Thread by @Nairametrics

Hello everyone and welcome to @Nairametrics Corporate News Roundup for the week ended March 14th, 2020. This thread is brought to you by @BluechipTechNG.

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1/Last week, the Chief Executive Officer of Guaranty Trust Bank Plc (GTB), Segun Agbaje, revealed that the tier-1 bank is currently considering a holding company structure. FBNH, FCMB and StanbicIBTC are banks that currently operate a holdco structure.

Agbaje explained that a holding company structure will enable GTBank to keep up with the latest trends in the Nigerian financial services industry.

According to him, the bank had decided, about ten years ago, to shed all of its subsidiaries in order to become mainly bank-focused.

2/Access Bank Plc has earmarked plans to increase its presence across 22 African countries, through the acquisition of more subsidiaries. This plan is coming barely two months after the tier-1 bank completed the acquisition of a Kenyan bank.

The company’s Group Chief Executive Officer, Herbert Wigwe, disclosed this last week. According to him, focus is now on Francophone African countries.

Wigwe further disclosed that the expansion plan is part of Access Bank’s diversification of its retail banking on the continent. According to him, the expansion across Africa’s major trade corridors has been planned to happen over the next five years.

He also claimed that Access Bank will soon become Africa’s financial gateway to the world.
Recall that Access Bank is no stranger to mergers and acquisitions. Just last year, it acquired Diamond Bank Plc.

3/Another bank that is thinking about mergers and acquisitions is First Bank of Nigeria Limited. Last week, there were media speculations claiming that claiming the tier-1 bank is all set to merge with Polaris Bank Limited and Heritage Bank Plc.

FBN Holdings Plc, First Bank’s parent company, later reacted to the speculations.

In a statement that was made available through the Nigerian Stock Exchange website, the financial institution admitted that it has recently been presented with merger and acquisition opportunities; much like every other bank in Nigeria.

The company also noted that it understood why analysts are speculating that it might currently be involved in merger and acquisition talks, bearing in mind that First Bank is one of the biggest and most liquid banks in the country.

However, FBN Holdings Plc did not categorically confirm or deny its supposed involvement in the reported merger talks with Polaris Bank Ltd and Heritage Bank Plc.

Instead, the company said it has chosen to be mindful of its reactions regarding this topic. But it does believe that inorganic growth such as the one presented by merger/acquisition, will always be a growth strategy for many banks.

FBN Holdings Plc also noted that it will only consider the merger/acquisition option if it finds an opportunity that guarantees value addition to its shareholders.

4/Still on merger and acquisitions, Nairametrics gathered from reliable sources that Zenith Bank Plc has been given the green light to merge or acquire Union Bank Nigeria Plc.

We understand that talks are currently ongoing between the banks and a tentative arrangement may have been reached to commence due diligence.
Already, Zenith Bank Plc is Nigeria’s largest bank by profits and second largest by total assets.

The bank could, therefore, significantly increase its size with a merger of this magnitude.
Sources from both banks denied that any merger plans have been concluded. However, they did not deny or affirm if talks are ongoing.

And this is normal, because deals like these are typically not confirmed until the clearance is obtained from the Securities and Exchange Commission.
It is not immediately clear why both banks will be considering a merger.

However, we do understand that Atlas Mara, which owns a 49% stake in Union Bank Plc, is currently under pressure to exit their African holdings.
Last year (February), Atlas Mara’s co-founder, Bob Diamond, announced that he was resigning his post as Chairman of the company.

The company said it was looking at selling off banking assets in countries where it was not the dominant player. And Union Bank is definitely not a dominant player in the Nigerian financial services sector.

5/ Meanwhile, First City Monument Bank Limited is all set to raise capital to the tune of N20 billion through the issuance of commercial paper. The bank is the main subsidiary of FCMB Group Plc which is listed on the Nigerian Stock Exchange.

According to a press statement that was made available by FCMB Group, the N20 billion commercial paper is the first ever to be issued by First City Monument Bank. It is also the first part of a larger N100 billion commercial paper programme that has been planned by the bank.

