United Bank for Africa Plc, which prides itself as “Africa’s global bank” continues its reengineering and just as its name goes, it has continued a strategic expansion across the continent, already seeing impressive results from previous efforts as revealed by the diversification in revenue base. This much has reflected on its earnings, profitability and investment ratios, judging by the recently released nine months scorecard to the investing community. The nine-month score-card, besides giving investors the current state UBA’s financial health and direction to help investors plan their investment, has shown that the bank remains consistent in making it numbers available as at when due.
Stocks Pullback Amidst Impressive Q3 Corporate Earnings, Profit Taking.
Last week was a very busy one on the Nigerian Stock Exchange (NSE), with over 15 corporate earnings reports hitting the market, many of which were impressive numbers to which the market is yet to react in the form of price performance. The rush to present quarterly financials is based on the fact that figures for third quarter earnings are statutorily expected to hit the market before end of October 31, 2017, in line with the post-listing requirements of the NSE.
The delayed response by the market may not be unconnected with the fact that this is a season of mixed sentiments as revealed by the low volume of trades, when compared to the previous week.
FEDERAL High Court in Abuja, at the weekend, ordered the Central Bank of Nigeria, CBN, and the 19 commercial banks in the country to disclose all accounts in their custody and the balances in such accounts. The court ordered the banks to disclose the details of all such accounts, their owners and their proceeds in their affidavit of compliance deposed to by their chief compliance officers. It also made an interim order directing the banks to freeze all the said accounts by stopping “ all outward payments, operations or transactions ”pending the hearing of the substantive application seeking the forfeiture of the balances in the accounts to the Federal Government.. The banks were also directed to disclose “any investments made with funds from these accounts without BVN in any products ”. Such investments to be disclosed by the banks as directed by the court include “fixed/ term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and any other relevant information related to the transaction made on the accounts”. The court also directed the CBN and the Nigeria Interbank Settlement Systems “to validate the information contained in the affidavit of compliance / disclosure filed by the respective 19 banks” within seven days from the date of service of the orders on them. Justice Nnamdi Dimgba had made the orders on October 17 upon an ex parte motion filed on behalf of the Federal Republic of Nigeria and the Attorney-General of the Federation. Named as defendants are Access Bank Plc, Citi Bank Nigeria, Diamond Bank Plc, Ecobank Nigeria, Fidelity Bank of Nigeria Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Guaranty Trust Bank Plc and Heritage Bank Plc. Other banks are Keystone Bank, Skye Bank Plc, Stanbic IBTC Bank Plc, Union Bank of Nigeria Plc, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, Zenith Bank Plc and the CBN. A copy of the enrolled order, made available to judicial correspondents during the weekend, showed that the ex parte motion , marked FHC /ABJ / CS /911 / 2017 , was moved on behalf of the applicants by A. D. Tyoden . The title of the ex parte application indicated that the accounts without BVN allegedly had insufficient Know Customer Guidelines, contrary to the directive of the CBN and Section 3 of the Money Laundering (Prohibition) Act, 2011 (as amended). The title reads, ‘‘In the matter of an application seeking an interim order directing all the money deposit banks (commercial banks) to disclose/declare all individual and corporate accounts in their custody not covered by Bank Verification Numbers and for an interim order of forfeiture of the monies therein being accounts with insufficient Know Customer Guidelines contrary to the directive of the CBN and Section 3 of the Money Laundering (Prohibition) Act, 2011 (as amended).‘’ Granting the ex-parte motion, the court ordered banks to file before the court separate affidavits deposed to by their chief compliance officers, disclosing the accounts of individuals , corporate bodies and government agencies in their custody without BVN. The court directed that the order be equally served on the Central Bank of Nigeria. It furthered ordered the banks to advertise the accounts without BVN in a widely circulated national newspaper as notice to those who might have any interest in any of the accounts. The court also made an interim order appointing a Bank Examiner from the CBN to examine the books of “any bank that fails to comply with the order of the honourable court to file affidavit of disclosure.” Justice Dimgba adjourned until November 16 for the hearing of the substantive application seeking the forfeiture of the proceeds of the accounts without BVN. The court order read in part “That an order is hereby made freezing the said accounts by stopping all outward payments, operations or transactions (including any bill of exchange) in respect of the accounts pending the hearing and determination of the substantive application. “That an order is hereby made directing the 1st to 19th defendant banks to disclose any investments made with funds from these accounts without BVN in any products including fixed/term deposits and their liquidation and interest incurred, bank acceptances, commercial papers and any other relevant information related to the transaction made on the accounts. “That an interim order is hereby made directing the Central Bank of Nigeria and the Nigeria Interbank Settlement Systems to validate the information contained in the affidavit of compliance/ disclosure filed by the respective 19 banks within seven days from the date of service on the Central Bank and NIBSS. “That an interim order is hereby made appointing a bank examiner from the Central Bank of Nigeria to examine the books of any bank that fails to comply with the order of the honourable court to file affidavit of disclosure. “That an interim order is hereby made granting leave to the applicants or any officer authorised by them to advertise the accounts without BVN disclosed by the bank in a widely circulated national newspaper as notice to any person or body corporate or financial institution who may have any interest in any of the said accounts to claim ownership of same within 14 days of the publication of the order and show cause why the proceeds in the account should not be permanently forfeited to the Federal Government of Nigeria.” When contacted, spokesman for the Central Bank of Nigeria, Mr Isaac Okorafor, however, said he was not aware of the case and could therefore not speak on it.
