Category Archives: BANKING

FCMB Group Records 86% Increase in Half-year Profit



The FCMB Group Plc recorded a profit before tax (PBT) of N7.1 billion for the six-months ended 30 June 2018.

This represented an increase of 86 per cent from the N3.8billion it achieved for the same period in 2017.

 The bank explained that the positive development reflected the improving performance of the financial institution, as well as the effects of diversification through its investments in asset and wealth management.

From the details of its unaudited results announced on the floor of the Nigerian Stock Exchange (NSE), the Group’s gross revenue rose to N83.9 billion as at the end of June 2018, compared to N77.5billion in the corresponding period of 2017.

Similarly, net interest income rose by nine per cent year-on-year (YoY) from N32.5billion to N35.3billion, while non-interest income grew to N16.5billion, an increase of 29 per cent, from N12.8billion for the same period of last year.

The Commercial & Retail Banking group (which comprises First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited) generated a 32.2 per cent increase in PBT to N2.9 billion for half year 2018, from the N2.2 billion recorded at the end of first quarter 2018.

Its revenue increased 3.7 per cent year-on-year, driven by an 8.1 per cent year-on-year increase in non-interest income and an 8.7 per cent year-on-year increase in net-interest income.

Access Bank hosts Fintech Nigeria



The Fintech Association of Nigeria celebrated its first anniversary in grand style as it hosted representatives of its member institutions, regulators, affiliated associations and key players in the Nigerian Fintech space.

The event was hosted by Access Bank at its African Fintech Foundry facility in Lagos.

Fintech Association of Nigeria President, Dr. Segun Aina, while welcoming guests and participants noted that the association had been laying a very solid foundation for a thriving Fintech industry since its inception in June 2017.

According to Aina, the association, under his leadership, has become a rallying point for Fintech and Fintech related activities in Nigeria.

He said the association’s membership base stands at 52.

Listing crucial engagements the association has had in the last one year, he said they included:  hosting of IMF/World Bank delegation, co-hosting of Lord Mayor of London City and the DFID UK team, meeting with the Chairman, Senate Committee on Banking, Insurance and other financial Institutions, amongst others.

He equally said Fintech Nigeria had engagements with regulators such as Central Bank of Nigeria, Securities and Exchange Commission, Nigerian Stock Exchange, National Insurance Commission, National Information Technology Development Agency, Federal Ministries of Science and Technology, Communication, Commerce, Trade and Investment and Finance which would go a long way in creating an innovation and investment friendly environment through appropriate regulatory framework for the growth of the industry in Nigeria.

According to him “the Fintech Association of Nigeria is leading an effort to open us market access and foster cross-border policy regime as it leads the formation of the African Fintech Council, a Council that would be made up of representatives of the National Fintech Associations from the countries in Africa.”

In his goodwill message, President, the Chartered Institute of Bankers in Nigeria (CIBN), Dr. Uche Olowu, stated that the acceptability, growth and impact of the association within a year of existence played a key role in enlisting the CIBN as a member of the association.

He discussed the belief of the institute in the interplay between Fintech and the banks as partners in transforming the financial sector.


Judge Refuses To Hear Suit Against First Bank




Justice ‎Ijeoma Ojukwu of the Federal High Court sitting in Abuja, on Tuesday refused to hear a suit filed by WhitePlains British School against First Bank Plc.
Justice Ojukwu declined hearing the matter on the ground that a sister Judge, Justice Babatunde Quadri, had started hearing the matter and it was only proper for him to continue.
Both Ojukwu and Quadri are vacation judges.
“The case is not on my cause list and I am not going to hear ‎it. We have met and decided that once somebody has started hearing a case, he will continue to the end.
“Another Judge has started hearing this case and he will conclude it,” Justice Ojukwu insisted.
In her ruling after hearing counsel to parties in the suit, Justice Ojukwu said “I am not given to too much talking. I have made my mind and there is nothing anybody can say that would make me to change my mind.
“I will not hear it, somebody has started it and I can’t do anything here,” she declared.
Earlier, Counsel to WhitePlains British School, Mr. Chukwuma -Machukwu Ume (SAN), had pleaded the court to hear the matter, giving that the summer activities of the school have been disrupted by the closure.
“My lord, because of the curious development on Sunday, July 8, 2018, when a school was closed against a valid court order, the court had on July 16, 2018 ordered that this matter be heard ‎during vacation.
“Justice ‎Quadri who made the order equally adjourned the case for today, Tuesday, July 24 for hearing.
“All these orders and other processes have been served on the respondents, who have filed their counter affidavits, so the case is ready for hearing today.
“Although Justice Quadri did not seat today, since your court is equally sitting as a vacation court, it is ‎only proper that the matter be heard my lord, giving that all the parties have filed their processes and are present in court,” Ume submitted.
Reacting, counsel to First Bank Plc, Soji Toki, informed the court that Justice Quadri who had adjourned the matter till today (July 24), could not seat and the matter was further slated for August 8, for hearing.
Toki  wondered why the applicant’s counsel hurriedly decided to come before another Judge to hear the case.
In a further and better affidavit of urgency filed in support of the motion, the deponent, Genevieve Okereke, averred that ‎the respondents embarked on the illegal action two weeks ago while forcefully attempting to take over the school under the guise of staged loan default.
She told the court that First bank officials ,  Mr. Bola Olotu ( Receiver), some armed police officers and masons  on Sunday , July 8, 2018 chased out staff of the elites school worth over N6bn from the school premises in Jabi district of Abuja.
She stated that the respondents went to work and sealed the two entrances and two foot paths with  blocks while trying to enforce a N630m loan default  judgment which the school claimed was obtained through a forged document.
The school told the court that the Tripartite Legal Mortgage which  the bank used in misleading the court to grant their prayers was forged as the school never entered a tripartite agreement with the bank.

