In the world of business, some things are inevitable; one of such things is bad press. Little wonder companies typically expend billions every year in desperate attempts to either cover up stories or address negative news reports. So yes, companies will always be faced with negative press every now and then. However, it becomes worrisome when virtually all the news about a company is unflattering. To a large extent, this has been the case with Aso Savings and Loans Plc. Should this worry the company’s current and potential shareholders?
Welcome to Nairametrics’ company focus. This week, we are focusing on the above-mentioned corporate. The latest negative report about the company is basically what informed this article. Therefore, besides looking back at Aso Savings and Loans Plc’s history of bad press, we shall also be examining everything else from the company’s business model to its target market, competitors, ownership structure, as well as its financials.
Before we proceed, remember that Nairametrics’ company focus is a weekly profile of little-known companies that are listed on the Nigerian Stock Exchange. This is done for the benefit of investors who may be considering where to put their money.
About Aso Savings and Loans Plc
Established in November 1995, Aso Savings and Loans Plc is a Nigerian company which provides financial services. It is headquartered in Abuja FCT, and has about 600 full-time employees. According to information available on the company’s official website, it was previously majority-owned by the Federal Government of Nigeria until 2007 when the Government divested much of its stake to private sector players, retaining only 16% of the shareholding.
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Note that even though Aso Savings and Loans Plc became incorporated in 1995, it did not commence full operation until January 1997. Eight years afterwards, in 2005, it transitioned to a public limited company in preparation for becoming a quoted company on the Nigerian Stock Exchange. In April 2008 (about 13 years after incorporation), the company listed its shares on the Nigerian Stock Exchange. It currently has a market capitalisation of about N7.3 billion.
Listed below are some of the company’s top executives:
- Ali Mohammed Magashi: Chairman
- Adekunle Demoola Adedigba: MD/CEO
- Musa Ahmed Musa: Director
- Olutoyin Okeowo: Director
- Risikatu Ladi Ahmed: Executive Director
The company’s Business Model/Target Market
As a financial services provider, the bank has a very specific focus, in that it provides primary mortgage services. A primary mortgage institution is usually a bank, which specialises in the provision of funding for potential homeowners looking to purchase houses or other properties. Based on this definition, it can then be seen that Aso Savings and Loans Plc’s target audience include potential homeowners. The company also offers the following services:
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- Savings, Fixed Deposit, and Corporate Accounts
- Personal Loans
- National Housing Fund
These are the Company’s Competitors
According to the Central Bank of Nigeria (CBN), there are twenty primary mortgage institutions in Nigeria. Out of them all, only Aso Savings and Loans Plc and Infinity Trust Mortgage Bank Plc are listed on the NSE. The rest include the likes of Abbey Building Society Ltd, CENTAGE Savings & Loans Ltd, Imperial Homes Mortgage Bank Ltd, etc. This long list of Nigerian mortgage banks could only mean one thing – competition is rife and our company focus must constantly innovate if wants to remain relevant and profitable.
How profitable is Aso Savings and Loans Plc?
One of the easiest ways for analysts to ascertain a company’s financial situation is by simply studying its financial reports. Therefore, when such reports are difficult to find, it becomes very difficult to make this important analysis. This has been a problem when trying to examine Aso Savings and Loans Plc’s profitability or lack thereof. This is because the company has not released any audited financial report since its full-year 2013 result was released.
For the first quarter period ended March 31st 2017, the company released an unaudited interim result which showed that interest income declined by 23.9% to N992 million, compared to N1.3 billion in Q1 2016. The company also recorded a profit after tax of N10.4 million against a loss after tax of N12.4 million during the comparable period in 2016.
It should be noted that quoted companies on the NSE are required by the NSE listing rules to periodically disclose their financial reports for public perusal. The fact that Aso Savings and Loans Plc has not been consistent in doing this means that it has been abusing the rules of the Nigerian bourse. For this reason, the company is liable to be sanctioned. This corporate governance lapse has also constituted some of the reasons the company has often been trailed by bad press.
Struggle with bad press
As Nairametrics reported in early 2019, Aso Savings and Loans Plc was among 38 companies that the Nigerian Stock Exchange fined the sum of N429.5 million for a list of offenses committed. just last week, we also got to understand that some funds belonging to the National Health Insurance Scheme (NHIS) are currently trapped in Aso Savings and Loans Plc following what Nigeria’s Accountant General, Ahmed Idris, implied to be an uninformed investment decision on the part of the NHIS.
More Scandals for Aso Savings
Perhaps the above incidents are nothing when compared to the other scandalous situations the company has been immersed in. In October 2018, investigations by the Independent Corrupt Practices and other Related Offences Commission (ICPC) revealed that Aso Savings and Loans Plc refused to remit N9.8 billion to the Federal Government, following the sales of properties belonging to the Government.
As if all these weren’t enough, Nigerian lawmakers threatened in October last year to arrest the company’s Managing Director after it was discovered that some Government funds (outside of the Treasury Single Account) were allegedly hidden in an Aso Savings and Loans account.
Earlier in 2018, a now-former Executive Director of the company, Maimuna Aliyu, was prosecuted for an alleged N57 million fraud. Although she was never found guilty, the case further damaged the company’s already shattered public image.
In conclusion, one would have thought that 2018 was the last time we would hear bad news about Aso Savings and Loans Plc. However, the recent revelation by the Accountant General of the Federation has proven otherwise. It has, therefore, become imperative for the company to get its act together before it is too late.