Financial Services
Cornerstone Insurance to issue bonus shares in view of recapitalisation
The bonus share issuance is subject to shareholders’ approval during the company’s next Annual General Meeting.
Cornerstone Insurance Plc said its board of directors has reached a decision concerning a proposed issuance of bonus shares to its shareholders. This is part of the insurer’s plans to meet its recapitalisation mandate.
In a notice that was sent to the Nigerian Stock Exchange, yesterday, Cornerstone Insurance said the resolution on bonus shares is one of many other resolutions that were reached when its board of directors met on July 22nd.
Details of the planned bonus shares issuance
The bonus shares will be issued in the proportion of seven new shares for every thirty shares of fifty kobo each, already held by shareholders. Part of the statement by the company said:
“In line with Rule 19.2 (a) of the Issuers Rules Relating to Board Meetings and General Meetings of Issuers, Cornerstone Insurance PLC (“The Company”) wishes to inform its esteemed Shareholders, Stakeholders, The Nigerian Stock Exchange (“The Exchange”) and the general public that at the Board Meeting of the Company held on July 22, 2020, the following resolutions were duly considered and approved…
“The transfer of One Billion, Seven Hundred and Eighteen Million (₦1,718,000,000) from the Company’s share premium account to the share capital account by issuing bonus shares in the proportion of seven (7) new shares of fifty Kobo each for every thirty (30) existing shares of fifty kobo each, to achieve the Company’s recapitalization plan.”
READ MORE: Shareholders endorse Vitafoam’s dividend and bonus shares
Note that planned bonus share issuance is subject to shareholders’ approval during the company’s next Annual General Meeting.
What this means
Much like all the other insurance companies in Nigeria, Cornerstone Insurance Plc has had to grapple with the challenges of meeting the recapitalisation mandate set by NAICOM. As Nairametrics reported, the company prospected several options to this end, including a deliberated a merger and the eventual decision to sell some of their landed properties.
With this bonus share issuance, Cornerstone Insurance Plc will finally be able to meet the required share capital, even as the shareholders get to own additional shares in the company without incurring additional costs.
READ ALSO: Insurance: NAICOM extends recapitalization deadline
The backstory
Recall that it was back in May 2019 when NAICOM mandated all insurance companies in Nigeria to recapitalise. Since then, the deadline for compliance has been extended more than twice. The latest extension to the compliance deadline was given last month by NAICOM. In view of this, the insurance firms were given an additional year to recapitalise, with the final deadline being September 2021.
The recapitalisation programme is requiring life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.
Also, the regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.
Financial Services
CBN reviews appointment requirements for CCOs in Banks
The CBN has reviewed the appointment criteria for CCOs in Merchant Banks and Regional Banks.
The Central Bank of Nigeria (CBN) has reviewed the appointment criteria for Chief Compliance Officers in Merchant Banks and Regional Banks (Commercial and specialized).
This is according to a circular issued by the apex bank dated October 9, 2020, and signed by its Director of Financial Policy and Regulation Department, Kevin Amugo.
READ: CBN has rolled out new anti money laundering penalties that should get any banker worried
According to the latest notice, Merchant banks and Regional banks are hereby granted dispensation to appoint CCOs on a grade not below an Assistant General Managers. However, the CCOs will report directly to the ECO of the financial institutions who have sole responsibility for compliance matters in the bank.
READ: CBN to “reduce” savings rate to 1% declare OMO bills as “Poison”
Backstory
This latest action by the CBN is the sequel to consultations and engagement with stakeholders emanating from its earlier circular referenced FPR/DIR/GEN/CIR/06/004 of September 28, 2016, in which the tentative requirements for Executive Compliance Officers and Chief Compliance Officers of deposit money banks were mooted.
(READ MORE:CBN moves to ring-fence Disco collections)
Meanwhile, the requirements and responsibilities of Executive Compliance Officers remain as earlier communicated in the circular dated 28 September 2016.