The N20 billion commercial paper issuance has been planned to have a tenor of 269 days, and it is expected to support the bank’s short-term funding.

Note that commercial papers are usually targeted at institutional investors such as Pension Fund Administrators and non-pension asset managers. Some high net-worth investors are also eligible to apply.

Earlier in the week, FCMB Group Plc also announced that its board of directors unanimously voted to replace Messrs KPMG Professional Services with Messrs Deloitte & Touche as its new auditors.

According to an explanatory note that was released by FCMB Group, as seen by Nairametrics, KPMG’s ten-year tenure expired, hence the replacement.

The company said:
“By virtue of the provision of section 5.2.12 of the CBN Code of Corporate Governance for Banks and Discount Houses, the tenure of the auditors in a given bank shall be for a maximum period of ten (10) cumulative years, after which the audit firm shall not...

...be reappointed in the bank until after a period of another ten (10) consecutive years.”

This is @Nairametrics thread BTU by @BluechipTechNG

6/Still on financial news, some insurance companies in Nigeria are still struggling to raise enough money to in order to meet the December 2020 recapitalisation deadline that was set by the National Insurance Commission, NAICOM.

Nairametrics reported that some of these insurance companies have resorted to selling off their real estate assets in a bid to raise the required money. One of them is Cornerstone Insurance Plc.

The Chief Executive Officer of Cornerstone Insurance Plc, Ganiyu Musa, disclosed that for a long time, his company resisted the idea of selling off its landed properties. But a time came when it had no choice but to do just that.

According to him, the company has been able to realise billions of naira from the sale of some of its real estate assets.
Others like AXA Mansard and Niger Insurance are also in the process of selling off their assets.

Unfortunately, they are facing some challenges in this regard because saturation in the Nigerian real estate sector is making it difficult to find potential buyers.

Recall that NAICOM now requires that all the insurance companies offering Life, Non-Life, Composite and reinsurance packages, must increase their capital base from...

...N2 billion, N3 billion, N5 billion and N10 billion to N8 billion, N10 billion, N18 billion and N20 billion, respectively.

7/ Royal Exchange Plc announced last week that German-owned InsuResillience Investment Fund has completed the acquisition of 39.25% equity stake in its subsidiary – Royal Exchange General Insurance Limited.

The InsuResilience Investment Fund was set up by Germany’s state-owned development bank – KfW – on behalf of the German Government. The fund is managed by Blue Orchard Investment Ltd, a Swiss impact investment manager.

According to a statement that was made available to the public by Royal Exchange, the investment would enable Royal Exchange General Insurance Ltd to expand on its underwriting capacity, particularly so in the agriculture underwriting space.

8/In an interesting development, Sovereign Trust Insurance Plc blamed a supposed breakdown of its information technology (IT) system for delaying the publication and release of its audited financial statement for full-year 2019.

According to a public notice that was sent to the Nigerian Stock Exchange, the company said the IT failure hindered the timely completion of the auditing process.

The inability to conclude the auditing process has, in turn, made it impossible for Sovereign Trust to submit its 2019 financial statement to the National Insurance Commission which is the primary regulator in charge of approving such results by insurance companies.

The company said it is regretful of any inconvenience this development may have caused its stakeholders.

Note that the listing rules of the Nigerian Stock Exchange require quoted companies in Nigeria to submit their audited full year financial statements at most 90 days after the end of each financial year.

9/Dangote Industries Limited disclosed last week that significant gas supply would be unlocked by its subsea gas pipeline project. The announcement is coming in the heels of the anticipated completion as Dangote’s multibillion-dollar refinery project.

The company said that the gas pipeline, which is expected to significantly reduce Nigeria’s gas flaring, would connect the Niger Delta to Lekki Free Trade Zone where the Dangote refinery is located.

Gas from the Niger Delta will also feed the Dangote Fertiliser plant, a part of Dangote’s refinery project has been scheduled to be commission by the first half of 2021. The project is now 75% completed while the petrochemical unit is also 60% completed.

