Economy
Fidelity Bank to Issue N100bn Bond in Q4 2020
By Adedapo Adesanya
Fidelity Bank Plc has announced plans to issue bonds worth N100 billion in the fourth quarter of the year to boost its capital ratios and funding capacity.
This was made known by the bank’s Chief Operations and Information Officer, Mr Gbolahan Joshua, during an analysts’ call on Tuesday.
The Lagos-based lender will issue the debt in a series, starting with a N50 billion offer which will commence anytime from October.
The extra funds will help increase the bank’s capital adequacy ratio by 2 percentage points, from 18.8 per cent in June, he said.
The bank also plans to refinance a N30 billion, seven-year fixed-interest security with part of the proceeds by recalling it two years earlier.
This is coming at a time when the COVID-10 outbreak, a slump in oil prices and the devaluation of the Naira have affected businesses in the country.
Fidelity Bank is looking to raise funds at a cheaper rate than the 16.5 per cent it paid for a similar issuance in 2015, according to Mr Joshua.
Nigeria’s debt market yields have dropped since the Central Bank of Nigeria (CBN) last year barred individuals and non-bank institutions from buying short-term securities in its Open Market Operations (OMO).
In its forecast, the lender said it expects to see a 15 per cent drop in profit this year compared with 2019, citing the impact of the coronavirus pandemic.
Commenting on the half-year results released at the weekend, Fidelity Bank CEO, Mr Nnamdi Okonkwo said the performance for the period, reflects the resilience of the bank’s business model.
“Due to the global and domestic headwinds witnessed in H1 2020, we proactively increased our cost of risk as the impact of the pandemic slowed down economic activities whilst adapting our business model to the new risks and opportunities of the new normal,” he stated.
According to him, Fidelity Bank, re-stated its first half 2019 figures from N15.1 billion to N9.8 billion to reflect the impact of International Financial Reporting Interpretations Committee (IFRIC) 21- Levies, which was adopted for the first time on the first half 2020 financials.
“The key impact of IFRIC 21 was that our 2020 full year, the Asset Management Corporation of Nigeria (AMCON) cost was recognised 100 per cent in our first half 2020 accounts rather than been amortised over 12 months as was done previously on our financials,” the retiring senior banker said.
He further revealed that, without implementing IFRIC 21, profit for the period would have been N17.9 billion compared to the N15.1 billion reported in the comparable period in 2019.
Its savings deposits in first half 2020 increased by 32.2 per cent to N363.9 billion with the bank on course to achieving the seventh consecutive year of double-digit growth in savings. Its savings deposits accounted for 49.1 per cent of the total growth in customer deposits and now represents 25.9 per cent of total deposits, compared to 22.5 per cent in 2019 full year.
By Adedapo Adesanya
Crude production under the collective Organisation of the Petroleum Exporting Countries (OPEC ) fell in May to its lowest level in at least 37 years as the blockade of Iran by the United States and disruptions in the Persian Gulf, continued to limit output.
According to a Bloomberg survey released on Friday, output from the organisation’s 11 current members, including Nigeria, dropped by 1.22 million barrels per day to 16.33 million barrels per day last month.
Iran accounted for more than half of the decline. The data excludes the United Arab Emirates (UAE), which departed the cartel last month after six decades of membership.
War between a US-Israeli alliance and Iran has reduced oil supplies from the Middle East, largely closing the Strait of Hormuz waterway. Saudi Arabia, Iraq, the UAE and Kuwait have been forced to cut crude production. Iranian shipments face additional pressure following a US blockade of its ports imposed in mid-April.
Iranian output fell by 710,000 barrels per day to a five-year low of 2.34 million barrels per day in May, the survey showed. Central Command reported that US forces have redirected 127 commercial vessels to enforce the blockade of all maritime traffic entering and exiting Iranian ports.