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8.25% US$300,000,000 FBN finance company BV subordinated callable note due 2020



Key message

First Bank of Nigeria Limited (“FirstBank” or the “Bank”), the largest subsidiary of FBN Holdings Plc exercised its option to redeem the fixed rate subordinated Note (“the Note”) held by FBN Finance Company B.V. Accordingly, FBN Finance Company B.V. exercised its option to call the US$300,000,000 8.25% subordinated notes, raised in the international debt markets, due August 2020.

By this action the Bank intends to call and prepay holders of these Notes on August 7, 2018. Calling these notes ahead of maturity, demonstrates the strength of the Bank’s foreign currency liquidity and the resilience of our balance sheet. Despite the 2020 Bond being a subordinated Tier 2 instrument, we are able to redeem this without any impact on our capital ratios, due to the surplus Tier 2 capital we currently hold confirming the robust capital base of the Bank.

To ensure the smooth redemption, FirstBank had systematically built up internal liquidity on the back of a strong franchise and its deep market access in the course of 2018, FCY deposits had grown 11.9% year to date and 6.9% year on year. FirstBank will not be reissuing debt in Eurobond markets in the near term, following the planned redemption. Reissuance will be a function of our funding needs, market conditions, expected pricing in relation to alternative funding structure and sources. At the moment, the Bank has ample liquidity to meet foreign and local currency funding needs and maintains sufficient market access to raise additional funds, if required.

It is important to note that the Bank through its various SPVs , like FBN Finance Company B.V. is a repeat issuer and this exercise would make it the second time FirstBank will call and prepay bondholders following its debut 2007 9.75% US $175 Million which was called in 2012. It is a known issuer in international debt markets and has significant market access

The Bank has remained focused on delivering on its strategic objectives and continues to execute towards; improving its asset quality and risk management; enhancing revenue generation; and optimizing operational efficiency.

Union Bank grows H1 profit to N11.7bn


Image result wey dey for Union Bank Logo


Union Bank of Nigeria Plc posted a profit before tax of N11.7bn for the first half of the year, up from N9.5bn in the same period of 2017.

The bank, which announced its unaudited financial statements for the period ended June 30 2018 on Wednesday, said its gross earnings rose by 16 per cent to N83.3bn from N72.1bn in H1 2017, driven by a 10 per cent increase in interest income and 37 per cent increase in non-interest income.

Its interest income grew to N62.2bn in the first half of 2018 from N56.6bn in H1 2017, while net interest income before impairment was up by 14 per cent to N34.4bn, driven by an improvement in net interest margins from 7.9 per cent to 8.2 per cent on the back of lower cost of funds.

The lender said its non-interest income increased by 37 per cent to N21.1bn from N15.4bn in H1 2017, driven by enhanced treasury trading income, recoveries and 311 per cent growth in alternate channel revenues.

It added that the operating expenses rose by 21 per cent to N39.2bn from N32.4bn in H1 2017, largely due to a 25 per cent increase in regulatory levies from the Nigeria Deposit Insurance Corporation and the Asset Management Corporation of Nigeria as well as some one-off items.

The bank reported gross loans of N508.5bn, down from N560.7bn as of December 2017 due to successful recovery/collection efforts and the write-off of some fully provisioned non-performing loans.

Customer deposits was up by three per cent to N826.7bn from N802.4bn as of December 2017, reflecting a 66 per cent increase in foreign currency deposits and the optimisation of local currency deposit book towards low-cost deposits.

Commenting on the results, the Chief Executive Officer, Union Bank, Emeka Emuwa, said, “In the first half of the year, we have continued to see positive results from our efficiency and productivity drive. Across all our business lines, we witnessed strong underlying performance, translating into improved earnings.

He said in the second half of the year, the group would continue to focus on productivity, leveraging enhanced platform to deliver best-in-class services to its customers and taking advantage of targeted opportunities across business lines and geographies.

Speaking on the H1 2018 numbers, the Chief Financial Officer, Oyinkan Adewale said, “With low-cost deposits now accounting for 70 per cent of total deposits, up from 67 per cent as at December 2017, our cost of funds fell in H1 2018. Consequently, the group NIM has improved from 7.9 per cent in H1 2017 to 8.2 per cent in the period. Our foreign currency deposits are up 66 per cent, compared with December 2017; and up 40 per cent compared with March 2018, as we continued to optimise our balance sheet.”

