This Corporate News Compilation for the week ended January 20th, 2018 is brought to you by Bluechip Technology Ltd Nigeria.
- We start of this week’s big stories with some sports news. Not what you might consider news, but we thought it was interesting to learn that Dana Air signed a “multimillion naira” sponsorship deal last week with Heartland Football Club of Owerri. The team just newly got promoted to the Nigerian Premier League. This is actually an important deal when you consider that kit sponsorship deals are very rare in Nigerian football not to talk of other sports. Just 3yrs ago Guiness signed the endorsement deals with Eyimba and 3SC with Dubic Beer. The quintet of Lobi Stars, Sunshine Stars, Rangers, Heartland and Dolphins had Harp as their sponsors. BUA Group sponsored Kano Pillars, in one of the more successful deals while ULO Consultants sponsors Sunshine Stars. Heartland’s latest deal is perhaps connected with the State Air career deal between the Imo State Government and Dana Air, which we reported sometime last year. Last January, Dana Air announced a partnership with the Imo State Government to form Imo Air.
- Sticking with sports, Coca-Cola Nigeria and the Nigerian Football Federation (NFF) announced a sponsorship deal for all the National Teams of Nigeria. The deal is reportedly worth around $4 million and is for a period of 5 years. Last September, the NFF signed a sponsorship deal with TGI Group, Tropical General Investments (TGI) Group, the parent company of WACOT Limited, Chi Limited and Hollandia Yoghurt as their Official Food Partner. The deal made WACOT Rice the official rice of the Super Eagles. They also signed a deal with PayPorte as the official online store partner of the NFF.
- Reports emerged last week that Airtel had pulled out of its bid to acquire 9mobile complaining that “many things are not too plain with the entire process” The report also suggests Globacom and Helios Investment Partners LLP submitted bids but did not make any financial offer. This leaves Teleology Holdings Limited and Smile Telecoms Holdings Ltd who submitted bids of about $500 million and $300 million respectively. Whoever wins this bid will still be on the hook to pay for the loans owed to the Nigerian Banking Consortium of lenders.
- Samsung revealed last week that it was not going to setup a manufacturing plant in Nigeria because its market share in the country is not big enough. This is despite being the company with the largest electronics products in Nigeria. The biggest smartphone maker in the world has a manufacturing plant in Vietnam, China, South Africa and Korea but none in Nigeria. It claims that of the 400 different components found in a mobile phone, none is available in Nigeria. Perhaps Samsung did not want to mention issues such as power, ease of doing business and government policy as major concerns.
- Nigerian drug maker, Swiss Pharma Nigeria Limited (Swipha) announced last weekend that it was shutting down its operations “to safeguard its property and prevent any form of hostility following the industrial action embarked on by its workers.” The Swiss company was acquired by Biogaran, a subsidiary of Servier, a French Pharmaceutical Group saving the company from an imminent collapse. However, they soon ran into labour troubles after a Lebanese and former executive of Jagal Ltd, Gaby El Khoury was appointed MD. According to Gaby, “Management decided to restructure the organisation to ensure efficiency by removing superfluous staff and eventually align the firm with global best practices. “However, some of these policies appear to be unacceptable to some members of staff who preferred to slow down, then to hinder operation and embarked on strike since mid-December 2017 while all efforts to make them have a rethink about a promising future proved abortive.” Union members on the other hand claimed that he imposed harsh working conditions that contravened labour laws. For example, they claimed that “he imposed a new condition of service that states that any staff who leaves the company either through termination or resignation must not work in another pharmaceutical company for a period of one year.” They also claimed that he slashed salaries and leave days and also brought in about over 50 Jagal staff without following due process to head the HR department, Finance, Purchasing, Clearing and Forwarding, and Project Departments. Takeovers are always brutal, and it is high time Nigerian employees start to realise this. It’s unfortunate but that’s just how capitalism functions.
