Banking
Banks Unlikely to Declare Huge Profits in 2019—Coronation Research
By Dipo Olowookere
An arm of Coronation Asset Management Limited, Coronation Research, has said banks operating in Nigeria are unlikely to post large gains in profits this year.
In its 2019 economic outlook report titled A Tale of Two Halves, Coronation Research, a leading financial services company licensed and regulated by the Securities and Exchange Commission (SEC), further said the deposit money banks will also not experience much loan growth, given the weak economy and the fact that they can benefit from high treasury bill yields.
Speaking on the report, the Head of Coronation Research, Mr Guy Czatoryski, said if interest rates come down later in the year and the market conditions improve, then there could be a sharp rally in bank stocks later in the year.
He further said the narrative for the Nigerian economy in 2019 is largely hinged around the performance of the oil.
“We forecast an average $58.00/bbl for 2019. An average much below this means the Central Bank of Nigeria (CBN) will have to keep rates very high and could even challenge the Naira/Dollar exchange argument.
“An average much about $60.00/bbl means the CBN will have confidence its reserve position and will be able to cut rates later in the year, in Q4, less likely Q3.”
In addition, he said, “The current rate of N365.29/$, or close to it, is likely to prevail this year. The CBN’s policy is to defend the rate and with reserves at $43.0 billion, it is in a strong position to do so. We think the CBN will supply US dollars to the FX markets at an average rate of $500 million per month during 2019. This is compatible with maintaining a strong reserve level
“If, as we think, the oil prices will average $58.00/bbl this year, then we think the CBN will want to keep interest rates high. It will do this through its open market operations (OMO).
“We think OMOs will be issued in a range of 17.00 percent to 19.00 percent and that T-bill rates will be very close to this level during 2019.
“We look at Nigeria in the international context of interest rates. Nigerian T-bill rates look competitive in the context of other emerging market rates – which is why the CBN is having success in attracting inflows of Foreign Portfolio Investment
“However, if oil trades at substantially above $60.00/bbl during 2019 then foreign investors in T-bills will be encouraged and the CBN might well be in a position to cut rates in Q4 2019, or even in Q3 2019.
“This could be helped by a downtrend in inflation. Inflation has proved stubborn and has trended at around 11.00 percent over the past few months. But if inflation trends, in 2019, towards the CBN’s target band of 6.00 percent to 9.00 percent, then it will help the CBN cut rates in order to stimulate the economy.
“We are agnostic on politics. However, there is some evidence that in the period after general elections (2011 and 2015) yields in the T-bill market tend to fall. This might help persuade the CBN to cut OMO rates later in the year.” According to the report, GDP growth is expected to be 2.25 percent in 2019, as a result of very weak consumer demand, and a lack of growth in government expenditure relative to the 2018 budget.
By Aduragbemi Omiyale
The successful N351 billion rights issue through the Nigerian Exchange (NGX) digital capital raising platform known as NGX Invest has excited Access Holdings Plc.
The chairman of the firm, Mr Aigboje Aig-Imuokhuede, said the innovative platform allowed shareholders to acquire additional shares of the organisation without stress.
Access Holdings recently completed the capital raising to enable its banking arm, Access Bank Plc, to meet the new minimum capital requirement for lenders with international operations of N500 billion.
After the bank got N351 billion from the exercise, its capital base rose to N600 billion, surpassing what the Central Bank of Nigeria (CBN) asked for its category.
“By leveraging the NGX’s E-offering platform – NGX Invest, the Company provided its shareholders with a seamless, efficient, and convenient subscriber experience significantly reducing barriers and democratizing participation in the rights issue,” Mr Aig-Imuokhuede said.
In an article published by the World Federation of Exchanges, the chief executive of NGX Group Plc, Mr Temi Popoola, had emphasised that the platform was at the core of NGX Group’s digital strategy, stating that it was designed to streamline the distribution of securities in the Nigerian capital market.
“Its user-friendly interface allows investors to onboard seamlessly and verify their identities through the Nigeria Inter-Bank Settlement System (NIBSS), using their Bank Verification Number (BVN).
“With NGX Invest, the traditionally complex and time-consuming process of investing is reduced to a few clicks, making it easier for investors across Nigeria, including those in underserved areas, to participate in the capital market,” he stated.
The success of Access HoldCo’s capital raise, making it the first bank to officially comply with the CBN’s banking recapitalisation directive, is a key social proof and testament to the robustness of NGX Invest and demonstrates the potential of NGX Group’s platform to support the growth and business goals of its issuers.
By Aduragbemi Omiyale
A leading financial solutions provider in Nigeria, Greenwich Group, is looking to spread its tentacles to pension fund administration (PFA), insurance and financial technology (fintech) services.
To expand into these sectors, the firm, which celebrated 30 years of delivering innovative financial solutions a few days ago, has received an Approval-in-principle (AIP) from the Central Bank of Nigeria (CBN) for a non-operating financial holding company structure.