Businessman used POS to dupe Nigerian bank of N1.2 billion – Witness


EFCC operative used to illustrate the story



A prosecution witness, Chuks Igboerika, a manager with Access Bank Plc, on Monday told Justice M.S. Hassan of the Federal High Court in Ikoyi, Lagos how a suspected fraudster, Ifeanyi Nwaneri, had carried out fraudulent transactions to the tune of N1,231,105,297.00 (One Billion, Two Hundred and Thirty-one Million, One Hundred and Five Thousand, Two Hundred and Ninety- seven Naira, Eighty Kobo) using a Point of Sale, POS.

Mr Nwaneri is facing trial alongside Omede Silas Shehu and Monday Akor on an 11- count charge bordering on money laundering to the tune of N1.2 billion.

The complainant, Access Bank Plc, alleged it deployed a POS terminal enabled for international transactions/cards to Nwaneri, who is one of the bank’s customers with account number 0047820964.

It was further alleged that Mr Nwaneri, who claimed to be a businessman, was later found to have carried out fraudulent transactions on the POS.

The bank also alleged that on September 22, 2017, the POS Unit of the bank received a mail from Interswitch on alleged fraudulent transactions totalling N1.2billion via the merchant’s terminal, a development that led to the arrest of Mr Ifeanyi at the Dopemu, Agege, Lagos branch of the bank.

At the time of his arrest, Mr Nwaneri was said to have withdrawn a sum of N532, 929,914.91 (Five Hundred and Thirty Million, Nine Hundred and Twenty Nine Thousand, Nine Hundred and Fourteen Naira, Ninety One Kobo), leaving a sum of N677, 856,826.80 (Six Hundred and Seventy Seven Million, Eight Hundred Fifty-six, Eight Hundred and Twenty-six Naira, Eighty Kobo) in his account.

At the resumed hearing today, the prosecution witness told the court that findings and reviews done by VISA and the Central Bank of Nigeria, CBN, revealed that the POS transactions did not follow the normal procedure for international card transaction.

Led by the prosecution counsel, Nnemeka Omewa, the witness said: “The transactions should have procedurally gone through the issuing bank, which is Access Bank Plc. Then, it should have gone to VISA, that is the owner of the card, through Interswitch, which serves as a switching company and finally to the POS merchant (the first defendant) through the consent of Access Bank.”

He said the transaction, however, went from the merchant POS to Interswitch without getting to VISA.

“But they were all approved by Interswitch as successful transactions,” he added.

He also told the court that findings by the CBN revealed that the transactions were fraudulent and consummated between Interswitch and the POS merchant.

“ Consequently, Interswitch was sanctioned with 75 per cent of the total loss to Access Bank; UBA was sanctioned with five per cent of the total loss for its role in the transactions; Access Bank (the merchant’s bank) was sanctioned with 20 per cent of the total loss based on its negligence on Know Your Customer (KYC) policy”, the witness further said.

Giving further testimony, the witness told the court that a sum of N677million was recovered from the first defendant’s bank account, leaving a debit balance of over N532m deficit, which was shared amongst the three parties – Interswtich, UBA and Access Bank by CBN.

The case was adjourned to July 2 for continuation of trial.

Pearson PLC (LON:PSON) Stock Rating Reaffirmed by Citigroup; First Bancorp (FBP) Has 1.34 Sentiment


First Bancorp (FBP) investors sentiment increased to 1.34 in 2018 Q1. It’s up 0.35, from 0.99 in 2017Q4. The ratio increased, as 86 investment managers started new or increased equity positions, while 64 sold and decreased stock positions in First Bancorp. The investment managers in our database now own: 186.41 million shares, down from 191.75 million shares in 2017Q4. Also, the number of investment managers holding First Bancorp in top ten equity positions increased from 0 to 1 for an increase of 1. Sold All: 16 Reduced: 48 Increased: 56 New Position: 30.

Today, Citigroup reconfirmed their Buy rating on Pearson PLC (LON:PSON)‘s stock in an analyst note released.

The stock increased 0.12% or $0.01 during the last trading session, reaching $8.31. About 2.02 million shares traded or 12.74% up from the average. First BanCorp. (FBP) has risen 45.74% since July 25, 2017 and is uptrending. It has outperformed by 33.17% the S&P500. Some Historical FBP News: 27/04/2018 – FIRST BANCORP PR 1Q EPS 15C, EST. 8.0C; 19/04/2018 – Premier Fincl Bancorp, Inc. Announces Agreement to Purchase First Bank of Charleston; 13/03/2018 – First Bank & Trust Company Participates in VBA Bank Day Scholarship Program: Virginia High School Seniors Will Shadow Bankers for a Chance to Win College Scholarship Money; 19/04/2018 – Premier Financial Bancorp: First Bank Will Be Merged Into Premier Bank; 19/04/2018 – Premier Financial Bancorp, Inc. Announces Agreement To Purchase First Bank Of Charleston; 19/04/2018 – PREMIER FINL BANCORP, TO BUY FIRST BANK OF CHARLESTON; 16/05/2018 – Correction to Press Release: Fitch Affirms First Bancorp’s Ratings at ‘B-‘ and Removes Negative Watch; Outlook Stable; 15/03/2018 – First Bancorp Announces Cash Dividend Increase; 30/04/2018 – FIRST BANK CHIEF RISK OFFICER ALEBIOSU SAYS ON INVESTOR CALL; 21/03/2018 – FIRST BANK SEES AFRICA UNITS PROFIT CONTRIBUTION 10% IN 5 YEARS