- Nigeria’s football legend, Kany Nwankwo was in the news last week crying for help. He claimed that his hotel, Hardley Suites, which is located in Victoria Island was being earmarked for sale “under a secret arrangement”. The property was put under the temporary possession of the Assets Management Corporation of Nigeria (AMCON) by an ex-parte order on account of a purported indebtedness. According to reports, sometime between 2008 and 2011, Skye Bank lent the hotel about N520 million with three blocks of the hotel as collateral as well as the personal guarantee of Kanu Nwankwo and his partner Ayoola Gam-Ikon. However, the loan was unpaid ballooning to a total principal including unpaid interest of about N924m as at 2015. AMCON took over the loan from Skye Bank and is now poised to sell the hotel to recover its money. The hotel began operations in 2005 with about 55 rooms and was said to be valued at N3 billion as it made about N40 million monthly. However, bad management and a downturn in the hospitality industry ravaged the viability of the hotel leading to loss of customers and revenue. A few years ago, kanu accused his partner Ayoola of Stealing, misappropriation and outright fraud against The Hardley Apartments Ltd (which they both jointly owned). Ayoola however got judgement dismissing the claims. One wonders what it is about hotels that Nigerians can’t seem to manage on their own. I haven’t seen a Nigerian owned hotel, managed by a Nigerian that has lasted over 5 years retaining the standard or higher. Pls share if you know one and don’t mention Eko Hotel.
- A South African Company is yet again in the eye of the storm in corporate Nigeria. This time it is Shoprite, the Leading retail store chain in Nigeria. Now, this is an interesting short story. Nigerian firm, AIC Limited was awarded $10 million as damages against Shoprite Checkers (PTY), Limited and its Nigerian subsidiary, Retail Supermarkets Nigeria Limited for a breach of contract. The award was contained in a judgment delivered by Justice Lateef Lawal-Akapo of a Lagos High Court, Igbosere. AIC is owned by Chief Harry Akande. According to the excerpts of the case, AIC claimed that sometime in 1997, it conceived of the business idea of developing and establishing mega stores/ retail supermarkets in Nigeria similar to Shoprite Chain Store Supermarket in South Africa and Sainsbury Supermarket of the United Kingdom. According to AIC, this culminated into several meetings in Nigeria and in South Africa spanning 1997 and 1999 between both parties. AIC claimed they eventually signed a JV with Shoprite to exclusively operate and manage the first defendant’s Shoprite brand in Nigeria and elsewhere in the coast of West Africa except Ghana. Well, as we all know, Shoprite set up shop in Nigeria in 2005 under a different arrangement and with different partners and is now one of the largest supermarket chains. This is one case I will be following closely as it could impact heavily on future potential JVs and Technical Partnerships with foreign owned brands. South African firms have learnt a lot of lessons investing in Nigeria and I hope we are also learning too.
- Spar, a rival supermarket chain to Shoprite, announced last week that its customers can now have free Internet services in its stores nationwide. The project will begin in its Ilupeju branch and will be implemented across stores nationwide in the coming weeks. Apparently, the free Wifi service is being rolled out using KonneXion Wifi engine in partnership with Internet Solutions Nigeria Limited (ISN) and Melvic Gold Communications (MGC) who have ensured that service will be available to any shoppers using a smartphone, tablet or a laptop that has built-in Wi-Fi. In case you want to use this, it comes free for just 30 minutes and will require that you drop your email address and other personal information. Don’t be surprised if you are sent “unsolicited messages” from the supermarket
- Africa focused investment bank, Atlas Mara has upped its stake in tier two lender Union Bank to 48%. Prior to the rights issue, Atlas had a 42% stake. Union Bank recently concluded a N50 billion rights issue, which is 20% over subscribed. At 48% there is rising expectations that Atlas Mara may soon launch a takeover bid for the bank. Proceeds will be used to bolster its capital base and provide loans for emerging areas in the Nigerian economy. The bank’s share price is up 3.2% Year to date and is one of the weaker performers in the banking sector this year. A takeover bid may lead to a rally of its share price.
- First Bank announced last week that it has upgraded its internet banking website Firstonline. The website now has a new feel and allows its users to have tools such as self-verification for intercepted transactions, statement download in different file formats, multiple transactions with a single token entry, bills payment, creation and cancellation of standing orders or recurring transfers. First Bank just recently hit 10 million card users, only the second bank in Africa to hit that milestone.
