Banking
First Bank Writes off Bad Debts Linked to Two Oil Moguls
By Modupe Gbadeyanka
Group Managing Director of FBN Holdings Plc, Mr Urum Kalu Eke, has disclosed that in the first half of 2019, the company wrote off one of its largest non-performing loans (NPLs) belonging to Atlantic Energy Drilling Concepts Nigeria Limited.
Speaking on the performance of the firm in the first six months of this year, Mr Eke said this development contributed to the reduction of the entity’s NPL ratio from the 25.9 percent it stood in December 2018 to 14.5 percent as at June 2019.
He stated further that the financial institution was working towards achieving its target of pruning the NPL ratio to a single digit by year-end.
Business Post reports that as at the end of first quarter of 2019, which ended March 31, the NPL ratio of FBN Holdings was 25.3 percent.
“Despite the difficult operating environment, we remain resolute in delivering on our guidance across key metrics including our commitment towards a single digit NPL ratio by the end of year, as evidenced by the reduction in NPLs from the last quarter.
“Essentially, Atlantic Energy, our largest NPL, was written off, translating to a decline in the NPL ratio from 25.9 percent in December 2018 to 14.5 percent as at June 2019, a step that brings us closer to our FY 2019 target and creates more headroom for quality asset growth.
“This is paving the way for sustained improvement in asset quality and a further reduction in impairment charges that will allow us to take advantage of enhanced earnings opportunities when they arise.
“Furthermore, we have remained focused on deepening our transaction-led income and are uniquely positioning for stronger revenue growth and value creation,” Mr Eke was quoted as saying.
Also commenting on the issue, the CEO of First Bank and Subsidiaries, Mr Adesola Adeduntan, noted that, “In line with our commitment to address the legacy asset quality challenges, exposure to Atlantic Energy was written off in the quarter.
“This is a material progress in our legacy NPL resolutions and clearly reflects our resolve towards achieving a single digit NPL ratio by year end.
“In addition, this step creates significant headroom for increased business opportunities and enhanced earnings especially in the oil & gas sector of the economy.”
Business Post reports that Atlantic Energy is promoted by the duo of Mr Kola Aluko and Mr Jide Omokore, both who are believed to be close allies of Mrs Diezani Alison-Madueke, Nigeria’s former Minister of Petroleum from April 2010 to May 2015 under the administration of Mr Goodluck Jonathan.
According to a document released by First Bank, which was sighted by Business Post, the bank, alongside another lender, provided credit facility to Atlantic Energy. This was a $289 million term loan and working capital facilities to make payment of the entry fee to the Nigerian Petroleum Development Company (NPDC) for OML 26, 30, 34, and 42 and fund cash calls for OPEX and CAPEX on the OMLs.
“Atlantic Energy will be providing funds for operation and development of NPDC’s 55 percent interest in OML 26, 30, 34, and 42. In return for this, Atlantic Energy will be granted lifting rights for its financial interest in the Strategic Alliance Agreement (SSA),” the document stated.
This deal between Atlantic Energy and NPDC has been described by observers as one of the biggest oil scams in Nigeria.
By Adedapo Adesanya
Access Bank Plc, the banking subsidiary of Access Holdings Plc, has entered into a binding agreement with South African-based Bidvest Group Limited for the acquisition of 100 per cent equity stake in Bidvest Bank Limited.
The deal for the 24-year-old South African lender is due to be completed in the second half of 2025, upon regulatory approval.
This shows Access Bank’s further expansion plans in line with goals set by its late founder, Mr Herbert Wigwe.
The agreement to acquire 100 percent stake in Bidvest Bank reflects Access Bank’s commitment to strengthening its footprint in South Africa and consolidating on its position as the continent’s gateway to global markets as it seeks to optimise the benefits of recent acquisitions and accelerate its transition towards a greater focus on efficiencies.
Bidvest Bank, founded in 2000 is a niche and profitable South African financial institution providing a diverse range of services, including corporate and business banking solutions and diverse retail banking products.
As of its year ended June 2024, Bidvest Bank reported total assets equivalent of $665million and audited profit before tax of $20million.
Upon conclusion of this acquisition, Bidvest Bank will be merged with the bank’s existing South African subsidiary to create an enlarged platform to anchor the regional growth strategy for the SADC region.
This is coming just as the bank opened a new branch in Malta as part of efforts to focus on international trade finance 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.
The 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.
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.
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