Banking
FCMB to Sustain Conservative Dividend Policy to Boost Capital Position
By Modupe Gbadeyanka
Group chief executive of FCMB, Mr Ladi Balogun, has disclosed that the group will continue to maintain a conservative dividend policy so as to improve its capital position.
Mr Balogun made this disclosure during a conference call to stakeholders of the banking group on Friday.
According to him, the financial institution does not have plans to raise funds this year due to high funding costs, especially for borrowing in Dollars.
In its 2017 financial statements released this week, the board of FCMB proposed the payment of 10k per share dividend to shareholders.
As at Friday, April 6, 2018, the shares of FCMB were sold on the floor of the Nigerian Stock Exchange (NSE) for N2.35k per share.
Speaking on how the firm plans to make a possible impact this year, Mr Balogun said the tier-two lender expects its non-performing loans to rise in the course of the year but would be within a regulatory target of five percent.
In 2017, the financial institution recorded non-performing loans (NPL) to total loans ratio of 4.9 percent.
Also last year, FCMB booked a 50 percent impairment of N2.3 billion on loans to debt-laden 9mobile, which is in talks with investors to take over the telecoms firm.
This year, the bank expects loan growth to be flat, down from last year’s 5.4 percent rise, as oil companies pay down debt.
“We expect to see large repayments in the oil and gas sector this year. We agree that the (economy) will be improving but largely because of chunky paydowns, we don’t think we would be able to replace those quickly,” Mr Balogun stated.
The bank chief disclosed that FCMB would focus on retail banking with a higher margin this year to make up for a drop in government bond yields as the lender may not be able to write large loans quickly enough to counter-balance repayments by oil firms.
He said the economy was improving after Nigeria experienced its worst recession in a quarter of a century in 2016, which should boost consumers.
“We are pushing more in the area of retail banking,” he said.
According to him, the lender was seeking to convert its wholesale banking unit in Britain, FCMB UK, into a retail bank, as part of its push to grow its balance sheet and tap into non-institutional customers in Britain.
He said the impact of the British strategy would not be immediate but would enable the lender to achieve incremental growth.
Mr Balogun disclosed that the earnings contribution in Naira terms from the British unit will be around N500 million for 2018. FCMB UK grew pre-tax profit by 250 percent to N300 million last year.
“We’ve decided to slow down right now on asset growth and focus more on changing the mix of the asset and getting out some of the low margin upstream oil and gas business,” he said.
In its 2017 earnigns, FCMB achieved a gross revenue of N169.9 billion, a 4 percent decrease from N176.3 billion in 2016.
The decrease was primarily driven by the exceptional FX revaluation income in 2016.
The lender also posted a non-interest income of N32.0 billion for the full-year ended December 2017, a decrease of 33 percent Year-on-Year (YoY) from N47.7 billion for the same period prior year.
In addition, the net impairment on loans reduced by 33 percent YoY to N21.3 billion for the twelve-months ended December 2017, from N31.8 billion for the same period prior year, while the operating expenses increased by 5 percent to N68.7 billion for the full-year ended December
2017, due to contingent expenses.
During the year under review, the bank posted a profit before tax (PBT) of N11.5 billion, declined by 30 percent from N16.2 billion for the twelve-months 2016.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
By Aduragbemi Omiyale
In recognition of its unwavering commitment to fostering access to financing for Nigerian micro, small and medium enterprises (MSMEs), Development Bank of Nigeria Plc has been rewarded with the Financial Inclusion Leadership Award at the Champions of Inclusion Nigeria Financial Inclusion Awards.
This was at the 2024 International Financial Inclusion Conference (IFIC) organised by the Central Bank of Nigeria (CBN) in collaboration with the World Bank and other stakeholders.
The chief executive of the lender, Mr Tony Okpanachi, said the recognition affirms the company’s efforts in expanding access to financial services for MSMEs in Nigeria.
“We are honoured to receive the Financial Inclusion Leadership Award, which is a testament to our bank’s commitment to expanding access to financial services for all Nigerians. This award recognises our efforts to bridge the financial inclusion gap, particularly for a priority sector like the MSMEs.
“Additionally, this award is a validation of our strategic focus on driving financial inclusion for small businesses, and we are proud to be at the forefront of this initiative that drives that. We will continue to innovate and expand our financial inclusion programmes, ensuring that more Nigerian small and startup businesses have access to services,” he stated.
On his part, the Chief Operating Officer of DBN, Mr Bonaventure Okhaimo, said the accolade demonstrates the firm’s dedication to driving financial inclusion and economic growth in Nigeria.
“This award acknowledges our Bank’s innovative approach to widening opportunities for MSMEs in Nigeria to grow and scale their businesses,” he said.
“This award will motivate us to continue pushing the boundaries of financial inclusion, exploring more innovative solutions and partnerships to expand our reach and impact.
“We are committed to ensuring that more small businesses and startup enterprises in Nigeria have access to financial services, this award will further inspire us to accelerate our efforts in this regard,” he stated.
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