2019 award winners are the companies that have paid dividend for a minimum of 10 years and above. These include Nigerian Breweries, Vitafoam Nigeria, Nigerian Aviation Handling Company (NAHCO), FBN Holdings, FCMB Group, Unilever Nigeria and CAP among others. There are 52 award winners with the awards ranging from bronze, silver and gold.REad also: Seplat urges public, private sector investmentsManaging Director, Third Observers Nigeria Limited, Abiodun Ayodele said the yearly awards ceremony was established to highlight dividend payment performances of listed companies in Nigeria with the core objective of encouraging both the investors and the paying companies.He noted that by showcasing outstanding performances of dividend-paying companies, other non-dividend paying companies will be encouraged to catch up with their peers.

Stock market investors lose N528bn in three days

Investors in the nation’s stock market lost a total of N5228bn in the last three consecutive days of trading on the floor of the Nigerian Stock Exchange.

The market capitalisation, which opened the week at N11.672tn, shed N205bn to close at N11.467tn on Monday and lost N114bn on Tuesday to close at N11.353tn.

On Wednesday, the market capitalisation of equities listed on the NSE shed N209bn to close at N11.144tn, bringing the total losses since the beginning of the week to N528bn.

The All Share Index shed 1,372.69 basis points in the three days to close at 29,268.73bps on Wednesday, which worsened the year-to-date loss to -5.6 per cent.

However, activity level improved as a total of 542.580 shares valued at N5.663bn exchanged hands in 4,146 deals, which represents a 44.1 per cent and 24.8 per cent increase in volume and value traded, respectively.

The top five trades by volume were Sterling Bank Plc (144.189 million), First City Monument Bank Plc (68.722 million), FBN Holdings Plc (55.016 million), Zenith Bank Plc (35.702 million) and Access Bank Plc (35.404 million), while the top five trades by value were Guaranty Trust Bank Plc (N1.1bn), Nestlé Nigeria Plc (N851.1m), Nigerian Breweries Plc (N778.3m), Zenith Bank (N739m) and FBN Holdings (N415m).

The NSE said in a circular on Wednesday that scheme shares resulting from the merger between Access Bank and Diamond Bank Plc, which were not available for trading on April 2, 2019 due to operational reasons, were made available for trading on Wednesday, which brought about an increase in the amount of Access Bank shares traded.

Sectoral performance was largely bearish as only two out of five indices advanced.

The consumer goods index advanced the most, reversing Tuesday’s losses by 1.20 per cent on the back of buying interests in Nestlé and Nigerian Breweries, while the oil and gas index trailed by 0.3 per cent as upticks in Oando Plc inched the index higher.

On the flip side, the banking index declined the most, dipping further by 4.59 per cent due to sustained losses in United Bank for Africa Plc, GTB and Zenith Bank while the industrial goods index trailed, inching southwards by 4.42 per cent following losses in Cement Company of Northern Nigeria Plc and Cutix Plc.

The Insurance index declined by 1.24 per cent following major sell-offs in AIICO Insurance Plc.

Investor sentiment further declined to 0.3x from 0.4x as only eight stocks advanced against the 26 stocks that declined.

The top five gainers were Nigerian Breweries, Cornerstone Insurance Plc, Sovereign Trust Insurance Plc, Sterling Bank and Nestle, which saw respective gains of 5.45 per cent, five per cent, 4.55 per cent per cent per cent per cent per cent, 3.77 per cent and 3.57 per cent.

The top five losers were Access Bank, Chi Plc, AIICO Insurance, Cement Company of Northern Nigeria and Neimeth Insurance Plc, whose share prices shed 10 per cent, 10 per cent, 9.86 per cent, 9.75 per cent and 9.68 per cent, respectively.

International Breweries hit its lowest level in 21 months, as its share price dropped by 9.62 per cent to close at N23.50.

The company’s share price dropped to N24.19 on June 2, 2017, after which it climbed to a five-year high value of N64 on January 26, 2018.

Analysts at Afrinvest Securities Limited said, “We expect the less than stellar performance of the equities market to continue in Thursday’s session in the absence of any positive development that could upturn market performance.”

 FCMB Plans Debt Sale to Boost Capital

By Udo ONYEKA

First City Monument Bank group, FCMB plans to raise tier II debt and retain profits this year to boost its balance sheet after the adoption of stricter accounting standards impacted its capital ratios, it disclosed yesterday.

The banking group said the capital adequacy ratio for the mid-tier lender FCMB Bank, stood at 15.9 percent in 2018, down from 16.9 percent a year earlier. It added that it expected its capital to grow throughout 2019.

Nigerian banks have been adopting stricter IFRS 9 accounting standards which require lenders to model credit loss risk based on expected rather than incurred losses and has a material impact on regulatory capital requirements.

FCMB Group Plc, last week-end released its full-year 2018 results after trading hours.