First BanCorp. operates as the bank holding firm for FirstBank Puerto Rico that provides a range of financial services and products to retail, commercial, and institutional clients. The company has market cap of $1.80 billion. The Company’s Commercial and Corporate Banking segment offers commercial real estate and construction loans, and floor plan financings, as well as cash and business management services; and underwrites municipal securities, and other investment banking services. It has a 24.81 P/E ratio. The companyÂ’s Consumer Banking segment provides auto, boat, and personal loans; credit cards; lines of credit; and deposit products comprising interest bearing and non-interest bearing checking and savings accounts, individual retirement accounts, and retail certificates of deposit, as well as engages in the finance leasing and insurance activities.

Clover Partners L.P. holds 4.16% of its portfolio in First BanCorp. for 620,266 shares. Rock Point Advisors Llc owns 1.19 million shares or 3.52% of their US portfolio. Moreover, Stieven Capital Advisors L.P. has 2.3% invested in the company for 2.41 million shares. The Illinois-based Fortaleza Asset Management Inc has invested 1.28% in the stock. Jacobs Asset Management Llc, a New York-based fund reported 950,000 shares.

The stock decreased 0.29% or GBX 2.6 during the last trading session, reaching GBX 901.4. About 364,098 shares traded. Pearson plc (LON:PSON) has 0.00% since July 25, 2017 and is . It has underperformed by 12.57% the S&P500.

Pearson plc provides educational materials and learning technologies for teachers and students worldwide. The company has market cap of 6.98 billion GBP. It operates through North America, Growth, and Core divisions. It has a 18.06 P/E ratio. The firm offers courseware services, including curriculum materials provided in book form and/or via access to digital content; and assessments, such as test development, processing, and scoring services.

CBN monetary policy meeting, inflation report and other things to know in finance this week


…The Central Bank of Nigeria monetary policy committee meets in Abuja to discuss key policy rates in the country…


Nigeria's central bank to lend directly to companies through commercial papers                         CBN Governor Godwin Emiefele


Nigeria’s annual inflation rate slowed 11.23% in June 2018 from 11.61% in the prior month, the seventeen consecutive decline and lowest in more than 2 years.

The Nigerian Bureau of Statistics made this known in Abuja on Monday, July 23, 2018. The NBS report will also serve as a reference point as the Central Bank of Nigeria kicks of its monetary policy meeting in Abuja.

 Sub-Saharan Africa looks at other financial and business news for the week:

1. The Central Bank of Nigeria monetary policy committee will be meeting July 23 and July 24 to discuss key policy rates in the country.  The committee will foreign capital flows into the economy, inflation and interest rate and make key decisions as 2019 elections approach.

2. The Nigerian Stock Exchange (NSE) to start implementation of a regulatory framework for the listing of non-interest debt securities on the stock market.

3. Auditor-General 2016 annual report: The report queried 308 Ministries, Department and Agencies of government over the extra-budgetary spending of N149.5 billion in 2016.

4. The Senate and House of Representatives’ Committees on Capital Market and Institutions, Securities and Exchange Commission and other Regulatory Agencies hold the second bi-annual Stakeholders’ Forum on the Capital Market on Monday, July 23 while Nigerian Stock Exchange Bi-annual Nigerian Capital Market Information Security Forum (NCMISF) is slated for  Wednesday, July 25, 2018.

5. Nigerian examination body, Joint Admission and Matriculation Board, has remitted N7.8 billion as surplus to the Federal Government.

6. Stears’ financial technology summit holds on Tuesday, July 24, 2018, at the Oriental Hotel, Lagos with the theme, ‘Banking on FinTech: The Future of Money, Markets and Marketplace.’

7. Nigerian Medview airline took delivery of its newly acquired B777-200ER to boost its fleet with a facility from FirstBank of Nigeria Limited.

8. A.B.C Transport appoints two new directors

9. Dangote Cement, UACN, Seplat Petroleum, Unilever Nigeria Plc, Ecobank Transnational, United Capital Plc, others filed their half-year financial report with Nigerian Stock Exchange. Others companies and public listed companies to follow suit this week.

10. AFRICA CEO FORUM picks Rwanda as host country for its 2019 event

The seventh edition of the AFRICA CEO FORUM, the largest international gathering of CEOs  and investors from the African private sector, will be held between March 25 and 26, 2019, in Kigali, Rwanda.

Nigerian Banks’ Twitter Banter Goes Viral



Sterling Bank may not be the most popular bank in Nigeria. But on Saturday, it crept into the consciousness of many Nigerians, perhaps, potential customers, all thanks to a tweet, which has since gone viral.

The tweet is a less-than-subtle shade thrown at the banks’ rivals including Guaranty Trust Bank, Access Bank, First Bank and Union Bank.

It contains a graphic with the logos of the four banks manipulated to show they are not worthy of customers’ attention.

