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AIICO Insurance to boost property, technology with proceeds from right issue

Right issue will increase the capital base of the firm from N11.6 billion to N15.1 billion.

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FCMB Pensions, AIICO Insurance Plc to Offer Right Issue Of ordinary shares worth N3.5 billion

AIICO Insurance Plc, to invest the proceeds of its on-going right issue on its property, plant, equipment and technology.

While 61.2% of the proceeds are planned to be invested in property, plant and equipment to be completed Q4 2024, 38.8% are expected to be invested in technology to ne completed Q2 2023.

This was disclosed by Chief Executive Officer, AIICO Insurance Plc, Mr. Babatunde Fajemirokun during a virtual Facts Behind the Issue on Friday.

According to him, the issue, which is between September 2, 2020, and October 7, 2020, worth a total of N3.5 billion, will be offered on the basis of 5 new ordinary shares for every 13 ordinary shares held at the close of business on Monday 15th June, 2020. 

On the rationale for the right issue, Fajemirokun, remarked that NAICOM increased the regulatory capital requirements for the insurance industry, increasing the composite players to the tune of N18 billion by 2021.

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He said, “If successfully implemented, the right issue will increase the capital base of the firm from N11.6 billion to N15.1 billion.”

He also expressed intent in capitalizing some of the firm’s retained earnings. 

Speaking further, Fajemirokun remarked that the offering of the right issue will ensure networking and infrastructural upgrade, while empowering the firm to underwrite big-ticket transactions, especially in oil and gas industries.

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Key highlights 

  • The right issue size is worth N3,486,216,763.20 
  • The number of shares is 4,357,770,954 
  • The price is N0.80 (representing a discount of 25.2% as of the qualification date)
  • 5 new shares will be issued for every 13 shares held as of C.O.B, June 15th, 2020
  • The issue period will be between September 2, 2020 and October 7, 2020 
  • 61.2% of the proceeds from the right issue will be invested in Property, Plant and equipment to be completed by Q4, 2024 
  • 38.8% of the proceeds from the right issue will be invested in technology, to be completed by Q2, 2023 

Over the years, AIICO has evolved from an insurance agency to a leading diversified non-banking financial institution in Nigeria providing life, health and general insurance, as well as investment management.

 About AIICO Insurance Plc 

AIICO Insurance Plc was established in 1963 with a large Life and Non-life business, and complimentary focus on Asset Management, Health and Pension. Its market capitalization pre-issue is N9,064,163,584.00.

In 2019, AIICO Insurance Plc recorded 78% revenue from the Life business, 17% from Non-life business. On profit side, Life business contributed 91%, Asset Management contributed about 9%. It currently has 22 branches and 3 retail outlets across the federation. 

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Financial Services

CBN grants Mortgage Refinancing Companies approval to refinance Non-member banks

The CBN has expanded access to mortgage financing by removing restrictions on refinancing mortgages earlier imposed.

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The Central Bank of Nigeria (CBN), has granted approval to Mortgage Refinancing Companies (MRC), to re-finance non-member banks.

This is contained in a circular referenced FPR/DIR/GEN/CIR/07/056 and signed by Ibrahim Tukur, the Director of Financial Policy and Regulation Department, CBN.

The circular improved on the earlier provisions contained in section 7.3.1.5 which states that “A mortgage refinance company (MRC) shall not, without the prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than twenty times the value of the borrower’s shares with the MRC or 25 percent of its shareholders’ funds unimpaired by losses.”

READ MORE: Unity bank wants to be seen, but time is running low

READ: NFF receives $1 million from FIFA as COVID-19 palliative

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What this means

Based on the provisions contained in the latest circular, MRCs are now free and legally permitted to refinance the qualifying mortgages of banks and all other non-members ( that do not hold equity), subject to meeting all other relevant requirements specified in the framework.

In a nutshell, the restriction on non-member mortgage lenders from refinancing their mortgages with MRCs has been removed.

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READ: MFBs, DMBs, others get new lending limit directive from CBN

Why this matters

Prior to the provisions contained in the latest circular, CBN had expressed fears that provisions of section 7.3.1.5 negatively impacts the mortgages sub-sector, as it constrains the MRCS from refinancing the mortgages of non-shareholder banks. Therefore, the new order will help to remove the restrictions already highlighted.