- Ecobank Nigeria announced an increase in the maximum daily limit of its naira debit cards abroad “depending on the type of card held by its customers”. According to what we heard, customers with naira debit cards can now pay “up to $4,000 and $5,000 per day on online channels and point of sale (PoS) terminals respectively across the world.” I had to read that twice too. The report also added that foreign currency debit card holders can spend up to $5,000 daily from their domiciliary accounts. For Ecobank Premier Customers with Platinum Credit Cards, daily transaction limits of $15,000.00 apply. The only caveat we saw was that the limits were also subject to the Central Bank’s annual spending limits on naira and foreign currency denominated cards.
- In good news to the new fathers out there, especially those who work in Access Bank, they can now have one week full of paternity leave. The bank announced this last week, indicating that fathers one-week leave will be a paid leave allowing fathers to spend time with their wives and new born child. However, the aspect of the news that surprised us was the part that mentioned surrogacy. According to the bank’s new policy, surrogacy or adoptive leave will attract full pay for three calendar months for female employees of the bank. “Furthermore, a pregnant employee who has been in the bank’s employment for 12 consecutive months also has the option of six calendar months’ maternity leave with two-thirds of full month pay, while the surrogacy or adoptive leave period is three calendar months with full pay or six calendar months leave with two-thirds of full month pay.” I understand unlike in some countries, Surrogacy is not illegal in Nigeria neither is it legacy as there are no laws or regulations around how it works.
- FCMB confirmed last week, that it was funded the new Radisson Blu hotel located in GRA Ikeja. The hotel, which was previous called Renaissance hotel is owned by the Avalon Intercontinental Hotel Group, who also own Protea Hotel Ikeja, Protea Hotel Victoria Island and Avalon Hotel, Offa, Kwara state. It is interesting to note that Executive Director, Avalon Intercontinental Nigeria Limited, Kazeem Tajudeen; Director Legal, Avalon Intercontinental Nigeria Limited, Olaitan Tajudeen; and Director of Projects Avalon Intercontinental Nigeria Limited, Ahmed Tajudeen are all members of the same family and are actively involved in the operations of the hotel.
- The Edo State Government announced last week that it has commenced discussion with the Nigerian Bottling Company about a power purchase agreement from the company’s Benin plant. According to its Governor, Godwin Obaseki, the deal will see NBC power government buildings and streets across Benin metropolis. NBC reportedly has about 6MW of installed power generating capacity and has an excess of about 2MW that it can sell to Edo State Government. Lagos State Government has a similar arrangement and has been off grid for years now, relying on the State’s IPP to power its offices and public utilities. ICYDK, major roads like the Third Mainland Bridge has steady power from street lights on the back of the states IPP.
- Sticking with Edo State, they also reached a deal with Sahara Energy to power public utilities in the state with flared gas. They plan to use the electricity generated from this deal to power street lights, schools and hospitals. The deal with require Sahara Energy to convert some of the gas being flared daily in the state into electricity. Sahara Group are also the owners of Nigeria’s largest power plant, Egnin Power Plant.
- Russian Oil firm, Lukoil has indicated interest in acquiring Petrobras stake in Nigeria’s oil fields in Akpo and Agbami. Petrobras owns 16% stake in the Akpo field and a 13% stake in the Agbami field. Akpo and Agbami are already producing fields. Petrobras announced last year that it was looking to sell its holdings in Petrobras Africa which has stakes in the two major Joint Ventures (JV) Akpo and Agbami. Two other shareholders of the African unit, Helios Investments and Grupo BTG Pactual E and P (a subsidiary of investment bank Grupo BTG Pactual SA) are also selling their stake. Petrobras is selling the stake as part of a wider asset divestment programme to reduce its debts.