It was not long before the four banks, sans GTBank, started to respond with digs of their own.

Access Bank’s reply has been liked and retweeted more than Sterling’s trigger tweet.

Union Bank followed suit quickly. It took the bank three tweets to hit the home run.

The last tweet, however, comes with a tone finality and with allusion to the beefs between Nas and Jay-Z (Ether) and Pusha T and Drake (Story of Adidion). And if you are familiar with hip-hop, you will know that ‘Ether’ by Nas and ‘Story of Adidion’ are among the top knock-them-dead diss tracks.

The oldest bank among the lot also fired its own two-tweet salvo.

Guaranty Trust Bank has refused to be drawn into the catfight. Silence is golden?

Why it makes sense for FBN to recall the 8.25% $300m Subordinated Callable Bond


The Nigerian Stock Exchange has just been notified that First Bank of Nigeria, the largest subsidiary of FBN Holdings plc, intends to exercise its option to redeem the fixed rate Note held by FBN Finance Company BV before its maturity date.

In exercising its option, the company intends to call the $300 million 8.25% subordinated Note raised from the international debt markets. The notes which were to mature in 2020, without the call option, will be called and repaid on August 7, 2018. According to the SEC filing, the objective of this corporate action is to manage the company’s liquidity as well as enhancing the efficiency of the bank’s balance sheet.

As a recap, a callable bond is a bond that grants the issuer the option to redeem or repay the principal of the bond before its maturity date. Different factors such as prevailing market rate determine whether an issuer will call a callable bond or not, so it is not always that a callable bond gets called. Now that FBN Holdings has decided to call the bond, the question is, does it make economic sense to do so, if yes, why?

We strongly feel that this corporate action is a smart move on the part of FBN to call the bond and here is why:

Strong Balance Sheet

FBN Holdings has a strong balance sheet and the cashflow to effectively redeem the bond. According to its March 31, 2018 financial statement, FGN Holdings has N1.4 trillion in its cash and cash equivalent at the end of the period which translates into $3.9 billion at a conservative exchange rate of N360/$. This is more than enough to execute the bond redemption and continue to grow the business.

Saving on Interest Expense

This callable bond pays 8.25% annual interest which amounts to about $24.75m annually. Fortunately for the bank, yield has been falling globally with some countries recording negative interest rates.

For example, the yield on the US 10-year Treasury note stood at 2.8327 percent on Friday, July 5th, 2018, although there are projections by analysts in the US that the rate will most likely spike to between 3.5% and 3.75% by the end of the year. There is therefore no gain for FBN to continue to pay 8.25% on the bond when the market interest rate has fallen to around 2.85%. Even if the Holdings Company does not have enough cash to redeem the bond, it makes economic sense to refinance it with another bond that pays far less in coupon interest.

Therefore, by redeeming the bond, FBN will be saving about $24.75m yearly August 8th 2018 to 2020 assuming that there is no alternative investment that would yield more than 8.25% to the company. In addition, having so much money in cash that pays minimal interest while paying 8.25% on callable Notes will have negative impact on the company’s balance sheet and as such, redeeming or calling the Note is quite a smart move.

Pricing Action Suggests Investor Readiness for a call

Ordinarily, as bonds head to maturity or expected call date, they undergo what is usually known as “pull to par or pull to maturity or pull to call”, which is the tendency for prices to trend towards par value unless there is a high likelihood of default, in which case, the price of the bond trades at discount to par. Pricing action for this Note suggests that investors were expecting a call. It may not be a thing of surprise to institutional investors that FBN Holdings is calling the bond as price analysis shows that the bond was being priced very close to par.

According to available pricing information, the bond was priced at 100.1(which is very close to par of 100)  on July 5th, 2018 suggesting that institutional investors and analysts were pricing the bond in anticipation of a possible call.



Nova Launches New Solution to Enhance Operations


Nova Merchant Bank Limited has introduced a new banking solution, Intellect Digital Core (IDC) banking platform to enhance operations and delivery to customers.

According to the bank, the new initiative was informed by the focus of the bank to be the dominant leader in the merchant and investment banking sub-sector in the nearest future.

Chairman of the bank, Mr. Phillips Oduoza, explained that the adoption of the solution aligned with the bank’s goals of enhancing customer satisfaction, while scaling up its services to meet their personalised and individual needs.

He said: “The new banking solution, IDC, helps banks accelerate their digital banking and channel transformation journey and comes with a digital 360 proposition with inbuilt design for both Digital Outside and Digital Inside. While the Digital Outside ensures true Omni channel and consistency of customer experience at all touch points, the Digital Inside drives operational excellence.

“The selection of IDC was borne out of the bank’s philosophy of ‘New Thinking, New Opportunities’. We wanted a platform, which would empower our clients, offer a superior customer experience and lay a robust digital foundation for our bank. IDC is an open and flexible architecture, which allows us to seamlessly integrate with other systems to offer end-to-end solutions. “We believe this gives us a platform to build on the creativity of our employees to solve many of the problems facing our customers and serve as a genuine source of competitive advantage.” 

He assured customers that armed with the new banking platform, the bank was on its way to generate the momentum necessary to achieve its goals for the coming months, adding.

