Business News
C&I Leasing assures investors of brighter 2020 amid likely financial error
C & I Leasing Plc has assured the investing public of its ability to meet its 2020 profit target.
After it notified the Nigerian Stock Exchange of a likely financial error in the audited accounts of its Ghana subsidiary, C & I Leasing Plc has assured the investing public of its ability to meet its 2020 profit target.
Incorporated in Ghana, Leasafric is a non-bank institution founded in 1992 to focus on leasing business.
What it means: C & I Leasing owns 71% equity stake in Leasafric and the subsidiary contributes about 10% to the group’s financial performance. It implies the error could affect the figure of the parent company at the end of the financial year-end.
In its notification to the NSE, the board of directors of Leasafric Ghana was expected to meet today to review the matter and would notify all regulators including the Bank of Ghana and carry out a special investigation into the circumstances surrounding the likely errors in the Audited Accounts
Company Secretary, Mbanugo Udenze & Co, explained that while the exact amount in question would be ascertained by the ongoing investigations, they are of opinion that the write-off of the amount might not have any material impact on the group’s net earnings for 2019.
[READ MORE: C & I Leasing diversifies into offshore asset operation and partners Indian firm]
C & I Leasing said it had begun putting adequate measures in place and strengthening its existing risk control framework to prevent a recurrence.
The firm said, “Nevertheless, we assure all the stakeholders and the investing public that C&I Leasing Plc is resilient and well-diversified to cushion any likely impact of the financial error.
“It is noteworthy to mention that our detection of this financial error is as a result of the effective implementation of the company’s robust corporate governance framework which is closely monitored by the board and we remain committed to ensuring the continued full and effective implementation of the framework.
“In spite of the likely impact on our profit target for 2019, we are optimistic that with our exceptional track record in major sectors of the economy, we expect to meet our profit targets for 2020, and beyond. We, therefore, do not envisage that this event will have any material negative impact on C & I Leasing Plc’s on-going rights issue.”
Financial Services
Ratings agency, Moody’s reveals it is reviewing First Bank’s ratings
Moody’s explained why it might downgrade First Bank’s ratings.
Moody’s Ratings agency said on Thursday that it has put First Bank of Nigeria on review for a downgrade after the central bank sacked the board of directors and replaced them with new directors.
Moody’s made this statement in a report titled ‘Removal of Non-Executive Board Members Highlights Governance Shortcomings.’
In a quote, Moody’s said:
“Moody’s Investors Service, (“Moody’s”) has today placed all long-term ratings and assessments of First Bank of Nigeria Limited (First Bank) on review for downgrade. The review will focus primarily on an assessment of evolving governance considerations at First Bank, specifically corporate governance developments. The rating action follows the dissolution of First Bank’s board by the Central Bank of Nigeria (CBN), the bank’s primary regulator, on 29 April 2021. As a result of this action by the CBN, all the non-executive directors were removed while the executive management remained in place.”
The Governor of the Central Bank of Nigeria, Godwin Emefiele, had last week announced the sack of the entire board of directors of FBN Holdings Plc and its subsidiary, First Bank of Nigeria Ltd following the initial removal of its MD/CEO Dr Sola Adeduntan. Following his sacking of the board, he set up a new board for the bank holding company and its subsidiary and also reinstated Adeduntan as MD/CEO.
Moody’s mentioned that the regulatory actions demanded of First Bank by the CBN introduces a clould of uncertainty over the outlook of the bank. For example, the CBN had asked the bank to divest from its holdings in two listed companies while also recovering its loans from one of them.
“The review for possible downgrade reflects the rating agency’s view that the removal of all non-executive directors of the bank’s board by the regulator demonstrates corporate governance shortcomings and weaknesses in board oversight. The bank also needs to implement regulatory directives concerning the resolutions of loans to, and shareholding in non-banking related parties, which reportedly had not been executed in the recent past.
Moody’s notes that the outcomes of these developments are uncertain at this point, and the final and long-term governance, reputational and financial implications of the events for First Bank are also unclear.”
The central bank directive sacking the board of the bank also retained its executive management perhaps suggesting that the CBN had confidence in the ability of the MD and his team to manage the bank. Moody’s also noted this in its briefing.
“While the bank’s executive management team remained the same, the rating agency believes these developments could distract management’s focus on implementing the bank’s strategic plan and road to recovery. First Bank management’s immediate key target was to reduce nonperforming loans (NPLs) to levels comparable with domestic peers. The rating agency recognises that, in the context of asset risks, the bank took steps to reduce its stock of problem loans, with its reported NPL ratio falling to 7.7% at year-end 2020 from 25.9% in 2018.”
Will Moody’s downgrade First Bank?
The rating agency explained that the decision to downgrade will depend on how strong the bank’s corporate governance structure is and whether the CBN will impose additional sanctions. If any of these crystallizes, it could downgrade its ratings.
“The bank’s long-term deposit ratings can be downgraded if flaws in the bank’s governance systems exist, and if the CBN imposes additional sanctions on the bank, including, but not limited to, conditions to address any vulnerabilities that may be discovered. Financial output that is less than anticipated could also result in a rating downgrade.”
Moody’s, however, poured water on any optimism around a rating upgrade.
Given the review for downgrade and the pessimistic outlook on the government of Nigeria, there is a slim chance that First Bank’s ratings will be upgraded. Stronger solvency progress than currently reflected in the ratings, combined with a stabilization of the sovereign outlook, could result in the outlook being stabilized.
Why is rating important?
Corporate Organizations desire positive ratings because of the effect it has on their ability to raise capital as well as the cost of capital. A high credit rating typically attracts positive investor sentiments helping organizations tap the debt and equity markets, especially from institutional investors.
Spotlight Stories
Tip Jar, Twitter’s new giveaway feature that lets users send money to you
Twitter has introduced a new feature called Tip Jar that allows you send money to your favourite tweeters.
Twitter has introduced a new feature called Tip Jar that allows you send money to your favourite tweeters.
According to the blog post, “Tip Jar is an easy way to support the incredible voices that make up the conversation on Twitter. This is a first step in our work to create new ways for people to receive and show support on Twitter – with money.”
The new feature utilizes different payment platforms like PayPal, Venmo, Patreon, CashApp, and others.
Users can link their Twitter accounts with Tip Jar to any of these payment providers. Twitter takes no cut.
READ: Facebook is creating an audio chat product similar to Clubhouse
You’ll know an account’s Tip Jar is enabled if you see a Tip Jar icon next to the Follow button on their profile page. Tap the icon, and you’ll see a list of payment services or platforms that the account has enabled. Select whichever payment service or platform you prefer and you’ll be taken off Twitter to the selected app where you can show your support in the amount you choose.
Twitter has released series of features this year as part of its efforts to grow Twitter’s user base to 315 million daily active users by the end of 2023.
The company also launched Twitter crop where images don’t get crop again on Twitter for Android or iOS. Standard aspect ratio images (16:9 and 4:3) will now display in full without any cropping and images will look just like they did when you shot them.
READ: Does YouTube stand a chance against TikTok?
Lauren Alexander, a Twitter spokesperson said, “Today’s launch is a direct result of the feedback people shared with us last year that the way our algorithm cropped images wasn’t equitable, The new way of presenting images decreases the platform’s reliance on automatic, machine learning-based image cropping.”
Twitter has tested several features and more will be rolled out soon.