- Last week, reports emerged that Phase3 Telecom company and Alheri Engineering limited were indebted to the federal government to the tune of N27.18 billion over a concession agreement with Transmission Company of Nigeria (TCN). Alhaji Aliko Dagote has interest in Alheru Engineering Limited. Phase 3 and Alheri have expectedly denied the claims contained in a letter purportedly sent to the Presidency by the office of the Minister of Power. Another report by Premium Times, also claimed that there was evidence of conflict of interest in the deal between Alheri and Phase 3 telecom. According to the online paper, “the concession agreements were entered into under circumstances of conflict of interest because Phase 3 is owned and managed by one Stanley Jegede, son-in-law to Mr. Adebayo, one time Nigerian minister of communications. Mr. Adebayo was in office as communications minister when the company obtained the long distance license.” It also reported that “Joseph Makoju who signed the agreement on behalf of NEPA (TCN) as its then Managing Director is now an executive officer in Dangote Group, owners of Alheri Engineering Company. He has equally signed letters on behalf of Alheri on the concession agreement. ” “Again, the Infrastructure Concession Regulatory Commission, ICRC, mediated between the TCN and the two concessionaires when issues of non-payment of fees arose. “ The former Director General of the commission, one Aminu Diko, was for several years an employee of Dangote group before he was appointed DG of the ICRC.” Do you see a conflict of interest in here or is this all just coincidence?
- The GMD of NNPC, Dr. Maikanti Baru revealed last week that it was in talks to engage the services of the guys who built the Kaduna, Warri and PH Refinery to help turnaround the refineries. He also inaugurated eight committees (yes, 8) charged with the express directive to return the refineries to their nameplate capacities by 2019. Here is Baru explaining the plan. “For a start, the corporation has gone back to the original refineries’ builders, which are the JGC Corporation of Japan for Port Harcourt Refinery, Italy-based Snamprogetti (owned by Saipem), for Warri Refinery and Japan-based Chyoda, for Kaduna Refinery.” Baru. Just in case, JGC and Chyoda posted an annual revenue of $7b and $6b in 2016. Please when will the government sell-off NNPC. That corporation is a disgrace.
- European oil trading company Vitol, has reportedly reached a $530 million deal with Nigeria’s Shoreline to finance an oilfield in exchange for access to some of the 50,000 barrels per day (bpd) of oil it produces. Shoreline is owned by Nigeria’s Kola kareem. Reports indicate that the agreement with Shoreline will provide the company with cash to refinance existing debt and further develop OML 30 in Nigeria’s oil-rich Delta region. The field currently produces 50,000 bpd and has an estimated 1 billion barrels of oil reserves. Shoreline has a 45 percent interest in the field. Kola Kareem had in 2016 revealed that his company will now be raising funds via bonds, until oil price was above $60 and the unrest in the Nigeria Delta recedes.
- Dangote Industries Ltd announced that it had signed a deal with Mammoet, a Netherlands-based engineered heavy lifting and transport specialist. The Dutch company will be transporting, lifting, and installing all over-dimensional components for Dangote’s 650,000 bpd multi-billion-dollar refinery being built by the Dangote Group of Companies. It will be interesting to see the list of consultants, professionals, contractors both foreign and local working on this huge project. Anyone thinks Dangote Group’s website needs a makeover? That website is not befitting. You developers should send them a proposal.
CFOs of FUGAZ and their 3-year performance record
CFO is to ensure that the company is highly profitable so that no matter how high it’s share price might be, if listed on the floor of the Nigerian Stock Exchange, it would still be termed undervalued.
Among many executive positions in an organisation, the Chief Financial Officer (CFO) is sometimes considered to be one of the most strategic, and rightly so. When the firm in question is an operator in the financial services sector, then the office becomes even more critical to be thrown to just anyone.
Besides being responsible for fiscal operating results, the CFO is the senior executive directly responsible for managing the financial strategy, decision and actions of a company. He tracks cash flow, analyses the company’s financial strengths and weaknesses, and fill in for the lapses, reducing operations costs and increasing income.
In other words, we can say that the job of the CFO is to ensure that the company is highly profitable so that no matter how high it’s share price might be, if listed on the floor of the Nigerian Stock Exchange, it would still be termed undervalued.
This article looks at the CFOs in Nigeria’s tier one banks, their profiles, their last 3 years records and projections for 2020.
Ugo Nwaghodoh, Group CFO, United Bank for Africa Plc (UBA)
Ugo is a seasoned financial analyst and accountant with experience spanning assurance, advisory, financial control, financial modelling & programming, strategy and business transformation, investor relations, corporate restructuring, risk management, mergers & acquisition, business integration and project management.
He has been the Group CFO at United Bank for Africa Plc since 2011, managing the performance, financial control, portfolio investment and investor relations among others. Before then he was the Divisional Head, Financial Control and Investor Relations between 2008 and 2011.
He also had a brief stint as Group Chief Compliance Officer, and as Head of Special Project (Corporate Mergers). He was Head, Performance Management, Strategy and Business Transformation for about 3 years, where he drove the cost optimization initiatives of the bank, and engaged in policy formulation.
Before UBA, he had worked as Manager, Assurance and Business Advisory Services with PriceWaterhouseCoopers Nigeria for 8 years, and 2 years in Kenya on secondment.
He has a degree in Accounting and Finance, and MSc in Finance & Management from the Cranfield School of Management, Cranfield University.
He is a fellow, Institute of Chartered Accountants of Nigeria (FCA).
His last 3 years performance
UBA, under Nwaghodoh’s watch, had a fairly unfavourable 2018 as cost to income ratio increased from 57.8% in 2017 to 64% in 2018, and profit after tax almost remained the same increasing only slightly from N78.59 billion in 2017 to N78.60 billion in 2018.
The bank, however, staged a comeback in 2019 with cost to income ratio reduced to 62.7% while profit after tax increased by over N10 billion to N89.08 billion.
Share price however declined from N10.3 in 2017 to N7.7 in 2018 and N7.15 in 2019, probably not Nwaghodoh’s fault though, since this happened across most financial services institutions. In addition, the bank also paid N30 million as fine to the CBN in 2018, a situation which led shareholders to cry out to Apex bank for what was termed ‘unfair penalties’.
Nwaghodoh, however, has a beautifully designed investor relations page to his credit, with answers to Investors FAQs, analysts reports and credit ratings for the bank, shareholders information and news among others.
Oluseyi Kumapayi, CFO Access Bank Plc
Kumapayi joined Access Bank in 2002. Before then, he was with the First City Monument Bank (FCMB) where he served as Financial officer.
Kumapayi got his MBA from the Kellogg school of management, Northwestern University, and has been severally endorsed in Corporate finance, risk management and business strategy, financial analysis, mergers and acquisitions, financial modelling and investment banking.
He also attended the INSEAD course on Risk Management, London Business School (LBS) High Performance People Skills program, Euromoney, Assets and Liability Management, Strategy Master Class and Mergers and Acquisition. He is a Certified Chartered Accountant.
Now let’s look at the bank’s three years performance under Kumapayi.
For the cost to income ratio, Access bank has remained profitable over the last three years, but now the question would be how profitable?
Cost to income ratio reduced from 72.40% in 2017 to 65.30% in 2018 showing that the bank’s strategies succeeded in reducing the ratio of cost to income and making more profits. However, 2019 recorded a negative progression to 68.7%.
This is in spite of the fact that profit after tax grew significantly to N97.5 billion in 2019, from N94.98 billion in 2018 and N53.6billion in 2017.
Overall, we can say the indices point to greater progress made in 2018, compared to 2019.
Note also that the merger between Access Bank and Diamond bank started in 2018, running through 2019 before it was eventually sealed with the launching of the new Access logo, and the slogan ‘access more’. The role of a CFO in a merger of this magnitude is ourightly priceless, given that not all merger talks result in a successful merger of assets, shareholders, and even management team.
There is also the acquistion of controlling equity interest in Transnational Bank Kenya Plc, which Access Bank undertook in October 2019.
Share price at last day of the year progressed from N10.45 to N6.8 to N10, showing that share price dropped most in 2018, which interestingly happened to be the most profitable year so far. In the same 2018, Access bank paid N20 million in fines to the Central Bank of Nigeria.
Kumapayi has kept the investor relations page of the bank’s website duly updated with annual financial reports, investor news, credit ratings, upcoming events, shareholders information and news.
Oyewale Ariyibi, CFO, First bank of Nigeria Plc
Before becoming Chief Financial Officer at FBN Holdings Plc, Oyewale Ariyibi had worked with Transnational Corporation of Nigeria Plc (Transcorp) as Chief Finance Officer, and at Standard Chartered Bank, Nigeria as Country Financial Controller.
