Banking Briefs, BREAKING NEWS
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FIRST Bank Nigeria, FBN Holdings Plc on Thursday, May 22, declared a total dividend of N35.9 billion for the financial year which ended December 31, 2013, prompting the company to pay N1.10 kobo for every share of 50 kobo held by investors. Bello Maccido, group chief executive officer, said during the company’s annual general meeting, AGM, in Lagos, that the company posted profit before tax of N91.3 billion in 2013, from N93.9 billion achieved in the comparative period of 2012.
He said the company gross earnings increased to N395.9 billion, up by 7.0 percent year-on-year, from N370.2 billion recorded the preceding year, while the non-interest income stood at N67.0 billion, dropping by 9.3 percent year-on-year, from N73.9 billion recorded the previous year. According to him, the company is committed to its vision of becoming the dominant financial service group in Sub- Sahara Africa.
Maccido, who explained that in spite of the difficult regulatory environment under which commercial banking group operated in 2013, it was able to maintain its prior performance. He said that the commercial banking group posted profit before tax of N87.5 billion, compared to N87.1 billion achieved the preceding year.
He added that the banking group witnessed 8.9 percent growth in gross earnings, from N341.9 billion in 2012 to N372.6 billion in the year under review. Further analysis showed that commercial banking group contributed 93.7 percent of the total revenue, while investment banking and asset management, insurance and other financial services added 4.9 percent, 0.9 percent and 0.5 percent respectively to the group net revenue.
The CEO noted that with the recent acquisition of international commercial banks across four West African countries, Oasis Insurance and the ongoing effort to strengthen the investment banking and asset management business group through the acquisition of merchant banking licence, the company was convinced that the group was line to deliver on its promise to its various stakeholders, particularly the shareholders.
Maccido assured shareholders of better returns on investment in the near future. He said the growth drive of the company would enhance the aggregate performance of the group. He noted that the growth would be complemented by reinforcing the pre-eminence of the company’s commercial banking franchise and harnessing of its non-banking subsidiaries.
CBN Reduces Government Stakes in Banks
THE Central Bank of Nigeria has released a new code of corporate governance and whistle blowing guidelines for Deposit Money Banks and discount houses. In a 40-page code of corporate governance, which will become effective from October 1, 2014, the CBN has barred governments from holding more than 10 percent stake in any bank.
It also directed banks to henceforth disclose the remuneration package of the board members in their annual reports. It prohibited investors from owning more than five stakes in any bank without prior approval from the central bank. According to the document, “An equity holding of five per cent and above by any investor shall be subject to the CBN’s prior approval. Where such shares are acquired through the capital market, the bank shall apply for a no-objection letter from the CBN immediately after the acquisition.
“In order to discourage government(s) from having majority shareholding in banks, government’s direct and indirect equity holding in any bank shall be limited to 10 percent.” The last code of corporate governance was issued in March 2006 shortly after the banking sector consolidation of 2005. According to the CBN, corporate governance has received increased attention because of high-profile scandals involving abuse of corporate power and, in some cases, criminal activities by corporate officers.
The central bank recalled that poor corporate governance practice in banks had led to the removal of five chief executive officers of banks during the banking sector crisis of 2009. Justifying the need for the new code of corporate governance, the CBN further noted that the existing code of corporate governance was reviewed because of the need to update it in order to align it with contemporary developments and international best practices.
Fidelity Bank’s Target Growth
NNAMDI Okonkwo, Fidelity Bank Plc is set to achieve a target of six percent net margin growth between now and 2016. According to Nnamdi Okonkwo, the managing director/chief executive officer, the plan would be anchored on its low-cost deposit and earning assets growth expectations. Within the same period, the bank will be targeting an effective tax rate between 15 and 20 percent, while its loan growth would average 15 to 20 percent per annum.
Okonkwo said a 20 percent average deposit growth would form part of its strategies to reclaim the future. He said: “This will be strongly matched by an average growth of non-interest income to about 20 percent per annum, indicating that a good rise in total income will be clearly anticipated. With an expected cost to income ratio of 60 to 65 percent, the bank expects that growth in income lines are expected to outstrip increases in operating income which also means that a lot of reserves would have to be achieved or a proportional growth in revenue would be recorded.”
He said the bank’s current mandate to perform will be driven by the lender’s superior manpower and that the proposal of having 20 percent of its total branch network positioned in Lagos was based on the huge resource base of Lagos which will quickly advance the bank’s rapid retail banking gains. Okonkwo said that with the bank’s targets to position about 37 percent of the branches to capture the oil and gas region and the Federal Capital Territory, the bank has put a strong road map in place for the actualisation of the drive for cheap funds.
“This will, no doubt, make the target to grow its retail banking accounts to three million very easy by 2014 year end, using 230 bank branches. What this retail banking positioning analysis means is that the bank will be much more visible and closer to the medium income populace who need banks as avenues to induce domestic savings,” Okonkwo said. He also said that the bank was committed to becoming the Small and Medium Scale Enterprises bank of choice at a time the economy has witnessed failed promises from finance houses.
Sterling Bank’s Staff Rewards
STERLING Bank Plc has announced the promotion of 386 members of staff across all cadres. This follows the conclusion of its full year 2013 appraisal. The bank said the development was in line with its commitment to rewarding excellence and hard work in order to boost productivity among the staff. The bank noted that the promotion was based on merit, using a transparent and robust performance management system in line with global practice.
Out of the number, 368 staff were promoted in the junior and middle management cadres while 18 senior management staff members were elevated. Fourteen managers were promoted to senior managers; 15 from deputy managers to managers; 26 from assistant managers to deputy managers, while 80 banking officers were promoted to senior banking officers.
Compiled by Chinwe Okafor
— Jun. 2, 2014 @ 01:00 GMT
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