Banking
What Jim Ovia Said About Rumoured Zenith Bank, Union Bank Merger
By Dipo Olowookere
On Monday, March 16, 2020, Zenith Bank Plc held its 29th Annual General Meeting (AGM) in Abuja, and it was an opportunity for shareholders of the bank to engage the top hierarchy of the company on some issues, including the financial statements and others.
Before the meeting, there were unconfirmed reports that Zenith Bank was planning to acquire Union Bank of Nigeria Plc and the shareholders used the occasion, the AGM, to ask Chairman of the bank, Mr Jim Ovia, if this was true.
However, this question was dodged by Mr Ovia as he said nothing about it, but went ahead to answer other questions asked by shareholders present at the meeting.
“Zenith Bank is committed to consistently deliver superior returns to our highly esteemed shareholders by ensuring that a good chunk of our profit is set aside for you.
“In a clear demonstration of this, we had declared and paid you an interim dividend of 30kobo per share in the course of the 2019 financial year.
“We hereby propose a final dividend of N2.50kobo per share. If approved, this will bring the total dividend for the year ended December 31, 2019, to N2.80kobo per share,” Mr Ovia said at the gathering.
During the AGM, shareholders of Zenith Bank unanimously approved the proposed final dividend of N2.50 per share, bringing the total dividend payment for the 2019 financial year to N2.80 per share with a total value of N87.9 billion.
Zenith Bank reaffirmed its leading position in the Nigerian banking industry posting an impressive pre-tax profit of N243 billion, representing a 5 percent increase over the N231.6 billion recorded in the corresponding period of 2018. Its post-tax profit stood at N208.8 billion over N193 billion, an increase of 8 percent, thus making Zenith Bank the first Nigerian bank to cross the N200 billion mark.
The bank’s result showed an increase in gross earnings from N662 billion to N630 billion, indicating dominance in market share, while its assets grew by 5 percent from the N5.9 trillion to N6.3 trillion, a growth driven by the 29 percent increase in non-interest income from N179.9 billion in 2018 to N231.1 billion in 2019.
The bank’s fees on electronic products continue to grow significantly with a 108 percent year-on-year from N20.4 billion in 2018 to N42.5 billion in 2019.
The drive for cheaper retail deposits coupled with the low-interest yield environment helped reduce the cost of funding from 3.1 percent to 3.0 percent.
However, this also affected net interest margin, which reduced from 8.9 percent to 8.2 percent in the current year due to re-pricing of interest-bearing assets.
Although returns on equity and assets held steady YoY at 23.8 percent and 3.4 percent respectively, the group still delivered an improved earnings per share (EPS) which grew 8 percent from N6.15 to N6.65 in the current year.
The group created new viable risk assets as gross loans grew by 22 percent from N2.016 trillion to N2.462 trillion. This was executed prudently at a low cost of risk of 1.1% and a significant reduction in the non-performing loan ratio from 4.98 percent to 4.30 percent.
Prudential ratios such as liquidity and capital adequacy ratios also remained above regulatory thresholds at 57.3 percent and 22.0 percent respectively.
Financial analysts noted this unprecedented feat by a Nigerian bank as remarkable, and an indication of strong financial leadership and resilience.
As a testament to this superlative performance, the bank emerged as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the recently released Banker Magazine Top 500 Banking Brands 2020, the Best Bank in Nigeria 2020 in the Global Finance World’s Best Banks Awards 2020 and the Bank of the Decade (People’s Choice) at the Thisday Awards 2020.
In addition, the Bank was also voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto & Co.
By Aduragbemi Omiyale
The chief executive of Wema Bank Plc, Mr Moruf Oseni, assured shareholders and other stakeholders that putting money in the company would not lead to biting of fingers.
Speaking ahead of the planned raising of about N200 billion in the second quarter of this year, he boasted that Wema Bank has everything to put smiles on the faces of investors.
The lender intends to commence its rights issue and special placement for about N200 billion on April 1, 2025, to complete the recapitalisation requirement of the Central Bank of Nigeria (CBN).
Last year, in the first tranche, Wema Bank raised N40 billion, with the second phase expected to surpass the minimum capital base of the regulator.
“We stand strong today not just as Nigeria’s oldest indigenous bank but also as Nigeria’s leading innovative bank.