The chairman of Greenwich Group, Mr Kayode Falowo, expressed profound gratitude to God and the company’s stakeholders for their support.
At the event, the firm, formerly known as Greenwich Trust Limited, said it has continued to build on the legacy of the late (Sir) Remi Omotosho’s good governance, integrity, and professionalism, as he was part of the journey of the company while alive.
The chief executive of Greenwich Merchant Bank, Mr Benson Ogundeji, attributed the success of the past decade to the unwavering support and guidance of the chairman which has been instrumental to the growth of the institution, the commitment of the staff, and the unwavering faith of the esteemed shareholders in the company’s vision, as their continued patronage has been fundamental to Greenwich’s success.
On his part, the Governor of Ogun State, Mr Dapo Abiodun, commended Mr Falowo for demonstrating exemplary leadership and commitment to excellence in his role for spearheading the remarkable traits that have significantly contributed to the growth and success of the Institution.
“We are celebrating the testament of the triumph of tenacity, which is predicated on faith, hope, and fortitude. Kayode is dependable, reliable, and very consistent. Kayode upholds all the attributes of good governance. He has demonstrated himself to be a good manager of human and financial resources over the years. I am convinced that your best is yet to come,” he added.
Business Post reports that the organisation transitioned from its early days as a Financial Adviser and Issuing House into a Merchant Bank.
In March 2024, Greenwich Merchant Bank was granted an AIP by the CBN for a non-operating financial holding company structure.
Today, Greenwich Merchant Bank is the most capitalized Merchant Bank in Nigeria, with a strong asset base of N146 billion as of June 30, 2024.
At the 30th anniversary dinner held in Lagos, the company awarded a posthumous award for leadership of N50 million to the late Mr Omotosho.
The best staff across the Greenwich Group, Mrs Yakashim Shettem, also received the Kayode Falowo Award for Excellence.
By Modupe Gbadeyanka
Stanbic IBTC Bank has solidified its position as the leading bank for capital importation in Nigeria, capturing an impressive 28.30 per cent of total foreign capital inflows in the first nine months of 2024, according to data from the Central Bank of Nigeria (CBN).
The central bank said the subsidiary of the Standard Bank Group attracted approximately $2 billion in capital imported in the period under review, demonstrating its performance during the pivotal year of 2020, which was marked by unprecedented global economic challenges.
The parallel with 2020 is particularly significant, coinciding with the onset of the COVID-19 pandemic, which significantly impacted Foreign Direct Investments (FDI) and Foreign Portfolio Investments (FPI).
Stanbic IBTC Bank weathered this storm and strategically positioned itself to capitalise on the post-pandemic economic recovery.
The lender rapidly digitised its banking operations, maintained robust risk management protocols, and supported clients through unprecedented economic uncertainty while leveraging technology to maintain seamless international financial connections.
With approximately $2 billion in capital importation, Stanbic IBTC Bank has demonstrated its ability to attract international investments during a critical economic reconstruction period.
This performance surpasses its 2023 figures of $919 million, highlighting the Bank’s growing global credibility.
At the heart of this success lies the organisation’s Fitch Triple A ratings for the Holding Company and the Bank subsidiary, which offer investors a beacon of stability in an uncertain global financial landscape.
“We are incredibly proud of what we have achieved with this milestone, as our performance in capital importation goes beyond mere financial metrics; it reflects our strong commitment to making Nigeria an attractive destination for global investors.
“By utilising our international networks and deep local expertise, we facilitate capital flows and actively reshape Nigeria’s economic narrative in the post-pandemic global landscape,” the chief executive of Stanbic IBTC Bank, Mr Wole Adeniyi, stated.
The financial institution’s strong affiliation with Standard Bank Group brings global expertise crucial for navigating post-pandemic economic complexities.
Its highly competent Corporate & Investment Banking team has been instrumental in strategically attracting international capital during economic reconstruction.
This leadership in capital importation reflects broader economic trends, facilitating international investment during global economic rebalancing, supporting Nigeria’s economic recovery, and bridging local economic needs with global investment opportunities.
The $2 billion capital importation in 2024 is not just a number but a narrative of resilience. Where 2020 represented a survival challenge, 2024 symbolises strategic triumph – transforming pandemic-induced disruptions into opportunities for growth and international financial reconnection.
Stanbic IBTC Bank is now positioned to potentially surpass other foreign-affiliated Banks in Nigeria as the primary conduit for foreign capital. This trajectory speaks volumes about its strategic adaptability in a post-pandemic world.
More than a financial achievement, this milestone represents a critical contribution to Nigeria’s economic renaissance. Stanbic IBTC Bank continues to play a pivotal role in driving economic progress and international investment appeal to Nigeria.
The organisation has effectively demonstrated how domestic financial institutions can survive global economic challenges and emerge as leaders in the global financial ecosystem.
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