 Oduoza declared: “I have full confidence that if we all imbibe the virtues of the Nova spirit displayed in the implementation of our Core Banking Application, there is no limit to what we can achieve collectively as an institution.”

Union Bank Grows Half-year Profit after Tax by 25% to N12bn



                                                Union Bank CEO, Emeka Emuwa


Union Bank of Nigeria Plc has released its financial results for the half year ended June 30, 2018, showing improved performance indicators. The lender recorded gross earnings of N83.3 billion, indicating a growth of 16 per cent.

Net interest income rose 14 per cent from N30.1 billion to N34.3 billion, driven by an improvement in net interest margins from 7.9 per cent to 8.2 per cent on the back of lower cost of funds. Non-interest income grew by 37 per cent to N21.1 billion, from N15.4 billion following enhanced treasury trading income, recoveries and 311 per cent growth in alternate channel revenues. Credit/other impairment charges went up by 26 per cent from N3.7 billion to N4.6 billion.

The bank ended the period with a profit before tax (PBT) of N11.7 billion, up 23 per cent compared with N9.5 billion in the corresponding period of 2017. Profit after tax (PAT) grew faster, rising by 25 per cent from N9.2 billion to N11.5 billion in 2018.

A further analysis of the results show that Union Bank is attracting more patronage as customer deposits rose three per cent to N826.7 billion, compared with N802.4 billion in 2017. However, loans and advances to customers fell by nine per cent from N560.7 billion to N508.5 billion in 2018. Non-performing loan ratio improved from 19.8 per cent to 10.8 per cent.

Commenting on the results, Chief Executive Officer of Union Bank said: “In the first half of the year, we have continued to see positive results from our efficiency and productivity drive. Across all our business lines, we witnessed strong underlying performance, translating into improved earnings. We continue to focus on the recovery of non-performing loans. With the resolution in Q2 2018 of the large real estate exposure which was impaired in December 2017, the Group NPL ratio is down to 10.8 per cent from 14.9 per cent at 31 March 2018 and 19.8 per cent at 31 December 2017.”

Also speaking, Chief Financial Officer of the bank, Oyinkan Adewale said: “We are pleased that for the first time since 2012, the group’s retained earnings moved from a negative to a positive position, thus eliminating a major technical impediment to the payment of dividends. Operating Expenses for the period were affected by some one-off items, as well as a combined 25 per cent increase in NDIC premium and AMCON levy. For the rest of the year, we will intensify our cost rationalisation initiatives.”

Wema Bank Consolidates Growth

…with a 29.7 per cent increase in customer deposits and profit after tax for the half year ended June 30, 2018, Wema Bank Plc has consolidated its growth and raised hopes for improved returns for shareholders…




Wema Bank Plc has shown resilience over the years surviving many challenges that saw the collapse of many of its peers. Through various strategies, including reverting to a regional bank at a point, the financial institution has been able to reposition itself for better performance. Going by its results for the half year ended June 30, 2018, Wema Bank Plc is fast regaining strong customer acceptance and posting improved bottom-line.

The bank recorded gross earnings of N31.93 billion in 2018, indicating a growth of 5.1 per cent above the N30.37 billion recorded in the corresponding period of 2017. Interest income was N25.39 billion, compared with N25.36 billion in 2017.
Non-interest income rose by 30.4 per cent from N5 billion to N6.5 billion. Profit before tax improved by 26.6 per cent, from N1.43 billion to N1.81 billion, while profit after tax grew faster by 29.6 per cent from N1.22 billion to N1.58 billion.

A further analysis of the results showed that more customers are getting attracted to the bank as deposits improved by 39 per cent, while total assets stood at N450.12 billion, up by 16.7 per cent from N385.4 billion.
Also, while many banks are reducing lending, Wema Bank Plc increased loans and advances from N223.4 billion in 2018, from N215.8 billion in 2017. Shareholders’ funds stood at N50.98 billion from N49.72 billion.

Bank Explains Performance
Commenting on the results, the Acting Managing Director /CEO, Wema Bank, Mr. Ademola Adebise said the performance was largely in line with our expectations.

“Deposit grew by 39 per cent to N354.88 billion on the back of continued acceptance of the Wema brand and the sustained success of ALAT – our flagship digital bank. We also improved our earnings capacity. The bank continues to execute on its five-year retail strategy with a clear mandate to improve performance by leveraging innovation. The emphasis for us is not just to digitise our product offerings to customers but also to build a technology driven back-end infrastructure to further improve on turnaround time and efficiency,” he said.

According to him, the bank also continues to improve its customer acquisition through the impressive performance of its USSD platform. The bank also recorded significant growth in agency banking partnerships, with the number of agents increasing by 25 per cent to 845 agents as at H1’2018 across all the 36 states of Nigeria.
“The bank will further leverage on its platforms and in-built capabilities in lowering cost to serve and growing market share.

“During the period, the bank secured credit lines of $15 million and N7.3 billion from the African Development Bank (AFDB) and the Development Bank of Nigeria (DBN) respectively. This is further in-line with the Bank’s intent of obtaining long term funding to drive its SME business. The bank is also expected to open the second tranche of its debt issuance program in a few weeks. With these half-year results, we believe we are on track to deliver on our commitments to shareholders at the beginning of the year,” he said.

