Economy
GCR Affirms FBN Merchant Bank Limited’s A-(NG) Rating
By Modupe Gbadeyanka
Local rating agency, Global Credit Ratings (GCR) has affirmed the national scale ratings assigned to FBN Merchant Bank Limited of A-(NG) and A2(NG) in the long and short term respectively, with the outlook accorded as stable.
GCR said it accorded the above credit ratings to FBN Merchant Bank Limited (FBNMB) after it successfully operated as a merchant bank for the full year 2016, having converted from Kakawa Discount House Limited (Kakawa) and subsequently becoming a member of the FBN Holdings Plc.
Also, note is taken of the significant change at the top management level to drive the new merchant banking strategy.
While FBNMB intends to explore all the permissible activities under merchant banking operations, it is yet to fully implement its strategic plan. As such, the bank is considered to be in an initiation stage.
Shareholders’ funds increased 4.0 percent to N29 billion at FY16, ranking as one of the highest among peers and ahead of the regulatory minimum of N15 billion for the subsector.
The bank’s capital adequacy ratio is considered strong at 22.6 percent, against a regulatory minimum of 10 percent.
The bank’s regulatory liquidity ratio ranged between 58.5 percent and 84.6 percent in FY16 and averaged 74.4 percent for the period, against the 20 percent regulatory minimum for the subsector.
Furthermore, cash and equivalents totalled N22.9 billion, representing 16.8 percent of the asset pool at FY16.
Furthermore, a sizeable 86.8 percent of the investment securities were placed in tradable treasury bills and Federal Government of Nigeria bonds.
Asset quality metrics improved significantly in FY16, as the non-performing loan (NPL) ratio reduced to 3.4 percent, from 12.2 percent in FY15.
While cognisance is taken of the fact that all NPLs were from the discount house operation, management has also informed GCR that these only relate to two obligors, one of which made a partial settlement in FY16.
Although FBNMB reported an improved profitability at the pre-tax level (which grew 28.5 percent in FY16), profit after tax was a lower N4.9 billion (FY15: N6.6 billion) as the bank had benefited from tax credit in FY15. The bank recorded 21.1 percent growth in total operating income, largely supported by non-interest income (comprising fee and commission income, foreign exchange revaluation gains as well as investment banking activities).
However, operating expenses also grew 39.5 percent on the back of ongoing structural adjustments and an increase in staff strength. The cost to income ratio is considered moderate at 39.8 percent.
Consequently, return ROaE and ROaA stood at 17.3 percent and 4.0 percent respectively in FY16 (FY15: 29.2 percent and 6.6 percent respectively).
Furthermore, performance in 1Q FY17 reflects a significant improvement from that of the same period in FY16, albeit behind budgeted figures. Note is taken of the fact that budgeted figures for FY17 appear optimistic.
The rating may be adjusted upward following a sustained improvement in profitability and asset quality. However, it may be negatively impacted by a deterioration in asset quality metrics, liquidity and or the capitalisation level.
By Bon Peter
The Area 11 Command of the Nigeria Customs Service (NCS) in Onne, Rivers State surpassed its 2024 annual revenue target by N16 billion.
This information was revealed to newsmen by the Customs Area Controller of the Command, Mr Mohammed Babandede, at a news conference last week.
He also disclosed that the command recently intercepted 12 containers of illicit drugs worth over N20.30 billion concealed in various items.
According to him, the content of the seized container included 1,721,100 bottles of 100ml cough syrup codeine, 510,000 tablets of 50mg Really Extra Diclofenac, 7,100,000 tablets of 225mg Royal apple Tramadol and Tramaking, 3,461 pieces of sanitary ware fittings used for concealment, 840 pieces of Chilly cutter used for concealment, and 153 cartons of TVS rubber.
“Our vigilant officers and men have successfully intercepted and seized an additional 12 containers (40 feet) of illicit medicine.
“This is a testament to our unwavering commitment to safeguarding public health, ensuring security of our nation and compliance with Nigeria’s import regulations. This also justifies our commitment to trade facilitation, transparency, effective and efficient service,” he said.
He said last year, the command received the support of different stakeholders, thanking them for working with the agency to achieve success.
“We appreciate the continued support and collaboration of all stakeholders, including the media, in amplifying our message and efforts to combat smuggling,” he said.
