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Penalties: NSE makes over N143.6 million from banks, others in 2019 

NSE boosted its revenue with N143.6 million fines imposed on listed companies across banks, manufacturing, insurance sectors, among others.

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stock, shares, Equity Market down by 0.6% on Monday, Quoted Companies post N4.2 trillion combined profits since 2015, Stockbrokers in Lagos are shifting focus to commodities as stocks underperform, Stock Market gains N204 billion, as effects of OMO restriction kicks in , Penalties: NSE makes over N143.6 million from banks, real sector in 2019 , These companies could soon be delisted from the Nigerian Stock Exchange , C&I Leasing, Oando, UBA, two others top gainers chart on Wednesday, 2020 Nigerian Equities Outlook: Breaking the Jinx?, LASACO, AIICO lead gainers on Wednesday, as bourse dips 0.91% , MTN, Zenith, GTBank lead actively traded stocks on Thursday , Equities: Bearish trades cost the Stock Market N403.02 billion in one week, Blue chips outperform, as All-Share Index up by 9.2% since OMO ban 

The Nigerian Stock Exchange (NSE) boosted its revenue with N143.6 million fines imposed on listed companies across banks, manufacturing, insurance sectors, among others between January and November of 2019. This is contained in the X-compliance report obtained by Nairametrics from the Stock Exchange.

The report disclosed that while three firms were fined over N8 million for non-disclosure of material information, 15 others were asked to pay N135 million for their failure to file their financial statements by the due date.

Why it matters: Every listed company is required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market. In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules) and The Exchange’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on Publication of Announcements or Press Releases via The Issuers’ Portal, listed companies are required to obtain prior written approval from The Exchange before publications that affect shareholders’ interest are made in the media or via the Issuers’ Portal.

Nigerian Stock Exchange, NSE CEO Oscar Onyema, NSE Graduate Trainee Programme, NSE, VAT, Financial market data gulps $28.5 billion from stakeholders, says NSE , NSE lifts R.T. Briscoe’s shares suspension , NSE lifts suspension on Guinea Insurance’s, Niger Insurance’s shares , v

Osar Onyema, Chief Executive Officer, NSE

Details: For non-disclosure of material information, Access Bank Plc, Diamond Bank Plc and First Aluminium Nigeria Plc were fined N4.41 million, N3.24 million and N476,280, respectively. Access Bank and the defunct Diamond Bank were penalised for non-disclosure of resolutions passed at their board meetings while First Aluminium was penalised for non-dispatch of the notice of its annual general meeting and annual reports to shareholders 21 days before the date of the meeting.

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Failure to file financial statements: Grief Nigeria Plc, Union Bank Nigeria Plc, Afromedia Plc, Conoil Plc, Lasaco Assurance Plc, Flour Mills of Nigeria Plc, Universal Insurance Plc and Thomas Wyatt Nigeria Plc and others were fined. In this category, Amino International got the highest fine of N41.1 million as it failed to file its financial statements since 2015.

  • R.T Briscoe was fined N31.3 million for the delay in filing its 2018 audited financial statement, first and second quarter of 2019 financial statements.
  • Niger Insurance and Guinea Insurance were fined N19.8 million and N19.2 million, respectively, for failing to file their full-year 2018, first quarter 2019 and second quarter 2019 financial statements as and when due.
  • Royal Exchange, Thomas Wyatt and Lasaco Assurance were respectively fined N8.9 million, N4.9 million and N1.4 million, for failing to file their audited 2018 and first quarter 2019 financial statements while Universal Insurance got a fine of N5 million for failing to audit 2018, first and second quarter 2019 financial statements.
  • NSE slammed N800,000, N200,000, N400,000 and N400,000 on Grief Nigeria, Union Bank, Afromedia and Conoil for the delay in filing their 2018 financial statements.
  • Flour Mills of Nigeria, Access Bank and Interlinked Technologies received respective penalties of N1.2 million, N700,000 and N200,000 for failing to file the financial statements for the first quarter, second quarter and second quarter of 2019 respectively.

[READ MORE: NSE highlights the importance of the capital market in achieving SDGs)

Meanwhile, some shareholders of the companies, who spoke with our analyst in separate interviews, praised the management of the Stock Exchange for being strict on its compliance exercise as they called for the punishment of erring companies.

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National President, Constance Shareholders Association of Nigeria, Shehu Mikail, agreed that the companies should be fined but urged the Exchange to ensure such fines are not deducted from the shareholders’ fund, which to him, would create holes in the investment pockets in the companies.

President, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, lamented that the incessant penalties on companies were discouraging companies from seeking quotation on the nation’s bourse, thereby affecting the growth and development of the market. He added that the market regulators must pursue friendly policies and initiatives to put the market forward.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

1 Comment

1 Comment

  1. Chinwendu

    December 7, 2019 at 7:33 am

    Kudos for making the information available for investors.

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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.

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Fidelity Bank Plc

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.

READ: Another Fidelity Bank Non-Executive Director purchases 1 million shares worth N2.75million

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.

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READ: STANBIC IBTC posts Profit After Tax of N45.2 billion in H1 2020

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.”

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READ: Sterling Bank Plc records 3.28% decline in 2020 9M gross earnings

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.

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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.

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READ: Strong performance from Stanbic IBTC, despite weak retail banking position

Stanbic IBTC

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.

READ: Unity Bank Plc posts gross earnings of N11.04 billion in Q3 2020

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.

READ: Central Bank says monetary policy not to blame for rising food cost

Other indices

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.

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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.

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Top payday loans, Airtel is paying up its debts

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%.


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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.

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Unilever Overseas increases stake in Unilever Nigeria Plc

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.


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