10/Airtel Africa Plc announced last week that it has finalised the acquisition of 10 new MHz spectrum (in the 900 MHz band) for its Nigerian operation. The acquisition follows approval by the Nigerian Communications Commission, NCC.

According to a public disclosure, which was issued to the Nigerian Stock Exchange, the 10 MHz spectrum was acquired from Intercellular Nigeria Limited for the sum of $94 million. Note that this sum covers fees payable to the NCC.

The statement from Airtel Africa went further to note that the sum is in line with the NCC Spectrum Trading Guidelines.
Recall that the acquisition was first announced in November last year.

As Nairametrics reported on November 14th, 2019, the telecoms company initially projected that the acquisition would cost about $70 million.
Airtel Africa is expectant that the investment will help to improve its 4G network.

The company’s Chief Executive Officer, Raghunath Mandava, said:
“With increasing smartphone penetration, data usage and a young growing population, Nigeria represents a significant growth opportunity in data.

This investment will not only strengthen our leading 4G position in mobile data but also allow us to expand our fixed wireless broadband offer to support the government agenda for faster broadband services with improved coverage and availability.”

This is @Nairametrics thread BTU by @BluechipTechNG

11/In appointment news, Nigerian IT company, CHAMS Plc, said it had appointed Sir Demola Aladekomo as its new Chairman of the board of directors.

The appointment took effect on the 3rd of March, 2020, according to a public disclosure that was issued to the Nigerian Stock Exchange.

Aladekomo’s appointment became necessary after the resignation of CHAMS Plc’s former Chairman, Dere Awosika.

She was said to have resigned her position in order to “focus on her other business commitments.” Note that Dere Awosika was recently appointed Access Bank’s Chairman of the board of directors.

Demola Aladekomo, on the other hand, is coming back to familiar territories because he founded the company in 1985. He also served the founding Managing Director until 2015 when he retired as the Group Managing Director.

He currently sits on the boards of different companies and NGOs.

12/The board of directors of PZ Cussons Nigeria Plc also announced the retirement of the conglomerate’s Chief Executive Officer, Christos Giannopoulos.

A public disclosure that was signed by the Company Secretary/Legal Adviser, Jacqueline Ezeokwelume, and sent to the Nigerian Stock Exchange on March 12, 2020, also announced that a the company has appointed Panagiotis Katsis as its new Chief Executive Officer.

Katsis’ appointment will take effect from July 1, 2020.
Christos Giannopoulos is a Greek national who, for the past seventeen years, has been living and working in Nigeria.

He joined PZ Cussons Nigeria Plc in 2002 as the Head of Sales. Since then, he gradually rose through the ranks to become the company’s CEO in 2009.

13/In other news, the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, said efforts are underway to cut down on Nigeria’s oil production cost.

This is one of the solutions he proffered to the problem of declining oil revenue, which was caused by a recent crash in global oil prices. Kyari was addressing stakeholders last week, during the CBN roundtable, when he offered the solution.

According to him, the cost of crude production in Nigeria is about $30 per barrel of crude. This is quite problematic, bearing in mind the fact that oil is currently trading below $40 per barrel. Nigeria relies mostly on crude oil revenue to fund its budget.

At the moment, the country is being forced to scale down on its ambitious N10.6 trillion 2020 budget, in response to the dramatic crash in global oil prices.

14/To end this week’s corporate news roundup, here are some deals news. Paga announced that it has signed a partnership deal with global payment processor, Visa, to leverage on the latter’s network for its users.

The deal will allow Paga account holders enjoy new merchant options and be able to transact on Visa’s global network. The deal will also enable both companies to collaborate on technology.

Recall that it’s been barely two weeks since Paga signed a similar deal with Flutterwave, another Nigerian fintech company. The deal with Flutterwave is such that Paga wallet users will be allowed to access products from merchants on Flutterwave merchant service.

Your guess is as good as mine.....

That's our thread for this week.

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Until we do this again.....do have a profitable week ahead.

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