He has a cumulative 23 years experience in banking and financial services, business assurance, tax management, business process review and consulting across several institutions.
He has been certified in areas such as capital raising, tax planning and cost management, operational risk management, strategic and corporate planning, compliance and business assurance amongst others, and is a Fellow of the Institute of Chartered Accountants of Nigeria (FCA), Associate of the Chartered Institute of Taxation (ACIT) and Certified Pension Institute of Nigeria (ACIP).
So what has he done with First Bank in the last three years?
Profit after tax has been on an increase, from N47.78 billion in 2017 to N59.74 billion in 2018 and N62.09 billion in 2019. This is laudable given that 2016/17 was not the best times for the Nigerian economy.
Share price has however dropped from N8.8 in 2017 to N7.95 in 2018 and N6.15 in 2019.
This may be no fault of his given that he has managed to keep the cost to income ratio stable at 80.17% in 2017, 80.15% in 2018, but it increased slightly in 2019 to 81.31%.
Note that the FBN Holdings also paid a fine of N32.65 million to the CBN in 2018.
This trend can be considered worrisome not only because FBN holdings has the highest cost to income ratio among the tier one banks, but because it is the only of the five banks where cost to income ratio did not reduce over the last 3 years.
This probably explains why shareholders earned 0.25 dividends per share in 2017, 0.26 in 2018 and 0.38 in 2019, the least dividends declared by any of the top banks.
The investors’ relations page of the bank’s site is a bit unclear and it is not easy to access needed information, but once a site visitor gets past the initial confusion, one can see shareholders information, corporate governance reports, financial highlights, unclaimed dividends, press releases and news.
Ariyibi might need to ask some pointers from his colleagues in other tier one banks.
Recently, Ariyibi led engagements with regulators towards FBN’s intention to divest its 65% holdings in FBN insurance Limited.
Mukhtar Adam, CFO Zenith Bank Plc.
Mukhtar Adam was appointed Chief Financial Officer (CFO) of Zenith Bank in 2018, and is currently the Group Head, Financial Control and Strategic Planning Group of the bank.
Before this, he was the bank’s Deputy CFO, and sometime before 2014, he headed the Financial Reporting, Tax Management and Strategic Planning Groups, overseeing the entire Zenith Group’s financial reporting.
Adams worked in Financial Services Group of the Nigerian and Ghanaian practices of PricewaterhouseCoopers (now PwC), as a Senior Consultant, before joining Zenith Bank in 2007.
Adam holds a PhD in Finance from the Leeds Beckett University (UK); M.Sc. (Finance – Financial Sector Management) from University of London’s School of Oriental and African Studies, (UK); MBA (Finance) from the University of Leicester (UK) and B.Ed. Social Sciences (Economics and Management) from the University of Cape Coast (Ghana).
Many feathers for one man’s cap, we must agree!
He also holds a Diploma in International Financial Reporting Standards (IFRS) from the Institute of Chartered Accountants in England and Wales (ICAEW).
He is a member of the Institute of Chartered Accountants of Nigeria (ICAN), Chartered Institute of Taxation of Nigeria (CITN), and Institute of Chartered Accountants of Ghana (ICAG).
So, what has Mukhtar Adam achieved for Zenith bank since he took over from Stanley Amuchie in 2018?
It’s been three progressive years for this tier one bank as cost to income ratio has continued to decline from 52.70 in 2017, to 49.30 in 2018 and further down to 48.8% in 2019. Commendably, this progression is not just a result of cutting down operation costs, but increasing income.
Profit after tax for 2017 stood at N173.79 billion and increased to N193.42 billion in 2018 and spiked further to N208.84 billion in 2019.
Whatever magic wand Adams holds over the bank, it must be working well because among the five tier one banks, Zenith bank has consistently had the highest profit after tax for the past three years.
Share price of the bank also moved from N25.6 in 2017 to N23.5 in 2018 and further down to N18.6 as at last day of 2019.
However, this cannot be counted against him as share price is subject to a whole range of extraneous factors. In the 2018, the bank paid N10 million fine to the CBN.
