GTBank Plc, Zenith Bank, Access Bank, First Bank of Nigeria (FBN), United Bank of Africa (UBA) and 10 others spent over N8 billion on their Corporate Social Responsibilities in 2018.
While Zenith Bank Plc spent N3.06 billion, UBA spent N1.04 billion, GTBank spent N928.07 million, FBN spent N831 million, Access Bank (N376.75 million), FCMB (N315.80), Sterling Bank (N299.01 million), Stanbic IBTC (N233.40 million), Fidelity (N158.36 million), Wema Bank (N34.62 million), Union Bank (N30.20 million) and Unity Bank (N13.38 million).
- Arts – N49.70 million
- The bank initiated Painting the future for tomorrow’s leaders when it engaged children with a 4-week Art635 Summer programme where they explored and harnessed their creativity through painting, sketching and photography. It also promoted creative expressions through writing, harnessed art for economic development, conducted capacity building for female photographers, and preserved historical artefacts and monuments among others.
- Community Development – N326.61 million
- It launched a nationwide campaign, tagged “#SimpleChangeBigImpact” through which it collaborated with individuals and groups to invest in the social infrastructure of 20 communities nationwide.
- Education – N544,964,714
- Having transformed the Herbert Macaulay Library into a vibrant centre for personal learning and group interactions, GTBank also promoted innovation and academic excellence as it empowered four outstanding Junior Secondary School students; Mordi Menashi, Gbemi Famobiwo, Afolabi Williams and Osagumwenro Ugbo, who created a Virtual Farm Application that helps farmers manage their farm and connect with their target market.
- Environment – N905,118
- Others- N5,888,289
The financial institution spent N3.06 billion on various states governments’ security funds (N1.57 billion). Others are:
- sports organisations (N363 million);
- seed contribution to private health sector alliance (N305 million);
- financial inclusion project (N200 million),
- medical assistance to the underprivileged (N158 million);
- educational support to Nigerian schools (N131 million);
- Information Communication Technology (ICT) centres for educational firms (N85 million);
- economic summit (N81 million);
- Delta State principal Cup second edition (N43 million);
- CFA Society of Nigeria, Musical Society of Nigeria, Centre for Value in leadership youth empowerment and Louisville girls high school among others.
The Bank identifies with the aspirations of the communities and the environments in which it operates. It made contributions to charitable and non-charitable organisations amounting to N376.7 million, lower than the N567.02 million it spent in 2017.
- The financial institution spent N100 million on its contribution towards deepening financial inclusion in Nigeria;
- Lagos State Security Trust Fund (N100 million);
- National MSME clinics in Nigeria (N40 million);
- Donations to 2018 Brains Initiative (N14.7 million); and
- Sponsorship of Capacity Building Programme for the Association of Senior Staff of Banks Insurance & Financial Institutions (N10 million).
Others are sponsorship of the 2018 International Press Institute Conference (N10 million), supporting 2018 World Mosquito Day (N10,000); contribution towards commemoration of World Malaria Day 2018 (N6.03 million), sponsorship of the African Women Business Initiative (N5.50 million) and contribution to NSE for its Essay Competition (N5 million) among others.
FBN’s Corporate Responsibility and Sustainability (CR&S) involves meeting the needs of its current stakeholders now and in the future. It goes beyond financing economic activity in a responsible way to ensuring an inclusive, positive impact on our communities. It is about creating long-term stakeholder value by adopting the opportunities and managing the associated environmental, social and governance risks. It concentrated on areas like:
- Deepening Wealth Creation for Women across the Nation: Through FirstGem, its passion and drive to increase the number of women who take pride of place in business and wealth creation intensified. FirstGem is a bespoke solution to foster women empowerment across all socio-economic strata.
- Supporting SMEs in Growing the Nation’s GDP: The Bank organised several empowerment programs for SMEs tagged ‘SME Connect Series’. This initiative provides 360 degrees support to startups and scale-ups, offering practical and realistic solutions to numerous business challenges encountered.
- Youth Empowerment Series: This is a program designed to sensitise children and young adults on issues relating to financial literacy with focus on financial discipline, savings, investment and career guidance. In 2018, children between the ages of 10 to 24 years were hosted at the 2nd edition of the Youth Empowerment Series which attracted about 1,350 youths across the Lagos metropolis.
- Employee Giving and Volunteering: Its Employee Giving and Volunteering programme was set up to encourage employees to give back to the community and instil the integral corporate culture of giving.
- Renovation of classrooms and donation of Boreholes: The Company renovated two blocks of classrooms at a primary school and also donated boreholes to both the primary school and the neighbouring secondary school located in a village near Abraka, Delta State among others.
The bank engaged in various community development initiatives either directly through UBA Foundation, its special purpose vehicle for Corporate Social Responsibility, or in partnership with credible non-governmental organisations and public institutions. They are:
- Financial Inclusion and Public Enlightenment Project (N400 million);
- Akwa Ibom State Government Security Project (N177.25 million);
- Ambrose Ali University, Edo State (N93.72million);
- Taraba State Government Security Project (N84 million);
- Abia State Government Security Project (N65.86 million);
- Plateau State Specialist Hospital (N37 million);
- Benue State Financial Management System (N32.88 million);
- Taraba State University (N30 million);
- National Youth Service Corps (N27.76 million); and
- Chartered Institute of Bankers of Nigeria (N15.50 million).
Others are Delta State African Senior Athletics Competition (N10 million), Flood Victims of Jibia Local Government Area, Katsina State (N10 million), Augustine University, Lagos State (N10 million), Ibrahim Badamosi Babangida University, and Niger State (N10 million) among others.