A part of the recent circular signed by Mr. Kevin read thus,
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“Further to the circular referenced FPR/DIR/GEN/CIR/06/004 of 28 September 2016 on the appointment of Executive Compliance Officers (ECO) and Chief Compliance Officers (CCO) of deposit money banks, the CBN has, after due considerations and presentations by stakeholders on the size, structure, operation, and dynamics of classes of operators in the sectors reviewed the requirements for the appointment of Chief Compliance Officers.”
Business
#EndSARS: We were not hacked – CBN
The Central Bank of Nigeria has dismissed rumours that its website was hacked by hacker group, Anonymous.
The Central Bank of Nigeria (CBN) has debunked rumours that its website was hacked. This was disclosed via its official Twitter handle in the early hours of today.
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The apex bank assured the Nigerian public that there was no cause for alarm and it would do everything within its statutory power to protect its proprietary data from being breached.
READ: #EndSARS: National Human Rights Commission sets up independent investigative panel
CBN Website Not Hacked pic.twitter.com/nZFdabmARo
— Central Bank of Nigeria (@cenbank) October 16, 2020
READ: $70 billion per annum will be needed to tackle pandemic induced poverty – World Bank
The press release concluded by advising the Nigerian public to ignore such false claims, designed at undermining the credibility of the CBN.
Backstory
Nigerians were shocked yesterday when the website of the CBN was temporarily off the grid, leaving many to suspect that it may have been hacked. Recall that Anonymous, an international hackers group, had earlier claimed via its Twitter handle, that it breached some Nigerian government websites.
READ: CBN invests over N120 billion on 320,000 farmers across CTG within four years
The act is said to be in support of the ongoing #EndSARS protests that have taken over many cities in Nigeria, following calls for the disbandment of the notorious police unit – FSARS.
Financial Services
Stanbic IBTC retains Fitch’s AAA Rating
Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC were rated high based on the potential support from their parent company, Standard Bank Group.
Globally renowned credit rating agency, Fitch Ratings, has reaffirmed that Stanbic IBTC Holdings PLC and its subsidiary, Stanbic IBTC Bank PLC, have retained their National Long-Term’ AAA (nga)’ and National Short-Term’ F1+(nga)’ ratings.
Fitch Ratings is a leading provider of credit ratings, commentary and research for global markets. The National Long-Term’ AAA (nga)’ and National Short-Term’ F1+(nga)’ Ratings are the highest possible ratings on Fitch’s rating scale.
Stanbic IBTC Holdings PLC and Stanbic IBTC Bank PLC were rated high based on the potential support from their parent company, Standard Bank Group, which is based in South Africa.
According to Fitch Ratings, both organisations retained their ratings as a result of the vital role they play in Standard Bank Group’s primary operations in West Africa as well as its size and high operational integration.
“The National Long-Term Ratings on Stanbic IBTC Bank’s N30 billion senior unsecured notes and the National Long- and Short-Term Ratings on the N150 billion structured note programme for senior unsecured debt are in line with the Bank’s issuer ratings,” Fitch says.
Stanbic IBTC Holdings PLC is a subsidiary of the Standard Bank Group. Its principal operating entity is Stanbic IBTC Bank, a mid-tier commercial bank, which represented 96 per cent of the holding company’s consolidated assets at the end of 2019.
Both entities are highly integrated with Standard Bank Group’s risk-management framework with access to Standard Bank Group’s competitive advantages relative to peers. This also includes connectivity to its network and the ability to serve large domestic and multinational companies.
The ‘AAA (nga)’ is given to issuers with the lowest expectation of default risk when compared with their competitors. The National Short-Term Rating of ‘F1+(nga)’ is assigned to issuers that have the strongest capacity for timely payment of financial commitments in comparison to other issuers in Nigeria
COVID-19 Update in Nigeria
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COVID-19 Update in Nigeria
Daily Parallel Market Exchange Rate – ₦461/$1
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CBN reviews appointment requirements for CCOs in Banks
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