With his input, the bank also maintains a detailed investors relations page with press releases, credit ratings, corporate governance reports and financial updates. In addition to the BOT which pops up to help guide a visitor through the page and answer inquiries, Adams also appears to be one CFO who spells out his key financial strategies on all aspects of the banks operations, on the investors relations page.
Adebanji Adeniyi, CFO, GT Bank
Adeniyi became CFO of GT bank in 2013.
Adeniyi has been certified competent in risk management, portfolio management, risks and investments, Operational dynamics and Associated Risks among others, and has over two decades of professional experience.
He gained his early experience from notable companies including PricewaterhouseCoopers, and Arthur Andersen (now KPMG).
His banking experience comes from his stint with Lead Bank Plc, and his years at GT Bank. He is a Fellow of Institute of Chartered Accountants (FCA), and also holds a MBA.
So, what has he been up to in the last 3 years.
For Guaranty Trust Bank Plc, cost to income ratio reduced from 38.2% in 2017, to 37.2% in 2018, and to 36.1% in 2019
In addition to its gradual improvement, GT bank has maintained the best cost to income ratio among the top banks.
The bank has also maintained a high profit after tax after Zenith bank. GT Bank recorded N170.47 billion profits after tax in 2017 and this increased to N184.64 billion in 2018 and N196.86 billion in 2019.
Like other banks, however, share price has dropped over the years – from N40.75 in 2017 to N34.45 in 2018 and N29.7 in 2019. In addition to this, GT Bank also received a heavy penalty of N24 million in 2018 from the CBN.
In terms of profitability, both for the bank and for investors, Adeniyi is getting it right.
The bank also has a well laid out investors relations page detailing corporate and financial information, outlooks and insights, upcoming events and investors news, shareholders information and annual reports.
Endeavour honours founders of Kobo360
Fixing Africa’s supply chain is clearly important for commerce on the continent.
Endeavour, a leading global movement for high-impact entrepreneurship, has honoured the founders of Kobo360, Obi Ozor and Ife Oyedele as Endeavor Entrepreneurs.
Kobo360 is a digital logistics platform that uses big data and agile technology to reduce friction and improve efficiency in the African logistics ecosystem.
Managing Director, Endeavor in Nigeria, Gihan-Mbelu, explained that the company is excited to welcome Kobo360 into Endeavor’s network which includes some of the world’s most exciting scale-up entrepreneurs and most experienced mentors and investors.
He said, “Fixing Africa’s supply chain is clearly important for commerce on the continent, and Kobo360’s rapid growth over the past 3 years is evidence that the company’s valuable services are in critical demand. Obi and Ife are inspiring founders and their relentless focus on scaling Kobo360 serves as an inspiration to high-impact entrepreneurs everywhere.”
Meanwhile, since launching in 2017, Kobo360 has surpassed several milestones, including a $30 million Series A in August 2019.
“It’s an honour to be joining this global network of high-impact entrepreneurs and to have Endeavor recognise our efforts to transform Africa’s logistics sector using technology. As entrepreneurs, we wanted to turn African problems into African opportunities.
“Focusing on logistics, Ife and I started Kobo360 to not only fix the inefficiencies that exist, but to build opportunities for the businesses we serve and most importantly, the hundreds of thousands of truck drivers across Africa. This is a fundamental milestone in Kobo360’s journey; our Global Logistics Operating System [GLOS] will revolutionize supply chain across emerging markets, Ozor, Co-founder & CEO of Kobo360.
Why these companies remain on NSE’s delisting radar
The Regulation Committee of the National Council of The Exchange (RegCom) has given approval to The Exchange to proceed with the delisting process.
Data obtained from the Nigerian Stock Exchange (NSE) has revealed that about seven companies have been on the delisting radar of the Exchange since December 2019.
They have been either in the process of delisting their issued shares from the bourse or on the delisting watchlist of the Exchange. This was stated in the Exchange’s X-Compliance report.
The report, which is released by the Exchange every Friday and seen by Nairametrics, stated that the Regulation Committee of the National Council of The Exchange (RegCom) has approved for the Exchange to proceed with the delisting process of Evans Medical Plc, Tourist Company of Nigeria, Anino International Plc, Nigerian German Chemicals Plc, and Roads Nigeria Plc since last December.
