AIICO Insurance Plc has increased its Profit after Tax (PAT) from N3.2 billion in 2018 to N5.9 billion as at the end of the 2019 financial year. This represents an 88% growth. The insurance company’s gross written premiums for FY 2019 also increased by 33% from N37.7 billion in 2018 to N50.1 billion last year.
AIICO’s profit before tax (PBT) for the period under review stood at N6.2 billion, marking an increment of 78% compared to the N3.5 billion achieved in 2018. Its earnings per share (EPS) also increased by 89% from 44 kobo in 2018 to 83 kobo in 2019.
The company’s performance was predominantly driven by growth across all lines of business within the group. Chief Executive Officer, Babatunde Fajemirokun, explained that in the course of 2019, the company undertook a thorough review of its businesses with a clear aspiration to attain market leadership through profitable growth. Based on the progress made so far, he said:
“It is my belief that we are on course and have the right strategy in place to deliver even more sterling performance in the years ahead.
“In accordance with our commitment to the fulfilment of our obligations to our clients, gross claims grew by 6% from N29.0 billion in 2018 to N30.6 billion in 2019. From this amount, about 75% was for benefits and claims payment in our Life business with the remaining 25% incurred in the Non-Life business.”
Following the approval to increase the authorized share capital of the company, AIICO’s shareholders’ equity increased by 92% from N14.5 billion in 2018 to N27.9 billion. This was driven by the successful completion of a private placement investment by LeapFrog Nigeria Insurance Holdings Limited and AIICO Bahamas Nigeria Limited; two strategic investors. Improvements in retained earnings also contributed to this.
The development also led to an upward review of the company’s paid-up share capital, increasing from N6.1 billion to N11.3billion. Plans are underway to raise the outstanding capital by way of a rights issue. According to the company, the new capital injection is expected to strengthen its balance sheet and provide additional capacity to underwrite more risks.
“We are in unprecedented times, and only the bold and agile will survive. That is why AIICO will continue to push boundaries to break new grounds and more importantly, we will keep adapting to change, identifying and introducing innovative ways of working and providing our customers with distinctive experiences. This is the only way to succeed in the long term,” the AIICO boss added.
CBN extends Covid-19 forbearance for intervention loans by another 12 months
CBN will continue to charge an interest rate of 5% for its intervention loans for another 1 year.
The Central Bank of Nigeria has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.
In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered. The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.
The CBN also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.
See excerpt from Circular
“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”
Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.
Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;
2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.
What this means
Companies who secured intervention funds from the CBN or through any of its on-lending banks will continue to service the loans at an interest rate of 5% per annum instead of 9%.
- They can also get another year of not needing to pay back the principal sum collection. However, they will need to apply.
- Whilst this move helps the small businesses continue to manage their cash flow, it means the CBN will record a reduction in its income extended under such facility.
- Regulatory forbearance is a widely adopted concept during an economic crunch and it is meant to help stimulate businesses. These pronouncements if implemented will only affect those who borrow from the CBN or BOI but those who do not will miss out.
- Download the circular here.
LNG boss tasks FG to begin the monetization of Nigeria’s gas
Mr Attah has urged the FG to take the gas sector more seriously as the future of Nigeria’s energy lies with it.
The MD and CEO of Nigeria LNG Limited Mr. Tony Attah has tasked the Federal Government to begin the revamping and monetization of the Gas sector in Nigeria.
He made this statement while making his presentation at the 2nd virtual Nigerian Gas Association (NGA) Industry Multilogues, with the theme: “Powering Forward, Enabling Nigeria’s Industrialization via Gas.”
Mr. Tony Attah drew the attention of the audience to the hidden treasure in the Nigerian Gas industry which he believes is not getting enough attention from the government.
On the future of gas as an alternative energy source, Mr. Attah stated that the developed world is already keying into gas as an alternative to crude oil. Gas has proven to be a cleaner and more sustainable alternative.
He exclaimed that Nigeria is very rich in gas and yet poor in energy. Nigeria is the 9th country with the largest gas reserves in the world but makes very little use of it.
Mr. Attah went further to paint a clear picture of the promise of investing in gas using the success achieved by Qatar. Qatar is currently the largest LNG exporter in the world.
“We just touched on a quick case study of Qatar. Someone mentioned Qatar already from a poor fishing country to a gas giant and it took just 10 years, which is why we, as Nigeria LNG, firmly believe in the conversation and the narrative about the declaration of the decade of gas.
“We believe it is possible. If you look at Qatar from 1995, when they really went into gas development, we were just two years behind Qatar. So, Qatar’s first LNG was in 1997.
“Nigeria’s first LNG was in 1999, just two years behind. But then, within 10 years, because of the deliberateness of the government and focus on gas, they have gone to 77 million tonnes and we are at best, 22 million tonnes,” Attah said.
Mr. Attah stressed further the importance of the gas sector in Nigeria’s future. He recalled that the Nigerian Government declared 2021-2030 as the decade of gas. He pleaded with the government to take the sector more seriously as the future of Nigeria’s energy lies with it.
“Gas is the future. That future is now, and just as the Minister of State has made us to realize, gas is food in fertilizer. Gas is transport as you saw in the Auto gas project that was declared.
“Gas is life, as a matter of fact, for cooking, for heating, for existence. Gas is development in manufacturing, gas is power. Gas is everything. “We think it’s time for gas. It’s time for Nigeria to diversify and that is why we fully support the decade of gas,” he said.
What you should know
- Early last year, the director of the Department of Petroleum Resources (DPR) Mr Sarki Auwalu confirmed that Nigeria’s proven gas reserve stood at 203.16 trillion cubic feet.
- Nigeria has the 9th largest gas reserves in the world. It is also the 6th largest exporter of gas.
- The Federal Government declared the year 2021–2030 as the “Year of the Gas“. It pledged to finally kick start the development and commercialization of Nigeria’s huge gas reserves.
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