Nigerian banks, on the average, spend more on advertising compared to companies in other sectors of the economy. Little wonder Nigeria’s Tier 1 banks or FUGAZ, spent a combined sum of ₦35.7 billion on advertising in the full financial year ended December 31st, 2017.
This amount is slightly above ₦31.1 billion, the combined sum the banks spent for the same purpose in 2016.
It should be noted that some companies outside the banking sector such as Unilever, Okomu Oil, and WAPCO spent ₦3.7 billion, ₦540 million, and ₦477 million respectively.
Break down of the advertising costs
Zenith Bank Plc is the highest spender, having recorded ₦8.8 billion as its total costs on adverts for the financial year ended 2017. This is a little less than ₦9.5 billion which the company spent on adverts in 2016. Meanwhile, the company recorded gross earnings of ₦740 billion in 2017 with an annual profit of ₦177 billion.
United Bank for Africa spent ₦7.4 billion against ₦3.6 billion which it spent in 2016. The company earned a total revenue of ₦461 billion, with a profit after tax of ₦78 billion.
Guaranty Trust Bank (GTB) spent a total of ₦7 billion on adverts against ₦7.4 billion which it spent in 2016. In total, GT Bank recorded an annual revenue of ₦419.2 billion, with a profit after tax of ₦170 billion.
First Bank of Nigeria Plc spent ₦6.4 billion on advertising against the ₦6.2 billion it spent for the same purpose in 2016.
In return, it realised ₦595 billion in revenues, and a profit after tax of ₦47.7 billion.
Access Bank Plc spent ₦6 billion in 2017 for adverts. This represents about ₦1.8 billion more than the ₦4.2 billion which the bank had spent in the preceding year. The company recorded a total revenue of ₦459 billion and a profit after tax of ₦61 billion.
Did the costs of adverts affect the banks’ performance?
Looking at the companies’ financial year reports, it can be seen that asides First Bank and UBA, the companies that spent more on advertising reaped more profits.
Zenith Bank spent the most out of all the other banks and recorded the highest profit of ₦177 billion. This is followed by GTBank which recorded ₦170 billion.
It should, therefore, be stated that in as much as other factors are responsible for each of these companies’ profits, their commitment to advertising also played a part.
Advertising and Public Relations are two of the most powerful tools utilised in the business world to communicate brands’ benefits and create awareness about new or existing products.
These, in turn, helps companies to either reach newer markets or consolidate on existing ones. In light of this, the importance of advertising and public relations can never be underestimated, as no company can really survive without them.
About Tier 1 banks
Simply defined, tier 1 banks are banks with the strongest financial capabilities. These banks are said to have enough capital to withstand heavy losses without ceasing operations.
In other words, they are the biggest banks by way of assets. In Nigeria, these banks include First Bank, United Bank for Africa, Guarantee Trust Bank, Access Bank, and Zenith Bank; or FUGAZ as we like to call them here at Nairametrics.
For the sake of this piece, the advertising costs of all the banks were compiled. All the figures are contained in these companies’ audited financial reports as submitted to the Nigerian Stock Exchange.
In conclusion, Nigeria’s Tier 1 banks should consider spending more than they currently do on advertising. This will enable them to reach more market opportunities and position them for more profits. This is important because, even though these banks are already big [with loyal customers], there are always more opportunities which advertising can help unlock.
The previous version of this article erroneously classified the amount spent on advertising in millions instead of in billions of Naira. This has been corrected.
Thanks to our loyal readers for spotting this.
Africa Prudential proposes dividend of N1 billion for shareholders
Africa Prudential Plc has proposed a sum of N1 billion as dividend for shareholders.
The Board of Directors of Africa Prudential Plc has proposed a sum of N1 billion as dividend to shareholders for the period ended 31st of December 2020.
This is according to a disclosure signed by the firm’s secretary, Joseph Jibunoh and sent to the Nigerian Stock Exchange, as seen by Nairametrics.
According to the notification, the proposed dividend will be paid electronically to qualified shareholders on the 26th of March, 2021, subject to appropriate withholding tax and approval from the company’s Annual General Meeting (AGM) scheduled a day earlier.
The breakdown of the proposed dividend shows that a sum of 50 kobo will be paid for each outstanding 2,000,000,000 ordinary shares of the company, held by its shareholders, totalling N1 billion. The proposed dividend is 28.6% lower than the 2019 figures of N1.4 billion.
The comparative decline in the company’s proposed dividend for the year might be attributed to a recent dip in profit and other key metrics recorded by the firm in its latest audited financial statement for 2020. For example, the firm posted a profit of N1.45 billion for the year, indicating a decline of 13.98% YoY. In addition, its earnings per share declined by 14.29% to print at 72 kobo.
What you should know
- Africa Prudential had recently announced the appointment of Mrs Zubaida Rasheed as Director.
- Africa Prudential Plc, formerly known as UBA Registrars Ltd, was incorporated as a private limited liability company on 23rd March 2006. It was listed in the NSE on 17th of January, 2013.
Dangote Sugar proposes N18.2 billion as final dividend for 2020
Dangote Sugar Refinery Plc has proposed a sum of N18.2 billion as the final dividend for shareholders.
The Board of Directors of Nigeria, Dangote Sugar Refinery Plc has proposed a sum of N18.2 billion as the final dividend for shareholders for the period ended 31st December 2020.
This announcement was contained in the audited financial statement of the leading integrated sugar company.
In line with the statement of the Board of DSR, the approval of this proposed dividend at the forthcoming Annual General Meeting will see Dangote Sugar pay out a final dividend of N1.50 for each of the outstanding 12,146,878,241 ordinary shares of the company, held by its shareholders.
The proposed dividend is 36.36% higher than the final dividend of N1.1 per share (N13.36 billion) the sugar company paid its shareholders in 2019.
What you should know
- Dangote Sugar Refinery declared in its audited statement for the period ended 31st December 2020 that its profit for the year climbed to N29.8 billion, from N22.4 billion in 2019.
- According to these figures, DSR’s earnings per share for 2020 are pegged at N2.45. Hence, with a dividend of N1.50 per share, Dangote Sugar is set to payout 61.2% of its profits for 2020.
- At the close of trading activities on the floor of the Nigerian Stock Exchange today, shares in Dangote Sugar Refinery declined by 0.83% to close lower at N17.85.
- At this price, the dividend yield of Dangote Sugar shares is 8.40%.
Nairametrics | Company Earnings
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- 2020 FY Results: Nigerian Breweries reports a 54.3% decline in profits in 2020
- Abbey Mortgage Bank projects N51.08 million profit in Q2 2020.