Mr Babandede stated that, “It is worth noting that the morale and dedication of our officers have been significantly bolstered by the Comptroller-General of Customs’ award, recognizing Area 2 Command as the Best Command in Anti-Smuggling Operations.
“This honour has further strengthened our resolve, and I assure you that we will not relent in performing our duties to protect the lives and well-being of Nigerians.”
The customs chief said earlier last year, the command was given a revenue target of N618 billion but as of December 31, 2024, it generated N634 billion, higher than the N321 billion recorded in 2023, promising to do more in 2025.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited appreciated by 0.39 per cent on Friday as the demand for local equities continued to increase.
During the final trading session of the week, the insurance maintained its upward trend with a growth of 7.81 per cent as the banking index appreciated by 1.08 per cent, the consumer goods sector rose by 0.52 per cent, and the industrial goods counter expanded by 0.33 per cent, while the energy space went down by 0.49 per cent.
At the close of business, the All-Share Index (ASI) jumped by 406.19 points to 103,586.33 points from 103,180.14 points, and the market capitalisation increased by N248 billion to N63.166 trillion from N62.918 trillion.
The bourse recorded 67 appreciating shares and 11 depreciating shares, implying a positive market breadth index and strong investor sentiment.
Chams, Omatek, NCR Nigeria, Learn Africa, and Regency Alliance topped the gainers’ table after they gained 10.00 per cent each to finish at N2.31, 88 Kobo, N6.05, N4.95, and 88 Kobo, respectively.
On the flip side, TotalEnergies lost 9.74 per cent to trade at N630.00, CWG depreciated by 6.04 per cent to close at N7.00, Thomas Wyatt went down by 5.26 per cent to N1.80, ABC Transport crumbled by 4.07 per cent to N1.18, and UAC Nigeria shed 3.19 per cent to N31.90.
Yesterday, investors traded 709.3 million stocks valued at N8.2 billion in 13,593 deals compared with the 829.8 million stocks worth N5.7 billion transacted in 11,752 deals on Thursday, representing a slowdown in the trading volume by 14.52 per cent and a rise in the trading value and number of deals by 43.86 per cent and 15.67 per cent, respectively.
At the close of business, Chams topped the activity log with 58.1 million equities sold for N133.8 million, Veritas Kapital traded 55.1 million shares valued at N89.2 million, Abbey Mortgage Bank exchanged 50.1 million stocks for N165.5 million, AIICO Insurance transacted 39.7 million equities worth N68.3 million, and NPF Microfinance Bank sold 34.3 million stocks valued at N64.0 million.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its positive start to the year with a 0.08 per cent rise on Friday, January 3.
The market saw a gain of N840 million, with the value of the alternative bourse growing to N1.046 trillion from the N1.045 trillion it closed a day earlier as the NASD Unlisted Security Index (NSI) made an addition of 2.43 points to wrap the session at 3,052.34 points compared with 3,049.91 points recorded at the previous session.
The appreciation posted yesterday at the NASD OTC exchange was caused by two price gainers led by Industrial and General Insurance (IGI) Plc which jumped by 2 Kobo to end at 20 Kobo per share compared with the preceding session’s 18 Kobo per share and UBN Property Plc, which improved its value by 16 Kobo to close at N1.98 per unit, in contrast to Thursday’s closing price f N1.82 per unit.
The market posted a price loser, which was FrieslandCampina Wamco Nigeria Plc as it dropped 18 Kobo to finish at N39.76 share versus the previous day’s N39.94 per share.
There was an 856.6 per cent surge in the volume of securities traded in the session to 11.3 million units from the 1.2 million units traded in the preceding session.
Equally, there was a jump in the value of shares traded yesterday by 1,078.4 per cent to N56.8 million from the N4.8 million made previously, and the number of deals increased by 22.7 per cent to 27 deals from 22 deals.
FrieslandCampina Wamco Nigeria Plc was the most active stock by value (year-to-date) with 1.4 units worth N55.8 million, IGI Plc came next with 10.6 million units valued at N2.1 million, and 11 Plc was in third with 6,45 units sold for N1.4 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, FrieslandCampina Wamco Nigeria Plc came next with 1.4 million units valued at N55.8 million, and UBN Property Plc followed with 275,740 units worth N545,965.
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