Enters New MD
After nine years in office as MD/CEO, Mr. Segun Oloketuyi will retire effective September 30, 2018. He has already proceeded on terminal leave from July 1, hence Adebise will take over in acting capacity subject to regulatory approvals.

Oloketuyi was named GMD/CEO of Wema Bank Plc in June 2009. Upon joining Wema, he was tasked with returning the bank to profitability following the 2008 banking crisis which saw the collapse of many banks.
At that time, Wema Bank had negative retained earnings in excess of N66 billion and was declared a bank in grave financial situation by the regulatory authority. In his decade-long leadership, he completely turned around the fortunes of the bank, recapitalising the bank and returning it to profitability.

The bank is now positioned to deliver dividends to shareholders in the near-future. In his time as MD, the bank also regained its national banking licence from the Central Bank of Nigeria, which has allowed it to expand to the North and East of the country, significantly increasing its market share and customer base in the process,” it said.
The smooth transition that saw Adebise occupy the position of MD/CEO has been hailed as a strategic decision. Adebise has been part of the bank’s executive management team since the transformation programme began in 2009 and has played a pivotal role in the execution of the strategic turnaround programme for the bank.

He has over 28 years’ experience in the banking industry (inclusive of four years in management consulting), and has worked in various capacities in information technology, financial control & strategic planning, treasury, corporate banking, risk management and performance management.
Before joining Wema Bank, Adebise was Head, Finance & Performance Management Practice at Accenture (Lagos Office) where he led various projects for banks in business process re-engineering, information technology and risk management.

He is an alumnus of the Advanced Management Program (AMP) of the Harvard Business School and a holder of a Bachelor’s degree in Computer Science from the University of Lagos. He also holds a Master’s degree in Business Administration (MBA) from the Lagos Business School.
Adebise is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN). He is also an Associate of the Chartered Institute of Taxation and Computer Professionals (Registration Council of Nigeria). He is an honorary member of the Chartered Institute of Bankers of Nigeria (HCIB) and a member of the Institute of Directors.

N20bn Bond Boost
In order to boost its capital, Wema Bank Plc is planning to raise N20 billion via bond offering in August. Adebise said: “We need to enhance our funding. The bank is in the process of raising Tier II and the offer will be opened in August,” Adebise said.

The debt raise is the second tranche of a N50 billion bond programme. The bank said it has appointed parties for the offer and aims to boost its capital ratio to 15 per cent before year-end. The debt issue would help Wema Bank boost its capital ratio above its internal guidance of 15 per cent, from 14.3 per cent compare with the regulatory minimum capital ratio for Wema Bank and its peers, which is 10 per cent.

Wema Bank had earlier said it could issue debt assuming government bond yields dropped below 18 per cent with falling inflation. The bank also hinted of raising equity in 2018 to bolster its capital ratio and cut its operating costs as its new digital strategy gains traction.

ALAT Wins Award
ALAT, which contributed to the growth of deposits of Wema Bank Plc won the ‘Best Mobile Banking App’ and ‘Best Digital Bank for 2017’ in this year’s World Finance Digital Banking Awards.
The World Finance Digital Banking Awards celebrate organisations that lead the way with digitalisation while meeting consumer demands and mitigating against accompanying risks along the way.

The recognition by World Finance, a global print and online media platform which provides comprehensive commentary and analyses of the global economy, is the latest in a series of awards that has greeted the arrival of ALAT into the African banking space.

“We are delighted to earn such a global recognition so early in the existence of ALAT. To us, they are not merely a reward for the hard work but also an incontrovertible evidence of Wema Bank’s new place as a leader in banking innovation in Africa,” the bank said.
The bank noted that it would always remain committed to leveraging technology in delivering superior value to all stakeholders.

“We have developed in-house capacity and capabilities to enable us provide best-in-class digital banking services across all touch points,” it added.
According to the bank, beyond ALAT, it continues to champion innovation and leverage technology in breaking barriers plaguing conventional banking.

Nwankwo: Access to Capital Really Affecting MFBs

The Chief Executive Officer, Impact Training Centre Limited, an academy involved in training microfinance institutions, Mr. Promise Nwankwo, in this interview, spoke about developments in the sub-sector.



What is the public perception about microfinance banks?

My take is that microfinance is the bank of the future. When microfinance banks (MFBs) started, fortunately I was part of it about ten years ago. What has happened over the years is that there has been one or two issues. But with capacity building initiatives in the industry which the central bank has introduced, through the Microfinance Certification Programme and a few other capacity building institutions that have come of age, I think the industry is getting better.

Over time, I think it would become much more interesting because I know that a lot of MFB promoters came in with their commercial bank mindset. I know fully well that MFB is quite different from commercial banking. What we are doing right now is to ensure that a lot of them know how to appraise those customers because a lot of customers they are dealing with are illiterates. I assume also that a lot of them are women. So, your ability to appraise them in terms of loans so that you don’t give them excess loans is one of the things that is in the industry. And things are much more better once they understand that training is very important.