In lieu of this, the latest circular stated that the provision of section 7.3.1 5 is hereby revised to “the MRC shall not, without prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than 25 percent of its shareholders’ funds unimpaired by losses,” the circular reads.

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Financial Services

CBN reveals framework for the N75 billion Youth Investment Fund

The Nigerian Youth Investment Fund will be funded through the NIRSAL MFB window of the CBN.

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CBN reveals framework for the N75 billion Youth Investment Fund, Economic Growth, CBN, Governor, Emefiele, CBN releases new capital base, sanctions for Microfinance Banks, Nigerian Banks broadly positive after naira devaluation, Naira hits N465 to $1, Central Bank begins disbursing $100million to hit at currency speculators

The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund.

This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria.

The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion.

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.

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Objectives of the scheme:

  •  Improve access to finance for youths and youth-owned enterprises for national development.
  •  Generate much-needed employment opportunities to curb youth restiveness.
  •  Boost the managerial capacity of the youths, and develop their potentials to become the future large corporate organizations.

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What you should know
Recall that on the 22nd of July, 2020, the Federal Executive Council (FEC) approved the sum of N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023.
The fund was created to support the innovative ideas, skills and talents of Nigerian youths, and to institutionally provide Nigerian youths with a special window for accessing much-needed funds, finances, business management skills and other inputs critical for sustainable enterprise development.
  • The fund targets young people between the ages of 18 and 35 years.
  • Beneficiaries of NMFB, TCF and AgSMEIS loans, and other government loan schemes that remain unpaid are also not eligible to participate.
  • Individuals (unregistered businesses) shall be determined based on activity/nature of projects subject to the maximum of N250,000.
  • Registered businesses (Business name, Limited Liability, Cooperative, Commodity Association) shall be determined by activity/nature of projects subject to the maximum of N3.0 million (including working capital).
  • The tenor of the intervention is for a Maximum of 5 years, depending on the nature of the business and the assets acquired, of which interest rate of not more than 5% under the intervention shall be charged annually.
  • The Federal Ministry of Youth and Sports Development (FMYSD) will collaborate with relevant stakeholders to identify potential training for training/mentoring.
  • The youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to login to the portal provided by the NMFB to apply for the facility.

READ: CBN raises alarm over fraudulent loan offers, investment schemes with charged fees

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Optics
As a huge percentage of youths are engaged in the informal sector, the NYIF will facilitate the transition of informal enterprises owned by youths into the formal mainstream economy, where they can be supported comprehensively, build a bankable track record, and be accurately captured as active participants in economic development.

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Financial Services

CBN to drive implementation of zero balance account opening in banks

The CBN has urged the DMBs to allow zero balance for the opening of new accounts.

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CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited

The Central Bank of Nigeria (CBN) has urged the Deposit Money Banks (DMBs) to allow zero balance for the opening of new accounts, as part of the efforts to promote greater financial inclusion across the country.

In addition, the banks are also expected to simplify their account opening processes, while adhering to Know-Your-Customer (KYC) requirements in the push towards financial inclusion.

READ: This is where PSB, CBN got it all wrong

READ: CRR: Banks suffer N917.5 billion debits in latest CBN action

This disclosure was made in the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for 2020/2021 fiscal year, which was issued by the Central Bank of Nigeria (CBN).

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While stating that these measures are part of the efforts to encourage banks to intensify deposit mobilization during the 2020/2021 fiscal years, the apex bank also encouraged banks to develop new products that would provide greater access to credit.

READ: Nigeria @ 60: The Banking Sector and the Nigerian economy 

A part of the report reads, “As part of its effort towards promoting greater financial inclusion in the country, the bank shall continue to encourage banks to intensify deposit mobilization during the 2020/2021 fiscal years. Accordingly, banks shall allow zero balances for opening new bank accounts and simplify their account opening processes, while adhering to Know-Your-Customer requirements.

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READ: Lagos Rail Mass Transit: House of Assembly approves N153 billion for construction

“Banks are also encouraged to develop new products that would provide greater access to credit.”

In addition, the apex bank said that the Shared Agency Network Expansion Facility (SANEF), which was established to enhance the provision of financial services access points in under-served and unserved locations and drive financial inclusion through agent banking, would continue in the 2020/2021 fiscal years.

READ: CBN launches framework for advancing women’s financial inclusion in Nigeria

It states that banks, mobile money operators, and super-agents would continue to render returns in the prescribed formats and frequency to the CBN.

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