Gross Earnings increased from N169 billion in 2017 to N177 billion in 2018, representing a 4.5 per cent increase year on year.

The lender’s Profit before tax jumped from N10.6 billion in 2017 to N18.4 billion in 2018. This amounts to a 73.5 per cent increase year on year.

Shares in the Lagos-listed FMCB rose 1.06 percent on Tuesday to N1.90, valuing the banking group at N37.6 billion.

FCMB said it was targeting a 5-10 percent loan growth in 2019.

Access Bank lists N15bn green bond on NSE, FMDQ

Access Bank Plc has listed its N15bn green bond on the Nigerian Stock Exchange and the FMDQ OTC Securities Exchange.

The five-year, 15.5 per cent fixed rate senior unsecured green bonds, which would mature on March 18, 2024, was described as the first-ever climate bonds standard certified corporate green bond to be issued in Africa.

The Group Managing Director/Chief Executive Officer, Access Bank Plc, Mr Herbert Wigwe, said, “With our pace-setting experience in mainstreaming of sustainability in our business operations, we are confident that this green bond will further help in supporting environmentally friendly investors to meet their investment objectives, while simultaneously supporting the bank’s customer towards realising growth opportunities in the fast-developing low carbon economy.”

The Associate Executive Director, Capital Markets, FMDQ, Ms Tumi Sekoni, congratulated the issuer for the successful issue of the green bond in the Nigerian debt capital market.

She said the bond would help to address climate and environmental challenges in a sustainable manner to deliver prosperity for Nigerians and further deepen the domestic debt capital market by increasing the range of investible debt securities in the markets, invariably contributing to Nigeria’s development.

She reiterated the FMDQ’s commitment to continue to create awareness and drive education for green financing, thereby facilitating the development of the green bond market in Nigeria.

The Managing Director, Investment Banking, Chapel Hill Denham, Mrs Kemi Awodein, said, “Chapel Hill Denham is proud to have acted as lead arranger and financial adviser to Access Bank on Nigeria’s and Africa’s first climate bond certified corporate green bond.

“This is another first-of-a-kind deal for both Access Bank and Chapel Hill Denham and this demonstrates our leadership in DCM innovation and our commitment to doing work that delivers positive impact for Nigeria’s future. A commitment to advancing sustainable development goals is imperative in Nigerian and debt markets provide us many solutions.”

Wema Bank’s PAT rises by 36% to N3.08b

Wema Bank Plc has released its audited financial results for the full year ended December 31, 2018 which showed that its Profit After Tax (PAT) rose 36.28 per cent to N3.08 billion in 2018 from N2.26 billion in 2017.

The bank’s Profit Before Tax (PBT) also grew by 59 per cent to N4.8 billion. The PBT figure was an improvement compared with N3.01 billion recorded in 2017 even as the lender has recommended dividend payment to its shareholders.

The bank’s gross earnings grew year-on-year from  N65.27 billion in 2017 to N71.53 billion in 2018 representing 9.6 per cent increase.

The bank’s interest expenses dropped by eight per cent, causing Net Interest income to increase by 36.52 per cent, this was majorly driven by a reduction in deposits held for other banks.

According to the bank’s financial results, net loans and advances stood at N252 billion, compared to N216 billion in 2017 representing 16.84 per cent year-on-year growth.

The bank is also pleased to be recommending to its shareholders a dividend payment for the first time in 14 years. The bank recommends a dividend of three kobo per share in line with the board approved dividend policy.

Speaking on the result, the bank’s Managing Director/Chief Executive Officer, Ademola Adebise said that despite the challenging macro-environment, Wema Bank delivered modest improvement at the end of the 2018 financial year.

“The group recorded a gross earning of N71.53 billion which was a 9.6 per cent increase over the 2017 figure and Profit before tax (PBT) of N4.8 billion which represents a 59 per cent growth over the N3.01 billion reported in 2017 and profit after tax (PAT) of N3.33 billion  as against N2.26 billion in 2017. This growth resulted from an 8.59 per cent increase in Interest income and a 13.95 per cent increase in non-interest income,” he said

He said the bank continues to improve on its Deposit mobilization while at the same time working down its cost of funds. ALAT, Nigeria’s first fully digital Bank, launched in May 2017 has improved the banks retail liabilities and customer base. The bank records over 1,000 new customers daily on the digital platform and continues to grow its partnership profiles.

The Digital Bank continued to receive several accolades in 2018, including the World Finance Awards for Most innovative Bank Africa and the Asian Banker Awards for Best Digital Bank Africa.  “Our vision is to get ALAT to become the premier digital platform in Nigeria. This will be driven by our expertise in the Digital space and our retail partnerships,” Adebise said.

The bank also recorded other notable achievements during the year as it successfully raised Tier-2 capital of N17 billion and retained its Investment grade ratings from Fitch, GCR and Agusto.