Kuwait recorded the second-largest decline last month, with production falling by 310,000 barrels per day to 490,000 barrels per day, less than one-fifth of pre-war levels. Saudi Arabia, the group’s leader, saw output decrease by 240,000 barrels per day to 6.57 million barrels per day.
The production reductions have not prevented OPEC and its allies from raising quotas over recent months, continuing a year-long process of restoring output halted several years ago.
This comes ahead of a meeting scheduled to be held on Sunday, June 7, where a sub-group of seven members is expected to increase targets by 188,000 barrels again in July. The session is one of four online meetings OPEC and its partners plan to hold that day.
Delegates indicated the alliance has plans for two additional monthly quota increases in August and September. UAE output rose by 300,000 barrels per day to 2.44 million barrels per day in May, according to the survey.
By Aduragbemi Omiyale
The 2025 third quarter Budget Implementation Report from the Budget Office of the Federation has shown that the federal government exceeded the funds allocation for repayment of debts for the first nine months of the fiscal year by about 18 per cent.
In a report by Punch, the sum of N10.74 trillion was budgeted for debt servicing between January and September 2025, but the government used N12.63 trillion for the purpose, N1.90 trillion or 17.65 per cent more than the allocation for the year.
The funds were spent on domestic debts, foreign debts and sinking fund by the central government in nine months.
Business Post reports that for the whole year, the amount approved by the National Assembly and signed by President Bola Tinubu for debt repayments was N14.31 trillion.
Looking at the nine-month figures, domestic debt service gulped N6.23 trillion, exceeding its N5.39 trillion provision, while foreign debt service was N6.30 trillion versus the budget provision of N5.06 trillion.
According to the report, the figures indicated that 67.2 per cent of the federal government’s retained revenue of N18.63 trillion was spent on debt service in the first nine months of 2025. When the sinking fund is included, debt-related payments consumed about 67.8 per cent of revenue.
It was also observed that aggregate federal government revenue underperformed the budget by N12.03 trillion or 39.24 per cent, as actual revenue of N18.63 trillion fell short of the N30.67 trillion projected for the first three quarters.
In the third quarter alone, the government generated N7.70 trillion versus the quarterly target of N10.22 trillion as a result of persistent oil revenue shortfalls, despite stronger non-oil collections.
The debt burden also crowded out capital spending, as total capital expenditure was N3.10 trillion in the first nine months compared with the N17.58 trillion budgeted for the period, indicating that actual debt-related payments were more than four times capital expenditure.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a loss of 1.13 per cent on Thursday, June 4, shrinking the market capitalisation by N30.03 billion to N2.630 trillion from N2.660 trillion on Wednesday.
Similarly, this brought down the NASD Unlisted Security Index (NSI) by 50.19 points to 4,396.08 points from the 4,446.27 points recorded a day earlier.
The loss was influenced by the overpowering of the bulls by the bears, after the bourse closed with two price gainers and three price losers, led by FrieslandCampina Wamco Nigeria Plc, which slumped by N20.03 to sell at N190.38 per unit compared with midweek’s N210.41 per unit. Food Concepts Plc declined by 25 Kobo to trade at N2.50 per share versus the previous day’s N3.00 per share, and Acorn Petroleum Plc crumbled by 2 Kobo to end at N1.32 per unit, in contrast to the preceding session’s N1.34 per unit.
For the gainers, Central Securities Clearing System (CSCS) Plc added N2.93 to close at N78.34 per share compared with the previous price of N75.41 per share, and Afriland Properties Plc gained 80 Kobo to settle at N16.80 per unit versus N16.00 per unit.
There was a slip in the volume of transactions yesterday by 46.8 per cent to 280,714 units from 527,221 units, as the value of trades dropped 66.5 per cent to N21.8 million from the preceding session’s N64.2 million, and the number of deals fell by 8.7 per cent to 42 deals from 46 deals.
Great Nigeria Insurance (GNI) Plc ended the session as the most traded stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also finished the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
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