Oil prices rose on Monday over supply concerns in the Middle-east as the U.S. market showed further signs of tightening while demand in Asia keeps rising.
Brent crude futures, the international benchmark for oil prices, were at $57.84.
U.S. West Texas Intermediate (WTI) crude futures were at $52.03 per barrel.
The amount of U.S. oil rigs drilling for new production fell by seven to 736 in the week to October 20, the lowest level since June, General Electric Co’s Baker Hughes energy services firm said on Friday. RIG-OL-USA-BHI
Much will depend on demand to guide prices, with the U.S. market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups.
Again, production is still being withheld as part of a pact between the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to tighten the market.
In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers.
India imported a record 4.83 million barrels per day (bpd) of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand.
The country’s September imports stood 4.2 per cent above this time last year and about 19 per cent more than in August, ship-tracking data from industry sources and Media Analytics showed.
Given the tightening oil market conditions, many analysts expect prices to rise further.
DIRECTORS of Guaranty Trust Bank Plc, on Wednesday presented its un-audited financials for the nine-month ended September 30, 2017, which showed that the period was not as smooth sailing as before, especially with the drop, though marginal, in gross earnings, customer loans, as well as deposit base, the lifeblood all commercial banks. The result also showed that the bank’s saving grace was the huge decline in loan impairment charges, which fell to N8.356bn, from prior ninemonth’s N57.083bn as restated as well as the non-provision for the toxic Etisalat loan, both of which ensured it did not suffer a sharp drop in profit before and after tax. Gross earnings income fell from N329.283bn in the corresponding period of 2016, to N309.913bn, boosted by interest income of N248.27bn, which jumped from N181.909bn, helped by interest from customer loans and advances of N153.688bn, up from N140.779bn; as well as from investment securities available for sale, which grew from N27.457bn to N66.357bn. Interest expense climbed from
N49.161bn to N58.703bn, the bulk of which was the N44.14bn interest paid on customer deposits, which rose from N36.892bn; following which net interest income climbed from N132.748bn to N189.566bn. Net interest income after loan impairment charges was N181.209bn, up from N75.665bn. Fee and commission income dropped to N39.676bn from N50.41bn, due to the significant decline in electronic business (e-business) income from N23.18bn to N9.138bn; just as credit related fees and commission dropped from N8.66bn to N7.03bn; as commission on foreign exchange deals rose to N4.821bn from N3.272bn. GTBank also earned N2.077bn from transfers related charges, down from N3.702bn; and account maintenance charges from N6.311bn to N7.542bn. Fee and commission expense fell from N2.275bn to N1.699bn, resulting in net fee and commission income N37.977bn, as against preceding ninemonth’s N48.134bn. Net gains on financial instruments classified as held for trading jumped to N9.938bn from N3.013bn; other income suffered a slump also, falling from N93.95bn in the third quarter of 2016, to N12.027bn,
as foreign exchange revaluation gain fell to just N11.669bn from N93.639bn. In a review of the result, analysts at FBN Capital (FBNQuest) noted that “the year-on-year decline in earnings was driven by a 73% year-on-year reduction in noninterest income due to negative base effects in the prior year (GT Bank’s 9M 2016 earnings were boosted by foreign exchange revaluation gains of N93.6bn vs. N11.7bn 9M 2017).” Personnel expenses rose to N24.629bn from N21.772bn; operating lease expenses increased N1.45bn from N1.324bn; depreciation and amortization increased to N11.26bn from N10.961bn; just as other operating expenses rose from N48.713bn to N53.021bn, the bulk of which was the N13.066bn one-off Asset Management Corporation of Nigeria (AMCON) levy, which rose from N11.388bn; followed by outsourcing services of N6.323bn, up from N6.005bn; and the deposit insurance premium of N5.826bn from N4.582bn. Profit before tax came to N150.032bn from N137.991bn; income tax expense increased to N20.909bn from N24.454bn; following which net profit stood at N125.577bn, up from N117.081bn, which translated to Earnings Per Share stood at N4.44, as against the previous N4.14. Total assets rose to N3.212tr from N3.116tr, even as customer loans and advances dropped from N1.589tr from N1.428tr; derivative financial assets also dropped from N1.042tr to N696.129bn; while restricted deposits and other assets increased to N437.268bn as against N371.995bn in the prior nine months. Total liabilities rose marginally to N2.631tr from N2.611tr, as customer deposits dropped to N1.891tr from N1.986tr, even as other liabilities climbed to N252.281bn from N115.682bn. Shareholders’ fund for the period rose from N504.902bn to N581.908bn While rating GTBank shares Neutral, FBN Quest noted that “despite the year-on-year decline in earnings, we expect the market to focus on the broad positives, particularly the year-on-year decreases in opex and loan loss provisions. Notwithstanding, the weakness in non-interest income and the q/q decline in funding income will concern investors. “Although the bank’s shares have gained 65% ytd (vs. a 36% year-to-date return on the NSE ASI), we expect a slight positive reaction from the market,” the report added.