What is the rate of customer default in the sub-sector?

We normally use the word portfolio at risk. It varies from bank to bank. But on the average, currently, I think we have over 1,000 MFBs in Nigeria and averagely I think it’s about 40 per cent because of the level of default by customers. I also want to tie it to what I said earlier, the ability to appraise a customer is the major reason why a lot of defaults are happening and some customers wouldn’t tell you the whole truth about their businesses.

So, our ability to teach customers how businesses are done is the major way which those level of defaults can be reduced and secondly, I think loan monitoring is very important. You can’t just give out loans to customers and go to sleep. You must ensure that you monitor them as much as possible.

How are the MFBs coping with the challenge of poor infrastructure in the country, which obviously would be affecting their profitability?
It affects their profit immensely because the cost of doing business is quite high in the industry and you have to take care of any bill that is attached to it. Your ability to a reasonable extent to reduce cost as much as possible so that you would keep your head above water and stay afloat is very important. One of the major parameters for MFBs is that you work within a radius of your environment, maybe 5-10 kilometres, so that you don’t see yourself extending to places that is going to cost you so much to transport.

Then possibly, if you can afford solar, you should put those things in place so that it would reduce your level of buying diesel or fuel because over time, solar can last for the next 20-25 years as the case may be. So, if you can afford that, you would discover that it reduces your cost. Of course, there is the initial cost, but over time, it would reduce. On how they are coping, the major thing is outreach. You must ensure that you cover a lot of customers so that you are not just dealing with few customers.

You must endeavour to be dealing with a multitude so that over time it weighs out the cost of doing business. For example, for the kind of product we offer, we do group lending and it is expected that an account officer would have at least 200-250 clients he or she is dealing with over a period of nine months to one year. So, with that, if you are given X amount, you see that the cost of doing business is spread rather than dealing with one customer. So, your ability to have more outreach covers a lot of cost for you.

What measures do you think should be taken to improve financial inclusion?

Well like I said earlier it’s a function of outreach. A study has shown that only about 33 per cent of the entire population has been to the four walls of a bank and about 65 per cent have not, particularly in the rural areas. It is a very interesting place to look at where people can now begin to set up businesses or branches as the case may be, in rural areas and ensure that they market them because a lot of them need loans to expand their businesses or whatever they are doing.

So, financial inclusion includes that those customers are now being part of the financial system where whatever money they have is no longer kept under their pillows but now being accounted for in the sector. The CBN can do a lot in assisting the MFBs especially in the area of training because you find out that one area of deficiency in the sub-sector is knowledge, commercial banking inclusive. So, helping to sponsor or co-sponsor training of staff in the microfinance institutions would affect the quality of the workforce and that would make a huge impact.

Can you highlight some challenges facing the sub-sector today?
One of them is capital and access to funds. You would realise that many of them were set up with N20 to N50 million. So, it is quite difficult for them to reach out and with the cost of doing business in Nigeria, you need a sizable amount of money for you to do a sustainable business.

And for you to have a very small capital and you are struggling in an environment where you have to provide your own power and all sorts of things, it is quite difficult. Even if you want to borrow, the banks are not lending and for the development funds from the CBN, because of the conditions attached, it is also not available. It is only the big microfinance institutions that have access to foreign development organisations and that’s why some of them are doing well. But they are very few. We have less than 10 of them in Nigeria, whereas the other MFBs that are over 900 do not have access to funds.

‘Access to Mobile Phones Has Simplified Banking’





The spread of mobile phones and cellular networks are facilitating easier access to financial services in hard-to-reach population and small businesses at low cost and risk in developing countries.

Managing Director and Chief Executive Officer of Sterling Bank Plc, Mr. Suleiman Abubakar, said this while delivering a paper as guest speaker at a breakfast roundtable organised by the Financial Services Group of the Lagos Chamber of Commerce and Industry (LCCI) on deepening financial inclusion through data analytics and financial technology in Lagos recently.

Abubakar, who was represented by Sterling Bank’s Chief Information Technology Officer, Mr. Olayinka Oni, noted that in the context of financial inclusion, “Fintechs hold tremendous potential, challenging old business models with greater speed, accountability and efficiency at a cheaper cost.”

He said access to financial products and services were becoming more attainable than ever for consumers that live in rural locations or regions without the equipment and infrastructure of a modern economy due to the prevalence of mobile phones and cellular networks.

Abubakar said financial institutions and fintechs could objectively use data analytics to extend credit to consumers who previously had to contend with sometimes exploitative informal credit because they had no formal credit history.

He said it was essential for a country to have strong political commitment and coordination across relevant stakeholder groups in both the public and private sectors of the economy to achieve financial inclusion.

In addition, the country must put in place wide-reaching policies that promote responsible financial access, financial capability, innovative products and delivery mechanisms, the guest speaker said.

He stressed the impact of data on financial inclusion, saying as customer transactions around the world become increasingly digitised, data analytics can shed light on patterns such as how frequently and for what purposes customers use their accounts to provide some benefits for financially excluded customers.

“Benefits that can be obtained from this approach include insights on financing, accelerating customer product adoption, improved marketing effectiveness and agent network optimisation,” he said.