“Wema Bank turns 80 this year and I can safely tell you that we have never been more driven to excel. I am blessed to lead with the support of a team of determined and driven professionals who will leave no stone unturned in achieving our strategic aspirations.
“Indeed, we are building Wema Bank into a formidable force in the African financial services landscape.
“We remain dedicated to maintaining transparency throughout this process and will provide regular updates to all stakeholders and shareholders as we go forward.
“This capital raise will be a win-win for us all. You can trust as always that your investment in Wema Bank will produce exceeding returns. This is our promise to you,” Mr Oseni said.
With the deadline for CBN’s recapitalisation exercise set for March 31, 2026, this move by Wema Bank will undoubtedly ensure the bank retains its national banking license way ahead of the deadline
Reaffirming its stance as a bank committed to transparency and adherence to regulatory standards, Wema Bank is working to secure all necessary approvals from relevant regulatory authorities to ensure the process is conducted in full compliance with applicable guidelines.
By Adedapo Adesanya
Global financial payments giant, Visa, has made a strategic investment of $10 million in Nigerian fintech unicorn, Moniepoint, to expand its services and deepen financial inclusion on the African continent.
This development comes three months after Moniepoint raised $110 million in a Series C funding round that made the company a unicorn.
With the new play, Visa joins other investors, including Development Partners International, Google’s Africa Investment Fund, Verod Capital, Lightrock, QED Investors, Novastar Ventures, British International Investment (BII), FMO (the Dutch entrepreneurial development bank), Global Ventures and Endeavor Catalyst as equity partners.
This partnership will combine Moniepoint’s local expertise and innovative business model with Visa’s global resources and capabilities to offer payment solutions to businesses and entities.
Moniepoint provides banking and payment services to small and medium businesses and retail banking. It is one of the market leaders in Nigeria’s agent banking space, with over 300,000 POS agents and has processed billions of transactions since it was founded in 2015.
The new Visa’s investment will further help Moniepoint expand its services and deepen financial inclusion on a continent that still has a comparatively low rate of financial services adoption.
Moniepoint will leverage Visa’s Cybersource system to gain better visibility into transactions. Additionally, it plans to integrate with Visa Direct for remittances and money transfers as it looks to expand into markets within and outside Africa.
Speaking on the move, Mr Tosin Eniolorunda, Founder and Group CEO of Moniepoint said, “Visa’s backing is a strong endorsement of our vision to digitize and support African businesses at scale.
“We aim to deepen financial inclusion, enabling SMEs to access the tools and resources they need to thrive in an increasingly digital economy.”
On his part, Mr Andrew Torre, Regional President, Central and Eastern Europe, Middle East and Africa at Visa, noted that, “Moniepoint has built an impressive platform that directly addresses the needs of Africa’s SMEs, a critical segment in enabling economic development.
”By making financial services and digital payments more accessible and efficient, Moniepoint is helping transform how businesses operate in Nigeria and beyond.
“We are excited to support their next phase of growth and innovation,” he added.
By Dipo Olowookere
Efforts are being made by the management of a rapidly growing financial technology (fintech) company,
Bankit Microfinance Bank (MFB), to grow its loan and gaming services.
The firm said this is one of its targets for 2025 to solidify its position as a leading platform for comprehensive, simplified banking activities after it recorded remarkable growth in 2024 with different milestones as a result of its competitive edge and cutting-edge technology.
The digital financial services provider said it was already talking to its various partners on how to ensure customers get more access to credit facilities for different needs.
It said nothing would be spared to revolutionise digital banking in Nigeria, especially with a focus on innovation, customer protection, and financial inclusion.
Last year, Bankit MFB, within its first few weeks of operations, successfully registered over 50,000 users on its platform, a testament to its innovative simple banking approach to digital banking.
This year, the small lender has an ambitious plan to increase this by 900 per cent to a record 500,000 businesses in 2025.
Business Post gathered that in 2024, the financial institution recorded impressive transaction values, exceeding N100 million, with an impressive 90 per cent transaction success rate.
Since joining the business, it has introduced web banking and other innovative banking products, with more in development.
With the financial services sector not immune to fraud, Bankit MFB said it prioritises the protection of customers’ funds, expressing its commitment to diversifying its digital services to enhance customer experience.
Bankit MFB is a financial institution licenced to operate in the country by the Central Bank of Nigeria (CBN), which is dedicated to providing innovative, customer-centric financial solutions to individuals and others.
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