On the other hand, Omatek Ventures and Deap Capital Management & Trust have been placed on the NSE’s delisting watch-list over their failure to comply with some post-listing requirements, including failure to file their quarterly and annual reports within a stipulated time.
Why companies delist
There are two main reasons why companies delist from the NSE or are forced to delist from the market. The first one entails punishment for companies that violate NSE’s listing rules.
The NSE periodically fines defaulting companies, whilst demanding that such companies address their corporate governance lapses. As Nairametrics reported recently, the latest X-Compliance report showed that the NSE made as much as N154 million by imposing fines on defaulting companies.
But sometimes, fines are not enough. The NSE is often forced to voluntarily delist companies whose infractions have become persistent.
On the other hand, a good number of companies have also voluntarily delisted from the NSE for various reasons, including the desire to become privately owned entities.
What you should know
In the case of Omatek Ventures, the company’s fate has been dwindling since the departure of its founder, Dr Florence Seriki. Nairametrics reported when it was accused of defaulting on its credit facility agreement with the Bank of Industry (BOI).
According to the development bank, the company has refused to service the N5.81 billion which it obtained in 2012. The bank disclosed that several measures had been employed to ensure that Omatek kept to the loan agreement, all to no avail. One of such efforts was the appointment of Ade Oyebanji as a receiver, who took inventory of all items located at Omatek’s premises at Plot 11, Kudirat Abiola Way, Oregun, Ikeja, Lagos, in January 2017.
Summary of the loan detail
In December 2012, the Bank of Industry loaned Omatek Ventures N5,808,429,033.95 in a term loan and working capital facilities agreement. The loan was disbursed to finance the procurement of assembly components for the production of laptops.
Also, as part of the requirements for obtaining the loan, the development finance bank said that it requested an Irrevocable Standing Payment Order arrangement with the defunct Skye Bank Plc in favour of BoI, all assets debenture, and an Irrevocable Personal Guarantee of the late Seriki.
Evans Medical Plc is a Nigerian pharmaceutical company that was established in 1954 and listed on the Nigerian Stock Exchange in 1979. Over the years, the company has been plagued by many challenges, ranging from increasing competition to corporate governance lapses. The latest NSE X-Compliance report indicated that the company has not submitted any quarterly financial statement from 2016 to 2019. At this rate, the NSE may have no choice but to forcefully delist the company.
Nigeria-German Chemicals Plc has also not been obeying the listing rules of the NSE. The latest NSE X-Compliance report also noted that the company had not filed any financial statement since Q3 2014 till date. It will not come as a surprise if the company is delisted from the Nigerian bourse any moment from now due to regulatory reasons.
Note that the company is a chemical/healthcare company which was incorporated in 1964. It was initially known as Nigerian Hoechst Plc before it rebranded and changed to its name in 1995. It was listed on the NSE in 1979.
Amino International Plc is also in the process of delisting, primarily because it abused NSE rules by not disclosing its quarterly financial statements from 2015 till date. The company, which engages in manufacturing different kinds of personal and industrial products, was incorporated in 1981 and listed on the NSE in 1990.
Roads Nigeria Plc is a civil engineering firm that is in the business of construction of roads, bridges, dams, airfields, and real estate. The company was incorporated in 1974 and is headquartered in the Northern Nigerian city of Sokoto.
Unfortunately, the company has not released its quarterly financial statements since 2014. This is a major violation of the NSE listing rules, which could result in the company being delisted soon.
The delisting of the Tourist Company of Nigeria Plc from the Nigerian Stock Exchange may be a voluntary move by the company’s owners. The company has recently been plagued by ownership tussles, with some shareholders calling for it to be liquidated. The hospitality company was incorporated in 1964.
DEAP Capital Management Trust Plc was incorporated in 2002 and listed on the NSE in 2007. Though Nairametrics had reported earlier that it was unclear whether its delisting was voluntary or regulatory with the recent X-Compliance report, it appears that the company is struggling financially as it has failed to turn in its quarterly reports to the Exchange.