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Companies
These banks gave AMCON N168 billion in 2019
Nigerian Banks increased their contributions towards the AMCON sinking Fund to about N167 billion in 2019 compared to about N154,9 billion a year earlier.
Nigerian Banks increased their contributions towards the AMCON sinking Fund to about N167 billion in 2019 compared to about N154,9 billion a year earlier. This is according to data compiled by Nairametics Research.
All banks operating in Nigeria contribute 0.5% of their total assets as at the dates of their audited financial statements as levies to the Banking Sector Resolution Cost Trust Fund (BSRCTF), also known as the AMCON Sinking Fund, to repay AMCON’s debt to the Central Bank of Nigeria (CBN).
According to the data banks in our universe of data that we track have contributed a combined N455.9 billion in the last 3 years alone. Financial services conglomerate, FBNH has contributed the most with about N107.4 billion in the last 3 years. Zenith Bank is next with about N82.7 billion.
READ ALSO: “There will be no downsizing”, Access Bank assures its employees in spite of the pandemic
Nigerian Banks’ contribution to AMCON Sinking Fund.
Source: Nairametrics Research.
What it means: The AMCON’s sinking fund was established following the realization that recoveries from AMCON-acquired bad loans might be insufficient to meet the cost of restoring financial stability. The fund is to further ensure that the burden on the national treasury is reduced, as any banking crisis will be resolved by banks, CBN and AMCON.
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Meanwhile, the increase in levies is in tandem with the growth of the banks’ total assets. For instance, the total annual assets of banks in the last five years were N27.37 trillion in 2015, N32.02 trillion in 2016, N35.77 trillion in 2017, N41.04 trillion in 2018 and N47.27 trillion in 2019, based on data compiled by Nairametrics Research.
While some industry watchers believe that AMCON’s existence will be longer than expected, considering the crisis that rocked the industry from inception, some shareholders told Nairametrics that such tenure elongation is not a welcome development for them.
National President, Constance Shareholders’ Association of Nigeria, Shehu Mikail, explained that the contributions made by the banks are huge and if care is not taken, it could deplete banks profit and returns on investments (ROI).
He said, “The contributions being made by banks into the sinking fund is to the detriment of their shareholders. The act that established AMCON needs to be reviewed and the agency should give details of its services to the nation.
“We do believe that all other regulatory agencies are up to the task of enforcing the necessary rules to sustain the financial sector but this is not, as it causes more injury to shareholders in terms of dividend payment.”
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Another shareholder, Taiwo Oderinde alleged that AMCON was designed to suppress investment in Nigeria, as all shareholders’ investments in the collapsed banks have gone down the drain. He said,
“Banks must have paid about N1trillion to AMCON in the last 10 years of its existence despite the fact that some financial institutions were nationalized without giving their shareholders anything. It was an emergency toxic vehicle established by the government through the CBN and stakeholders then to save the situation at hand, but it has overstayed its welcome.
“The only way forward is for AMCON to start winding down its operations because it has spent 10 years; it can use 2020 for rounding off. We call on the legislators to look into the tenure extension. The government needs to evaluate the performance of AMCON since inception, noting that the impact of the corporation is not felt.”
Companies
Neimeth Pharmaceuticals to raise N5 billion in additional equity
The Board of Neimeth is set to raise N5 billion additional equity upon the approval by shareholders of the company at the AGM.
Companies
Cutix Plc forecasts N148 million profit in Q4 2021
Cutix Plc has projected that its revenue will double and profit will increase by 9% to N148 million.
Cutix Plc has projected that in the fourth quarter of its financial year 2021, its revenue will double and profit will increase by 9% to N148 million.
These projections were made by the company in a recent earnings forecast issued by the Management, and signed by the Company’s CEO and CFO.
READ: Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020
Key highlights of the earnings forecast for Q4 ended April 30, 2021
- Revenue to increase to N1.66billion, 100% Q-o-Q.
- Cost of Sales to increase to N1.16 billion, 70% Q-o-Q.
- Distribution, Admin & Other expenses to increase to N232.89 million, 14%% Q-o-Q.
- Other Income to remain unchanged at N2.50 million,
- Finance Charges to increase slightly to N47.38 million, 3% Q-o-Q.
- Operating income to increase to N227.83 million, 14% Q-o-Q.
- Taxation is projected at N79.74 million.
- While Profit attributable shareholders is projected at N148.10 million.
READ: Royal Exchange Plc forecasts N500.83 million PAT in Q1 2021
Bottom line
The earnings forecast was made on the ground that the Nigerian economy will continue improve, as the country recovers from the impact of COVID-19. In this regard, revenue in the fourth quarter of 2021 will be slightly higher than the revenue projected in the third quarter of 2021.
READ: Okomu Oil Plc records 27.01% decline in 2020 Q3 revenues
However, the increase in the cost of sales driven by the input cost will pressure profitability to the tune of N148.10 million, which is 9% higher than the profit after tax made in the corresponding quarter of 2020.
Companies
PZ Cussons proposes dividend payout of N397 million to the shareholders
The Board of Directors of PZ Cussons Nigeria Plc has proposed the payment of N397 million to the shareholders of the company.