Fidelity Bank Plc must cover the chink in its curtains to keep rising
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years.
The Nigerian banking sector has consistently been one of the most profitable sectors in the Nigeria Stock Exchange market. However, in 2020, Deposit Money Banks (DMBs) have faced a flurry of impediments, which may have affected their solidity.
With reduced income from fee and commission implemented at the start of the year by the Central Bank of Nigeria, the paucity of foreign currency for international transactions, the resulting economic contraction from dire effects of the coronavirus pandemic, and the consequent operational constraints of keeping employees safe, 2020 is obviously fraught with numerous disorders for banking institutions.
For most, it hasn’t exactly been a year for growth at all, more like a walk in the woods, where improvements to bottom-line is almost unexpected. This period, many banks seem content with simply surviving and fundamentally matching their previous feats.
Fidelity Bank Plc follows the narrative of top tier-2 banks, which have had better or easier years. The bank generated a 2020 9M PAT of N20.4billion, rising 7.08% from the corresponding figures last year, but drilling solely into its results in Q3’2020 and its exact comparative period in 2019, the bank suffered reduced interest revenue, reduced fees and commission, reduced profit before tax, and reduced after-tax profit.
Fidelity Bank Plc concluded Q3 with a profit position of N9.1billion, 13.7% decline compared to its position in 2019 y/y. PBT reduced by 12.9% from N10.8billion in 2019 to N9.4billion this year. Gross earning in Q3 was only N49billion as against N57billion in 2019 – plummeting 14%.
The Group Chief Executive Officer of the bank, Mr. Nnamdi Okonkwo, commenting on the result said: “Our 9 months results reflect our resilient business model, particularly in a very challenging operating environment. We worked closely with our customers to gradually recover from the economic impact of the pandemic and the attendant effect of the lockdown. The drop in gross earnings was due to the decline in interest and similar income, caused by lower yields and drop in fee income.”
True cause of the reduction in earnings
DMBs generate gross earnings under three primary subheads: Interests earned, Fees and commission, and Other operating income. Fidelity Bank Plc generated a combined total of N150.8billion for the period ended September 2020 from these three categories, compared to the N158.5billion in the corresponding period last year.
Deeper analysis reveals that this rising tier-2 bank has seen more deficit in revenue from fee and commission compared to the other aforementioned gross-earnings’ generating-sources within this period. Interest earned dropped by a difference of N4.3billion, while revenue from fee and commission saw a decline of N4.8billion from N14.5billion in 2019 to N19.3billion YoY.
Fee and commission as a component of gross earnings
Card maintenance fees, account maintenance fees, commission on remittances, collect fees, telex fees, electronic transfer fees, amongst others, represent the plethora of channels that makes up income from fee and commission.
The real insight this particular component of gross earnings provides is that a spike in revenue generated indicates increasing/increased customer account activity. The more a customer maximizes the usage of an account’s product and facilities, the more the revenue earned from this segment. Thus, earnings from fees and commissions are so overriding due to their apparent controllability.
For example, a bank could make the decision to purely pursue and aggressively drive the usage of its ATM debit card and promptly see the revenue from commission rise. Furthermore, an increased rate of card production and collection necessitates usage and consequently means more money is earned as card maintenance fees.
The fact that gross earnings reduced mostly from fees and commissions should be a telling concern for the Management of Fidelity Bank Plc. Post covid-19 would birth the dawn of a new era for business processes. The management must guarantee the usability of its electronic banking channels, promotion of its cards, and with urgency, implement improved service delivery mechanisms to ensure that it is the first port of call to customers for general payments and remittances.
These measures are of grave significance in the bid to bridge its widened fee and commission income gap.
Holistically, in the 9 months ended September, it is worthy of note that the bank made certain advancements. Customer Deposits, Net Loans and Total Assets all grew in double digits. Customer Deposits grew by 22.3% from N1.2billion to N1.5billion, Total Assets also rose by 21% from N2.1billion in 2019 to N2.5billion, and Net Loans rose by 12.9% to N1.3billion from N1.1billion.
Airtel is paying up its debts
Airtel’s annual report revealed that the company has a repayment of $890 million due in May, as well as, an installment of $505 million due in March 2023.
Airtel’s presence in 14 countries from East Africa to Central and West Africa would have been impossible without relevant financial investments. But, while the funds have been key to its growth in the past few years, many of its financial obligations are starting to mature quickly.
The Covid-19 pandemic has had negative economic effects on different sectors of the economy; however, the resilience of the telecom sector is evident in an increase in Airtel’s income. The overall performance of Airtel increased with a revenue growth in constant currency of 19.6% in Q2 compared to 16.4% recorded in Q1, while revenue on reported basis increased by 10.7% to $1.82 billion, with Q2 revenue growth of 14.3%.
Unilever Nigeria Plc: Change in management has had mixed impact
9 months into the change of management, Unilever Nigeria Plc’s performance in Nigeria has been largely underwhelming.
Change in the management of a company is never a walk in the park. Transitions usually take time to yield the desired results. Organizations can look to past successful managerial transitions for inspiration, but not for instruction because there is no defined playbook. The decision to replace Mr Yaw Nsarkoh, who served as the Managing Director of Unilever Nigeria Plc until the end of 2019 was plausible, but adjustments were never going to be an easy task.
Mr Nsarkoh had served as Managing Director of the company for 5 years and steered the course of its proceedings with remarkable skill up until the financial performance disaster which culminated in his resignation on November 28th, 2019.