By Emma Okonji
The scramble to acquire 9mobile, Nigeria’s fourth largest network operator, promises to be very competitive, as 16 firms have submitted expressions of interest (EoIs) to Barclays to bid for 9mobile, THISDAY has learnt.
Companies that have expressed interest in 9mobile, which until recently was Etisalat Nigeria Limited, until a debt default forced its former owner to relinquish its stake in the firm and exit Nigeria, include Africa’s biggest telecoms operator, MTN; India’s Bharti Airtel, operating as Airtel in Nigeria; and ntel, which in 2015 acquired the assets of the defunct NITEL and MTel through the federal government’s privatisation programme.
Also in the race are Bua Group, the privately held conglomerate promoted by Alhaji Abdulsamad Rabiu; Morning Side Capital Partners, promoted by the former Managing Director of Diamond Bank Plc, Mr. Alex Otti; and Africell, a subsidiary of the Lebanon-based Lintel Group of Companies, with cellular communications operations in the Democratic Republic of Congo (DRC), The Gambia, Sierra Leone and Uganda.
Other firms that submitted EoIs are Obot Etiebet & Co, belonging to a former petroleum minister, Mr. Don Etiebet; Blackstone Private Equity; Tel-ology Holdings Limited, a special purpose vehicle led by a former chief executive of MTN Nigeria, Mr. Adian Wood, and Ericsson; De-elim Services Limited; Veittel, a firm owned by the investment arm of the Vietnamese military which has telecoms assets in Africa; AB-Bro Limited, a Nigerian venture company; Hamilton and George International Limited; and two other firms.
Industry sources confirmed to THISDAY that the 16 companies had complied with the deadline for the submission of EoIs at Barclays’ office in Ikoyi, Lagos, and are preparing to access the data room to conduct their due diligence on 9mobile, preparatory for the bid submission stage.
Etisalat Nigeria had taken out a $1.2 billion syndicated loan from a group of 13 banks but struggled to make repayments this year due to a currency crisis and recession in Nigeria.
The Central Bank of Nigeria (CBN) was forced to intervene to save the company from collapse and prevent creditors from putting it into receivership, leading to a change in its board and management, as well as the new name 9mobile.
The crisis forced the telecoms company’s one-time parent Etisalat to terminate its management agreement with its Nigerian business and surrender its 45 per cent stake to a trustee following the central bank intervention.
9mobile CEO Boye Olusanya has said he is focused on getting the telecoms company back on track to make a profit, while working on the paperwork to eventually raise new capital, adding the company was open to new investors.
The 13 banks have put a freeze on collecting the principal and interest payments on the syndicated loan pending new investors, in order to help the company survive, the sources told Reuters.
They have also held back on taking provisions for the syndicated loan and agreed to extend it after the regulatory intervention in July.
The sources said the central bank had asked the lenders to take a five percent provision on the loan as part of their third quarter results due this month. Some lenders, such as Zenith Bank, UBA, and Access Bank have already made 30 per cent provisions to cover direct lending to 9mobile outside the syndicated loan.
9mobile has over 20 million subscribers with a 14 per cent share of the Nigerian market.
South Africa’s MTN is the market leader with 47 per cent, Globacom has 20 per cent while Airtel has 19 per cent.
The Nigerian lenders with exposure to the telecoms firm had given Barclays the mandate to handle the sale of 9mobile, after Citigroup and Standard Bank, previously in the running for the role, were dropped.
According to Reuters, the lenders decided against Citigroup and Standard Bank due to their previous ties to 9mobile.
Standard Bank’s Nigerian subsidiary, Stanbic IBTC Bank is among the group of lenders to 9mobile while Citi has advised the telecoms company in the past, said banking sources.