BREAKING NEWS, Business
–
Kakawa Discount House, a subsidiary of the First Bank Holdings Plc, has been granted a Central Bank of Nigeria licence to operate a merchant bank, while the company also pays dividend and bonus
| By Anayo Ezugwu | Jun 1, 2015 @ 01:00 GMT |
THE Central Bank of Nigeria, CBN, has approved a merchant banking licence to Kakawa Discount House Limited, a subsidiary of First Bank Nigeria Holdings Plc. According to Bello Maccido, group chief executive officer, FBN Holdings Plc, the CBN approved the licence five months after Kakawa Discount House applied for it.
Maccido, who CEO spoke at FBN Groups Annual General Meeting, in Lagos on Tuesday, May 19, said to have a merchant banking licence would be beneficiary to the shareholders. He noted that the licence would boost dividend payment to shareholders in the future, especially as the FBN Holdings had in 2014 increased its holding in Kakawa Discount House from 46 to 100 percent.
FBN Holdings had declared a dividend of 10 kobo for the 2014 financial year and granted a bonus of one share for every 10 held. However, the 2014 dividend payment was a far from the N1.10 dividend proposed by the board of directors for the 2013 financial year, which amounts to N35.895 billion. Maccido told the shareholders that the drop in dividend was caused by the reduction of the dividend the group received from its subsidiaries, including First Bank of Nigeria.
He explained that the FBN Holdings retained profits because of the increased capital requirement of the CBN as a result of the adoption of Basel 2 capital accord in 2014. He said the group was negatively affected by the increase in cash reserve requirement, losing N68 billion revenue in 2014 as a result.
According to him, as a result of the decision to retain profit, the group’s capital adequacy ratio was good for business. “FBN has reduced its pay-out ratio and retained substantial portion of profit to boost capital which impacted the capacity of FBN Holdings to pay dividends. With the retention of N79.6bn, we are confident that the capital adequacy ratio is adequate for business in the short to medium term,” Maccido said.
Shareholders of the group, who spoke at the event, called on its board and management to work towards paying a higher dividend and consolidating the positives of the year under review. Boniface Okezie, president, Progressive Shareholders Association of Nigeria, lamented the payments being made by the group to the CBN, Asset Management Corporation of Nigeria and Nigeria Deposit Insurance Corporation.
According to him, such payments are eroding value for shareholders and may force them to challenge the regulators in court. He explained that if the bank had not made any payment to the regulators, the shareholders would have received a higher dividend. “It is time to wake up and challenge the CBN, AMCON, etc.; our regulators are reckless and impunity is becoming too much in the system,” Okezie said.
On his part, Sunny Nwosu, national coordinator, Independent Shareholders Association of Nigeria, called on the board to ensure that the FBN Holding’s decision to retain profit would amount to greater dividend for the shareholders in future. He also called for the payment of an interim dividend to augment the 10 kobo and bonus of one share for every 10 held.
|
Tags:
