this is a thread to talk about the phenomenal growth experienced by nigerian banks and to talk bout the growing no of banks with billion dollar capital bases

Stellar Performance Boosts Demand for Access Bank’s Offer
07.30.2007



The ongoing N70 billion public offer of Access Bank Plc has continued to witness significant levels of interest and demand by institutional investors and the investing public.
Investigations among informed industry analysts reveal that this demand is being driven principally by the awe inspiring financial performance that the bank recently posted. This unprecedented performance is illustrated by its audited accounts as at March 31 2007 and the un-audited first quarter results as at June 30, 2007, which showed exceptional levels of growth and profitability across all performance indices.
A review of the audited reports of the bank for the year ended March 31, 2007, showed that gross earnings grew by more than 100 per cent from N13 billion in 2006 to N27 billion in 2007. Profit before tax also rose by a staggering 618 per cent from N1.1 billion to N8.0 billion in spite of the huge write-off of goodwill and merger expenses totalling N7.5 billion that the bank recognised during the year. In the same breadth, the bank also recorded significant growth in its balance sheet as total assets and contingents surged by 100 per cent from N204.6 billion in to N408.7 billion, while total deposits, which indicates the level of confidence customers have in the bank, moved up by 86 per cent, from N110 billion in to N205 billion.
Similarly, the first quarter results of the bank which was released recently show that the bank is once again set on the path of another rousing year. Interim reports for the first quarter ended in June 31, 2007 indicate that the profit making capacity of the bank improved significantly. Gross earnings inched up by 102 per cent to N11.12 billion from N5.5 billion in 2006. Profit before tax also advanced by 159 per cent to N4.05 billion from N1.57 billion in 2006. With these stellar performances Access Bank has reinforced its claim as Nigeria’s fastest growing bank by assets consistently maintaining a triple digit growth since 2003.
A very significant observation is that the first quarter profit before tax is a 160 per cent improvement over the prior year’s N1,566,690, 000 recorded as at June, 30 2006 and 50 per cent of the bank’s PBT for the entire financial year ended March 31, 2007. And going by the historical trend of quarterly performances, the first quarter typically accounts for about 20 per cent of the full year performance. This gives strong indications as what shareholders should expect for full year performance ending March 31, 2008.
Access Bank’s performance ratios also witnessed encouraging trends and in almost all cases have outperformed its peers and industry averages. The bank’s Price Earning (PE) ratio of 22 as at March 31, 2007 and the PE ratio of 13 based on its first quarter results of the 2007/2008 financial year compares very favourably with those of banks considered to be ahead of Access Bank in the top banks’ table. Given this scenario, leading analysts have made a buy recommendation for the on-going public offer of Access Bank both for short and long term. This represents a very strong investment endorsement.
Also, earnings per share at 87kobo out-performed those of banks considered to be ahead of Access Bank on the top 10 banks table. This analysts state, presents the Access Bank stock as a high value stock with potentials for phenomenal returns as the market fundamentals begin to adjust appropriately to bring its share price to a true value that is commensurate with those of similar banking stocks.
Access Bank is currently the eighth biggest bank in Nigeria and is set to redefine the Nigerian banking landscape through its acknowledged innovativeness and ingenuity. The bank is a product of a corporate restructuring exercise which commenced in March 2002 with the setting of a 13 point transformation agenda that must be accomplished by 2007. These agenda included positioning the bank as a reference point for service delivery in the Nigeria; make it an employer of choice for Nigeria’s best and brightest professionals; turn it to a model for compliance in the industry; position it as a reference point for technology in Nigeria; make it the preferred bank in relationship with multinational and foreign financial institutions; attain “ A” risk rating and position it as one of the top 3 foreign exchange ( FX) and money market banks in Nigeria.
Today, the bank has met and indeed surpassed some of its targets, and through its on-going public offer Access Bank is positioning to achieve even higher feats with an enhanced capital base. Access Bank over the next five years is set to rank amongst top three financial services group in Nigeria; become the employer of choice in Africa, attain “AAA” Agusto & Co Rating; A+ Fitch; S &P Rating (Bank); be the leading E-Business bank in Africa; rank amongst the top three banks stocks in any exchange where it is listed; be the best treasury & financial markets bank in Africa; be the reference point for service delivery in African financial institutions; be the reference point for corporate governance in Africa and be a leading project & structured finance bank in Africa.
The bank is presently raising money from the market after a similar offer in 2004 that experienced a subscription of 133 per cent. The offer proceeds will provide financing for the bank’s growth objectives, including financing the bank’s branch expansion which include domestic and international branch roll-out; ICT; E-Channels A&TM roll-out, provide additional working capital to support enlarged operations and equity investment in subsidiaries: local and offshore.
Two and a half years after consolidation, Access Bank has continued to demonstrate phenomenal growth and extraordinary performance as a leading player in the Nigerian banking scene.
Analyst have stated that the bank’s offer will be well received by investors and shareholders’ value will be greatly enhanced because the offer will usher the bank to an unequalled industry leadership position that will make it a role model for other financial institutions.

Zenith Emerges Nigeria’s Biggest Bank


• Total assets now N1.2trillion •Declares 1 for 4 bonus
By Ayodele Aminu, 08.01.2007


Zenith Bank Plc has emerged the biggest and most profitable bank in Nigeria with total assets plus contingents of N1.2 trillion and a pre-tax profit of N26 billion for the year ended June 30, 2007.
The bank is also creating more value for its shareholders with a one for four bonus issue and a dividend payout of N9.26 billion, which surpasses the N6.6 billion paid out in the previous year by almost 40 per cent.
The results which were released on the floor of the Nigerian Stock Exchange (NSE) in Lagos yesterday indicates that the N26 billion pre-tax profit posted by the Zenith Bank is the largest so far by any bank, up from N15.15 billion the previous year by 41 per cent. Gross earnings also rose to N94.88 billion, a 58.1 per cent increase from the N60.00 billion recorded the previous year, indicating an increasing dominance in its market share.
The bank’s current assets plus contingents of N1.2 trillion is also the largest in the industry, representing a 67 per cent growth from the N759.97 billion reported in the last financial year.
In the same vein, post-tax profit show a 63.5 per cent increase from N11.48 billion recorded the previous year to N18.77 billion in the year under review.
The financial year just ended has been an exceptionally good one for Zenith bank with renewed interest in its stock on the floor of the Exchange driven by a string of good quarterly results, boosting its share price to an all time high of N65. The bank has since remained the most capitalized company on the Exchange, with market capitalisation of N612.82 billion as at June 2007.
The result was hailed by financial analysts and investors as outstanding, as it shows the ability of Zenith Bank to sustain its performance, raise the bar of competition and continually meet the expectations of shareholders.
Zenith Bank has one of the best assets qualities in the banking industry as evident in the low ratio of non performing loans to total loans of 1.79 per cent as at June 2007.
Zenith Bank was last January adjudged the most customer-focused bank in Nigeria from a survey conducted by foremost consulting firm, KPMG.
The survey, which focused on corporate customers of banks, including companies in a variety of sectors, found that they were most satisfied with the services rendered by Zenith Bank. In 2005, Zenith was named ‘The Most Respected Bank in Nigeria’ from a survey conducted by PriceWaterHouseCoopers. That year also, Zenith Bank won the ‘Bank of the Year’ award from The Banker magazine, a publication of the Financial Times of London.

where does First Bank of Nigeria, GT bank, United Bank of Africa feature? Who can do the honors to compile a list of the top 5 banks by assets or market capitalization in Nigeria.

im happy to see first bank is no longer number 1.

looks like first bank is second, then union bank, uba and gtb. at least according to market cap.

Nigeria: Zenith Bank Emerges Most Capitalised in May On NSE



Vanguard (Lagos)

6 July 2007
Posted to the web 6 July 2007

Michael Eboh

For the second time in two months, Zenith Bank Plc has emerged the most capitalised company on the Nigerian Stock Exchange (NSE) for the month of May 2007, with a market capitalisation of N496.17 billion.

It retained the position after rising by N36.7 billion from N459.48 billion recorded in April 2007. Its share price for the month under review was N53.55 per share while its total number of issued shares was 9.27 billion.

The most capitalised company is determined by the current market price of a company multiplied by its total number of shares.

First Bank Nigeria Plc followed with a market capitalisation of N418.53 billion while Dangote Sugar Refinery Plc recorded a market capitalisation of N410.0 billion.

Other highly capitalised stocks for the month under review include: Union Bank Nigeria Plc N381.07 billion, United Bank for Africa Plc N372.43 billion, GT Bank Plc N319.0 billion, Intercontinental Bank Plc N311.02 billion, Nigerian Breweries Plc N291.91 billion, Oceanic Bank International Plc N262.99 billion, Ecobank Transnational Incorporated N217.50 billion, West African Portland Cement Company Plc N207.08 billion, Ecobank Nigeria Plc N188.18 billion, Guinness Nigeria Plc N185.84 billion among others.

A significant appreciation was recorded in equity trading or the month under review, as a turnover of 12.54 billion shares valued at N196.66 billion in 207,939 deals, up by 6.36 per cent from 11.79 billion shares valued at N139.70 billion recorded in April in 155,570 deals.

The Banking sub-sector dominated trading during the month under review, accounting for 62.97 per cent of the market with a turnover of 7.89 billion shares, followed by the Insurance sub-sector with a turnover of 2.72 billion shares representing 21.70 per cent of the market turnover.

Wema Bank Plc recorded the most patronage during the month under review, with a turnover of 1.30 billion shares, followed by Mutual Benefits Assurance Plc with the exchange of 971.03 million, while Access Bank Plc recorded 862.33 million shares.

Others include: First Inland Bank Plc 838.10 million shares, Intercontinental Bank Plc 817.19 million shares, Fidelity Bank Plc 671.51 million, First City Monument Bank Plc 569.43 million shares, Lasaco Assurance Plc 507.32 million shares, Union Bank Nigeria Plc 421.35 million shares, Standard Alliance Insurance Plc 401.20 million shares among others.

Ashaka Cement Plc recorded the highest share price appreciation for the month under review, rising by N17.00 to close at N83.00 per share from N66.00 per share at which it started the month, followed by Flour Mills Nigeria Plc with a gain of N10.00 to close at N84.00 per share while African Petroleum Plc garnered N9.21 to close at N76.21 per share.
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Other share price gainers include: Ecobank Transnational Incorporated N8.22, Julius Berger Nigeria Plc N8.20, Costain (West Africa) Plc N8.11, National Salt Company Plc N7.63, Platinum Habib Bank Plc N7.18, Oando Plc N7.01, UACN Property Development Company Plc N6.41 among others.

On the other hand, Total Nigeria Plc recorded the highest share price depreciation, dropping by N24.98 to close at N165.02 per share, followed by Nigerian Aviation Handling Company Plc with a loss of N23.61 to close at N38.89 per share and Chevron Oil Nigeria Plc dipped by N19.95 to close at N160.05 per share.

Other share price losers include: Okomu Oil Palm Plc N14.75, Cement Company of Northern Nigeria Plc N11.76, Nestle Nigeria Plc N8.30, GT. Bank Plc N5.80, Mobil Oil Nigeria Plc N5.00, Nigerian-German Chemicals Plc N4.44, Northern Nigerian Flour Mills Plc N3.34 among others.

The essentially forced merging of many small banks in Nigeria was a good idea that should be rolled all around Africa.

The essentially forced merging of many small banks in Nigeria was a good idea that should be rolled all around Africa.

i was telling some friends from Ghana, that the Bank of Ghana should follow this model and consolidate the many banks that operate in that country. In South Africa its always been much harder to get a banking license, since 1997 the banks consolidated from 7 banks into 4 really big banks (with the smallest of them having at least $53 billion plus assets, and Stanbic, the largest has about $139 billion in assets) and the rest fall into micro-finance banking sector.

The consolidation happened when 4 medium sized banks merged into what is now ABSA (Amalgamated Banks of SA). The other members of the gang of 4 are First National Bank, Standard Bank and Nedbank. Barclays bought 57% of ABSA in 2004 for $5.5 billion and in return agreed that ABSA will buy out all African operations of Barclays plc. Just below them is the second tier of banks who are kind of micro-finance/banking institutions like Capitec, African Bank etc and these have at least $1 billion in assets each.

Several advantages flows from a consolidation move. One you don't want to have banks that are so small, they can't even afford to put up 200 ATM machines as is often the case in West Africa. Also you can eliminate complexity when it comes to inter-bank settlements. These can take anything from 7 - 21 days in some banks in West Africa as opposed to 12 - 24 hours in SA. A consolidated banking sector will make it easier for banks to streamline settlements between themselves and link up ATM networks more effectively to realize economies of scale. It will also accelerate investment decisions as the return on investment becomes more attractive when there are 8 banks as opposed to 30 banks all fighting for the same market.

Perhaps the biggest advantage that consolidation will do to the banking sector in West Africa is that its going to instill confidence in the banking and financial system of the country. The central banks will be able to effectively regulate the sector to ensure that the integrity of the country's financial system is intact and people will have confidence in the banking sector. This in turn will result in more people starting to put their money and long term investments in banks.

i think this plan is critical for the smaller west africa countries. consolidation may have to take place across borders. But following the consolidation, a protectionist policy has to put in place because the banks then become attractive for foreign firms to seek to buy them. the nigerian central bank governor has stated that he has prevented several attempts to take over nigerian banks, because he wants them larger first. and he wants them to take up other banks in africa.

anyway, check these out.

Round two of Nigeria’s

Published:
02 July, 2007
Page:
103

Aigboje Aig-Imoukhuede, managing director of Access Bank

The number of players in Nigeria’s banking sector is falling again

as a desire to maintain a top 10 listing, as well as a nationwide

presence, pushes a new wave of mergers, writes Nick Kochan.

Nigeria’s banks are undergoing a new wave of consolidation. Two banks have merged in the past few months, and the total number has fallen from 25 to 23.

This second wave of consolidation was expected, but not so soon after the first between 2004 and 2006. However, there is a crucial difference between the first wave and the most recent. Government regulation and intervention brought about the first, following the Central Bank’s decision to enforce a minimum capital requirement.

The second wave is being driven by banks, which have decided their long-term prospects are better served by combining than by going it alone.

Elizabeth Ebi, the chair of FutureView, a leading issuing house and adviser to top Nigerian banks, says: “Everybody wants to be in the top 10. So when one bank realises that someone else is getting into the top 10 and they will not, they will merge to make sure they get there. They will have to come to some understanding through partnerships. Nobody wants to be left behind.”


Foreign input


Foreign banks are at the hub of the new merger wave. Ecobank Nigeria (a regional bank based in Lome, whose parent Ecobank Transnational is listed in Lagos) has merged with Unity Bank, itself an amalgam of nine banks created in the earlier restructuring. The merger of Stanbic and IBTC-Chartered has long been mooted and negotiated over and had received central bank and stock exchange approval.

The contraction of the sector will not stop here. Nigeria’s bankers are convinced the second wave is only now gathering speed and a lot more banks will be swallowed.

“We will see 10 banks surviving in 10 years’ time,” says Aigboje Aig-Imoukhuede, managing director of Access Bank. “The reduction will happen naturally. The market will become too competitive. People will elect not to compete.”

The expansion of networks is the key to this expansion, says Christian Udechukwu, managing director of Business in Africa Events. “The banks have gone into the next stage of consolidation. Banks that do not have a good nationwide spread are being forced to combine resources.”

Regional expansion is another priority for Nigeria’s banks. Less developed local markets present easy pickings for the newly confident and better capitalised Nigerian brigade. Mr Udechukwu says: “They have become the predominant regional players in west Africa. They are far ahead of the competition.”

Many banks are exploring opportunities in east Africa and central Africa. Mr Udechukwu adds: “southern Africa will be the last match. Breaking in there will require more skills, more capital and more technology.”


Top 100 ambitions


Pressure for this expansion is coming from the Central Bank of Nigeria, which is encouraging banks’ acquisition of skills. It also wants to “raise their global vision to ensure they come within the top 100 global banks in the next 10 years”, says one local banker.

The Central Bank is encouraging strategic alliances for activities such as asset management. Local banks have formed strategic partnerships with 15 global investment banks to manage Nigeria’s $43bn-worth of sovereign assets.

Arguably it is not too soon to start talking about the globalisation of Nigerian banking. Many local banks have already opened offices in London, or are set to open up shop shortly, including Zenith Bank, First Bank, UBA, GT Bank and Oceanic Bank. The march onto the international stage has begun in earnest.


Custody competition


Another area where banks are prospecting further is in the custody market. Four banks have new custody offerings under preparation. First Bank, the country’s largest bank, has already thrown its hat in the ring. The challenge to the monopoly of Stanbic, the historic custodian for Nigeria, is truly under way.

International custodians are also believed to be prospecting the market, and one is thought to be talking to local regulators. Alex Trotter, an analyst with Afrinvest, a local investor, says international investors are awaiting the entry of a major custody player into the sector.

“We are looking for a big player like Bank of New York to come to Nigeria. The market needs someone who can compete and bring down the wide cost of transactions. Capital is abundant, but we need something that will enhance the friction relating to transactions. That will occur in due course,” he says.

Local banks set to offer custody include Oceanic, UBA and First City Monument Bank (FCMB). Malcolm Gilroy, the chief operating officer of UBA Global Markets, says: “We expect to take on international accounts and sub-custodian mandates by September.”



Ladipupo Balogun, managing director of FCMB, says: “All international investors with Nigerian assets must have a local custodian. The Nigerian Securities and Exchange Commission is going to change the laws, and stockbrokers will be required to have separate custody accounts. This will ensure that they don’t abuse the funds.

“We expect at least four banks to set up custody businesses. Our focus will be on attracting the assets of the captive customers we have through our stock-broking and asset management business.”

Reform of pension, banking, capital markets and insurance sectors, prompted by the government of former president Olusegun Obasanjo, has stimulated greater liquidity in the financial sector. Rapid annual gross domestic product (GDP) growth – estimated at between 7% and 8% – puts further pressure on capital markets to fund infrastructural development. Capital markets are encouraged by the stance of the new president, says FutureView’s Ms Ebi: “The government is trying to provide the environment where business can run effectively.”


Capital market products


Institutional players have sought to absorb the new liquidity with the creation of a wide range of capital market products. These include exchange-traded funds (ETFs) and some derivative products linked to property.

Farooq Oreagba, head of strategy at the Nigerian Stock Exchange, says that JPMorgan, Renaissance Capital, Rand Merchant Bank and Deutsche Bank have discussed setting up or participating in Nigerian ETFs.

The Nigerian Stock Exchange has also produced a set of rules for the establishment of closed-end funds. Mr Oreagba says: “We are looking to list a structured real estate fund, which will have downside protection with embedded upside options. A private placement of N5bn [$39.2m] was successful and we are going to try and list it on the exchange. We want the guys who took it up to realise some value. Once that gets going, more and more will come along.”

The exchange is currently preparing to launch an index of the 40 Nigerian stocks, whose greatest component is the banking sector.

Many of the new instruments are linked to property and mortgages, where investment has lagged. This is prompting the creation of real estate investment trusts (Reits).

The first Reit has just been listed on the exchange, and Mr Oreagba says that many more are in the pipeline. It is understood that the International Finance Corporation is considering launching a Reit.

Activity in the local bond markets has been driven by the needs of local banks to raise money to meet a new set of capital regulations. Nigeria’s Central Bank imposed a minimum capital requirement of $25m in 2004, and many banks have gone on a capital raising spree to boost their Tier 1 capital. Money has also been needed to acquire and absorb the multitude of tiny banks that were on the verge of closure. The number of banks has collapsed from 100 to 23 as a result of the new capital requirements.

Regulatory changes have helped bond markets to handle new fund-raising requirements. Since June 2006, dealers in bonds have been required to make a market in all bonds. Mr Gilroy says that bonds worth N500bn have been issued on the exchange over the course of the past year and many have been bought by international investors.

The success of a bond issued by UBA indicates the strength of the market, he says. This was a N100bn mortgage-backed security with a five-year term, where the first tranche was bought at 75 basis points over government treasuries.

The bond was sold with a yield of 9.98% but trade in the secondary market was brisk, and the yield currently stands at 9.75%. Mr Gilroy says that the buyers are banks, pension funds and hedge funds.


Mortgage sector


The need for investment in housing will prompt many such issues, says Mr Gilroy. He expects Nigeria’s state government to set up mortgage banks, such as the German landesbanken (savings banks), to issue bonds aimed at financing development. Lack of credit checking systems restrains the development of the country’s mortgage sector, although this is expected to be rectified when a credit checking bureau is established in 2008.

Banking borrowing continues to grow at a fast pace, says Ms Ebi, but she expects it to move forward through increasingly complex structures. “Banks are looking at second-tier fund-raising as opposed to straight equity. They will be looking at split bonds, convertibles and more esoteric structures. They will also be looking further at the international markets.”

Mr Balogun says: “Organisations are looking for hybrid debt. We are developing capabilities and taking principal positions. We are looking for opportunities for real estate developers, where we provide subordinated debt which can be convertible.”


„The branch is becoming much less of a vehicle for transactions and much more a vehicle for selling products and giving advice”

Stephen Timewell, Editor-in-Chief, The Banker.




© Financial Times Limited 2007

Nigeria's Guaranty Trust sets GDR offer price at 11.2 usd for London listing


Published : Mon, 23 Jul 2007 08:12
By : Agencies
Print this Story


LONDON (Thomson Financial) - Nigeria's Guaranty Trust Bank PLC said it has fixed an offer price of 11.2 usd per global depositary receipt (GDR) for its listing on the London Stock Exchange, resulting in a market capitalisation of about 2.99 bln usd.

The full service bank said it intends to raise about 750 mln usd, excluding the over-allotment option, from the listing.

The offer comprises a total of 67 mln new issued GDRs, excluding the over-allotment option, with 1 GDR representing 50 ordinary shares, it said.

The bank intends to use the offering proceeds to fund expansion and refurbishment of its branch network, strategic business development, increasing its equity investment in subsidiaries and further regional expansion into West Africa.

The funds will also be used towards increasing working capital and expansion and upgrading of its IT infrastructure, Guaranty Trust Bank said.

GDR investors will own about 21 pct of the enlarged issued share capital of the bank, before allowing for shares sold pursuant to the over-allotment option.

Tha bank has granted its joint bookrunners, JPMorgan and Morgan Stanley, the right to purchase additional GDRs representing up to 15 pct of the total offer at the offer price to cover over-allotments, if any, the bank added.

TFN.newsdesk@thomson.com

kal/slm

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Nigeria: GT Bank's Shares Listed in London Stock Exchange


Daily Champion (Lagos)

30 July 2007
Posted to the web 30 July 2007

Lagos

GUARANTY Trust (GT) Bank has successfully listed its shares on the London Stock Exchange (LSE), and becomes the first Nigerian company and first African bank to be listed on the London Exchange.

This is coming on the heels of the resounding success of the bank's $750 million offer for subscription of global depositary receipts ("GDRs") which closed recently. The offer was issued in the London market to raise about $500 million from international institutional investors outside Nigeria and about $250m from individuals and institutional investors in Nigeria.

A Global Depositary Receipt ("GDR") is a negotiable dollar denominated bank certificate issued in international financial markets through a registered depositary bank. It represents ownership of certain equity securities that are issued and traded in a local market as well as ownership of a certain number of shares of a company. It can be listed / traded independently from the equity securities. GDRs are typically used by companies from emerging markets to raise capital and access investors in international markets.

Guaranty Trust Bank's GDR Offering is the first ever opportunity for Nigerians to make dollar denominated investments in the securities of a Nigerian company listed and traded on the London Stock Exchange. It opens up a previously unavailable large and global capital market to Nigerian investors considering that the London Stock Exchange is the primary market to many of the world's largest companies; attracting some of the largest and most sophisticated investors in the world. The dividends of the GDRs are paid in US dollars.

The bank whose ordinary shares trade on the Nigerian Stock Exchange, had earlier filed an application to the United Kingdom Listing Authority for the admission of the GDRs to the Official List. Following the closure of the Offer Period, the GDRs have been admitted to trade under the symbol "GRTB" on the market for listed securities of the London Stock Exchange through its International Order Book.


The London Stock Exchange has in it's over 200 years of existence, remained the fulcrum of global stock exchanges with 350 highly reputable companies from over 50countries trading on its markets. Its wealth of experience, integrity, expertise as well as knowledge of the market has propelled it into becoming one of the world's foremost equity exchanges, ahead the famed New York and Tokyo Stock exchanges.

This land mark achievement reaffirms Guaranty Trust Bank's desire to further strengthen its cross boarder presence and grow the confidence of international investors in the burgeoning Nigerian market. The bank already has a credible foot print in the international market with its highly successful $350 million Eurobond offer which was the first of its kind by any Nigerian Institution.

The listing in the London Stock Exchange gives a positive commentary on the bank as one of Nigeria's most profitable and fastest growing banks while lending credence to its AA- (double A minus) by Fitch; and BB- (double B minus) by Standard & Poor's, the best ratings assigned by the two international rating agencies to any Nigerian or West African-based bank.
Copyright © 2007 Daily Champion. All rights reserved.

Nigerian banks begin eating into South African dominance

Published:
02 July, 2007
Page:
165

Africa is changing and it is not just $11.7bn of Chinese investment in recent years that is making a difference. Nigeria’s banks are bulking up as a result of central bank governor Charles Soludo’s new capital requirements, and are becoming bigger and stronger through multiple mergers and acquisitions.

Sub-Saharan Africa provides 18 banks in the 2007 Top 1000, a big increase from just 10 banks two years ago. And a key contributory change is that South Africa is now not the only banking force in the Top 1000 – Nigeria and others are beginning to play a part.

Although the five South African banks dominated last year’s Sub-Saharan listing of 15 banks, accounting for 83.9% of the combined Tier 1 capital of $17bn, the 2007 ranking shows the 11 Nigerian banks taking a much larger share of the African banking pie along with banks from Togo and Mauritius. This year, the South Africans expanded their total Tier 1 capital by 34.3% but now only account for 72% of the aggregate $22.8bn, a larger total ($16.4bn) but a lower proportion.

It is important to note, however, that Barclays’ acquisition of ABSA Group in 2005 has taken ABSA out of the ranking as a South African bank. However, it still remains a force in the region and is the second largest bank in South Africa.

With real economic growth in South Africa achieving 5% in 2006 and record expansion in construction helping make a record 34 consecutive quarters of economic growth since 1998, the South African banks continue to produce strong performances. Standard Bank Group remains the biggest sub-Saharan bank by a large margin. Its Tier 1 capital expansion of 35.4% to $6.5bn makes it almost twice the size of Nedbank and well over twice the size of Investec and FirstRand Banking Group. But, as important as Standard Bank is in terms of South Africa and Africa in general, it remains relatively small on the world stage in 106th place.

Return on capital remains strong at South African banks. Standard leads the way with 40.4% (against a country average of 37.9%), slightly down on last year’s record 42.8%.

The important story this year is the expansion of Nigeria’s banks. The total Tier 1 capital of the 11 banks in the 2007 Top 1000 reached $5.8bn, more than 135% up on last year’s total of $2.5bn. A significant part of this increase comes from Intercontinental Bank, whose capital has increased almost fivefold to $1.3bn from $273m last year. Union Bank of Nigeria jumps into second place in Nigeria, more than doubling its capital to $783m. And Zenith International Bank has expanded similarly, reaching $738m.



„The branch is becoming much less of a vehicle for transactions and much more a vehicle for selling products and giving advice”

Stephen Timewell, Editor-in-Chief, The Banker.


Mailing address:
Financial Times Ltd, Number One Southwark Bridge, London, SE1 9HL, United Kingdom

© Financial Times Limited 2007

Access Bank to open 100 branches
By Femi Makinde, Akure
Published: Saturday, 11 Aug 2007

In a bid to expand its operations, Access Bank Plc has promised to open no fewer than 100 branches in the next 12 months.

The Executive Director of the bank, Mr. Ebenezer Olufowose, said this in Akure on Thursday during investors’ forum organised by the bank to educate investors on the profitability of buying its public offer currently available in the market.

The bank’s application offer for subscription of N4,721,839,130 which opened on July 23 is expected to close on August 29.

According to him, the unit of ordinary shares of bank was going for N14.90 per share and he said that the fund realised from the offer would be used to expand the operations of the bank.

Olufowose said that 10 out of the 100 proposed branches would be opened outside the shores of Nigeria.

He also said that the bank had started its operations in the Gambia, adding that Sierra Leone and Cote d’ Ivoire were two countries where the bank would establish its presence in the next one year.

Olufowose said that the bank would increase its automatic teller machines in order to facilitate easy withdrawal for its numerous customers.

He encouraged investors to invest in the bank, stressing that investing in an offer like the Access Bank’s was a sure way of getting out of poverty.

He also said that the bank had undergone a transformation process, which had improved its operations, adding that the improvement had impacted positively on its investors.

I'm not an economic expert, Does anyone know the benefits of having banks with high capita bases?

Nigerian banks are now moving to challenge South African banks regionally. Does anyone know the implications that this could have on Nigeria's economy?

I mean the Nigerian Banks are not growing, they are erupting.

the little i know means that nigerian banks are now capable of handling large projects that previously would be financed by foreign corporations. it also frees them to engage in legitimate business and reach out to small enterprises instead of doing just dealing in round tripping, wholesale and high margin projects.

insurance companies are doing the same thing. i guess a great deal of the insurance in sectors like the oil sector was handled by outside insurance companies and now the insurance companies can handle projects done within the shores of nigeria. and hopefully in west africa as time goes on.

I'm not an economic expert, Does anyone know the benefits of having banks with high capita bases?

Nigerian banks are now moving to challenge South African banks regionally. Does anyone know the implications that this could have on Nigeria's economy?

I mean the Nigerian Banks are not growing, they are erupting.

Yes, a higher capital base means that the risk of a bank having a run (It is a panic which occurs when a large number of customers of a bank fear it is insolvent and withdraw their deposits.) is minimal. A large capital base also means that the bank has a larger balance sheet which enables it to borrow from bigger financial markets/ banks by placing instruments like eurobonds with European banks to raise cheap debt. The risk of default is lower on a bank with a higher capital base. The obvious advantages are also that a well capitalized bank can build more branches, buy more ATMs, implement better systems and grow faster and become a respectable and trusted bank which improves the financial systems of the country's economy. It can also finance bigger deals as it has a larger capital base/balance sheet and really make a bigger impact on the economy. Notice how Zenith is getting involved in financing projects like Tinapa. Previously those type of projects would have only been financed and therefore managed by the government who you really don't want to come any close to this type of projects except as a facilitator or by foreign banks and World Bank/IFC (who bring all this conditions with their money).

Also when local banks are participating in financing some of the projects, it gives foreign financiers more comfort to pump their money as they know that even the Nigerian banks themselves believes that this project will be successful. They are putting their own money into it and sharing the risk. So it has this effect of really helping to stimulate foreign direct investment. In South Africa many of the projects that foreign companies invest in such as the Alcan's $3 billion aluminum smelter also involves SA financiers like Industrial Development Corporation. Even government financed projects such as the $4 billion rapid rail link in Johannesburg had Standard Bank putting in about $500 million in finance.

A strong banking sector is a corner stone of a successful economy. Virtually every mall, office building, listed company, mines etc in South Africa was financed by the likes of

- Old Mutual - financed lots of skyscrappers, malls, industrial property
- Sanlam - financed lots of skyscrappers, malls, industrial property
- Standard Bank - own lots of skyscrappers, malls, industrial property
- IDC (govt finance arm for private sector - created SASOL in 1950)
- DBSA (govt finance arm for public sector projects)
- PIC (pension fund with over $100 billion worth of assets and owns 10-15% of most listed firms on JSE)
- Anglo American - largest mining company from SA, at some stage controlled 35% of the JSE, including , De Beers, Sappi, built carlton centre in 1971 etc.


I can not over-emphasize the importance of a healthy and stable financial system for an economy that wants to really fly. So this is really good for Nigeria and all the kudus to the CBN governor.

Yes The CBN Governor, Charles Solodu is a great man.

Nigeria's Foreign Reserves now stand at 43-44 Billion Dollars, and the Government has refused to distribute that money to the local Governments, in order to ensure that the Reserves and the Windfall can be used to enable Nigeria be in the top 20 Economies by 2020.

According to the CBN, the Local Governments have already received a large amount of money over the years, and only 8 or so Billion Dollars will be distributed.

This is a good move, as such a large amount of money such as that of Nigeria's Foreign Reserves will destabilize the economy if circulated all at once.

Concerning the Banking Sector, I think Nigeria stands in a good position. Nigeria is now moving towards becoming a Cashless economy, and the consolidation will speed up the process.

Like you said it should also help with Infrastructure. Nigeria's tallest building is owned by Union Bank, and as Nigerian banks become stronger, I expect the major Banks to establish themselves with new Headquarters and Branches that reflect on their success.

sorry who knws d market capitalisation of south africa's biggest bank and smallest bank...cos i want to compare somin..i see there are now 8 nigerian banks with capital bases btw 1 - 6 Billion dollars

Taking the initiative

Published:
02 April, 2007
Page:
6

Chukwuma Soludo: expects debt ratio upgrade

Chukwuma Soludo, governor of the Central Bank of Nigeria, tells James Eedes of a bold plan to raise $1bn for his brainchild – the Africa Financing Corporation.

One thing you would not accuse Chukwuma Soludo of is lacking momentum. The governor of the Central Bank of Nigeria (CBN) has energetically stuck to his economic reform agenda when others in government and the private sector have retreated to the sidelines ahead of the country’s April 21 election.

Most recently, Mr Soludo was in London and New York drumming up interest in his latest brainchild, the Africa Finance Corporation (AFC). In characteristically bullish manner, the governor was seeking seed capital for the institution from international investors despite there being no management team in place.

It would not be the first time Mr Soludo has confounded the sceptics – the governor famously overcame staunch resistance to his plan to restructure the Nigerian banking sector, despite serious doubts he would meet his own unlikely 18-month deadline. Ahead of elections in which no-one is betting on a winner, there are few who do not worry what the outcome holds for the country and the momentum of reform.

Speaking to The Banker in London, Mr Soludo dismisses such fears, insisting the direction of reform will not change. “The economy has the capacity to sustain growth of more than 10% in the medium term,” he says, citing Nigeria’s improving business environment, abundant natural resources, large tracts of uncultivated agricultural land, and the increasing interest in the country being shown by the estimated 17 million Nigerians living abroad.

Authorities estimate the economy grew at 5.6% in 2006. Although slower than the year before, the underlying structure of growth is healthy: oil sector output shrank by 4.7%, owing to unrest in the important oil producing Niger Delta, but the non-oil sectors grew by 8.9%.

With steady improvement in a number of performance indicators, Mr Soludo also expects an upgrade to the country’s sovereign debt ratio, currently rated BB- by Standard & Poors and Fitch.

Mr Soludo is looking to raise at least $1bn in equity to establish the AFC, a target that is being underwritten by the CBN. Already Nigerian banks have committed investment of more than $700m when the private placement was launched last month in Nigeria.


Development funding


The AFC is being billed as a private sector-owned and led regional investment bank. The business rationale for the proposed institution is the need to bridge the massive gap in funding required for the development of key economic sectors, in the process creating significant returns to investors. Its mission statement is “to be the leading international securities firm and investment bank in Africa with its leadership position defined by international investment grade rating, track record of profitability and delivery of positive returns to shareholders.”

It is envisaged the AFC will be owned by commercial banks in Africa, other institutional investors and African central banks, with a minimum of 51% of ownership held by the private sector. Within five years, the institution will be listed on one or more international stock exchange, including various regional exchanges within Africa.

Funding will be raised by means of international issuance and access to various credit lines. Significantly, legislation has been drafted to allow the CBN to make available up to 5% of the country’s external reserves – which presently equates to about $2.2bn – for lending through the AFC.

According to Mr Soludo, the AFC “will be viewed [much like] international organisations such as the International Finance Corporation, African Development Bank and South Africa’s Industrial Development Corporation”. He notes too that the institution will obtain diplomatic privileges and legal immunities such as those enjoyed by multilateral financial institutions such as the World Bank, avoiding what he describes as “tedious market entry formalities and regulatory requirements” such as application for a banking licence and listing requirements. Furthermore, the AFC will be tax-exempt at the corporate level.

It is a bold initiative, but it has raised eyebrows. In addition to launching the private offer without a management team or even a named CEO, Mr Soludo is promising a 21% return on equity by the AFC’s fifth year, a net interest margin of 48% and a profit margin of 41% – impressive performance even by international standards.

Notwithstanding obvious question marks about according a private sector-owned institution anti-competitive advantages – tax exemption, legal immunities and so forth – the AFC looks suspiciously less like a regional African investment bank and very much like a Nigerian institution, headquartered in Nigeria, underwritten by the CBN, majority-owned by Nigerian banks and probably listed on the Nigerian Stock Exchange.

Indeed, during the London road show, Mr Soludo was more inclined to talk about the exciting economic prospects in Nigeria than the rest of Africa.

Is this an elaborate ploy to give unfair advantage to Nigerian investors? Or is it a visionary intervention to mobilise the capital and expertise to make these investments in Africa, even if there is a concentration of projects in Nigeria?

Mr Soludo contends that the financing gap runs into the tens of billions of dollars, which is a clear signal that economic development needs are going unmet. Africa’s indigenous private sector investment banks mostly lack the size and, in the case of the large South African banks, the geographic coverage to effectively service the market. Left alone to market forces, it is doubtful strong, pan-African institutions would have emerged. Considering its size and economic significance (and potential), Nigeria in particular is conspicuous for its lack of muscular domestic investment banks with the necessary resources; the AFC is the consolidation of such resources under one roof.

In some ways, Mr Soludo’s widely hailed restructuring of Nigeria’s banking sector was a similarly crude intervention. However, it has proved undoubtedly successful. The 25 banks trimmed from 89 are larger and stronger and are already showing signs of playing a far more meaningful intermediary role in economic development.

“We have 25 strong and reliable banks, without one single unsound or questionable bank. It is the soundest the sector has ever been,” says Mr Soludo. “On a combined basis, these 25 banks are now the size of the first and second largest banks in South Africa. In contrast, the combined size of the 89 banks in 2003 was equivalent to the fourth largest bank in South Africa. Twenty of the 25 Nigerian banks are among the top 100 banks in Africa; 17 are in the top 40 and four are in the top 10. Whereas in 2003 Nigeria did not have a single bank among the top 1000 world banks, we now have 17.

“Growth in assets, deposits, credit and profitability since 2004 has been astounding. Performance on capital adequacy and liquidity ratios has been good and the size of non-performing loan ratios has declined significantly,” he says.

According to CBN figures, the asset base of the banking system increased 104% from N3209bn ($25bn) in June 2004 to N6555bn at end-September 2006. Capital and reserves were up 192% over the same time period to N957bn, compared with N327bn, and the industry capital adequacy ratio stood at 21.6%. Importantly, the ratio of non-performing loans was down to 9.5%, compared with 19.8% in June 2004.


Inflation busting


While Mr Soludo has gained many fans for his no-nonsense approach to reform, he is now under increasing scrutiny to see whether he can keep the Nigerian economy on an even keel. Aided by more prudent management of public expenditure, in particular cutting spending of windfall oil revenue, Nigerian inflation has slowed from high double digits to about 8%. Many argue this was the easy bit; keeping the brakes on inflation in a fast-growing economy – without jeopardising growth – will be tougher.

To this end, Mr Soludo promises “aggressive liquidity management” to counter this year’s expansionary budget, in which spending is up 21% on last year. The central bank’s monetary policy committee is likely to meet before the April elections, but Mr Soludo would not be drawn on rate movements, saying only that the bank was vigilant in countering increases in cash floating around in the economy.

His job is every bit as much about managing inflationary expectations. He is quick to point out that a potential injection of an additional $4bn in oil savings cash into the economy would be non-inflationary as they would merely fill the gap created by revenue shortfalls from oil production dropping under the 2.5 million barrels-per-day level forecast in the budget.


Investor concern


Foreign investors had applauded the 2007 budget for its prudence but now worry that a large disbursement from the excess crude oil account indicates that government is prepared to open the spending spigot ahead of elections. The excess crude oil account is savings from oil revenues above the budgeted price of $40 a barrel.

“It is not going to stoke inflation any higher than the budgeted framework,” Mr Soludo reiterates, adding: “All I’m saying is that [present] spending is only taking it up to that level. So it is not having any greater impact than the budget itself would have had.”

Asked if he thinks the government will overspend ahead of the election, Soludo replies: “No, I don’t think the government will go beyond that limit. So what is being proposed is still consistent within that particular framework, within that ceiling. So it is nothing above that. No new money.”

That said, whatever Mr Soludo’s worries ahead of elections, they may prove modest compared with difficulties managing the boom that would follow peaceful elections. If Nigeria’s reform plan remains intact, it is likely there will be a surge in investment which will need to be managed.

sorry who knws d market capitalisation of south africa's biggest bank and smallest bank...cos i want to compare somin..i see there are now 8 nigerian banks with capital bases btw 1 - 6 Billion dollars


i think the fairest way to compare banks is by assets, not capitalisation since theories on how much capital to hold may vary. but i may be wrong. the largest SA bank by assets remains standard bank (the old british standard chartered) by a long shot at some $130,bn. at last count, zenith in nigeria, stands at about $10bn in assets. i think zenith is current the largest. most of the mergers these days seem to be the smaller between the smaller banks, but hopefully a could of big ones like zenith and intercontinental merge, creating a mega bank.

anyway

Africa: Standard Bank Tops in Africa






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New Vision (Kampala)

5 August 2007
Posted to the web 6 August 2007

Vision Reporter
Kampala

STANDARD Bank of South Africa has been ranked the leading group in Africa and at 106th position among the 1,000 top banks in the world.

There were only 18 banks in sub-Saharan Africa featured in the annual rankings mainly from South Africa, Nigeria, Togo and Mauritius in the list published by The Banker and Financial Times.

Standard Bank, the parent company of Stanbic Bank Uganda, clinched the position due to the group's strong Tier 1 Capital base, which amounted to $6,516m at the end of 2006: up 35.4% year-on-year.

"Standard Bank Group remains the biggest sub-Saharan bank by a large margin.

"Its Tier 1 capital expansion of 35.4% to $6.5b makes it almost twice the size of Nedbank and well over twice the size of Investec and FirstRand Banking Group," said a statement on The Banker's website.

Stanbic Bank said in a separate statement that Standard Bank's leadership position also highlights the confidence of its shareholders, customers and depositors.
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"We believe that the future of banking in Africa lies in our pan-African capabilities, made possible by our strong base of African expertise through our staff, and international networks that ensure world class banking practice and services," said Craig Bond, the managing director of Standard Bank Africa.

Standard Bank is the largest banking group in Africa by assets, earnings and market capitalisation.

It has an asset base of over $139b, according to the statement issued by the bank.

sorry who knws d market capitalisation of south africa's biggest bank and smallest bank...cos i want to compare somin..i see there are now 8 nigerian banks with capital bases btw 1 - 6 Billion dollars

Here's the latest figures for the big 4 as we call them

FirstRand Bank
Market capitalization = $19.3 billion
Total assets = $120 billion

Standard Bank
Market capitalization = $19.2 billion
Total assets = $139 billion

Absa Bank
Market capitalization = $13.5 billion
Total assets = $85 billion

NedBank
Market capitalization = $9.0 billion
Total assets = $59 billion

im surprised absa is so small. i thought it was closer to standard bank in size.

further capitalisation in nigeria in the next year can produce a bank of that size. but the big guys dont seem to be joining hands, though there was talk of eco bnk and first bank combining

Notice that Standard bank is generally considered to be the largest bank when taking into account total assets, number of employees, market capitalization and Tier 1 capital. Market capitalization reflects the enthusiasm of shareholders about the prospects of the bank and so if the share price goes up, the market cap of the bank always increases. The Nigerian banks will see their market capitalization go high as there is a lot of enthusiasm in a relatively new reformed banking sector amongst stock peddlers. At some point it will start to stabilize and the banks will need to grow their assets and profits to continue to justify an increasing share price and therefore higher market capitalization.

im surprised absa is so small. i thought it was closer to standard bank in size.

further capitalisation in nigeria in the next year can produce a bank of that size. but the big guys dont seem to be joining hands, though there was talk of eco bnk and first bank combining

you do have to remember though that 70% of Absa's shares are largely held by 2 groups that are not doing much trading activity (i.e. Barclays plc and Tokyo Sexwale's Black Economic Empowerment Consortium). So that leaves only 30% of the shares liquid in the market and even those are largely held by large asset managers who are not doing much trading. I reckon only 10% of the shares are traded actively on the market. Remember that when Barclays bought 57% at $5.5 billion, the bank was worth around $9.6 billion, so it has increased its market capitalization by almost $4 billion. The man who is smiling all the way to his bank is Tokyo Sexwale who bought his 10% stake for something like $500 million in 2004 (just six months before Barclays plc started negotiations to purchase ABSA). Today his 10% is worth a cool $1.35 billion making him a nice $850 million profit and making him the largest South African shareholder of this bank.

what i found states that intercontinental has assets of $5.5.bn and market cap of $3.5bn

zenith market cap is $3.75bn and assets at $10bn


the rest are market caps for the followng banks. however these things change quickly, especially in the current nigerian context and are likely higher than these figures posted

first bank $3.4bn

uba $3bn

union 381 $3bn

gt bank $2.55bn

oceanic $2.02Bn

im sure soludo is disappointed more consolidation hasnt taken place as he once spoke of nigeria ending up with prhaps just 10 banks. there are 23 right now.

you do have to remember though that 70% of Absa's shares are largely held by 2 groups that are not doing much trading activity (i.e. Barclays plc and Tokyo Sexwale's Black Economic Empowerment Consortium). So that leaves only 30% of the shares liquid in the market and even those are largely held by large asset managers who are not doing much trading. I reckon only 10% of the shares are traded actively on the market. Remember that when Barclays bought 57% at $5.5 billion, the bank was worth around $9.6 billion, so it has increased its market capitalization by almost $4 billion. The man who is smiling all the way to his bank is Tokyo Sexwale who bought his 10% stake for something like $500 million in 2004 (just six months before Barclays plc started negotiations to purchase ABSA). Today his 10% is worth a cool $1.35 billion making him a nice $850 million profit and the largest shareholder South African shareholder of this bank.
tokyo looks like he may become the first recognized billionaire from africa (though nigeria has one in dangote, i believe). and there is that ethiopian fella.

the nigeria markets needs more consolidation to be global players. they are no more marginal, but there still small relative to the size of the economy and goals of the nation

Michaelda, where is First Bank of Nigeria? I thought it was one of the biggest?

Michaelda, where is First Bank of Nigeria? I thought it was one of the biggest?

first bank is currently third in market cap. my post above wasnt very neat. however these thngs change and who knows what next week. however, from what i have seen of first bank's culture, its old and wll continue to fall from its position

Stanbic, IBTC merger promises a new dawn in financial industry

STAKEHOLDERS and major in-vestors in the Nigerian capital market, who take advantage of the current offer provided by the Standard Bank of South Africa, now Stanbic Bank of Nigeria, and IBTC Chartered Bank will, in no long time, have an unpararelled dominance of the financial market as well as substantial share dividends to smile home.

This was the message of Stanbic Bank and IBTC Chartered, articulated Thursday, by executives of both banks at a media briefing at the Nigerian Stock Exchange, Lagos. Titled ‘Facts beyond Figures', the merger was essentially meant to reposition the two banks for greater competitiveness in Nigeria.

Chief executive officer of the Standard Bank, Mr G.R. Brackenridg, said the vision for the merger was essentially predicated on enhancing the competitive positioning of both banks by creating one of Nigeria’s leading bank with significant capital and asset base, offering a full rang of financial product and services.

“We know that Nigeria has a huge market and we are here not like every other bank you may have known in the past. We are here to give Nigerians the product and taste of one of best banking corporate practices. This is what we have been known for many years in South Africa.

The deal will offer millions of Nigerians the opportunity of what the Standard Bank have been known for in other parts of the world, namely, high ethical practice in banking governance that will transform the financial base of not only the rich people, but also the average poor people”

Earlier, the managing director of the IBTC Chartered Bank, Mr Atedo Peterside, had called on Nigerian investors and the general public to see the opportunity as one of the best in the banking business, adding that the offer was the best for the general public and an opportunity that will be harnessed by any wise investor.

Nigerian banks choose London for flurry of summer fundraising

By Danny Fortson
Published: 08 August 2007

Three Nigerian banks have raised more than $1.3bn (£650m) in London this summer in an unprecedented fundraising drive for private companies in Africa's most populous country.

The ground-breaking moves by Guaranty Trust Bank, Access Bank, and United Bank for Africa represent the fruit of a reform programme begun in 2004 by the Nigerian government after years of isolation. The flurry of deals also reaffirms London's position as the preferred destination for international capital raising.

Guaranty Trust Bank, a group started by a former banker, Olutayo Aderinokun, who returned to Lagos in 1990, became the first African company to list on the London Stock Exchange last month. GTB raised $750m in the float of global deposit receipts, or GDRs, which are shares that represent the stock of a company traded on another exchange. GTB was preceded by offerings of over-the-counter GDR's from Access Bank and United Bank for Africa, which raised $300m apiece in July and May, respectively.

Two years ago, Nigeria was struggling with an external debt of more than $35bn. Helped by debt relief and the rising price of oil and commodities, it has shaved that to $3bn. It now carries the same credit rating as Turkey. Last year, GDP growth came in at 7.5 per cent. Investors are keen to get in early on what could be a boom, despite oil worker kidnappings, strife in the Niger River delta, and a recent presidential election that international observers claimed was rigged.

Yvonne Ike, a banker at JP Morgan who worked on the three offerings, said all of them were well-oversubscribed. "Africa is getting better at organising itself... We have a number of other deals in the pipeline," she said.


Source: http://news.independent.co.uk/business/news/article2843994.ece

some o those figs are wrong though...cos gtb's boss said their market capitalisation is 3.8 billion...zenith banks figures as per their latest release says thy have a capital base of 4.8 billion and first bank due to its current ipo should see their figures go up by at least 1.2 billion dollars

oh yeah i heard standard bank is nt really south african cos a 50 percentstake was bought in it by some foreign company i think barclays..n is it actually barclays or absa or both tht was taken ova by barclays.....i think by the time nigerian banks are cut down to just bout 8 or less we would have some mega mega banks

Metropolitan signs a joint venture with Nigerian bank
August 8, 2007

By Mzwandile Jacks

Johannesburg - Metropolitan had signed an agreement to enter into a 50-50 joint venture with the biggest retail bank in Nigeria, UBA Nigeria, to form UBA Metropolitan Life Insurance Limited, the JSE-listed financial services group disclosed yesterday.

Arnoldus Kruger, the managing director of UBA Metropolitan Life Insurance, said the company had been capitalised by 2 billion naira (R114 million) and Metropolitan and UBA would each have a 50 percent shareholding in the company.

The company would provide financial solutions to policyholders and would build on Metropolitan's experience as a low-cost developer, administrator, and distributor of financial products and services. Risk and investment products would be the new company's key focus, with emphasis on credit protection and group life insurance.

Peter Doyle, the chief executive of Metropolitan, said it had been in talks with UBA Nigeria for the past 18 months and the agreement was finalised late last month. Doyle said UBA Nigeria had more than 5 million customers in west Africa.

Standard Trust Bank, the fifth-largest bank in Nigeria, merged with UBA, the third-largest bank in Nigeria, in 2005 to form a listed company called UBA Nigeria. About 56 percent of the shares in UBA Nigeria are held by former shareholders of Standard Trust Bank.

The consolidated UBA is the largest financial services institution in Nigeria and west Africa. Its balance sheet is just under $5 billion (R36 billion). It has more than 428 retail distribution centres across Nigeria. It also has a presence in New York, the Cayman Island and Ghana.

Willem Coetzee, head of strategic ventures at Metropolitan, said Nigeria, with a population of 145 million and 13 million in the formal employment sector, was the biggest potential market in Africa for future expansion.
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Metropolitan has already established operations in Botswana, Lesotho and Namibia. It is also currently establishing a business in Swaziland as the state liberalises the insurance industry in that country.

Doyle said: "Our entry into the African markets will be largely determined by three factors: the country's growth must be equal to or greater than South Africa, the markets should have low insurance penetration levels and be where changes in regulatory environment could lead to opportunities."

He said that while the group's international operations contributed about 5 percent to the group's value of new business, Metropolitan was looking to increase that to 20 percent within the next two years.

Metropolitan currently estimates that it services about 10 million South Africans through its retail, health and employee benefits divisions.

"While this number presents a significant share of the local market, the Southern African Development Community region is an attractive market, with a population of about 550 million," Doyle said.

This week UBA Nigeria said it was leveraging its dominance in the Nigerian financial landscape to expand into the rest of Africa and beyond, through an international roll-out plan that would see it open more subsidiaries in Francophone and Anglophone countries in west and central Africa, to add to UBA Ghana, which currently has eight branches

Absa sees sub-Saharan deal by year-end
August 3, 2007

By Mzwandile Jacks

Johannesburg - Absa would, as part of its strategy to purchase Barclays' sub-Saharan assets, finalise the acquisition of the asset in the region before the end of this year, Steve Booysen, the bank's chief executive, said yesterday.

Booysen would not disclose the name of the country in which the business was located and the price Absa would pay.

"At the moment, we can only say that we are moving forward regarding this matter. Gill Marcus [chairman of Absa] and the Absa team have been in discussions with Barclays, and the announcement would be made in due course," said Booysen.

An analyst, who did not want to be identified, told Business Report that this acquisition could be in Nigeria.

The analyst added that the acquisition would be a significant purchase, costing the company millions if not billions of rands.

Before Barclays acquired a majority stake in Absa for $5.5 billion (R39 billion), it was reported that South Africa's banking group wanted to take over three Nigerian banks.
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These were Habib Nigeria Bank, NUB International Bank and Fountain Trust Bank.

Barclays has franchises in Zambia, Botswana, Ghana, Kenya, Tanzania, Seychelles, Mauritius, Uganda and Zimbabwe. Jacques Schindehütte, the group executive director at Absa, said there had been talks about the acquisitions of these franchises.

Booysen said the portfolio of African operations consisted of businesses it controlled and the company wanted to get out of businesses where it had minority shareholding.

Absa's headline earnings grew 26.2 percent to R4.3 billion from R3.4 billion in the six months to June.

Absa shares lost R2 to R131. The sector gained 0.2 percent.

oh yeah i heard standard bank is nt really south african cos a 50 percentstake was bought in it by some foreign company i think barclays..n is it actually barclays or absa or both tht was taken ova by barclays.....i think by the time nigerian banks are cut down to just bout 8 or less we would have some mega mega banks

iluvnaija, its a little naive to say that because Zenith bank has been taken over by a foreign company it is no longer Nigerian. Wait until Nigeria especially the Nigerian Stock Exchange is fully integrated into the global equity markets as Johannesburg Stock Exchange is and confidence in the Nigerian economy and financial and capital markets matures, you will see that the number of foreign stock holders on Zenith and other stocks will increase. Right now, my friend who works for Stanlib (an SA asset manager) told me that they had snapped up almost $100 million worth of Zenith shares and was in Lagos 1 month ago to look for more.

Anyway, to answer your question, Barclays plc took over ABSA's 57% in 2004 for $5.5 billion. To illustrate the flow of capital in the global equity markets, consider the following transactions that took over around that same time regarding SA companies. SAB bought Miller of the US for $5.5 billion in 2002 while Old Mutual bought Skandia of Sweden for $7 billion in 2006 and MTN bought Investcom (London and Dubai) for $5.5 billion in 2006. And this is called global capitalism and its a good thing for a maturing economy.

its only a good thing if you are the buyer. i'd rather see nigerian firms go on the buying spree

its only a good thing if you are the buyer. i'd rather see nigerian firms go on the buying spree

the capital markets are all about wealth and value creation and realizing that value at some point. At some point it makes sense to sell. the decision on when it is the right time to sell , how much to sell and for how much is really up to the shareholders to decide and depends on how much value they expect to realize. everything is for sale at the right price, believe me.

the capital markets are all about wealth and value creation and realizing that value at some point. At some point it makes sense to sell. the decision on when it is the right time to sell , how much to sell and for how much is really up to the shareholders to decide and depends on how much value they expect to realize. everything is for sale at the right price, believe me.
but from a political perspective, it doesnt do a nation well to have its key industries owned by outsiders. it leaves you open to any nonsense the owners wish to do.

thats why depsite the good price offered for the port in the US by the dubai firm, they refused it. money isnt always th ebottomline

i agree with michealda i would ntr like to see nigerian banks being owned by foreignerers anad i think soludo has the same line of thinkin cos he said he had rejected some offers for bank buyouts by outsiders.....and considering what i said about absa i saw it in some financial magazine somewhere that it cnt be regarded as a south african bank anymre i didnt say it based on a whim,.

i agree with michealda i would ntr like to see nigerian banks being owned by foreignerers anad i think soludo has the same line of thinkin cos he said he had rejected some offers for bank buyouts by outsiders.....and considering what i said about absa i saw it in some financial magazine somewhere that it cnt be regarded as a south african bank anymre i didnt say it based on a whim,.
it was said by TheBanker magazine, which is one of the premier magazines in this field. i think thats very significant.

IBTC will no longer be considered nigeria with a south african bank taking it over

* Surveys & Reports » 2007 » Top 1000 World Banks 2007

Three banks jump more than 500 places

Published: 02 July, 2007


Major moves up the Top 1000 world banks ranking require significant capital injections and this year there are some extraordinary changes: a record three banks (from Libya, Nigeria and Kazakhstan) moved up more than 500 places in the ranking – each having more than quadrupled its Tier 1 capital base.

Topping the Highest Movers listing this year is Libyan Arab Foreign Bank, Libya’s largest bank, which rose a record 528 places to reach 423 in the Top 1000 ranking. Its capital increased from $237m to $966m but this change only represents the bank’s latest published figures, dated end of 2004.

Nigeria’s Intercontinental Bank reflects the huge consolidation and regulatory change that has taken place in Nigerian banking in the past two years. It rose 522 places to be ranked at 355, with capital ballooning to $1277m at the end of February 2007. Following a merger with three other banks, Intercontinental’s capital increased by 4.6 times, making it easily the largest bank in the country by capital.

Kazakhstan’s Bank TuranAlem also broke the 500-place barrier, rising 509 places to reach a ranking of 295. TuranAlem’s capital increased 5.2 times to $1688m at the end of 2006, pushing it into second place in the country.

This year also, two banks jumped more than 400 places, Russia’s Bank Uralsib (up 420 places to 324) and Kazakhstan’s largest bank, Kazkommertsbank (up 404 places to 248).

Again the Highest Movers listing is dominated by banks from emerging economies, with Russia (nine banks), India (seven) and China (six) providing the largest numbers of the 69 banks that moved up more than 100 places in the 2007 ranking. With Nigeria (five banks) and the UAE (five) following close behind, the Highest Movers listing on a country basis correlates well with the strong economic growth rates being achieved in all the above countries.

In contrast, banks from developed economies are sparse in the listing with the US (three), Denmark (two) and Italy (two) virtually the only ones.

Correction:


* Surveys & Reports » 2007 » Top 1000 World Banks 2007

Three banks jump more than 500 places

Published: 02 July, 2007


Major moves up the Top 1000 world banks ranking require significant capital injections and this year there are some extraordinary changes: a record three banks (from Libya, Nigeria and Kazakhstan) moved up more than 500 places in the ranking – each having more than quadrupled its Tier 1 capital base.

Topping the Highest Movers listing this year is Libyan Arab Foreign Bank, Libya’s largest bank, which rose a record 528 places to reach 423 in the Top 1000 ranking. Its capital increased from $237m to $966m but this change only represents the bank’s latest published figures, dated end of 2004.

Nigeria’s Intercontinental Bank reflects the huge consolidation and regulatory change that has taken place in Nigerian banking in the past two years. It rose 522 places to be ranked at 355, with capital ballooning to $1277m at the end of February 2007. Following a merger with three other banks, Intercontinental’s capital increased by 4.6 times, making it easily the largest bank in the country by capital.

Kazakhstan’s Bank TuranAlem also broke the 500-place barrier, rising 509 places to reach a ranking of 295. TuranAlem’s capital increased 5.2 times to $1688m at the end of 2006, pushing it into second place in the country.

This year also, two banks jumped more than 400 places, Russia’s Bank Uralsib (up 420 places to 324) and Kazakhstan’s largest bank, Kazkommertsbank (up 404 places to 248).

Again the Highest Movers listing is dominated by banks from emerging economies, with Russia (nine banks), India (seven) and China (six) providing the largest numbers of the 69 banks that moved up more than 100 places in the 2007 ranking. With Nigeria (five banks) and the UAE (five) following close behind, the Highest Movers listing on a country basis correlates well with the strong economic growth rates being achieved in all the above countries.

In contrast, banks from developed economies are sparse in the listing with the US (three), Denmark (two) and Italy (two) virtually the only ones.

it was said by TheBanker magazine, which is one of the premier magazines in this field. i think thats very significant.

IBTC will no longer be considered nigeria with a south african bank taking it over

Guys, sure, you don't want all the banking assets being controlled by foreigners, but global capitalism means that its inevitable that foreign capital will flow into your economy looking for assets (financial assets or otherwise) and it happens the world over. You can't not say that we are going to close the economy and have it all controlled internally. There are other advantages that also go with foreign ownership that include foreign exchange earnings that flow from the purchase, increased FDI, more competition and hopefully better service and efficiencies all of which benefits the consumer and strengthen the sector. Look at Ghana, the Nigerian banks are buying left right and center and investing in its banking sector and the sector is growing. Should they close their sector from Nigerian buyers? It is already changing the banking landscape and improving credit extension and growing the market.

The SA banking sector is matured and grown and could do with selling 1 or 2 big banks to foreigners. That was the retionale when the reserve bank government approved the Barclays transaction.

^^^In a related point about foriegn take overs, as it relates to Canadian business, is that the new company usually invested more in the country than the domestic one.

I would assume that this would be the same thing worldwide.

^^^In a related point about foriegn take overs, as it relates to Canadian business, is that the new company usually invested more in the country than the domestic one.

I would assume that this would be the same thing worldwide.

but the new foreign company has the ability to take profits overseas

but the new foreign company has the ability to take profits overseas

That what you would assume but foreign companies tend to invest more in the country than the older company did. You have to remember that the foreign company will usually have more money and expertise to develop the the previous company to a higher level.

yes but u r ultimately developing someone elses company and economy leaving urs to lie fallow....i can understand u saying it bring more money in but nigerians have pride and want to have a world class institution of their own not world class institutions being owned by foreign companies..and thy tend to invest more but not all thy make..so instead of selling out most nigerian banks are partnering up to get technological know hw and learn hw to do it themselves..if u kip selling to foreigners u never develop local content cos the helm of affairs will always go to foreigners and they'll always be there for a profit not to develop u on a personal level as an indigene would do....their profits still have alleige=ance to their hme countries anyway u wanna see it

yes but u r ultimately developing someone elses company and economy leaving urs to lie fallow....i can understand u saying it bring more money in but nigerians have pride and want to have a world class institution of their own not world class institutions being owned by foreign companies..and thy tend to invest more but not all thy make..so instead of selling out most nigerian banks are partnering up to get technological know hw and learn hw to do it themselves..if u kip selling to foreigners u never develop local content cos the helm of affairs will always go to foreigners and they'll always be there for a profit not to develop u on a personal level as an indigene would do....their profits still have alleige=ance to their hme countries anyway u wanna see it

The best way is sell some and keep some whenever it makes sense. The theory goes, if the sale will enhance the value of the asset then do it. Also you don't have to sell all the stake in that company.

This speech was delivered by the Governor of Central Bank of Nigeria yesterday

Nigeria: Strategic Agenda for the Naira
This Day (Lagos)

DOCUMENT
15 August 2007
Posted to the web 15 August 2007

Charles Chukwuma Soludo
Lagos

Full text of the speech by the Governor of the Central Bank of Nigeria.

I: Introduction

It is my pleasure to welcome everyone to this important briefing on the 'Strategic Agenda for the Naira'. As you may recall, it is about three years since we launched (in this very Auditorium on July 6, 2004) the 13-point reform agenda designed to restructure, refocus and strengthen the Nigerian banking and financial system. At that meeting, I observed that the agenda constituted 'Phase One' of the reforms. We have since introduced other complementary reforms designed to stabilize the exchange rate, reduce inflation, reform microfinance, restructure the lower denominations of our currency and re-introduce coins, as well as promote the efficiency of the payments system. We have also launched the design of a comprehensive long-term reform agenda for the financial system (the Financial System Strategy 2020 ---FSS2020).

All these reforms are driven by our medium and long-term objectives to ensure economic prosperity of Nigeria, and for Nigeria to become the Africa's financial hub by the year 2020. Only a sustained stable macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve our national desire to become one of the 20 largest economies in the world by the year 2020.

The Strategic Agenda for the Naira is therefore being launched today as 'Phase Two' of our reform agenda, and as a necessary complement to the 13-point agenda of Phase One and other reforms. Phase Two of the reforms has become all the more imperative given the progress so far on Phase One, as well as the emphasis of the new Central Bank of Nigeria Act on ensuring monetary and price stability. According to the "Central Bank of Nigeria Act, 2007", (Section 2) the key objects of the Central Bank shall be to: (a) ensure monetary and price stability; (b) issue legal tender currency in Nigeria; (c) maintain external reserves to safeguard the international value of the legal tender currency; (d) promote a sound financial system in Nigeria; and (e) act as banker and provide economic and financial advice to the Federal Government. The Phase Two, by focusing on the Naira, means that the Central Bank intends to give greater emphasis to the most important function of central banks everywhere in the world namely, to issue legal tender currency and to defend its value (domestically by ensuring low inflation and externally by ensuring appropriate and stable exchange rate regime). Our specific objective in Phase Two of the reforms is to make the Naira the currency of reference in Africa, and thus a strategic catalyst for achieving the goal of an international financial centre as well as promoting Nigeria's rapid economic development. We also need the Phase Two to ensure that the results being achieved under Phase One are deepened and sustained.

II: Overview of the Reforms since 2004 and Outcomes

Before we outline the elements of the Strategic Agenda, it is germane to briefly review our progress so far. As you are aware, most of our reforms have focused on structural and institutional reforms, and have included the following:

- Strengthened the institutional framework for the conduct of monetary policy

- Bank recapitalization/consolidation

- Programme to possibly eliminate or reduce government ownership of any bank (to no more than 10 percent)

- Improved transparency and corporate governance

- Zero tolerance to misreporting and data rendition, and strict adherence to the Anti-money laundering regulations

- Implementation of Basel II Principles and Risk-based supervision

- Payments system reforms for efficiency---- especially the e-payment

- Reforming the Exchange rate management system--- adoption of the Wholesale Dutch Auction System (WDAS) and increased liberalization of the forex market (which since 2006 led to the convergence of the parallel and official exchange rates for the first time in 20 years).

- Restructuring the Nigerian Security Printing and Minting, Plc;

- Addressing issues of technology and skills in the banking industry especially in risk management and ICT.

- Launching of a new Micro finance policy and regulatory framework to serve the un-served 65 percent of the bankable public

- Ongoing Pension, Consumer credit, and Mortgage system reforms

- Forging strategic alliances and partnerships between Nigerian banks and foreign financial institutions especially in the area of reserve/asset management

- Establishment of Africa Finance Corporation (AFC), as first private-sector led African Investment Bank

- Encouragement of Nigerian banks to go global, leading to more than doubling of branch network in West Africa since 2004; setting up of subsidiaries in London as well as Nigerian banks successfully issuing Eurobonds and getting listed on the London Stock Exchange.

Our grand objective in the banking sector reforms was to re-engineer and fast-track a system that will engender confidence and power a new economy. So far, the grand objectives of that policy are being achieved, and our consolidation programme has been adjudged about the most successful and at least cost to the tax payers in the world. The total deposits trapped in the failed banks as percentage of GDP is about 0.7% (the lowest in the world), and no private sector depositor would lose a kobo of his/her deposit. The banking system is the safest and soundest it has ever been in history. Deposits and credits have more than doubled, and non-performing loans as percentage of total loans have gone down from about 23% before consolidation to about 7% currently. Individual banks now finance big projects valued at hundreds of millions of dollars and also operate in the oil and gas sector --- a feat they never could do before now. Interest rates are gradually coming down (with average lending rate at about 16.9%, down from 25%). Currently, commercial bank branches have gone up from about 3,200 before reforms to over 4,100, and total employment in the sector has gone up from about 55,000 before reforms to over 61,000 currently. The world is celebrating Nigeria's success, and over $1.5 billion of foreign investment has gone into the sector since 2005. By end 2007, there will be about 7 or more banks with shareholders fund in excess of $1 billion and over 10 banks with market capitalization of over $2 billion each (there was none in 2004). In 2004, there was no Nigerian bank in the top 1000 banks in the world. As at the end of 2006, there were 12 banks in the top 1000, with one ranked 355th (top 500 in the world). Our banking system is powering the Nigerian Stock Exchange. Today, Nigeria has the fastest growing banking system in Africa, and one of the fastest in the world. As seasoned commentators have observed, it has taken Nigeria less than three years to achieve what it took South Africa 20 years to achieve in the area of banking. To put it succinctly, a new banking system has emerged, and will only get stronger for the benefit of the Nigerian economy. We firmly believe that with the sustenance of the reforms as the CBN is determined to do, the best is yet to come.

On the macroeconomic front, double-digit and volatile inflation rate (which used to be the norm) have been subdued as inflation rate has remained at single-digit since last year. However, inflation risks remain high. The Naira/US dollar exchange rate has remained stable (with steady appreciation of Naira against the dollar) since 2004, and the GDP has maintained a robust growth rate of over 6% per annum since 2003.

III: Matters Arising and Challenges Ahead

Despite progress on a number of fronts, there are still enormous challenges and unfinished business. At the economy-wide level, there are still chronic challenges of insecurity of lives and property, infrastructure deficiency (especially power and transportation), education crisis, among others.

At the level of the financial system, we have the huge task of effectively implementing the FSS 2020. There is still the risk of fiscal dominance and volatility in the fiscal operations of government. Evolving Fiscal Responsibility arrangements and framework for managing highly volatile oil revenues will be critical. Other unfinished business in the reforms includes:

- Risk-based, consolidated and strengthened banking supervision

- Mortgage, SME, and consumer credit reforms

- Adherence of States and LGs to the requirement under the Micro Finance policy to devote at least 1 percent of their annual budget to micro credit

- Continued reform of the payments system, especially the e-payments system and enforcement of the Dud cheque offences Act.

Efforts will continue to be made to address these unfinished issues.

IV: The Strategic Agenda

The thrust of the agenda focuses on the Naira as our national currency---- to realign its denominations, ensure its stability and global integration. These will help to deepen the reforms of the financial system and national economy, and make the Naira the currency of reference in Africa thereby facilitating our quest for international financial status.

The new focus is an extension of our previous currency redesign and re-issuance of the lower denominations and attempt to re-introduce coins. Our goals were to redesign the currencies after 23 years (contrary to the international norm of currency redesign after 6- 8 years), drive down the cost of currency printing and experiment with the polymer substrate. Our objectives are largely achieved and we have learnt a lot from the exercise. However, in the light of the new mandate by the CBN Act (2007) to 'ensure monetary and price stability', as well as the vision articulated under the FSS 2020, it has become imperative for us to evolve a more comprehensive strategy for the Naira as a reference currency.

Currency redenomination and liberalization are not without risks especially for small open economies such as Nigeria. However, we believe that the time is auspicious for such reforms especially in the light of the following enabling conditions:

- Overall commitment of the Federal Government under Alhaji Umaru Musa Yar'Adua (GCFR) to sustaining macroeconomic and other structural reforms

- a robust external reserves to meet almost 20 months of foreign exchange disbursements and 25 months of imports

- Stronger banking system powering a new economy and capital market

- Inflation down to single digit, and robust GDP growth of about 6% and above

- Exchange rate stability and elimination of multiple currency practices that had been prevalent before now

- Strong capital inflows (with Central Bank as increasingly marginal player in the forex market)

- Debt relief: Nigeria without a debt burden

- Non-oil exports growing strongly (24% in 2006)

- Nigeria de-listed from the FATF list

New CBN Act not permitting CBN to grant ways and means advances to Government exceeding 5% of previous year's revenue provided such financing is retired before end of the financial year. Indeed, CBN is not positively disposed to granting any ways and means advances.

It is in the view of the foregoing enabling conditions, and our vision for a Naira that is the currency of reference in Africa that the Board of Directors of the Central Bank of Nigeria has approved the following agenda for the Naira:

A: Currency Re-Denomination

Here, we intend to restructure the entire currency by dropping two zeroes or moving two decimal points to the left from the currency, and issuing more coin denominations. This would entail a total currency exchange and phasing-out of all the existing denominations from August 1, 2008. Effectively, at the current exchange rate, this policy would mean that the Naira/US dollar exchange rate would be around N1.25 to US$1 then. All Naira assets, prices and contracts will be re-denominated by dropping two zeroes or two decimal points to the left with effect from this date.

The proposed currency structure is as follows:

COINS: 1 kobo, 2 kobo, 5 kobo, 10 kobo, 20 kobo

NOTES:

50 kobo, 1 Naira, 5 Naira, 10 Naira, 20 Naira

Effectively, our plan will restore the value of the Naira (in the short-term) close to what it was in 1985 before the commencement of the Structural Adjustment Programme (SAP) in 1986.

Re-denomination and re-introduction of totally new currency structure (notes and coins) following the progress so far with other reforms and the enabling conditions in the economy today are designed to better anchor inflationary expectations, strengthen public confidence in the Naira, make for easier conversion to other currencies, reverse tendency for currency substitution, eliminate higher denomination notes with lower value, reduce the cost of production, distribution and processing of currency, promote the usage of coins and thus a more efficient pricing and payments system, and lay the foundation for the convertibility of the Naira as well as make it the 'Reference currency' in Africa. The African Union has granted Nigeria the right to host the Headquarters of the African Central Bank when the common currency in Africa materializes. We must therefore lead the way in terms of properly aligned currency structure and sound monetary policy framework.

Several countries in the world have undertaken currency re-denomination at various times and for different reasons, including: Afghanistan (2002); Germany (1923, 1948); Argentina (1970; 1983; 1985; 1992); Bolivia (1963, 1987); Brazil (1967, 1970, 1986, 1989, 1990, 1993, 1994); China (1955); South Korea (1962); Mexico (1993, 1996); Ghana (2007); Israel (1948, 1960, 1980, 1985); Turkey (2005); Angola (1995, 1999); and others. Evidently, many countries have had to undertake the re-denomination more than once. In the case of Brazil, it had to do it many times before it got it right. The major challenge is to undertake other complementary reforms, particularly macroeconomic reforms that will underpin price stability and continuing confidence in the economy. This is where we believe Nigeria's experience is likely to be different from others, having learnt from the experiences of other countries.

Consequently, as necessary complements to the currency re-denomination, we intend to introduce three additional measures:

- Adoption of Inflation-Targeting Framework for the conduct of monetary policy;

- Sharing Part of the Federation Account in US Dollars to deepen the Forex Market and for Liquidity Management

- Current Account Liberalization/Co-nvertibility and Accession to Article VIII of the IMF.

B: Adoption of Inflation-Targeting Framework for the Conduct of Monetary Policy: to commence from January 1, 2009.

In the light of the new mandate as contained in the new CBN Act (2007) urging the CBN to "ensure monetary and price stability" as well as the need to provide a transparent, credible framework to lock-in inflationary expectations, the CBN will adopt inflation target as the nominal anchor for monetary policy with effect from January 1, 2009. Low and stable inflation will be our monetary policy's primary long-term goal. Focusing on inflation targeting does not mean that the CBN will not be interested in other broader objectives of macroeconomic policy--- output growth, employment, exchange rate, and balance of payments. Rather, an inflation-targeting framework will enable CBN to pursue these objectives in a more disciplined and consistent manner rather than the ad-hoc processes of the past. Locking-in inflationary expectations is one effective way of ensuring that the currency re-denomination will be sustainable. The outcome of this new framework will greatly improve the credibility of the CBN as the Monetary Authority, as well as deepen the financial markets and promote rapid development of a private sector-led economy.

We will use the next 16 months to fully prepare for the introduction of this framework especially in the light of the deep technical issues involved. The CBN would collaborate with the National Bureau of Statistics in significantly improving the availability of high frequency and reliable data especially those of the GDP and more robust measures of the price indices.

C: Sharing Part of the Federation Account Allocation in US Dollars to Deepen the Forex Market and for Liquidity Management: to commence from September 2007.

Given the structure and development of the financial system, the underdeveloped nature of the Forex markets, as well as the restrictions on foreign exchange transactions, the CBN has traditionally fully monetized the foreign currency receipts in the Federation Accounts, to be shared by the three tiers of government. Initially, the CBN also maintained the accounts for all the tiers of government--- as part of the liquidity management framework. Subsequently, as the banking system developed, the CBN allowed the share of the states and LGs to be deposited with the commercial banks.

Recently, following the reforms in the banking sector and the further liberalization of the Forex market, both the financial system and the forex market have deepened and become increasingly sophisticated. Since 2006, the CBN adopted the Wholesale Dutch Auction System (WDAS) in the forex market and significantly liberalized the forex market. Furthermore, Nigeria has exited the debt trap, built up significant external reserves, and the autonomous inflows into the Forex market are such that the CBN has become a marginal player in the forex market. The forex market has become so efficient that Nigeria no longer has multiple currency practices (as defined by the IMF). In the last two years also, the CBN has consistently intervened in the forex market through the increased sale of foreign exchange as an instrument of liquidity management (the so-called special auctions). In December 2006, the CBN introduced the Monetary Policy Rate (MPR) with the corridor, and this has eliminated the high volatility in the money market interest rates. The money market is deepening, and the bond market is also evolving.

The above conditions indicate that the private financial markets are getting deeper and sophisticated enough to warrant further steps on the part of the Central Bank to gradually withdraw as a dominant player in the forex market. The inter-bank forex market is now the dominant segment of the market, and needs to be deepened.

Consequently, the Monetary Policy Committee (MPC) of the CBN has approved the sharing of part of the Federation Account allocation to the Federal Government and the State Governments in US dollars. The Local Governments are excluded in this phase. For the Central Bank, this could also provide an additional instrument for effective liquidity management as we migrate to inflation-targeting framework.

The proportion of the Federation Account to be distributed in dollars will be determined from time to time, but largely dependent on the assessment of the forex market as well as the liquidity management requirements of the CBN. Both the States and Federal Government will be required to open 'Special Domiciliary Accounts' with commercial banks of their choice. The special account can only be accessed by monetizing the balances into Naira. In other words, the Governments cannot withdraw dollar cash but may also utilize part of their domiciliary accounts for settlement of external obligations (e.g. opening of letters of credit). From September 2007, the exchange rate that will be applied in the monetization of Federation Account as well as the 'Special Domiciliary Accounts' will be the inter-bank rate on that day.

As the market deepens, the CBN will gradually withdraw from the WDAS, and only intervene in the market (buy or sell forex) as may be required to achieve defined policy objectives.

This new policy thrust is expected to deepen the forex market, promote financial market development, and improve the degree of integration among the domestic markets and with international markets. This policy will complement the ongoing programme of allowing Nigerian banks to manage part of our external reserves in collaboration with foreign asset managers. The net effect of these will be to create and deepen capacity within our banks. All these will also provide important building blocks for the external current account convertibility and attainment of the IMF Article VIII status. The challenge here is that both the CBN and the commercial banks would have to manage the risks inherent in foreign exchange trading and deploy a sound system of monitoring foreign asset-liability matching. The CBN in particular, would need to sharpen its skills to monitor and regulate the use of domiciliary accounts in accordance with the international best practices as well as the rules and guidelines governing the anti-money laundering laws and regulations. The Governments too would need to be on top of the risk management techniques for optimal management of their portfolios.

The CBN is conscious of the risks of dollarization of the economy and will take steps to avoid such. Also, we are conscious of the dangers of the Dutch Disease and hence the need to avoid the repeat of history in terms of high overvaluation of the Naira in real effective terms as happened during the 1970s until early 1980s. Non-oil exports have begun to recover and grew by 24% in 2006. Also, capital inflows have been growing rapidly and highly overvalued exchange rate would hurt these trends. More fundamentally, without a currency re-denomination/realignment, a significant appreciation of the Naira/dollar exchange rate would lead to fiscal crisis given that much of the revenue is dollar denominated, and such appreciation would also significantly deplete our external reserves. Thus, while we deepen the forex market and effectively manage our liquidity, we would not lose focus on ensuring appropriate exchange rate regime for macroeconomic balance.

D: Current Account Liberalization/Convertibility and Accession to Article VIII of the IMF: to commence January 1, 2009

As a necessary complement to the foregoing policy initiatives, and to further deepen the integration of our financial system and economy into the global economy, we intend to embark upon full current account liberalization/convertibility by January 1, 2009. This would entail that Nigeria eliminates all restrictions on current account transactions, and accession to Article VIII of the IMF means that the policy is not easily reversible. Out of the 185 member countries of the IMF, 167 have acceded to the Article VIII on current account convertibility. It is our belief that the conditions are right for Nigeria to now join the world league. The timing is proposed to coincide with the commencement of the inflation-targeting framework.

V: Conclusion

These measures constitute a key component of the FSS 2020 agenda: our quest to become an international financial centre and Africa's financial hub. They will complement and deepen the ongoing financial system reforms. The conditions are now right, and despite the challenges, we are determined to ensure effective design and implementation.

Furthermore, we are working towards greater transparency in the formulation and implementation of our monetary policy. A new Monetary Policy Committee (MPC) will soon be reconstituted in accordance with the new CBN Act, and Minutes of the MPC shall be made public. We also intend to undertake greater public education about what we do and why we do them the way we do.

Are these policies consistent with the drive towards a single currency in West Africa? Yes: Nigeria remains committed towards the ECOWAS goal. Currently, the Nigerian economy constitutes about 70 percent of the entire ECOWAS economy and accounts for about 80 percent of the total external reserves. It therefore goes without saying that if the Naira is properly aligned and can become the 'Reference Currency', the goal of a monetary union becomes all the more credible and sustainable. Nigeria has met all the primary convergence criteria and hopes that the other countries will do same on a sustained basis. In the meantime, Nigeria must continue to make progress.

Professor Soludo, CFR, the Governor of the Central Bank of Nigeria, delivered this address yesterday.

Looks like the NAIRA will be undergoing re-domination like the Ghana cedi soon. This should be good news for the unit which will also help to streamline and smoothen financial transactions within the economy.

i can see its need in ghana where it traded at like 1 usd to 10,000 cedi or whatever, but im not sure its necessary in nigeria. it does provide a mental boost and its convinent in transactions.

im also concerned about allowing it to float internationally. im not sure its strong enough for that. but we'll see

i can see its need in ghana where it traded at like 1 usd to 10,000 cedi or whatever, but im not sure its necessary in nigeria. it does provide a mental boost and its convinent in transactions.

im also concerned about allowing it to float internationally. im not sure its strong enough for that. but we'll see

I thought the naira is already on the floating exchange rate regime already, so re-denominating it should not have any impact on that aspect.

I thought the naira is already on the floating exchange rate regime already, so re-denominating it should not have any impact on that aspect.

http://news.bbc.co.uk/2/hi/business/6946604.stm

perhaps i dont understand the language, but it seems it will be freely floated after this

http://news.bbc.co.uk/2/hi/business/.stm

perhaps i dont understand the language, but it seems it will be freely floated after this

Yes, based on that BBC article, it implies that the NAIRA was not a floating currency. I didn't know this. Thanks for enlightening me on this Michaelda.

The best way is sell some and keep some whenever it makes sense. The theory goes, if the sale will enhance the value of the asset then do it. Also you don't have to sell all the stake in that company.
i think ultimately you want these things bought by friendly nations. e.g. Us and Uk; Nigeria and Ghana. the US wouldnt want their banks bought by iran, not matter the price.

Yes, based on that BBC article, it implies that the NAIRA was not a floating currency. I didn't know this. Thanks for enlightening me on this Michaelda.

i hope this is a prelude to the cedi and naira forming the backbone of the eco or west africa currency.

CBN boss commends Intercontinental Bank’s achievements

By Peter Egwuatu

Posted to the Web: Thursday, August 16, 2007

The Governor of the Central Bank of Nigeria (CBN), Professor Chukwuma Soludo, poured praises and commendations on Intercontinental Bank Plc for its achievements and leadership of the Nigerian banking industry. Intercontinental Bank is the first bank in Nigeria to cross the $1 billion mark in capital, raising its share capital to over N156 billion, making it the biggest bank in the country by capital.

Intercontinental is rated the world’s second fastest growing bank in the world by The Banker Magazine which also ranked it the number one bank in Nigeria, number five in Africa and the 355th biggest bank in the world by first tier capital. This makes Intercontinental the first Nigerian bank to be rated among the world’s top 500 banks.

Professor. Soludo made this statement while welcoming the board and management of the bank who paid him a courtesy visit in his office in Abuja last week. Clearly delighted by the bank’s stellar performance, the CBN Governor congratulated the board and management of the bank saying: “It is my honour and pleasure to receive you. I wish to congratulate the board and management for your achievements.

He recounted that: “As soon as the result of The Banker Magazine ranking was released, I got a call from London informing me of your achievement and I called your Chairman immediately to congratulate him.,” adding, “you have dared, you have overcome, you are still soaring and you have lived up to your name, Intercontinental. I want to again congratulate your board and management”
He said that the CBN will accordingly honour the pledge it made last year to allocate an extra $500 million of the nation’s foreign reserves to the first bank that crosses the $1 billion (N130 billion) mark in tier one capital, to manage.

Professor Soludo also used the opportunity to redeem the pledge he made last year that the CBN will allocate an extra $500 million to any Nigerian bank that makes the $1 billion in share-capital to manage. He said: “Yes we made a promise on allocation of foreign reserve management and the promise, we are bound to keep.” Intercontinental Bank is the first bank to cross the $1 billion mark and it is biggest by capital in Nigeria.

The apex bank boss told the bank’s delegation led by its chairman, Dr. Raymond Obieri that the bank’s accomplishments qualify it for the allocation of the $500 million. Dr. Obieri thanked Professor Soludo for his foresight and courage, adding that the mission of the visit was to thank him and also inform him and his team about the rating of the bank by the highly reputable Banker Magazine. He described the award as an honour to the Central Bank.

Nigeria: Investors, Analysts Worry Over Looming Market Bubble




Vanguard (Lagos)

18 August 2007
Posted to the web 18 August 2007

Victor Ahoum-Young
Lagos

Investors in Nigeria's burgeoning stock market are seeing danger signals that the recent rally is turning into a bubble.

Concerns focus on banks, where share price growth has been spectacular since a wave of consolidation in 2005. Most bank stocks have more than doubled in value this year alone -- some have risen by more than 500 percent -- and the majority now trade at more than 20 times their expected 2008 earnings.


Investors say these multiples are unsustainable, even for a fast-growing "pioneer" market like Nigeria, where investor confidence has been growing steadily since economic reforms began in 2003.

"All the indicators of a market going out of control are here," said Jonathan Chew, head of Imara Asset Management UK Ltd, which has $25 million in Nigerian securities.

"When the entire retail sector is talking about stocks and shares, you know it is getting toppy," he added.

Reforms introduced by former President Olusegun Obasanjo won the country debt relief and a BB- credit rating in 2005. Optimism was fuelled by a peaceful transition from one civilian leader to another in elections in April -- a first for Nigeria -- despite widespread vote rigging.

President Umaru Yar'Adua has promised to extend Obasanjo's reforms and the All-Shares Index <.LAGLG> is up 68 percent in the 12 months to Aug 15, while the naira currency has strengthened against the dollar.

Fears of a bubble in the banking sector have mounted on reports that some banks are engaged in highly leveraged share purchase schemes through stockbrokers.

One senior bank executive said he knew of one case where a capital market operator borrowed 6 billion naira ($47 million) from a bank to invest in that bank's shares.

Bismarck Rewane of Financial Derivatives Company in Lagos, said the practice was widespread.

"Margin trading is the biggest gamble in town right now. It's very dangerous," he said.

Godwin Obaseki, managing director of brokers Afrinvest, said banks have extended big loans to brokers, perhaps as much as 20 percent of the whole country's credit. But he said he did not know of cases where banks insisted on the loans being used to buy their own shares, which would be illegal.

"I don't believe it is a deliberate attempt by banks to prop up their shares, but there are large numbers of uninformed investors taking unbridled risks."

"There will be a correction, but I don't think it will be as drastic as some people predict," he said, adding that demand for Nigerian stocks was still very strong.

Rewane estimated that 20 percent of all stock purchases in Nigeria were made using borrowed money.

Imara's Chew said the large number of non-professional investors in the Nigerian market increased the risk that any fall would be a sharp one.

In developed markets, institutional investors take advantage of corrections to buy. But in markets dominated by retail investors, a correction can easily turn into a crash because people are more prone to panic and sell at any price.

"Nigerians have learned what to do in a bull market, but they have yet to learn what to do in a bear market. They might find out shortly," said Chew.

Bank stocks are the focus for Nigerian retail investors because banks have raised popular awareness with aggressive advertising campaigns over the past 18 months.

Nigeria: Investors, Analysts Worry Over Looming Market Bubble

:eek:

:eek:

Booms and busts are normal in any stock market. Its all going to be fine. The Nigerian banks are making money so if you choose to buy at the right time into a bank with good fundamentals then you shouldn't have anything to worry about. But if you are speculating, then be ready for the outcome to go north or south. Its part of the fun of speculative investments.

insurance is to be th enext big growth area. starting this week. nigeria needs electricity because it seems the only industries growing that those that can function without relying heavily on electricity.

‘Zenith Bank is most capitalised company on NSE’ Gbola Subair, Abuja
Thursday, August 23, 2007

Zenith Bank Plc has emerged as the most capitalised quoted company on the Nigerian Stock Exchange (NSE) at the close of the financial year with market capitalisation of N612.82 billion.


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Chairman of the bank, Macaulay Pepple, assured the shareholders that its ‘friendly dividend policy” would continue, in view of investors’ preference for the bank’s stocks in the capital market.

Pepple disclosed that the bank’s performance led to its emergence as the highest priced stock, at N66.14 per share at the close of trading in June 2007.

The bank did not disappoint its shareholders as they are to recieve dividend of N1 for every share of 50 kobo totalling N9.265 billion, following the approval of the dividend at the bank’s Annual General Meeting on Wednesday in Abuja.

This dividend payment for the bank’s financial year ended June 30, 2007 represents an increase of 110.6 per cent and 40.4 per cent over the N4.4 billion and N6.60 billion paid to shareholders in 2005 and 2006, respectively.

The bank’s Chairman, Macaulay Pepple assured the shareholders that its ‘friendly dividend policy” would continue to be maintained, in view of investors’ preference for the bank’s stocks in the capital market.

Analysis of the bank’s results at the group level indicated substantial appreciations in all its evaluation parameters, as gross earnings grew by 58.1 per cent from N60 billion in 2006 to N94.88 billion in 2007.

The profit before tax rose to N25.67 billion in 2007 from N15.58 billion in 2006, while the profit after tax also appreciated by 61.6 per cent from N11.62 billion in the preceding year to N18.78 billion in 2007.

This is not alone , the bank’s earnings per share closed at 202 kobo, gaining 77 kobo over the 16.

i hope this is a prelude to the cedi and naira forming the backbone of the eco or west africa currency.

Nigerian government stops currency re-denomination plan

Fri 24 Aug 2007, 14:47 GMT
[-] Text [+]

By Felix Onuah

ABUJA (Reuters) - Nigerian Justice Minister Michael Aondoakaa on Friday froze a plan to re-denominate the naira currency which the central bank announced last week, saying the bank had violated the law.

Aondoakaa said Central Bank Governor Chukwuma Soludo should have sought President Umaru Yar'Adua's written approval before announcing the plan, which involves removing two zeros from price tags from August 1 next year.

"I, as the chief law officer of the federation, hereby stop all actions on the re-denomination of the naira," Aondoakaa told reporters after a meeting with Yar'Adua.

Festus Odoko, the central bank's chief spokesman, said it would discuss the issue with the justice minister. "It is certainly not true that the bank did not consult with the president about the re-denomination," Odoko said.

Re-denomination was one of a number of policies announced by Soludo on August 14, some of which financial markets considered more significant.

Asked if the other measures were also being frozen, a close aide to Yar'Adua, who did not wish to be named, said: "It is only the re-denomination that the president is not happy with."

Critics had questioned the cost and benefits of the re-denomination plan, announced just a few months after the central bank introduced new 50, 20, 10 and 5 naira notes. These notes, which cost millions of dollars to print, would become useless after the proposed re-denomination.

Aondoakaa cited section 19 of the Central Bank of Nigeria (CBN) Act 2007, which states among other provisions:

"Currency notes and coins issued by the Bank shall be ... in such denominations of the Naira or fractions thereof as shall be approved by the President on the recommendation of the Board."

"ILL-CONCEIVED"

"The federal government has done the right thing in halting the ill-conceived policy. The whole policy was not well thought out," said Ayo Teriba, head of consultancy Economic Associates in Lagos.

Soludo announced the re-denomination at the central bank's main auditorium to an audience of hundreds including state governors, ministers, diplomats and journalists.

Soludo said at the time that the aims of the re-denomination included anchoring inflationary expectations better, strengthening public confidence in the naira, making conversion to other currencies easier and promoting usage of coins.

He also announced that the central bank would distribute part of fiscal revenues to the three tiers of government in dollars from next month, while from January 1, 2009 it would adopt an inflation-targeting framework and remove restrictions on current account transactions.

The re-denomination was the measure that attracted most criticism. "Given the limited economic benefits, as well as the high fiscal cost associated with the re-denomination, there was always going to be some level of uncertainty attached to it," said Razia Khan, regional head of research for Africa at Standard Chartered Bank in London.

The naira depreciated on Friday to 126.41 to the dollar from 126.38 on Thursday, dealers in Lagos said, but they added it was not in response to freezing of the re-denomination plan.

oops, spoke too soon.

fools. its all politics. the plan is a good plan

There are actually numerous faults with the plan.

I.e Why did the CBN Governor introduce new notes this year, if the Naira was planed to be phased out next year, and be replaced by the "New Naira".

This move cost the Country heaps of money.

Re-denomination is a process that is used to ease Hyper Inflation. Nigeria doesn't have hyper inflation, inflation has been decreasing over the past 4 years, and although the process could potentially improve the bigger picture, it is not necessary and is quite costly.

The Government should concentrate on stabilizing the economy, so that the economy is strong enough, and growing adequately, reflective of the resources Nigeria has, hence ensuring a stronger currency. If the Naira is Re-denomination, it will only change the exchange on paper, but in theory the Naira is still weak.

The government spent so much money on introducing higher currency denominations, only to announce this year, that they will be phased out.

The Naira has been strengthening over the years, and the Naira will only gain value when resources are managed adequately.

There are actually numerous faults with the plan.

I.e Why did the CBN Governor introduce new notes this year, if the Naira was planed to be phased out next year, and be replaced by the "New Naira".

This move cost the Country heaps of money.

Re-denomination is a process that is used to ease Hyper Inflation. Nigeria doesn't have hyper inflation, inflation has been decreasing over the past 4 years, and although the process could potentially improve the bigger picture, it is not necessary and is quite costly.

The Government should concentrate on stabilizing the economy, so that the economy is strong enough, and growing adequately, reflective of the resources Nigeria has, hence ensuring a stronger currency. If the Naira is Re-denomination, it will only change the exchange on paper, but in theory the Naira is still weak.

The government spent so much money on introducing higher currency denominations, only to announce this year, that they will be phased out.

The Naira has been strengthening over the years, and the Naira will only gain value when resources are managed adequately.

the only part of the plan that seeks to make the naira stronger is flaoting it. re-denomination is to make it easier to carry the naira, so the largest curency one would carry under the new plan would be almost 3 times as high. nigeria, which is mor ein line with ghaa, argentina and brazil, should not compare the naira to the japanese yen. the point here was not to seek value, but easy of transaction

yes, re-denomination is necessary where there is hyper inflation but no rules say it cannot be beneficial to countries with relatively tame inflation.

along with the 1000 naira note the governor also introduced coins, a hint that thee plans to re-denominate the naira are not new and are part of a long term policy from the CBN. there are always costs in these moves. but the benefits surpass the cost

Intercontinental Bank Gets Highest Global Rating in Nigeria

...As Fitch Assigns the Bank A+ National & B+ Global Ratings

09.03.2007


Intercontinental Bank Plc continues to receive accolades on its stellar performance and increasing domestic franchise from global rating agencies. Only last week, FitchRating, the globally acclaimed rating agency, upgraded the bank’s National Long-term rating to ‘A+’ from ‘A’ while affirming its National Short-term rating at ‘F1’
Fitch equally assigned the bank, a Long-term Foreign Currency Issuer Default Rating, (IDR) ‘B+’ with a stable outlook, Short-term Foreign Currency, IDR ‘B’, Individual ’D’ and Support ‘4’ as well as a Support Rating Floor of ‘B+’.
The Fitch rating is in particular reference to the bank’s consistently outstanding performance in earnings, growth and capitalisation. The ratings, according to the internationally reputed rating agency, reflects the bank’s developing domestic franchise, consistent levels of earnings growth and above average levels of capitalisation.
The global rating, which is an acclaim of global confidence in the bank, is the best that any Nigerian bank has been assigned by Fitch. It is a vote of confidence in both the domestic and international investment potentials of the bank and engendering strong growth in patronage from both the private and public sector of the local and international economy. The rating, according to analysts, is the affirmation of the bank’s leading position in Nigeria, Africa and the world.
Only recently, in what is best described as extraordinary performance, The Banker magazine, a subsidiary of the Financial Times of London, in its 2007 edition of its TOP 1000 WORLD BANKS publication ranked Intercontinental, the biggest bank in Nigeria, fifth biggest in Africa and the 355th biggest bank in the world by first tier capital. This makes Intercontinental bank the first Nigerian bank to be rated among the world’s elite top 500 banks.
The Banker Magazine also ranked the bank as the second fastest growing bank in the world. It described Intercontinental Bank’s outstanding growth as symbolic of the massive impact of Nigeria’s banking reform. It noted that: “Nigeria’s Interco-ntinental bank reflects the huge consolidation and regulatory change that has taken place in Nigerian banking in the past two years,” adding that the bank rose by a record 522 places to be ranked at 355, with capital ballooning to $1277 million at the end of February 2007.”
The Fitch rating ackno-wledged the risks relating to the bank’s difficult operating environment and commended the bank for the exceptional performance in its profit after tax which increased by 104 per cent to N15.5 billion for the financial year ended February 2007.
Fitch noted that: “Interco-ntinental net after-tax earnings increased by 104 % to NGN15.5bn during FY07 on the back of strong growth that led to improvement in both net interest and non-interest income,” Fitch noted.
The international rating agency further expressed satisfaction with the bank’s Tier 1 capital adequacy ratio and the boosting of capitalisation by significant capital raising activities, which has positioned the bank as a strong and reliable financial institution within the Nigerian and international markets.
Intercontinental is one of the largest banks in Nigeria by system assets and capitalisation. The bank boasts of one of the highest returns on investment in the industry in the last 15 years. It has consistently paid dividend to its shareholders and issued bonus shares six times within the same period. In addition, shareholders of the bank have continued to enjoy huge capital gain on the bank shares. Between 2004 and 2006 the shares recorded capital gain of over 165 per cent.
Intercontinental Bank has consistently led the banking industry with managerial and financial accomplishments. The bank enjoys massive market support due to its avowed passion for excellent customer service delivery as encapsulated in the bank’s tagline: Happy Customer Happy Bank.

Payment system reform set to take off
By Bukky Olajide

A NEW require of payment system initiated by Central Bank of Nigeria (CBN) is set to take off, even as foreign stake in the country's business portfolio sustains rising profile.

Recently, foreign investors based in Europe and the United States boosted Skye Bank's capital base by N12.5 billion ($100 million).

In partnership with Skye bank's local financial advisers, Rembrandt Advisory Services Limited, Standard Bank (International Operation) facilitated the offer.

The Chief Executive of Corporate and Investment Banking Standard Bank Group, Ben Kruger attributed the partnership to Sky bank's ambitious plans in the innovative deal.

" We were confident on a successful deal despite the heightened volatility in the market, considering the potential of Sky bank and the Nigerian baking sector in general," he said.

The deal, which is highly innovative met the needs of both Sky Bank and the investors as it allows for potential equity investment in the bank. It also affords the bank the necessary in road into the international capital market.

The deal between Skye bank and Standard Bank has already received necessary approval from the CBN, as well as regulators of the capital market such as the securities and Exchange commission (SEC) and the Nigerian Stock Exchange (NSE).

Last week, the CBN began the implementation of payment system repositioning with the inauguration of National Payments System Working Groups.

The governor of the CBN, Professor Chukwuma Soludo said that reforming the payments system was a basic and necessary infrastructure for the attainment of the key responsibilities of the Central Bank.

These responsibilities include ensuring price stability and financial stability.

The deputy governor (Banking Operations), Mrs. Sarah Alade, who inaugurated the working groups on behalf of the governor said the reposition of the financial system for the a celebration of Nigeria's economic growth is a major factor for the comprehensive financial system study, which led to the development of the Financial Systems strategy (FSS 2020).

Her words: " The desire to make Nigerian banks to be in the league of the safest and fastest growing in the emerging market economies in 2020 requires an efficient payments system which should not only be sound but also fast and capable of facilitating complex transactions.

Alade said that in recognition of the central role of payments system for monetary policy, financial stability and overall functioning of the economy, the CBN has been nurturing the sector in order to create the enabling environment for the attainment of the objectives of ensuring price stability and financial sector soundness.

Over the years, said the deputy governor, the CBN in collaboration with the Bankers' committee and other Institutions in the money market undertook the major initiative to modernise the payment system with the automation of the cheque clearing system preparatory to the development of the electronic payment modes.

The CBN had noted that in order to effectively manage the transition to large scale electronic payments system, the payment system document outlined five working groups which include: Real time gross settlement, cheque payments, cards and mobile payments and securities.

The groups are to monitor developments in these areas across the globe and agree on modalities for moving the domestic payments system along global trends.

Also, the six initiatives working groups made up of government payments, person to person payments, salary payments, bill payments, tax payments and securities settlement are to outline the work plan that would drive the implementation of their initiatives.

She said that the National Payments System Committee (NPSC) expects periodic report from the co-ordinating unit for guidance and policy fine-tuning.

According to him, the APSC expects a clear road map on the implementations of the initiatives of the working groups after deliberations at the meeting.

" The deliverables are the immediate and future work plan with corresponding implementation timeliness," she said.

Meanwhile, First Bank of Nigeria Plc has raised a total of N500 billion in its just concluded public offer. Although the CBN is yet to verify the hybrid offer, there is every likelihood that the bank may absolve more than N125 billion.

This information was revealed at the bank's annual general meeting which took place last week at Abuja.

First Bank recorded a 17.2 per cent increase in profit after tax from N17.4 billion in 2006 to N20.4 billion in 2007, while profit before tax grew by 17.06 per cent from N21.8 billion in 2006 to N26 billion 2007.

With gross earnings of N90.32 billion and profit after tax of N20.4 billion, First Bank remains the most operationally efficient bank in converting revenue to profit with profit after tax and gross earnings ratio of 22.6 per cent.

Total assets plus contingents grew by 47.87 per cent to N1.084 trillion from N732.785 billion in 2006. Gross earnings on the other hand moved up by N22.883 billion or 33.93 per cent form N67.440 for the year ended March 31, 2006 to N90.323 billion.

First Bank has a network of over 400 branches all linked up with Finacle software to deliver on-line realtime services.

Also, with nine local subsidiaries, the bank also operates a full fledged bank in the United Kingdom and a representative office in South Africa.

Meanwhile, Banks non-performing Credit has failed by 38 per cent. The Insured banks non-performing credit in 2006 significantly decreased by 38 per cent to N225.08 billion from the N368.76 billion recorded in the preceding year.

The decrease was largely due to the fact that the greatest proportion of the non-performing loans in 2005 belonged to some of the insured banks that were closed in 2006.

The other reason was as a result of the drastic efforts by the consolidated banks to recover outstanding loan (bad debts).

Also, most of the loans booked in 2006 were the performing type due to the prudent measures taken by consolidated banks.

As a result, there was a remarkable improvement in banks in banks' asset quality as the ratio of non-performing credit to the total credit decreased from 20.13 per cent in 2005 to 7.92 per cent in 2006.

The improvement in asset quality was further indicated by a decreased in the ratio of non-performing credits to shareholders fund from 59.01 per cent to 22.06 per cent between 2005 and 2006.

Similarly, the banking industry's credit to the domestic economy increased by 55.02 per cent from N1.83 trillion to N2.84 trillion between December 2005 and December 2006.

This development showed that the consolidation programme and the increased capital base of banks had reshaped the nation's banking industry while the average liquidity ratio further increased from 61.1 per cent to 62.19 per cent within the year.

The improvement in banks' capital adequacy was also reflected in a substantial increase of over 40 per cent in the total qualifying capital from N682.22 billion in 2005 to N955.56 billion in 2006.

The performance on insured banks proxies by profitability recorded an appreciable increase of over 71 per cent in 2006 as their unaudited profit before tax rose form N57.88 billion in December 2005 to N99.24 billion in 2006.

All these information are contained in the Nigerian (Deposit) Insurance Corporation (NDIC) year report for 2006.




this makes first bank nigeria biggest bank because even before the offer they were worth bout 399 billion or more so this makes a total of about 899 billion or dere bouts...happy for them

One of my mates was in Nigeria, Lagos last week, they have a media deal with Intercontinental Bank worth several millions of dollars. They also have a deal with Wema Bank, never heard of this bank but my mate seems to know the banks really well in Nigeria.

CBN moves to further consolidate banks


Clement Nwoji, Abuja

Central Bank of Nigeria (CBN) has released the draft framework for further consolidation of banks in Nigeria.

The apex bank in a circular with reference no. BSD/DIR/CIR/07/V.11 to all banks said, "in keeping with global trend and current best practice in supervision, the Central Bank of Nigeria in conjunction with the Nigeria Deposit Insurance Corporation have developed the attached draft framework for the consolidated supervision of banks in Nigeria as a complement to the risk-based supervisory framework earlier released to the Nigerian banking industry in 2005".

It explained that the framework, among other things is aimed at addressing five key supervisory objectives such as: ensuring that no banking activity goes on without supervision, irrespective of location, thus eliminating regulatory arbitrage; eliminating double leverage/gearing in the computation of capital adequacy of conglomerates; ensuring that all the risks incurred by a banking group, no matter where they are booked will be evaluated and controlled on a global basis; enabling the CBN/NDIC to identify more quickly, emerging problems and work with banking organizations and other supervisors as appropriate, to take prompt corrective measures on the issues; and helping supervisors to gauge earlier, the effect of potentially adverse events on banking organizations and on the financial system in general.

The CBN envisaged that the final document will serve as a useful guide to supervisors and operators alike as the Nigerian banking system moves towards the adoption and implementation of consolidated supervision.

The first chapter includes introduction with the adoption of universal banking in Nigeria in 2001 that brought about additional challenges to the regulatory authorities.

It would be recalled that the CBN governor, Professor Charles Chukwuma Soludo had announced on July 6, 2004, the increment of the capital base of the Nigerian banks from N2 billion to N25 billion, with full compliance deadline fixed for December 31, 2005.

First Bank to set up Beijing, China, operations
From Paul Ibe in Beijing, China, 09.14.2007
Friday, September 14, 2007



Arrangements have reached advanced stage for the opening of First Bank of Nigeria Plc office in Beijing, the Chinese capital. It will be the first such of operation by any Nigerian bank in the country.



Danny Wen, Project Coordinator for setting up of the First Bank office in China told THISDAY at the ongoing 5th Nigeria-China Business and Investment Forum (NCBIF) in Beijing yesterday that the preliminary approval for the commencement of banking business has been obtained.

Wen, a Chinese, who had worked with leading telecommunications giants, ZTE said that First Bank will throw its Beijing office open for business as soon as a license is issued by the China Banking Regulatory Commission.

He said that First Bank, in setting up the Beijing operations, is merely cashing in on the phenomenal growth in trade and investment between Nigeria and China in opening.

”As a result of the growth between the two countries, a number of Chinese and Nigerian companies approached us saying that our presence (in China) will help them to further their businesses in both countries,”Wen said.

He said that First Bank will in addition to its bouquet of banking services offer advisory and consultancy services to Chinese firms interested in doing business in the Nigerian market and Nigerian business community on the opportunities of trade in China.

Also, he said that a major stimulus for the bank’s desired presence is derived from the rapidly increasing Sino-Africa relation, which is growing in leaps and bounds adding that First Bank intends to key in “to take this relationship to new heights.”

Wen disclosed that he was approached in March this year by First Bank as the Project Coordinator to set up the bank’s Beijing operations.

Nigeria shows Africa how to get rid of filth from banks

By Nation Media , Kenya

Nowhere in Africa was banking as chaotic as in Nigeria. However Nigeria has since carried out one of the most radical overhauls of the financial sector in Africa in a revolution that sent shock waves across the country. Time is gone when wealthy business people raided their banks’ vaults, insider-borrowed and simply “killed� the financial institutions when things became too hot for them, writes TONY ELUEMUNOR in Abuja

Suddenly bigger has become better in the Nigerian banking industry as what were minions three years ago balloon into mega banks. Â
Now, rarely do three months go without a bank raising more money from the public through Initial Public Offers and other instruments.Â

Until December 2005, the Nigerian banking sector was crowded with some 89 banks. Some of them, such as the Lead Bank, were one office affairs owned by crafty business people because owning a banking licence meant they could trade in foreign exchange with customer welfare being a secondary consideration.Â

Also, owning a bank meant that the principals could raid the vaults and spend freely shareholders funds, workers salaries or Federal and State Government ministries’ and parastatal funds. If such funds built up to a level such to tempt the gambler in the bank owner, he could just pocket them and close shop. Gone down the drain would be workers’ salaries, share holder funds and life-time savings. Worst of all, a banker owner was guaranteed access to hassle-free loans that he could choose not to repay. When things got hot, all one needed was to have the bank declared insolvent after which he kept his loot
Nigeria did nothing about this disease until it became an epidemic in the mid 1980s. Fortunately for the country, the then Head of State, Gen Sani Abacha lost some money in a failed bank. Rubbed the wrong way, the Strongman quickly minted the Failed Banks Decree and soon detention centres were teeming with rich detainees, who would remain under lock and key until they refunded the booty. Stories from such cases flooded the news media, detailing ingenious ways killing banks. Â
Among the most pathetic was that of the Crystal Bank founded by Chief Zebulon Abule. To remain relevant in the politics of the early 1990s as former military President Ibrahim Babangida kept on canceling power handovers to civilians, Abule found it prudent to dig his hands deeper and deeper into the bank’s coffers. Â

To make up for the shortfall, he took even more money from the bank to import cement. First, the consignment was delayed, and when it arrived, there was a slump in the cement market. Result? The bank could not honour cash calls. To make matters worse, the generals preferred to do business with Abule’s opponent in the race for the Rivers State Governor’s Office. Abule was jailed and his barely-breathing bank sold off to a young man, barely above 30, who experienced bankers thought was mad buying such a concern.Â

The young man, Tony Elumelu, renamed the comatose bank Standard Trust and from there, began the most aggressive bank expansion ever witnessed in Nigerian history. In five years, Standard Trust grew by the day and had opened branches across the country and introduced new banking products. Elumelu employed the young people who brought their youthful energy and zeal to bear on advancing the bank. When other banks closed doors to the public at 3pm, Standard Trust stayed on an hour or two longer. Every branch engaged in Saturday banking and it was the first to go really on line, enabling depositors to make withdrawals from any branch. Â

From there the mega-bank idea began to come alive, pushed also by the public excitement about the bank’s strategy of attracting deposits from rich men by sending to them beautiful and suggestively dressed girls with high targets that had to be met or they wee sacked. People called it institutional prostitution but the young man knew what he was doing.Â

When Nigeria opened its doors to cellular phone companies in 2001, it became clear that its banks were incapable of handling the new players’ huge transactions. The phone companies had to depend on foreign banks for loans and banking. Â

Earlier, it had been noticed that the companies operating in the capital-intensive oil sector did little borrowing from onshore as the banks lacked the capacity to handle multi-million dollar deals. Not even syndication could satisfy the businesses’ demand for credit. At one time, it took a 94-bank syndicate to finance a telecoms project. Â

As former President Olusegun Obasanjo’s second term began in 2003, he appointed Prof Charles Chukwuma Soludo to head the Central Bank of Nigeria. Soludo had never worked in the banking industry but had been in the academia for decades. So when the Bankers’ Committee (made up of bank chiefs) met on July 6, 2003, Soludo unveiled the nature of the expected transformation based on a 13-point agenda, the most prominent being the raising of the bank capitalisation base from N2 billion to N25 billion (exchange rate: 130 Nigerian Naira to the dollar) by December 2005 deadline.Â

Soludu told the Bank chiefs that he could visualise the Nigerian and world economy in year 2015 and 2050 when the world would have no more than 10 to 20 global banks.Â

“I see national and cross national mergers and acquisitions taking place in massive scales. It will not be a world for marginal or fringe players.â€�Â

He was of course basing his vision on a familiar trend. There has been no fewer than 7,000 bank mergers in the United States of America since 1980. This trend had gained pace by 1997 when Europe witnessed 203 mergers and acquisitions. One of the mergers in France alone produced a giant bank with a capital base of $688 billion. Another merger in Germany created the nation’s second largest bank with a capital base of $541 billion. Around the same time, Malaysia asked its banks to raise their capital base from $70 million to $526 million in just one year. Consequently, the number of banks in the country shrunk from 80 to 12. Â

At the pre-December 2005 level, the asset base of just one South African bank, Amalgamated Bank of South Africa, ABSA, was larger than that of all the 89 banks in Nigeria put together. Though 26 Nigerian banks were listed in the sub-Saharan top 100 banks by then, put together, they had only 10 per cent of the core capital (share holders funds and reserves) while eight South African banks accounted for 70 per cent. Other comparisons made Nigerian banks look Lilliputian. While eight South Korean banks had 4, 500 branches, all the 89 banks in Nigeria by 2005 totaled just 3,300Â

To prepare for the reforms, the CBN set up a committee of experts to advise the banks for free, so that each bank would get the same quality advice. Â

By the December 2005 deadline, 25 solid banks emerged instead of the 45 the CBN had envisaged as big banks simply acquired several smaller ones. Elumelu’s Standard Trust merged with the United Bank for Africa (UBA) with Elumelu as the managing director. It was surprising that such a shrewd entrepreneur would willingly submerge his company’s identity in another company, but that has made the man even more formidable a player in Nigeria’s business and finance sector. Â

With that merger too, the oil rich and entrepreneurial- savvy Southern Nigeria lost Standard Trust, a formidable bank under the control of one of its sons. The area boasts of the Zenith Bank, owned by Jim Ovie from Delta State, (Elumelu’s home state) and the Ibru family-owned Oceanic Bank, again from same Delta State.Â

The Yorubas of the Western Nigeria control Wema Bank and Guarantee Trust Bank owned by Chief Mike Adenuga, a big player in the African telecommunications whose Globalcom cellular phone company recently began operations in Ghana.Â

Other banks merged and had to change their names as they lost their former identities and leadership. Involved here were many Igbo-controlled banks, such as the African Continental Bank. Now, the real Igbo bank is Peter Obi’s Fidelity Bank. Obi is the gentlemanly Governor of Anambra State who has remained untainted by corruption. Â

The real loser in the mergers is the North. The Hausa-Fulani controlled banks had to merge with several others, thus losing their identities and ethnic leanings totally. Even the aptly named Bank of the North, which for years was jointly owned by all the Northern States, could not rally enough funds to remain in the hands of the North. It had to merge with several others to form the Unity Bank. Â

That was actually one of the aims of the bank reforms: To deny the banks their ethnic leanings and also to make it impossible for an individual or a family to have controlling shares in a major bank. But in the end, a few individuals and families still managed to maintain their control.Â

Within two years of consolidation, the gains have begun to show. Instead of 89 small banks each groaning under hefty operating expenses, formerly separate banks now operate together and enjoy economies of scale. This has reduced cost of intermediation, which had made several banks to focus just on mere trading in foreign exchange, treasury bills and direct importation of goods through dummy companies.Â

The banks have returned to the real business of banking, catering for the needs of the micro-small and medium savers instead of the mad focus on the really rich. Gone too are the past problems of ailing banks with weak capital bases, gross insider trading (as the ownership base has been widened), weak corporate governance with its tell-tale signs of non-performing credits and overdrawn accounts with the CBN. Â

Though diversification has not yet surfaced, the banks are becoming more regional as they spread out not just across Nigeria, but opening branches along the West coast and in major foreign capitals. Â

The Ecobank is fast becoming West Africa’s own bank as it enjoys a strong visibility in the entire sub-region. The main goal though is to integrate Nigeria’s banking system into the African regional grid and make it its hub, while becoming an effective player in the financial global system. Already in pursuit of this, the GTB’s shares are now bought and sold in the London Stock Exchange. Â

One direct result of this is that Nigerians abroad are now confident enough to invest in the banks through direct share holding, thus bringing their funds to drive growth and development in their own country. Â

To avoid shady deals during the banking reform, all mergers were based on the exchange of shares, not monetary payments, except in outright buyouts. Most importantly, the re-evaluation of fixed assets (in mergers) were not incorporated into the financial records of the consolidated banks until the CBN approved them after stringent checks.Â

Also, banks were promised amnesty on previous false reporting to encourage them to be open in their negotiations. Â

The rewards for successful consolidation included rights to trade in foreign exchange, permission to hold public sector deposits (they were withdrawn to reveal the actual strengths of the banks prior to the consolidation) , and the chance to manage parts of Nigeria’s external reserves which had been the prerogative of foreign banks, mainly.Â

The net result has been stronger and more competitive banks. Suddenly, the N25 billion consolidation base has proved inadequate as individual banks have been caught up in a competitive frenzy to leave that $188 million base behind. Almost all the 25 mega banks have doubled that base within two years.Â

The institutions have also returned to the neglected area of micro-and small scale financing - the engine for growth as they have adequate funds to meet borrowers’ needs now. Â

In the past, a bank with the right connections such as Afex Bank, which went defunct even before the consolidation, held huge government deposits which it promptly misspent and went under. The politician and oil-dealer who owned the bank never repaid the money. Afex even operated salary accounts for MPs.Â

The banks are now being managed by professionals as opposed to when family members managed mom and pop banks. In this regard, the greatest scandal was when the wife of the owner of the now shut Savannah Bank, who knew nothing about banking, was the managing director. Such anomalies gave Obasanjo the chance to close the bank though mainly because the owner was his political enemy. But the fact that the managing director used company’s funds to buy a $10,000 (Sh660,000) bed made the man to lose public sympathy.  Â

Has the consolidation succeeded? Zenith Bank supplied the answer on July 31 when it declared a profit before tax in excess of the N25 billion exceeding the consolidation target by a billion Naira for the year ended June 30, 2007. It is the largest so far by any Nigerian bank with N1.2 trillion in assets.Â

UPDATE 1-Nigeria's Guaranty Trust eyes acquisitions abroad
Mon Jul 23, 2007 4:08 PM BST138
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ABUJA, July 23 (Reuters) - Nigeria's Guaranty Trust Bank (GTB.LG: Quote, Profile , Research) wants to expand into francophone countries in Africa by acquiring local banks, Managing Director Tayo Aderinokun told Reuters on Monday.

Aderinokun was speaking on the first day of trade on the London Stock Exchange of Guaranty Trust's Global Depository Receipts (GDRs), which rose to $11.60 from their launch price of $11.20. The bank raised $750 million through the GDR offer.

"We have ambitions to extend our reach beyond anglophone West Africa," Aderinokun said in answer to a question about what the bank planned to do with the money it had raised.

"We believe we will most likely go into francophone Africa through acquisitions because it's a new market and we don't speak the language and it's easier that way. It's in the works," he said by telephone from London where he has been supervising the GDR offer.

Guaranty Trust covers most of anglophone West Africa with branches in Ghana, Gambia and Sierra Leone and plans to open in Liberia soon, he said.

Aderinokun said Guaranty Trust was the first African bank to list on the London Stock Exchange. The operation brings the bank's market capitalisation to about $3.8 billion, he said.

The bank's shares, which have roughly doubled in price over the past 12 months, were down 1.5 naira at 33 naira (26 U.S. cents) per share in Lagos at 1500 GMT on Monday.

National : Bank PHB makes N10bn profit, assets hit N480 billion
Bank PHB makes N10bn profit, assets hit N480 billion
24 September, 2007 20:00:00

Working assidiously to be among the top five banks by 2008, Bank PHB weekend declared profit before tax of N10.28-billion and total assets of N480-billion for year-end June 30 2007, effectively emerging the nation’s eighth biggest and most profitable bank.

Bank PHB is growing three times faster than the average growth rate of the Nigerian banking industry and it is exciting investors. The bank’s financial results provide a strong justification for the bank’s share price, which has made a capital gain of about 271 percent since its last financial year, June 2006 and about 400 percent since its listing in December 2005 at N1.95 a share.

The growth rate of the bank, which first emerged in its 2006 financial result, was clearly sustained in its current result with both earnings and profits more than doubling within the period.

The bank’s share price, which slipped from its year high of N30 last week in the grip of the general bearish trend in the market, regained its upward swing closing at N31 a share last Friday despite the bearish trend that has resurfaced in the market. The bank’s share price has made a capital gain of 231 percent this year alone.

Details of the financials, released weekend, show that the bank’s gross earnings, made up of both interest and non interest income, increased 172 percent to N36-billion in June 2007 from N13-billion in the corresponding period of 2006. Core income made up of interest earnings formed the greater bulk of earnings about 52 percent of gross earnings, while non-interest fee based income made up the balance of Bank PHB’s earnings.

Growth in Bank PHB’s profit before tax was even more impressive. The result shows a profit before tax of N10.28-billion representing an increase of 192 percent over the profit before tax of N3.52-billion in June 2006. Profit after tax at N7.75-billion was an impressive 217 percent higher than the N2.45-billion within the same period.

The bank’s high paced growth has resulted in higher earnings a share, which at 119 kobo is 644 percent increase on 16 kobo in 2006. The bank’s board of directors is proposing a cash dividend of 70 kobo a share, 977 percent higher than 6.5 kobo paid in 2006.

Bank PHB’s increase in profitability has been on the back of a steep increase in all other vital indices of the bank. Total assets and contingents at N480-billion represents a steep increase of 155 percent over N188-billion in 2006.

Within the period, there was also a strong evidence of increased customer confidence in Bank PHB reflected in a sharp increase in the bank’s deposit base. Total deposits at N307-billion in 2007 represents 181percent increase on a deposit base of N109-billion in 2006.

Analysts trace this to the strong acceptance of the Bank PHB brand by the Nigerian banking public. Several studies and research have always rated the acceptance of the Bank PHB brand well above competitors.

Sources close to the bank reveal that the bank’s growth rate is line with its target of ranking among Nigeria’s top five banks and West Africa’s leading retail banking services provider in the next three years.

By its latest results, Bank PHB effectively becomes the eighth largest bank in Nigeria. Based on the current growth rate analysts forecast that the bank will rank among the top five by next year.

Trust me, eventually Nigerian banks will become the biggest companies in Africa. I still dont know why other African countries arent consolidating their financial sectors too.

Trust me, eventually Nigerian banks will become the biggest companies in Africa. I still dont know why other African countries arent consolidating their financial sectors too.

Yes, that is true. Anyone who ignores the Nigerian market is doing so at their own peril. :banana:

Fitch gives IBTC highest rating
on 04 October, 2007 00:00:00 | 266 times read

International rating agency Fitch Ratings has upgraded IBTC Chartered Bank plc’s national long-term rating from "A" to "AAA". The triple-A rating is the highest possible.

The rating reflects what Fitch views as the enhanced level of support, which IBTC will derive from the Standard Bank Group’s acquisition of a 50.1 percent stake in IBTC last month following the merger between IBTC and Stanbic Bank (Nigeria) Limited, which was accompanied by a successful tender offer.

The rating is a strong endorsement of the raised international perception of IBTC.

Atedo Peterside, chief executive officer, IBTC said: "The merger between IBTC and Stanbic Nigeria has opened up a completely new chapter in our lives. It is a chapter that should be filled with exciting possibilities for our clients, our shareholders and our staff.

We had hoped we would get a triple-A rating and so we are very pleased that it has been confirmed by Fitch."

With a capital base in excess of N65-billion, the enlarged IBTC has the largest in-country operation of any international bank operating in Nigeria. It has 60 branches located in all major commercial centres.

Trust me, eventually Nigerian banks will become the biggest companies in Africa. I still dont know why other African countries arent consolidating their financial sectors too.

Undoubtedly naija banking sector is going to be real big real soon. other african countries? well as for kenya i dont know if there is consolidation or not but one thing for sure is that C.B.K(central bank of kenya) is doing a good job of keeping the banking and currency sector in order and in line.

BTW, does anybody have an idea how central banks are performing in sub-saharan africa? i know ghana, kenya, and naija are doing great but what about the others?

Fitch gives IBTC highest rating

this represents some of my reservations with these rankings. this merger doesnt automatically make IBTC ebtter than UBa, first bank, intercontinetal, guranty, etc.

October 22, 2007: Nigeria’s United Bank of Africa (UBA) — the largest financial institution in West Africa with $8 billion (Sh550 billion) in assets — is keen on buying a small bank as part of its expansion plans in Africa.

The bank will join Eco-Bank, which has already expressed interest in the Kenyan and regional financial services market. UBA bought two Nigerian banks in 2005, and subsequently acquired the erstwhile Continental Trust Bank Limited (CTB).

The drive into acquisitions abroad is a result of the huge capital base that Nigerian banks have been forced to meet, which have in turn made them stronger and in a position to absorb more business.

In Nigeria, banks were forced to consolidate beginning 2005 in order to meet the equivalent of Sh15 billion in core capital, a development that forced mergers and acquisitions.

The move also led to the collapse of 14 banking institutions that could not survive the increased capitalisation and consolidation regime.

UBA said on its website that it was in the process of “spreading its footprints across Africa to earn the reputation as the face of banking on the continent.”

A source familiar with the bank’s moves in Kenya’s banking industry said that the bank was interested in buying an existing institution.

Another Nigeria bank thought to have pan-Africanist ambitions is First City Monument Bank, which is currently raising $750 million in London and in Nigeria. In the prospectus for the bond issue, the bank says it aims “to be the most effective investment and consumer bank in Africa.”

“Generally Nigerian banks have been raising capital heavily in recent times. They are getting ready for expansion,” said Humphrey Gathungu, investment manager at Stanbic Investment Management Services.

He explained that penetration of banking in Nigeria is still very low compared to its 150 million population and other countries of equal income or gross domestic product.

In Kenya, though Finance minister Amos Kimunya’s move to raise core capital to Sh1 billion was defeated on the floor of the august House, analysts believe that mergers and acquisitions are inevitable due to the current structure of the banking industry.

“Buyouts and consolidations are inevitable in Kenya because of the increased competition in the industry. Those who don’t get bigger will be swept by the wayside,” said Mr Gathungu.

He explained that those institutions that do not grow bigger will get increasingly swamped by the bigger ones as it already appears to be the case in terms of assets, deposits and profits.

The top three commercial banks hold about 40 per cent of net assets comprising Barclays, Kenya Commercial Bank and Standard Chartered.

The top 13 large institutions have nearly 80 per cent of the total net assets, but the smallest 15 had only 8.4 per cent, making them perfect candidates for acquisitions or buyouts.

Foreign banks despite being only 11 constitute 43 per cent of the sector’s assets while the 34 local banks constitute 48.2 per cent.

In terms of pre-tax profits, the top three banks had 51 per cent of the total for the whole industry at just over Sh13 billion from the total of just over Sh26 billion. Indeed, the Nigerian banks are interested in having a foothold by buying out the small ones.

One of the attractions of the Kenyan market is the low penetration and the fact that banks are among the most profitable institutions in Kenya.

In terms of stock market valuation, their average P/E ratio is the highest at the Nairobi Stock Exchange, indicating that there are expectations of high returns.

In an interview Kabaki Wamwea, executive director at Dyer and Blair Investment Bank, said Kenya needs institutions that can spread across Africa stressing that the core capital should actually be raised to Sh3-5 billion.

“Consolidation of Nigerian banks has given them the capital strength to expand and we should expect this to happen in a big way across Africa,” he said.

An attempt to reach UBA’s chief executive in Nigeria by phone was unsuccessful as he was not available and neither did he respond to our request for an e-mail interview.

Founded in 1961, UBA is the largest financial services institution in West Africa with a balance sheet size in excess of just under $8 billion, an equivalent of three quarters of the total assets of Kenya’s commercial banks and more than five million customer accounts, operating out of the two most vibrant economies in the sub-region — Nigeria and Ghana.

CBN lends weight to banks seeking global prominence

The Central Bank of Nigeria (CBN) has support for Nigerian banks aiming to emerge as Africa’s global players, stressing that the progress made by United Bank for Africa is in line with the CBN vision.

Commending the contributions of Tony Elumelu, group managing director, UBA Plc, to the emergence of Africa’s first global bank, the bank said UBA’s ambition of becoming Africa’s first global bank is in line with CBN’s vision for the Nigerian financial services industry

Chukwuma Soludo, governor, CBN stated this at the special convocation of the University of Nigeria Nsukka, which coincided with the commissioning of a Hall of Fame built by UBA Foundation for the nation’s first indigenous university.

Soludo also commended the United Bank for Africa (UBA) plc for donating the Hall of Fame to University of Nigeria Nsukka. The bank has been playing active role in the upliftment of education in Nigeria as well as the growth of Nigeria’s financial services industry.

The Hall of Fame, Soludo noted, signposts UBA as a bank that recognises and rewards talent, adding that, it also reveals the disposition of the bank towards corporate social responsibility and the delivery of the social good.

The CBN chief recalled that Elumelu made the commitment to build the Hall of Fame in 2004 and thanked him for fulfilling the promise.

Earlier in his remark, Phillips Oduoza, executive director, Electronic & Transactions Banking, UBA, said the donation of the N85 million building by UBA Foundation was in line with the bank’s commitment to corporate social responsibility. Oduoza pointed out the importance of education as an essential ingredient of national development also the importance of immortalizing achievement to the future generation of Nigerians.

"Education is key to capacity building. UBA will always partner with educational institutions to improve the quality of education because it is only the educational system that can make sustained impact on the national economy," Oduoza stated.

Funlola Adewale, MD/CEO, UBA Foundation added that the Hall of Fame shall be useful, not only for the immortalization of Nigeria’s great achievers in and outside the academia, but also for workshops, seminars and other special events that would add value to learning.

Commenting on the grand gesture from UBA Foundation, Chinedu Nebo, vice chancellor of the institution, said UBA Foundation has contributed immensely towards the revitalization of education in Nigeria.

He asserted that the construction of the Hall of Fame by UBA was symbolic, for its role as a place where great achievers in the country would be immortalized, adding that such a project could not have been undertaken by any other organisation than UBA, a bank, which he noted, has a track record for achievement. "UBA is the best bank in Nigeria. It is therefore not out of place for such a bank to build a place where the activities of the best people in Nigeria are chronicled for posterity," he stated.

The partnership between UBA and UNN, Nigeria’s first indigenous university dates back over three years when UBA spearheaded the laying of fibre optic cable that would facilitate internet connectivity in and around the university campus.

Bank gets award

INTERCONTINENTAL Bank Plc, has won the 2007 African Commercial Bank of the Year Award at the annual meetings of the World Bank/IMF in Washington D.C., United States.

The award, tagged: "Celebrating Africa's Best," conferred honours on two other high performance agents of change in Africa. They are the winner of the 2007 African Central Bank Governor of the Year, Dr. Paul Acquah, Governor of the Central Bank of Ghana and the winner of the 2007 African Finance Minister of the Year, Ato Sufian Ahmed, Finance Minister of Ethiopia.

Hosted by the Annual Meetings Daily, a publication of D.E.R. Limited, the Awards' citation noted that Intercontinental Bank has achieved the seemingly unattainable vision it set for itself in 2003 to be "the number one bank in Nigeria, among the top five banks in Africa and among the top 500 banks in the world."

Capitalisation: Nigerian banks in a race for new heights
By Enitar Ugwu

EVEN with the glowing tributes being heaped on Nigerian banks globally, they are not resting on their oars. Currently they are trying to raise their market capitalisation to a new level.

The Central Bank of Nigeria's governor, Prof. Chukwuma Soludo last week revealed that the 25 banks market capitalisation would hit N3.84 trillion by December 2007.

Soludo, who disclosed this in Abuja in his address at the International Conference on African Central Bank's website, said by the end of the year there would be over 15 banks with market capitalisation of N256 billion ($2 billion) each.

Soludo, while pointing out that three years ago none of the banks came up to $500 million, remarked: "It is not an understatement that Nigeria has the fastest growing banking system in Africa and one of the fastest in the world.

According to him, there was no Nigerian bank in the top 1,000 banks worldwide of 2004, but as at the end of 2006, there were 12 banks ranked among the top 1,000, with one ranked 335th among the top 500.

"Besides making domestic roads into the West African coast, we now have Nigerian banks setting up subsidiaries in Europe as well as getting listed on the London Stock Exchange, he remarked.

He also said the goal of becoming one of the 20 largest economies in the world had imposed on the CBN a sense of urgency to mainstream the economy, as the international financial centre of choice and African's financial hub.

"In this regard, the apex bank has been at the forefront of institutionalising the necessary reforms through the Financial System Strategy (FSS) 2020 framework to leap frog Nigeria towards the attainment of this goal."

He expressed delight that the FSS 2020 is concretising the fine details of the road-map for the realisation of this medium agenda, which include the globally acknowledged banking consolidation exercise that has literally transformed Nigerian banks to global players.

For followers of events in the Nigerian financial clime since the 2004 banks' consolidation exercise in the country, current happenings are like a dream.

This is because, when this programme was unveiled by the Central Bank of Nigeria (CBN) governor, Pro. Chukwuma Soludo on July 6, 2004 most thought the idea was at best a bad dream.

Apart from the then N25 billion minimum capitalisation requirement, Soludo had insisted that he wanted to see Nigerian banks compete globally.

Currently, not only that, Nigerian banks have even far exceeded the N25 billion capitalisation benchmark, every of their steps in business has international trademark. Banks offerings now have Global Depository Receipts (GDR) components, which expose investors to the international stock markets.

Meanwhile, global acclaim came in bountiful proportions for Nigerian banks at the weekend in Washington D.C., United States.

The events also provided another opportunity for stakeholders in the financial sector to shower encomiums on the Central Bank of Nigeria and its governor, Prof. Chukwuma Soludo. And, Soludo has, for the second time, emerged the African Central Banker of the Year.

At one of the events, First Bank of Nigeria Plc clinched three awards, courtesy of a poll conducted by an international financial publication, Global Finance (GF) based in Washington D.C.

At another event, packaged by a London-based organisation, I.C. Publications, publishers of the African Banker magazine, six other Nigerian banks also carted away awards. The awardees include Oceanic International Bank Plc, the United Bank for Africa Plc and Zenith Bank. The others are Access Bank Plc, Bank of Industry and IBTC Chartered Bank Plc.

The three awards were bestowed on First Bank during this year's meeting of the World Bank and the International Monetary Fund (IMF) in Washington DC. They are Best Bank in Nigeria, Best Trade Finance Bank and the Best Foreign Exchange Bank for 2007.

In a poll conducted by GF with input from industry analysts, corporate executives, banking consultants and technology experts in 24 countries, First Bank was named Nigeria's best bank. This makes it the third consecutive year the bank has won the awards.

Announcing the award from its New York headquarters, Joseph Giarraputo, GF president, noted that emerging markets were attracting increased attention.

He added: "We have identified the banks that provide services to corporations seeking to take advantage of substantial opportunities for growth in a sometimes challenging environment and First Bank is one of them."

At the African Banker magazine awards, Dr. Cecilia Ibru of Oceanic Bank won the Banker of the Year award, while UBA got the prize for the Best Emerging Global Bank in Africa. The Most Innovative Bank of the Year went to Access Bank Plc, while the Bank of Industry was named the Development Bank in Nigeria and Zenith Bank got the Socially Responsible Bank of the Year award.

Swazi Bank in Swaziland received the Gender Sensitivity award. For its award, Access Bank beat two other Nigerian banks, First Inland and GTBank, as well as the Swazi Bank. Access Bank also came close to clinching the Gender Sensitivity award won by Swazi Bank.

Waheed Olagunju, who received BOT's award opened the floodgates of encomiums on the CBN and Soludo. He thanked the apex bank's governor for the consolidation policy, which forced Nigerian banks to either raise their assets portfolios to N25 billion or close shop.

Mrs. Ibru also spoke in the same vein, she said: "Before I say anything, I must congratulate the CBN governor, Prof. Chukwuma Soludo. Since he took over, I have become empowered. Without consolidation I would not have been standing in front of you today. I owe a lot to him (Soludo), God Almighty and my husband, Olorogun Micheal Ibru, our founding chairman, who gave me the opportunity to serve."

UBA won in the Emerging Global Bank in Africa category, which had JP Morgan Chase Bank and Standard Bank of South Africa (also trading as Stanbic Bank) in contention. Zenith emerged the Most Socially Responsible Corporate Citizen in Africa, coming tops of Fidelity Bank, Bank PHB, Intercontinental and Medbank of South Africa. Receiving the award, the Deputy Managing Director, Godwin Emefiele thanked the organisers for the initiative and promised to keep being a very good corporate citizen.

Soludo emerged the African Central Banker of the Year for the second time running. While receiving the award, the CBN governor commended the efforts of the Nigerian banks for their determination at becoming major players, not only in the continent but also globally.

Also of import is the fact that presently, most Nigerian banks going to the capital market to raise fresh funds to enhance their capital base are incorporating the Global Depository Receipts (GDRs) as a component part of their capital raising schemes.

In the spirit of expanding their world view and business focus, Nigerian banks are no longer satisfied with just raising only naira denominated capital but also dollar capital by offering their shares to international investors through GDRs.

A Global Depository Receipt is typically a dollar denominated instrument issued in international financial market through a registered depository bank (the depository bank). They are negotiable bank certificates, issued by the depository bank, which represent ownership of certain equity securities (the underlying shares) that are issued and tradeabe in local market.

The GDRs are exchanged with the underlying shares at a predetermined ratio (for example, 50 shares to one GDR), and are mostly used for capital raising by companies from emerging market to access investors in international markets.

The issuer of GDRs is typically a non-United States or United Kingdom domiciled company, and is responsible for issuing, registering, and depositing the GDRs with the depository bank.

Although a GDR offering is targeted at international institutional investors seeking to invest in well structured emerging market equities, local investors (Nigerians) may also participate in GDR offering if a Nigerian company seeking to issue GDRs decides to sell a portion of the offering to domestic investors.

For a typical Nigerian investor in the GDRs, the benefits accruing are many and include portfolio diversification into foreign securities, opportunity for holding a foreign currency denominated instrument issued by a top tier local company, and opportunity for getting dividends in U.S. dollars.

Other benefits include being able to trade on foreign stock exchanges, which provides liquidity as well as having equivalent corporate shareholder and economic rights to ordinary shares.

China’s CDB seals Nigerian deal

By Matthew Green in Lagos and Jamil Anderlini in Beijing

http://media.ft.com/cms/6f68385c-882a-11da-a25e-0000779e2340.gif

Published: October 30 2007 22:01 | Last updated: October 30 2007 22:01

China’s drive into Africa’s financial services sector has taken a fresh turn, with China Development Bank entering a partnership with United Bank for Africa, one of Nigeria’s biggest lenders.

The deal, sealed last month but not yet officially announced, expands the Chinese bank’s ability to finance infrastructure projects in Africa.

News of the agreement follows last week’s announcement that Industrial and Commercial Bank of China, another state bank, was buying a 20 per cent stake in South Africa’s Standard Bank for $5.56bn.

CDB has not bought equity in UBA, which is listed on the Nigerian stock exchange, though the deal will help it expand in Africa.

The two deals mark the start of a transformation in Africa’s banking industry, opening fresh channels for Chinese finance in a region which has previously been largely dependent on western companies and donors.

Chinese banks are seeking local operators to channel billions of dollars into African projects, in part to secure the oil and minerals needed to fuel China’s fast-growing economy.

CDB, which provides much of the financial muscle for infrastructure developments in China, refused to comment on Tuesday. Tony Elumelu, UBA’s chief executive, told the Financial Times: “It provides us [with] an almost infinite amount of capital to execute projects.” He added: “They will invest in any credit that we recommend.”

By the CDB agreement, a copy of which has been seen by the Financial Times, Chinese staff from the bank will work with their counterparts at UBA’s headquarters in Lagos to fund projects in West Africa.

Mr Elumelu said he hoped by the end of March to strike an agreement with CDB to finance a power project that would help to tackle Nigeria’s chronic electricity shortages.

UBA, with a balance sheet of about $8bn, hopes to expand into as many as 12 African countries next year.

“It is no longer a question of funding capability, but about our ability to identify good projects,” Mr Elumelu said. “Africa is a huge untapped market – but it takes those who understand African markets and African risks to take advantage.”

CDB has more assets than the World Bank and Asian Development Bank combined, with $281bn of loans outstanding by the end of June.

really good news

Nigerian UBA buys into African investment boutique
Tue 6 Nov 2007, 17:12 GMT
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LAGOS, Nov 6 (Reuters) - Nigeria's UBA banking group <UBA.LG> acquired 49 percent stake in London-based Afrinvest, a privately-owned investment banking firm, the two institutions said in a statement on Tuesday.

The purchase for an undisclosed sum will help UBA expand its investment banking activities, which have grown rapidly since a reform of the Nigerian banking sector in 2005.

"It provides UBA with a strategic presence in London from which it will be able to distribute primary and secondary securities of African issuers," the statement said.

Afrinvest, which also runs a stockbroking firm in Lagos, will become known as UBA Capital (Europe) Ltd, it added.

UBA has a balance sheet of about $10 billion and more than six million customers across West Africa, making it one of Nigeria's largest banks. (Reporting by Oludare Mayowa; Editing by David Holmes)

Nigerian First Bank raises $2.08 bln in new shares
Tue 6 Nov 2007, 14:25 GMT
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LAGOS, Nov 6 (Reuters) - Nigeria's largest bank by assets, First Bank Plc <FBNP.LG>, issued 253.54 billion naira ($2.08 billion) in new shares following a public offering that was oversubscribed by 752 percent, the bank said on Tuesday.

This is the biggest single public offering in Nigeria where retail banks have raised over $10 billion in a series of share offers since the sector was reformed in 2005.

First bank originally sought 96 billion naira to boost its operations through a hybrid offer that closed in June.

"The approval for the allotment of initial and supplementary offers have been obtained from the regulators," said an official of FBN Capital Limited, the issuing house to the offer.

The successful offer makes First Bank Nigeria's biggest bank by shareholders' funds, overtaking Oceanic Bank <OCBK.LG> which raked in $1.4 billion from its offer in October.

Nigeria's financial sector has grown dramatically since the 2005 reforms that raised minimum capital requirement, triggering a new wave of mergers. But some banks have resorted to a second round of fund raising in what analysts described as the second phase of the consolidation programme.

First Bank, which operates more than 350 branches in Nigeria and a United Kingdom-based subidiary, plans to expand its network with part of the proceeds of the share sales.

The bank posted a 47 percent increase in after-tax profit to 15.04 billion naira in its half year to Sept. 30, 2007, from 10.23 billion naira previously.

The bank share price closed little chamnged at 38.98 naira on the Nigerian Stock Exchange on Tuesday.

Zenith Emerges African Bank of the Year
By Linda Eroke, 11.08.2007


Another international recognition has come the way of Zenith Bank as it was Wednesday night named the ‘African Bank of the Year,’ by the African Investor magazine, capping an extraordinary year in which the performance of the bank’s stock on the Nigerian Stock Exchange (NSE) earned it the award of the ‘Quoted Company of the Year’.
At the well-attended award ceremony held at The Civic Centre, in Lagos, Zenith Bank emerged Africa’s best, beating five other banks including the Standard Bank Group of South Africa.
Judges at the highly competitive and reputable awards were: Alhaji Bamanga Tukur, Chairman, Africa Business Roundtable; Dr. Ken Kwaku, former Chief Representative for Africa at the Multilateral Investment Guarantee Agency (MIGA), Ms. Arunma Oteh, Vice-President, Corporate Service, African Development Bank; Dr. William Kalema, Chairman, DFCU Uganda; and Dr. Joe Wanjui, Chairman, UAP Insurance, Kenya and member, Board of Directors Stanbic Bank, South Africa.
Receiving the award, the Group Managing Director/ Chief Executive of Zenith Bank, Jim Ovia said, “It is a great honour for every Zenith Bank staff wherever they may be either in Zenith Bank, London, UK; Zenith Bank, Accra, Ghana; Zenith Bank, Johannesburg, South Africa or the grandfather of them all, Zenith Bank, Nigeria. “This is an endorsement of our brand and an inspiration to continue to provide excellent financial services to our growing communities of customers.”
Zenith Bank was in January 2007 adjudged the most customer-focused bank in Nigeria from a survey conducted by foremost consulting firm, KPMG. The survey, which focused on corporate customers of banks, including companies in a variety of sectors, discovered that it was most satisfied with the services rendered by Zenith Bank. In 2005, Zenith was named ‘The Most Respected Bank in Nigeria’ from a survey conducted by PriceWaterHouseCoopers.
That year also, Zenith Bank also won the ‘Bank of the Year’ award from The Banker magazine, a publication of the Financial Times of London.
Recently in Washington DC, Zenith Bank was again named the most Corporate Socially Responsible Bank in Africa by the Business Africa Magazine.
This award reaffirmed the fact that Zenith Bank is not just a leading financial power house, but also the pacesetter in Corporate Giving. Zenith Bank has virtually changed the way banks respond to their environment by devoting an appreciable amount of its profit before tax for philanthropy.
The bank’s philanthropic activities are anchored on the premise of giving back to the host communities and societies for providing an environment conducive and supportive of the pursuit of enterprise. Only recently, the bank was also adjudged the Most Corporate Socially Responsible Company in Nigeria by ThisDay newspaper for investing N1 billion in a single project – the highest by any company on a single project in Nigeria.
Zenith Bank, which first quarter results continue to draw applause from the investing and financial publics, is the largest company in Nigeria as well as the West African sub-region with market capitalisation of N613.12 billion ($4.84 billion) as at June 30, 2007. Total assets plus contingents approximates $10.02 billion (N1.27 trillion) making it the biggest bank in Nigeria.
The bank’s uaudited result for the quarter ending September 30, 2007 showed gross earnings of N28.86 billion and a profit before tax of N10.33 billion, up from N6.41 billion last year. Profit after tax for the quarter amounted to N8.06 billion, showing a remarkable jump of 70 per cent over the N4.73 billion recorded for the corresponding period last year.
The bank last week announced plans to raise an additional N130 billion from the capital market by way of public offer of 1.763, 000, 000 ordinary shares of 50 kobo each and a rights issue of 1,654,557,911 units.
Established in May 1990, the bank became a public limited company in June 2004 and was listed on the Nigerian Stock Exchange on October 21, 2004 following a successful initial public offering (IPO), which recorded a subscription level of 554%.
Zenith Bank remains a global brand with strong presence in Accra, Ghana (Zenith Bank, Ghana) and London, England (Zenith Bank, UK) as well as a representative office in Johannesburg.
Zenith Bank’s core values include service excellence, investment in human capital development, superior asset quality and strong credit culture, good and sustainable earnings, strong capital base, professionalism and community development. The bank maintains sound corporate governance culture in line with global best practices. This reflects in the bank’s consistent impressive risk assets quality with non-performing loans to gross loans and advances ratio of 1.67% against industry average of 18% and peer group average of 7%1.

Nigeria bourse freezes banks' shares ahead of merger
Thu 8 Nov 2007, 16:07 GMT
[-] Text [+]

LAGOS, Nov 8 (Reuters) - The Nigerian Stock Exchange has frozen the shares of Ecobank <ECOB.LG> and Sterling Bank <STBP.LG> ahead of their proposed merger, industry officials said on Thursday.

The shares of medium-sized Ecobank were suspended at 7.95 naira on Wednesday, while Sterling's shares stood at 7.28 naira, pending the conclusion of the process early next year.

"We are hoping that the process will be completed within the next few weeks and the merger consummated latest by January," said Sterling spokeswoman Bimbo Sowemimo.

The two banks are conducting due diligence on their books and operations to help them determine valuation of assets and share exchange ratio, the spokeswoman said.

The merger talks began after two failed attempts by the Nigerian unit of pan-African banking group Ecobank Transnational Incorporated <ETIT.LG> to fuse with First Bank <FBNP.LG> and Unity Bank <UBPL.LG>.

Ecobank and Sterling said last month the merger would diversify the new entity's earnings and increase its capital base, in an industry that has become increasingly competitive since a financial sector reform in 2005.

The merger would be the second since banking reforms that saw the number of banks in Africa's top oil operator shrink from 89 to 25.

In August, Africa's largest banking group, Standard Bank <SBKJ.J>, bought control of IBTC Chartered Bank <IBTC.LG>, merging the operations of its local unit, Stanbic with IBTC.

Central Bank Governor Chukwuma Soludo told Reuters on Thursday the regulator would not allow any further foreign takeovers of local banks and plans to set a cap on foreign equity stakes in domestic banks by the end of the year.

Nigerian GDP to grow by 7.0 pct in 2008 -president
Thu 8 Nov 2007, 11:32 GMT
[-] Text [+]

ABUJA, Nov 8 (Reuters) - Nigerian economic growth will rise to 7.0 percent in 2008, President Umaru Yar'Adua said on Thursday.

The second largest economy in sub-Saharan Africa grew by 5.73 percent year-on-year in the second quarter of 2007, the central bank has said.

Nigeria bourse freezes banks' shares ahead of merger
Thu 8 Nov 2007, 16:07 GMT
[-] Text [+]

LAGOS, Nov 8 (Reuters) - The Nigerian Stock Exchange has frozen the shares of Ecobank <ECOB.LG> and Sterling Bank <STBP.LG> ahead of their proposed merger, industry officials said on Thursday.

The shares of medium-sized Ecobank were suspended at 7.95 naira on Wednesday, while Sterling's shares stood at 7.28 naira, pending the conclusion of the process early next year.

"We are hoping that the process will be completed within the next few weeks and the merger consummated latest by January," said Sterling spokeswoman Bimbo Sowemimo.

The two banks are conducting due diligence on their books and operations to help them determine valuation of assets and share exchange ratio, the spokeswoman said.

The merger talks began after two failed attempts by the Nigerian unit of pan-African banking group Ecobank Transnational Incorporated <ETIT.LG> to fuse with First Bank <FBNP.LG> and Unity Bank <UBPL.LG>.

Ecobank and Sterling said last month the merger would diversify the new entity's earnings and increase its capital base, in an industry that has become increasingly competitive since a financial sector reform in 2005.

The merger would be the second since banking reforms that saw the number of banks in Africa's top oil operator shrink from 89 to 25.

In August, Africa's largest banking group, Standard Bank <SBKJ.J>, bought control of IBTC Chartered Bank <IBTC.LG>, merging the operations of its local unit, Stanbic with IBTC.

Central Bank Governor Chukwuma Soludo told Reuters on Thursday the regulator would not allow any further foreign takeovers of local banks and plans to set a cap on foreign equity stakes in domestic banks by the end of the year.

this is what i want to hear. we need to bank to merge , especially the much larger ones till we end up wit maybe 12 banks

African banks
On the frontier of finance

Nov 15th 2007 | ABUJA, JOHANNESBURG AND NAIROBI
From The Economist print edition
Taking advantage of more stable economies, banks are venturing deep into sub-Saharan Africa


NOT so long ago, a cruel joke among international bankers was that sub-Saharan Africa was less an emerging market than a submerging one. Local bankers had no reason to change that impression; for all the political and economic turmoil, tiny and informal markets, and shabby infrastructure, they mostly made good money doing very little. Using low-cost deposits to buy high-yielding government bonds, they harvested some of the best net-income margins in the world. The corollary, of course, was that most Africans had no access to financial services.

Nowadays, the thinking is shifting. According to the IMF, Africa is enjoying its best period of sustained economic expansion since independence. Real GDP growth is expected to rise from 5.7% in 2006 to 6.1% this year and 6.8% in 2008. This good performance is partly driven by high commodity and oil prices. Foreign aid has also helped. But it is also due to better economic management, more openness and more stable politics. Such policies mean banks have to work harder to make a profit, but also help them to grow. That is encouraging them to reach out to new customers—and so they should. A report from the World Bank on November 13th argues that promoting access to financial services in Africa should be a priority, as it boosts growth and helps reduce the income gap between rich and poor.

Still, only 20% of families in Africa have bank accounts. Small and medium-sized firms struggle to borrow; private credit accounts for 18% of GDP in Africa—and less than 5% in Angola, Chad, Congo, Guinea Bissau and Sierra Leone—compared with 30% in South Asia. Ethiopia, Uganda and Tanzania have less than one bank branch per 100,000 people. Opening an account in Cameroon requires $700—more than many of its people earn in a year. In Swaziland, a woman needs the consent of her father, husband or brother to open an account or take a loan, and 75% of adults do not have a verifiable address. Even in South Africa, where the financial sector is far more sophisticated, almost half of adults do not have bank accounts.

Millions of Africans stash money under their mattresses or keep their savings as cattle. In countries such as South Africa, Kenya and Uganda, many turn to informal services, such as burial societies or savings clubs. Microfinance outfits have filled some of the gap. But they are small, and banks are usually much better equipped to provide financial services on a large scale.

In many countries, not only are better and more predictable monetary policies improving the environment for banking; privatisation of state-owned banks has also created opportunities, and better regulation has helped too. In 2004, Nigeria's central bank raised the minimum capital requirement for banks from 2 billion nairas ($15m) to 25 billion, and it limited government ownership in banks to 10%. The number of banks has shrunk from 89 in 2004 to 25 today, but the number of branches has increased by over 600. So far, experts say, placements on the red-hot stock exchange have provided most of the increased capital. Some banks' returns on equity are believed to be shrinking. But ATMs have become so much a part of life in Nigeria's big cities that lines sometimes stretch down the street. There are also welcome signs of prudence: one Nigerian bank, United Bank of Africa, promises no “wahala” loans. All Nigerians know wahala means “trouble”.

The improving climate has caught the attention of foreigners. The Industrial and Commercial Bank of China, in the largest ever single investment in Africa, has offered $5.6 billion for a 20% stake in Standard Bank, of South Africa, which has operations in 18 African countries. In 2005 Barclays, a British bank that has been working in Africa for over a century, bought a majority interest in ABSA, another South African bank. Its ambitions stretch across the continent, and it believes its sponsorship of the English Premier League, something of a religion in football-mad African countries, has given it recognition (so, less happily, has its colonial pedigree). “Africa is going from unbanked to banked,” says Frits Seegers, a Barclays executive. Hitherto, the bank has served what it calls the top of the pyramid in Africa; now, spurred by competition from local African banks and by its experience in emerging Asian markets, it is targeting the middle and lower end.

South Africa serves as the Petri dish for the trans-African experiment (although its economy is so much larger than its neighbours' that results may not be perfectly replicable elsewhere). In the post-apartheid era, the government has nudged banks into creating simpler and cheaper products. They have taken branches to the unbanked, either in prefabricated form, or in vans that make regular visits to under-served areas. Other countries are doing the same. In remote areas where delivering cash is hard, mini-machines have been installed in corner shops where customers print out a slip confirming they are in the black and present it to the shopkeeper, who provides the cash. Some rural branches and ATMs rely on solar energy and satellite phone connections.

New technology also helps. Few Africans have a bank account, but many have mobile phones: in Kenya and Botswana, for example, 17% of those who are unbanked own a mobile phone, according to the FinMark Trust, a research group seeking to make financial services more accessible. In South Africa, Congo and Kenya, financial services are offered over mobile phones—though it is not always clear whether they can be called banks or not. Subscribers can open accounts, check their balances, pay their bills or transfer money by typing a few commands on their mobile phones. In Kenya, where 3m people have bank accounts, as many as 1m use M-PESA, a mobile-payment scheme.
Splashing out

South African banks, having learned lessons in their home market, are pioneering innovations elsewhere in the region. Standard Bank supplies an isolated branch on an island in Uganda's Lake Victoria by having planes drop bags of cash from the air. The bank credits its mobile sales force and its rapid roll-out of ATMs in Uganda—an extra 128 since it bought a local bank in 2002—to its success there. In a country of 30m people, it has opened close to 700,000 new accounts in five years, and controls 40% of the market. When its shares were listed on the minuscule local stock exchange this year, they were over-subscribed by 200%, and more shares were traded in one day than in the exchange's entire history. ABSA, meanwhile, is developing modern credit-scoring techniques for customers who have never been granted loans before. By keeping costs down and building up scale, it reckons micro lending is at least as profitable as its other services.

But competition among banks is growing. In Ghana, Barclays works with susu collectors, who gather money from small-scale market traders and keep it safe for them for a fee. The collectors' clients are typically too small for high-street banks, but Barclays reckons that they collectively represent a market worth £75m ($154m). The bank offers savings accounts, loans and training to the susu collectors, and says they have helped it reach 200,000 market traders. In two years, there have been no defaults.

For all the progress, much remains to be done. In spite of innovations to bring in new customers, banks still have to build up necessary scale, cut costs and manage risks better. Sub-Saharan African economies are growing, but except for a handful, they remain very small: South Africa's GDP alone makes up almost 40% of the whole. Relative poverty is declining, but four out of ten Africans still have to survive on less than a dollar a day. According to the World Bank, in 40 out of 48 countries in the region, it still takes over a year—and a long list of procedures—to enforce a contract. In Congo, Malawi, Mozambique and Sierra Leone, procedures to recover a debt cost more than the value of the debt itself.

Africa also remains far more vulnerable than other regions to the vagaries of weather, unpredictable aid flows, and volatile commodity prices. With the exception of places like South Africa, most economies are not diversified and therefore are highly vulnerable to shocks. Countries such as Zimbabwe and Sudan also show that political stability cannot be taken for granted. This residual uncertainty and the lack of confidence in local banks help explain why those who can often prefer to keep their money abroad and why most private finance in Africa is short-term.

Many African countries still have to develop and enforce policies and laws allowing banks to compete and operate more easily, while making sure they are financially solid—and customers are protected. In time, regional integration may help ease the problem of scale. Meanwhile, millions of people are still waiting to take their cash from under the mattress.

http://www.economist.com/finance/displaystory.cfm?story_id=10146637

Fitch Affirms First Bank’s Top Rating


11.27.2007

Fiitch Ratings, one of the world’s foremost rating agencies, has affirmed First Bank’s international Long-term and Short-term ratings at 'B+' and 'B' respectively with a stable outlook. Fitch also affirmed the Bank’s National Long- and Short-term ratings at 'A+(nga)' and 'F1(nga)', respectively.
According to the Agency, the ratings, the second in two years, reflect a well-established and growing franchise and improving asset quality indicators. The ratings also take into account Nigeria's difficult operating environment, the Bank’s concentrated loan book, increased credit exposure to individuals and accelerated credit growth since the financial year-ended March 31, 2007. During Financial year ended March 31, 2007, First Bank reported a 19.5 percent year-on-year increase in net earnings to N18.4b, and strong improvement in financial performance was reported for half year 2008.
In May 2007, First Bank raised fresh capital of N250 billion through a hybrid of rights and public offer. Fitch acknowledged the improvements made to the bank’s risk management framework and asset quality indicators (the non-performing loan (NPL) ratio reduced to 3% at Financial Year 2007 from 9% at Financial Year 2006.
First Bank is one of the three largest banks in Nigeria by total assets and has a network of 420 branches and 501 ATMs.
The Bank commenced operations in 1894 and provides universal banking services to corporate and retail clients..

Fitch Rates Zenith Bank Highest in Nigeria

By Patricia Ubaka, 11.26.2007


Zenith Bank’s performance has again been accorded recognition with the assignment of AA- rating by leading global agency, Fitch Ratings. This is the highest of any Nigerian bank, based on what it described as ‘positive outlook’ for the bank. Only one other bank has so far received such rating.
This is coming barely two weeks after Zenith was awarded one of the highest ratings of any Nigerian bank by Standard and Poor’s.
According to Fitch, Zenith’s ratings were boosted by the maintenance of strong levels of capitalisation, continuation of competitive performance measures relative to peers and sound asset quality indicators.
Fitch Ratings, which is committed to providing the world's credit markets with independent, timely and prospective credit opinions, assigned Zenith’s National long-term and short-term ratings to ‘AA- (AA minus)(nga)’ for the third time. It said: “The Positive Outlook for the Long-term IDR reflects Zenith’s strong and growing domestic franchise, consistent good financial performance and low levels of non-performing loans.
“The ratings reflect adequate levels of capitalisation and the potential that capital levels will be further enhanced. The ratings also reflect Nigeria’s difficult operating environment.”
The agency said it considered that the economic and industry risks of Nigeria act as the major constraints on the ratings of Zenith Bank. This implies that Zenith Bank could have been rated higher, but for Nigeria’s sovereign rating. The agency observes that Zenith’s “stable outlook balances the bank’s ability to benefit in terms of size and profitability, from strong macroeconomic growth boosted by its ever improving control of the financial services market.”
Zenith Bank was also recently awarded the Aaa rating by foremost agency, Agusto and Company, for the ninth consecutive year.
Agusto said the bank’s latest rating reflected its dominant position in the industry, strong asset quality, strong liquidity profile, good capitalisation and good earning among others.
“We consider Zenith Bank to have a strong capacity to meet its obligations when due. We thus uphold the bank’s Aaa rating,” Agusto said in its report.
Zenith Bank remains the biggest bank in Nigeria on total assets plus contingents of N1.2 trillion as at the end of June 30, 2007 and one of the most capitalised quoted companies with a total market capitalisation of over N500 billion.
The bank has enjoyed a successful year, with its consistently good financial performance producing high patronage on the floor of the Nigerian Stock Exchange (NSE). It was recently named the “Quoted Company of the Year” by the Council of the Nigeria Stock Exchange (NSE).
Zenith Bank is returning to the capital market to raise about N130 billion in a combined rights issue of 1,654,557,911 ordinary shares of 50 kobo each and public offer of 1,763, 000, 000 units. The offer is expected to open on Thursday, December 6, 2007. Zenith’s stock has enjoyed price appreciation of over 532.7 per cent since 2004 when it was quoted on the floor of the NSE.
The operating results of the bank in the last five years indicate an impressive performance on all parameters. Total assets plus contingents grew by 730.06 per cent from N153.44 billion as at the end of June 2003 to N1.271 trillion in June 2007.
Within the same period, gross earnings increased from N17.8 billion to N94.9 billion, representing a 433.14 per cent growth while profit before tax also grew by 372.42 per cent from N5.44 billion to N25.7 billion.

Nigeria´s Skye Bank to open branches in 3 West African countries

By Sun News Publishing
Tuesday, December 4, 2007


Skye Bank Plc is about opening its business offices in Sierra Leone, the Gambia and Ghana in a move to take its services and offerings to the West Coast.

The bank also intends to build a strong group structure that will allow it to take maximum market advantage in other segments of the financial industry.

Managing Director/Chief Executive Officer of the bank, Mr. Akinsola Akinfemiwa, dropped these hints recently in London at the Renaissance Capital Sub-Saharan Africa conference organized to sensitize foreigners about the investment potentials in the region.

Akinfemiwa explained that the bank growth strategy would incorporate growing its revenue along income line from retail/commercial banking products through the strengthening of its branch network and making its services easily available to this clients segment.

Besides, he said the bank intends to increase its business outlets to 450 before the end of year 2010, adding that the business outlet strategy stipulates outlet model/types that are designed to suit its main verticals.

Specifically, he said the bank has strategically positioned itself to focus on investment banking, corporate finance, as well as retail and consumer banking.
The Skye Bank boss also revealed that the bank was pursuing an aggressive regional expansion in Sub-Saharan Africa as part of its strategy of ensuring that it has presence where its revenue profile could be enhanced.

The bank strives to grow its business by focusing on mobilization of huge low cost deposit and fee based services available in the retail/consumer-banking segment of the market, he said.
Akinfemiwa also presented the bank unaudited full year result ended September 30, 2007 which saw the banking posting a profit after tax of N7 billion as against N1.9 billion during the corresponding period in 2006. The growth in profitability represents 467 per cent.

Gross earnings also rose by 84 per cent from N20.7 billion in 2006 to N38.1 billion during the review period, while its total assets grew substantially to N439 billion as against N170 billion in 2006.
Skye Bank has as its strategic goals, the desire to be one of the top five banks in Nigeria by 2010 by all indices, have and maintain 10 per cent of the total industry business outlets in high gross domestic product (GDP) area in the country.

It also wants to be the leading bank in e-banking products and services maintains its leadership role in the South West region of the country and play a leading role in public sector business at all tiers of government.

Nigeria: Ecobank earns GCR top ratings


Tuesday, 11 December 2007
The improved performance of Ecobank Nigeria Plc in the 2007 financial year has earned it an “A+” long term and “A1” short term ratings from Global Credit Rating Company (GCR), an internationally acclaimed Rating Agency. The ratings, coming in two successive years confirms Ecobank’s short and long-term favourable outlook. According to the report prepared by GCR, the “A+” Long Term Naira Rating attests to the Bank’s very high credit quality suggesting that protection factors are good, while the “A1” Short Term Naira Rating indicate very high certainty of timely payment, excellent liquidity supported by good fundamental protection factors.

The current rating is based on key factors including the bank’s successful initial Risk management framework, acquisition of assets and deposit liabilities of the defunct All States Trust Bank Plc; the first of its kind in Nigeria.

In order to fulfill its corporate vision, Ecobank is also actively engaged in a branch expansion strategy including a merger with Sterling Bank; the proposed merger is expected to lead to a balance sheet size of over N400 billion and a combined shareholders funds in excess of N60 billion and over 325 branches strategically spread across the country.

The rating agency in its report particularly notes that “Ecobank has sustained strong asset quality during the period under review. Asset quality improved considerably with the capital value in arrears position declining by 70% to 0.6% of gross advances (F05: 5.4%). Provisioning is consi-dered highly conservative, ensuring that the net NPL ratio remained negative.

The bank has reflected a strong trend in earnings and profitability, with NPAT increasing at a compound growth rate of 59% between 2002 and 2006. This trend is expected to continue. The report also noted that, cash and liquid assets covered a reduced 53% of deposits in F06 (F05: 122%).

Oceanic Bank's asset base hits N1trillion mark

OCEANIC Bank International Plc has recorded a 170 per cent increase in its asset base - including contingent liabilities - posting N1.26 trillion in the financial year ended September 30, 2007 compared to N466.5 billion recorded at the corresponding period in 2006.

This comes on the heels of its 2007 award of Bank of the Year-Nigeria from The Financial Times, London (Publisher of Bankers Magazine). It won the award for the second time consecutively (2006 and 2007) in the post consolidation era of the banking industry.

The bank's full year consolidated audited reports approved by the relevant regulatory authorities, recorded significant growth in all performance measurement indicators with gross earnings rising from N44.6 billion to N75 billion indicating a 67 per cent increase.

The bank also posted a profit before tax (PBT) of N23 billion compared to N11 billion in 2006 representing a growth of 98 per cent.

Besides profit, after tax (PAT) rose by 79.2 per cent to N17.5 billion compared to N9 billion posted in 2006.

Following its last public offer, Oceanic Bank's shareholders funds hit an all high of N222.48 billion in contrast to N37.67 billion as at the preceding financial year.

Chief Executive Officer of the bank Mrs. Cecilia Ibru, described the results as impressive and indicative of the dedication exhibited by staff and management in the financial year under review. She said that the bank's proposed dividend of N1.02 against the 75k promised is based on its 2007 Public Offer Prospectus.

Oceanic Bank has recently been rated among the top 1000 banks in the world and has also received positive local and international rating.

The bank is also strengthening its revenue base by establishing financial related subsidiaries towards providing value added comprehensive services to her customers. The establishment of financial related business is in line with its strategy of building a financial conglomerate and a Pan-Africa outlook. The subsidiaries which include Oceanic Registrars Limited, Oceanic Trustee Limited, Oceanic, Oceanic Insurance Group (General & Life), Oceanic Savings & Homes Limited and Oceanic Securities Limited contributed to the Consolidated reports of the bank as at September 30, 2007.

"These subsidiaries and good prospects from other potential businesses from Oceanic Capital, Oceanic Custodian and Oceanic Asset Management shall further accelerate the momentum of Oceanic Group in becoming one of the top three banks in Africa with excellent capacity to exceed customers' expectations. The concept of financial supermarket implies that the bank's customers receive a full range of modern financial services in any of its outlets," a statement said.

The bank grew its network from 12 branches as at September 31, 2000 to 320 Business Offices by September 30, 2007 and ranks among the top four banks in the industry in terms of branch network. In the 2006/2007 financial year, it added a total of 135 business offices to its branch network

Oceanic Bank's asset base hits N1trillion mark

OCEANIC Bank International Plc has recorded a 170 per cent increase in its asset base - including contingent liabilities - posting N1.26 trillion in the financial year ended September 30, 2007 compared to N466.5 billion recorded at the corresponding period in 2006.

This comes on the heels of its 2007 award of Bank of the Year-Nigeria from The Financial Times, London (Publisher of Bankers Magazine). It won the award for the second time consecutively (2006 and 2007) in the post consolidation era of the banking industry.

The bank's full year consolidated audited reports approved by the relevant regulatory authorities, recorded significant growth in all performance measurement indicators with gross earnings rising from N44.6 billion to N75 billion indicating a 67 per cent increase.

The bank also posted a profit before tax (PBT) of N23 billion compared to N11 billion in 2006 representing a growth of 98 per cent.

Besides profit, after tax (PAT) rose by 79.2 per cent to N17.5 billion compared to N9 billion posted in 2006.

Following its last public offer, Oceanic Bank's shareholders funds hit an all high of N222.48 billion in contrast to N37.67 billion as at the preceding financial year.

Chief Executive Officer of the bank Mrs. Cecilia Ibru, described the results as impressive and indicative of the dedication exhibited by staff and management in the financial year under review. She said that the bank's proposed dividend of N1.02 against the 75k promised is based on its 2007 Public Offer Prospectus.

Oceanic Bank has recently been rated among the top 1000 banks in the world and has also received positive local and international rating.

The bank is also strengthening its revenue base by establishing financial related subsidiaries towards providing value added comprehensive services to her customers. The establishment of financial related business is in line with its strategy of building a financial conglomerate and a Pan-Africa outlook. The subsidiaries which include Oceanic Registrars Limited, Oceanic Trustee Limited, Oceanic, Oceanic Insurance Group (General & Life), Oceanic Savings & Homes Limited and Oceanic Securities Limited contributed to the Consolidated reports of the bank as at September 30, 2007.

"These subsidiaries and good prospects from other potential businesses from Oceanic Capital, Oceanic Custodian and Oceanic Asset Management shall further accelerate the momentum of Oceanic Group in becoming one of the top three banks in Africa with excellent capacity to exceed customers' expectations. The concept of financial supermarket implies that the bank's customers receive a full range of modern financial services in any of its outlets," a statement said.

The bank grew its network from 12 branches as at September 31, 2000 to 320 Business Offices by September 30, 2007 and ranks among the top four banks in the industry in terms of branch network. In the 2006/2007 financial year, it added a total of 135 business offices to its branch network

when will these large banks merge. i want to se a $40bn naija bank

Banks' credit hits N7.266 trillion, says CBN
From Mathias Okwe, Abuja

AS at October, 2007, money deposit banks' contribution by way of credit to the private and public sectors of the economy stood at N7.266 trillion, according to the Central Bank of Nigeria (CBN)

A breakdown of the figure shows that the private sector has the largest chunk of the credit as its exposure stands at N4.363 trillion while the public sector has the balance of N2.863 trillion.

These facts were in the apex bank's October, 2007 monthly economic report just released in Abuja.

It explained that the private sector's credit sum represented an increase of five per cent over the figure of the preceding month while that of the public sector during the period fell by four per cent.

The CBN attributed the decline in the public sector credit to the 4.2 per cent fall in claims by the apex bank during the period and also explained that the rise in the private sector credit exposure for the review month reflected the significant increase in its claims on the private sector.

Provisional data indicated growth in monetary aggregates during the review month. Broad money supply (M2) and narrow money supply (M1) increased by 3.2 and 3.8 per cent over the levels in the preceding month.

The increase was attributable to the rise in both foreign assets (net) and banking system credit to the domestic economy.

Also, the report indicated mixed developments in banks' deposit and lending rates in October, 2007.

It said the spread between the weighted average deposit and maximum lending rates widened from 10.66 percentage points in the preceding month to 10.75, while the margin between the average savings deposit and maximum lending rates, however, narrowed from 15.22 percentage points in September, 2007 to 14.82.

It added: "The weighted average inter-bank call rate, which stood at 8.18 per cent in the preceding month, rose to 8.25 per cent at end-October 2007, reflecting the liquidity squeeze in the inter-bank funds market.

"The value of money market assets outstanding increased by 2.0 per cent to N2,170.0 billion over the level in the preceding month. The rise was attributable to the 4.1 per cent increase in outstanding Federal Government bonds. Activities on the

Nigerian Stock Exchange indicated mixed developments during the review month."

On inflation during the period, the report said inflation rate on a year-on-year basis was 4.6 per cent, compared with 4.1 per cent recorded in the preceding month, while the inflation rate on a 12-month moving average basis was 5.7 per cent, compared with 5.9 per cent in the preceding month.

It explained that the development reflected largely the stability in the supply of petroleum products and the harvest of agricultural products during the period.

Diamond Bank's GDRs now listed on London Stock Exchange

DIAMOND Bank Plc was yesterday listed on the Professional Securities Market (PSM) of the London Stock Exchange (LSE).

The peak of the epoch making event was the ringing of the bell by Emeka Onwuka, the bank's managing director, signaling the starting of trading on the floor of the LSE,.

The event was witnessed by captains of industries, top government dignitaries, including the Chairman of the bank, Igwe Alfred Nnaemeka Achebe; Mr. Pascal Dozie, Founder, Diamond Bank; Director-General of the Nigerian Stock Exchange, Professor Ndi Okereke-Onyiuke; the Director-General of the Nigeria Security and Exchange Commission, Mr. Musa Al Faki; Managing Director, Vetiva Capital Management Limited, Mr. Chuka Eseka, who was the Financial Adviser/Domestic co-coordinator for the offer and a host of others.

Commenting on the admission to the LSE, Onwuka, said "the listing is an important step in the evolution of the bank's strategy, aimed at raising stronger capital base, attracting new shareholders, raising its international profile, enhancing leadership position in the middle market and developing the bank into a reputable financial conglomerate".

Head of Primary Market, London Stock Exchange, Tracy Pierce, expressed delight about the listing of Diamond Bank on LSE.

"This is the second Nigerian company to be listed in the London Stock Exchange and the first Nigerian firm on our Professional Securities Market, and we hope that many more companies from Nigeria will follow."

Also, Okereke-Onyiuke did not hide her emotions as she said: "This is a major fulfillment for me as Diamond Bank has placed Nigeria in the world map, especially the world financial system, by being listed not just in the London Stock Exchange but the first African company/bank to be listed in the Professional Securities Market of the London Stock Exchange. This is because the Professional Securities Market is the cream of the London Stock Exchange and you must pass through a rigorous process before being listed in this market. I do hope that many more Nigerian companies will come and be listed in this market."

Already, the bank has floated its Global Depository Receipts (GDRs) on the Exchange. The initiative had enabled Diamond Bank to raise $500 million through 37.6 million newly issued GDRs, each GDR representing 100 ordinary Diamond shares. The settlement price per GDR has been set at $13.30 and will be traded on PSM.

The offer proceeds will enable the bank to expand its footprint through traditional and electronic channels in order to seize the growing Nigerian retail market, enter new business segments like Mortgages, Insurance, Investment Banking and also strengthen its Francophone West Africa expansion.

Diamond Bank's market capitalization post offering is now N263.2 billion ($2.3 billion as at January 02, 2008), while its shareholders' fund in the excess of N100 billion. Morgan Stanley is the Global Coordinator and Sole Bookrunner for the offering.

The Bank had its first major foreign equity capital injection in April 2007 when an international consortium led by Actis Capital LLP, as strategic investor, injected $134 million into the Bank. The investment gave Actis a 19.1 per cent stake in the Bank. Actis is a leading private equity investor in emerging markets, having significant investments across Africa, China, India, South East Asia and Latin America. Actis' approach to investment is long-term and partner-oriented.

p.s who knws hw many of the 25 banks have capitalization of over 1 billion dollars n hw mch thy are all capitalized for

p.s who knws hw many of the 25 banks have capitalization of over 1 billion dollars n hw mch thy are all capitalized for

this thread has the answer a a few pages back i believe

Nigerian banks attract attention from Standard Bank’s Africa fund
15 January, 2008 12:00:00 Reuters

A growth explosion and absence of exposure to the subprime mortgage make African financials and banking shares top picks for Standard Bank’s Africa equity fund.
John Mackie, fund manager at the Standard Africa Equity Fund, saw best value in shares like Nigeria’s Access Bank, Guaranty Trust Bank and First City Monument Bank.
Mackie, whose fund currently has about $125 million in assets and invests in pan-African stocks excluding South Africa, said, “Africa fortunately never got around to subprime.”
“Banks and financial services, for example banks and insurance companies in Nigeria, are coming off very low bases (and) growing their earnings anyway between 50 and 100 percent per annum,” the Johannesburg-based fund manager said.
“The underlying story is a growth story,” said Mackie, who is targeting growth of around 25 to 30 percent in 2008 for his fund. “They’ve all been raising capital, there has been quite a lot of consolidation, they are all rolling out different strategies to expand, coming off a very, very low base.”
“Think about oil at $100 a barrel,” Mackie said. “They’ve got to put that windfall to good use and as that filters through into consumer’s pockets, what (will be) the facilitator of all this? A bank and insurance company.”
Banks in the United States and Europe have taken billions of dollars of charges on exposures to subprime mortgages — loans made to borrowers with patchy credit histories — after the value of mortgage-backed securities held by the banks plunged.
The Standard Africa Equity Fund has had a 25 percent return in the first six months since it was launched in August last year and currently holds shares in 40 companies from around eight African countries.
It also invests in shares in African firms listed in Toronto and on London’s Alternative Investment Market.
Commodities are also favoured by the Standard Africa Equity Fund because of high demand for raw materials from China, with Equinox Minerals and Albidon the top picks.
He said emerging markets suffered less from any U.S. economic slowdown with Chinese demand for raw materials continuing to go from strength to strength in 2008.
Although positive on the 2008 outlook in Africa, investors should be cautious and remain wary of macro-type issues, Mackie said.
A recent example of this was the violence that erupted across Kenya after a disputed election on December 27 that the opposition says was rigged by President Mwai Kibaki.
“Kenya gave me a lot to think about over Christmas — it was a bit of a shock,” said Mackie. “(But) the fact that the market appears to have not have reacted as one would have thought, makes me think that the underlying story is very strong and it’s going to take a heck of a lot more than that to shake it.”
“Clearly what has happened will knock some company earnings and will put a dent in GDP growth, but if you knock it from 8 percent to 7 percent — it’s still not a bad story.”

Ethos-led consortium invests $130 mln in Oceanic
Thu 17 Jan 2008, 14:56 GMT
[-] Text [+]

JOHANNESBURG (Reuters) - South Africa's Ethos Private Equity said on Thursday it and a consortium, including Old Mutual Investment Group South Africa, had invested $130 million in Nigeria's Oceanic Bank.

Ethos said the investment is the group's first in Africa outside South Africa.

Ethos said since the closure of its Fund V, it had been actively been looking at investment opportunities in sub-Saharan Africa.

"This is our first foray into West Africa. This strategic stake represents a unique opportunity to participate in Africa's fastest growing banking sector through an investment in one of Nigeria's tier one banks," Ethos partner Ngalaah Chuphi said.

Ethos said the opportunities for banks in Nigeria are immense as most transactions are cash-based, with much of the population not having access to banking products like mortgages, car loans or credit cards.

Intercontinental Bank scores another first, launches i-cash* consolidates leadership position


Written by JOHN NWOKOCHA & AKOMA CHINWEOKE
Sunday, 20 January 2008
OUTSTANDING performance is the middle name of Intercontinental Bank Plc. In its quest to beat its competitors and stay on top, the bank recorded a major breakthrough last year. This can be substantiated with the bank’s third quarter result which ended November 30, 2007.

Records made available to Sunday Vanguard Business, when it announced its result last week, showed that the bank again consolidated its leadership position, having grossed N99.7 billion in nine months. Thus, to state that the bank is at top among its competitors is not a hype, but reality.

For clarity, the performance in gross earings showed a growth of 69 per cent and what that showed further is an increase over the N59.1 billion it earned in the corresponding quarter of the previous year. Profit before tax also witnessed a leap to N22.9 billion from N12.8 billion representing 78 percent growth. The impressive figure is higher than the 2007 financial year result. The bank also declared a profit after tax of N18.1billion, representing 78 percent over N10.1billion recorded in 2006.

Market watchers said, at that, the stellar performance of the bank for the nine months was an indication that the bank is set to record an unprecedented results for its year end. Intercontinental Bank, with a market capitalization of over N780 billion, representing about seven per cent of the total market capitalisation of listed equities at the Nigerian Stock Exchange, NSE, is already the toast of investors.

Its stocks, which were the most traded instruments on the nation’s capital market in November 2007, have continued to garner more price points on the stock movement ladder. The stock is currently trading at the NSE for over N40.00, with analyst’s projections of further increase in stock value. The equity had traded at a daily average of N36 in the last three weeks.

As fundamentals of the bank get stronger on quarterly basis, expectations for enhanced returns on investments by stakeholders are also on the high. The bank has a track record of consistent upward financial performance which has buoyed investors’ confidence in the bank.

Analysts believe that, with the bank’s competitive edge in customer service delivery, management and information technology, which are built into its systems and processes, the bank is on course to surpassing all profit projections. The bank’s corporate philosophy of Happy Customer, Happy Bank has been the driving force through its robust products, services and processes which are skewed towards meeting the needs and expectations of its discerning customers and other stakeholders.

The bank’s group chief executive, Dr. Erastus Akingbola, had, in a goodwill message to staff last week, attributed the bank’s exceptional performance in 2007 to the support of all its stakeholders as well as resilience and hard work of the staff. Dr. Akingbola, who was named Man of Year 2007, by media stakeholders, said that a major source of the bank’s success lies in the exceptional output of its high quality and professional staff and the bank’s consistent strategy of rewarding excellence. He said that the bank would continue to value strong bonding and warm relationships in demonstration of its Happy Customer, Happy Bank philosophy to every customer.

Intercontinental Bank has been executing a bold enhancement strategy of all its processes in line with the global best practices in customer service, IT and e-banking, expansion of its business lines and strengthening of risk management, among others. In line with this, the bank, in its quest for a global competition, has introduced a bigger, bolder global vision: to be the number one in Nigeria, number one in Africa and among the world’s top 100 banks. The vision is to enthrone a truly world class Intercontinental Bank with presence in all the continents of the world to help position the bank in good stead for global competition.

Last December, the bank, in its determination to be a dominant player in global banking, launched a new corporate identity. The epoch-making unveiling of the new corporate identity dubbed; Good to Great is a reflection of the strategic intent of the bank. The new corporate logo, which has the hexagon as its primary identity icon with two dominant colours of blue and yellow, is indicative of the bank’s bold international growth in all the continents of the world.

Intercontinental Bank is one of Nigeria’s biggest banks by capital, the fifth biggest bank in Africa and the only Nigerian bank among world top 500 banks. According to The Banker magazine, a subsidiary of Financial Times of London, Intercontinental Bank is the second fastest growing bank in the world currently. Only last Monday, the bank scored another first with the high profile e-payment system called I-Cash

'Our innovative products would boost trade relations between Nigeria and other countries': This was how the introduction of the product was couched by th e acting group chief executive of the bank, Alhaji Sheriff Yussuf, who also described the introduction of the two new products, I-Cash International product and I-Cash Mobile as unique products that would tremendously boost the increased trade relations between the business communities in Nigeria and the rest of the world.

Yussuf further pointed out that the flexibility in the new payment approach would ease the hardship and pains of undertaking bilateral trade between Nigeria and Ghana in particular, especially in the face of subsisting risks and rigours of travelling with physical cash through road borders, airports and seaports.

He explained that the introduction of the product was timely in view of the global attention that would be on Ghana and huge influx of people, businesses and funds to the West African neighbours who would be hosting the rest of Africa at the 26th edition of Africa’s biggest soccer fiesta, the African Cup of Nations. His words: “For Nigerians, Ghanaians and other nationals involved in cross border trade, parents who want to remit school fees to their wards and for various other transactions involving both countries, I-Cash International Product is designed as a safe, flexible, convenient and robust medium of effecting settlement of due payment.”

He added that the bank also has a local variant of the I-Cash product called the I-Cash mobile to serve the needs of people within Nigeria who desire the fastest means of transferring funds to their loved ones, folks, friends and business partners through the use of mobile phones. He stressed that Intercontinental Bank has evolved into one of the largest and most diversified financial service institutions in Nigeria with cutting-edge IT infrastructure. According to him, the bank now has over 250 branches through which a rich variety of products and services that are widely acclaimed in the financial markets as leaders are available for the customers.

The resounding success and wide appeal of these products in the market he attributed to quality of the bank’s service delivery. Yussuf also disclosed that Intercontinental Bank is already at advanced stages of opening other offices in major commercial centres of the world, including the United Kingdom, USA, Asia and the Middle East and some other key financial centres in the African continent.

He said, through the support of staff, customers, shareholders, and other stakeholders, the bank, in the past nineteen years of its existence, rose from a share capital of N12 million at inception to now a share capital of over N180 billion. He added that a few months ago, the bank set the pace and created a record in the annals of Nigerian banking and finance, when investors supported its public offer with over N100 billion subscription, stressing that it was the first ever one hundred billion naira quantum of proceeds raked in public offers.

Yussuf also said the bank again set the pace and created another record as the first Nigerian bank to hit the billion dollar mark in capital fund as a consortium of five leading global investors injected about US$161 million (N20-25 billion), which further enhanced the shareholders fund.

Oceanic Bank's asset base hits N1.26 trillion

OCEANIC Bank says it has reached an asset base of N1.26 trillion at the end of its business year, ended September 30, 2007.

The bank at its 11th yearly General Meeting (AGM) held recently in Abuja declared a dividend per share of 102k, compared to 42k in 2006.

Speaking at the meeting, the bank's chairman, Apostle Hayford Alile, said the N1.26 trillion record was a remarkable improvement over the N446.5 billion recorded in 2006.

Alile added that the increase represented a 170 per cent growth over 2006, noting that the bank's gross earnings rose from N44.6 billion to N75 billion.

"The increase in gross earnings could be attributed to the bank's ability to take advantage of new opportunities in the domestic economy," he said.

Alile said the bank posted a profit before tax of N23 billion compared to the N11 billion in 2006, representing a growth rate of 98 per cent.

According to him, detailed analysis of the result also showed that profit after tax rose by 79.2 per cent, from N9 billion in 2006 to N11 billion in 2007.

"Following its last public offer, Oceanic Bank's shareholders' fund hits an all time high of N222.48 billion in contrast to N37.7 billion in 2006," he said.

Chief Sunny Nwosu, the national co-ordinator of Shareholders Association of Nigeria, lamented the frequent hiccups in the Automated Teller Machines (ATM) of the bank.

He urged the management to improve on the bank's services to meet customers' expectations.

Germany´s Commerzbank enters Nigerian market finally!

Commerzbank is Germany´s second biggest bank institute and a global player with many representations in Latin America, Asia and Eastern Europe. The only have two represenations in Africa so far: Egypt and South africa (Jo´Burg) and Nigeria is third in Africa now:banana::banana::banana::cheers::cheers:


I just love this kind of news:cheers::banana:


Germany´s Commerzbank set for big Nigeria play

http://www.hochtief.com/hochtief_en/img/bildarchiv/prev/hoch/commerzbank_72dpi_rgb.jpg
Frankfurt´s Commerzbank Tower

14 January, 2008 12:00:00 CHARLES IKE-OKOH
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The approval for the office was granted recently by the Central Bank of Nigeria, (CBN).
Florian Wit, chief executive of the country office, who disclosed the bank’s move weekend, suggests that the bank was interested in helping local financial institutions internationalize their business and expand market where the Commerzbank name resonates.
Commerzbank, which has an established record in global trade and infrastructure finance outside Germany, is on the final phase of an ambitious international expansion which will see it build a network of representative offices in 42 different countries.
The bank plans to complete the international network of offices this year with additional office in Tianjin, Panama City. In 2007, new units were opened in Dubai and Addis Ababa.
Florian sees plenty of opportunities behind the strategy for a Lagos country office. He revealed that the bank has always been very active in Nigeria through the financial institutions sector.
“What we did in the past and what we will still be doing in the future is providing to the financial institutions here services-in particular trade finance services, cash services, international banking services,” he said. “So the financial institutions will have a strong partner in the world behind them when it comes to supporting their corporate here for their internationalization”
The bank, Florian said is already evaluating partnering with a syndicate of 12 Nigerian banks to change the distribution structure in the oil and gas sector, suggesting a more active role by the bank in the growth of the sector and the economy in general.
He said “We are evaluating at the moment to back a syndicate of twelve banks in the international scene and we talking here of about a very big project which involves a very huge amount”.
Before now it partnered with Oceanic Bank to manage part of the foreign reserves of the Central Bank of Nigeria. The partnership involved the provision to Oceanic the full package of training capacity in Germany and in other areas.
Commerzbank is the first bank which did an Export Credit Agency financing, ECA, with the German ECA, in association with a local bank in 2006. In the same year became the arranger of the first syndicated loan for finance institution when it introduced Intercontinental bank into the international financial market.

Germany´s Commerzbank enters Nigerian market finally!

Commerzbank is Germany´s second biggest bank institute and a global player with many representations in Latin America, Asia and Eastern Europe. The only have two represenations in Africa so far: Egypt and South africa (Jo´Burg) and Nigeria is third in Africa now:banana::banana::banana::cheers::cheers:


I just love this kind of news:cheers::banana:

And so what does this mean?

And so what does this mean?

Competition is good for the customer

Competition is good for the customer

Exactly..... and Commerzbank is a global player, once such brands enter Nigeria, it is always a positive sign for more to come!:)

quite interesting, although I am not sure if its good to Nigerian economy.

Brazilian banks have grown tremendously in the past years, due to high interest rates, which of course is not good to the population of Brazil

Bradesco is already the 7th largest bank in the Americas and 10th in the World. Itau, Banco do Brasil and Unibanco also feature on the list. All other banks on the list are from US.
(Shareholder equity)
http://img299.imageshack.us/img299/4726/screenhunter02jan281910sw7.jpg

Company Assets
Bradesco US$161.000.000.000 (U$161 billion)
Itaú US$146.857.142.857 (U$146 billion)

quite interesting, although I am not sure if its good to Nigerian economy.

Brazilian banks have grown tremendously in the past years, due to high interest rates, which of course is not good to the population of Brazil

Bradesco is already the 7th largest bank in the Americas and 10th in the World. Itau, Banco do Brasil and Unibanco also feature on the list. All other banks on the list are from US.
(Shareholder equity)
http://img299.imageshack.us/img299/4726/screenhunter02jan281910sw7.jpg

Company Assets
Bradesco US$161.000.000.000 (U$161 billion)
Itaú US$146.857.142.857 (U$146 billion)

Thats awesome! Doesn't Itau have a larger presence in foreign markets? I see a ton of their branches in Argentina.

I think they only have a presence (and not that big) in a few neighboring countries. I really dont know why they dont try to expand.

maybe because they have SHITTY services. One more reason to wonder if its really any good for the population these banks growing so much. (well, there are many other banks in Brazil, many much better. I dont really know why people go for Itau and Bradesco, which imho, suck)

how does this relate to nigerian or african banks

This thread is titled "The phenomenal growth of nigerian banks and the new billion dollar banks" and not about itau spanish league NFL and bundesliga. Have some people stopped reading?

I think they only have a presence (and not that big) in a few neighboring countries. I really dont know why they dont try to expand.

maybe because they have SHITTY services. One more reason to wonder if its really any good for the population these banks growing so much. (well, there are many other banks in Brazil, many much better. I dont really know why people go for Itau and Bradesco, which imho, suck)

Oh I so agree with you with regards to Bradesco, a year back my uncle who lives in Jacarepaguá got totally screwed he couldn't pay a loan given to him by the bank because they kept raising interest rates. Though to be honest theirs a blog in the Globo website by a guy called Sardenberg and he said the big hero in 2007 was the Central Bank which did decrease interest rates and keep inflation in control.

borrowing good ideas from each other. i love it

Ghana proposes new capital requirements for banks
31 January, 2008 12:00:00 Anonymous


Nigerian banks desiring to open Ghana subsidiaries will need extra fund as Bank of Ghana is proposing an upward adjustment for the minimum capital requirement for commercial banks and non-banks financial institutions.
It said for banks, their minimum paid-up capital would increase from 7 million GH cedis (N851.9-million) to between 50 and 60 million GH cedis (N7.3-billion).
Non-Bank Financial Institutions (NBFIs) and finance houses would increase from 1 million GH cedis (N121.7-million) and 1.5 million GH cedis (N182.5-million) respectively to between 5-8 million GH cedis (N973.6-million).
Announcing this at the first monetary policy committee press conference in Accra, Paul Acquah, governor of the Bank of Ghana, said the decision to increase the requirements was to further strengthen the financial sector and position for Ghana’s accelerated growth agenda.
“The banking system needs to be re-capitalised to support the banks’ strategies of deepening the financial sector for accelerated growth in the country,” he said.
He stated that the actual time for compliance of the new requirements would soon be announced with circulars to all banks and NBFIs, adding “the bank is currently working out the modality for the time frame for compliance.”
A survey of credit conditions conducted by the bank indicated evidence of improved credit conditions in terms of access and terms of credit supplies.
According to Acquah, “banks are increasingly favouring credit to households in the form of consumer loans, small scale enterprises, while credit conditions for mortgages are tightening because of resource constraints in an increasingly competitive environment.”
He said provisional data available indicated that there was an increase in broad money (M2+) in the fourth quarter of 2007 compared with 17.2 percent of the fourth quarter of 2006.

how does this relate to nigerian or african banks

it relates as 3rd world banks growing a lot is not always a reason to celebrate. Unless you are a bank shareholder.

Six Nigerian banks open branches in Ghana

Published: Saturday, 2 Feb 2008

The presence of Nigerian financial institutions in Ghana is growing as six were Nigerian banks have opened branches in the capital, Accra.

Nigeria’s High Commissioner to Ghana, Mr Salisu Abdul, told the News Agency of Nigeria on Friday in Accra that the aim was part of the plan to integrate the West African sub-region economically. According to Abdul, the banks are Zenith International Bank, Fidelity Bank, Guaranty Trust Bank, United Bank for Africa, Intercontinental Bank and Ecobank Plc.

He said Nigeria and Ghana had also signed a bilateral agreement on air transport, which allowed a number of Nigerian airlines to shuttle between the two countries. Abdul named some of the airlines to include Virgin Air, Aero Contractors and Belview. He said, “Nigerians are almost involved in all sectors of the Ghanaian economy. They are engaged in manufacturing, trading, petty business and other economic endeavours.”

Abdul said the high commission last year rescued a large number of children who were brought to Ghana for various things, including prostitution.

Six Nigerian banks open branches in Ghana

Published: Saturday, 2 Feb 2008

Very good news!:cheers:

UBA Launches Europe Affiliate, UBA Capital
02.08.2008


UBA Capital (Europe), the London-based investment banking and asset management affiliate of UBA Plc – West Africa's largest financial services institution – has formally commenced business following its official launch on Wednesday in London.
The impressive ceremony witnessed by UK and African business leaders, representatives of leading investment banking firms, clients in Europe and key players in the London and African financial markets, took place at the historic Duke of Wellington Arch, Hyde Park, London.
The birth of UBA Capital was the result of the substantial equity investment by UBA in Afrinvest Ltd, a privately owned investment banking firm in London specialising in African securities.
This transaction resulted in a name change to UBA Capital (Europe) Ltd, providing UBA (and its subsidiary UBA Global Markets, one of the most innovative local investment banks and leading debt capital market originators and distributors) with a strategic presence in London from which it will be able to distribute primary and secondary securities of African issuers into Europe.
In addition, London will act as an important addition to UBA's Pan African asset management business, providing international investors with access to investment opportunities across the African continent.
As Africa's global bank, UBA has been expanding from Nigeria where it has attained dominant status, to other parts of West, East and Central Africa. The London affiliate will further extend the Bank's presence outside Africa in addition to its operations in New York and the Cayman Islands.
Leveraging the group's footprints in Africa, UBA Capital (Europe) has extended its range of products and enhanced the liquidity of its existing trade capabilities.
Based on competencies built over the years as a London-based independent investment banking firm, UBA Capital is continuing the tradition, providing specialised research and investment advice for London-based institutions interested in the African markets as well as executing services for international institutional clients seeking to deal in African securities.
In line with UBA's aspiration to be Africa's global bank providing comprehensive financial services, the mission for UBA Capital is to become the investment bank of choice for African issuers and international institutional investors.
"We are most delighted at the launch of UBA Capital. It marks a significant milestone for us as we leverage this platform for all transactions involving Africa and Africa-related businesses," Mr. Tony Elumelu, the Group Managing Director/CEO, UBA Plc, said.
UBA Plc is the largest banking group in West Africa with a balance sheet of approximately US$15bn and more than 6 million customers across the region.
It is a full service financial services institution, offering retail banking, corporate and investment banking, private equity, asset management, stock-broking and custodian services.
UBA has an expanding footprint across the African continent, and its local investment banking subsidiary, UBA Global Markets, has rapidly gained a reputation as an innovative originator and leading distributor of securities, having transacted over US$8bn in local securities in the past 18 months.
UBA is rated as follows: Fitch A+, GCR AA+ long term and Agusto & Co AA+.
The Group is listed on the Nigerian Stock Exchange and also has an unlisted GDR programme currently administered by the Bank of New York.
Managed by a dynamic team of change-drivers led by its Group Managing Director/CEO, Mr. Tony Elumelu, the bank has won many awards over the years, most recently "Africa's Emerging Global Bank" as adjudged by a panel organised by the acclaimed African Banker Magazine.

FCMB's public offer records 223 per cent subscription level

FIRST City Monument Bank Plc (FCMB) has announced the result of its recently concluded public offer with a subscription level of 223 per cent. The bank received approval from the Securities and Exchange Commission (SEC) for the basis of its allotment for the domestic offering on February 6.

FCMB returned to the capital market between October 16 and November 13, last year to raise additional funds. A total of 4.5 billion ordinary shares of 50 kobo each at N14 per share were offered for subscription while $100 million or N12.6 billion of Global Depository Receipts (GDRs) were offered internationally.

A statement released by the bank in Lagos over the weekend revealed that N167.98 billion was raised from both the domestic offering and the GDRs placed on the international market.

Foreign Investors' participation in both the domestic offer and the GDR placements was worth $428.36 million, which represents 30.85 per cent of the total subscription.

Chief Executive Officer of the bank, Ladi Balogun said "this level of foreign investment is heart-warming; while the profile of the investors, who are amongst the best fund-managers in the global financial market, is significant testaments to the acceptability of the 'FCMB story' and the level of confidence these class of investors have in the management and future prospects of the bank".

The statement also confirmed that SEC had earlier given the bank approval for the basis of allotment of the GDR in December 2007, while the underlying shares of the GDR are already listed on the Nigerian Stock Exchange (NSE).

"We expect that subscribers to the domestic offer would start receiving their share certificates and return/rejected money warrants within the next 15 working days. This is obviously the fastest completion of both a public offer and a GDR by any Nigerian bank", Balogun said.

Proceeds of the offer will be utilised in project financing, investment banking, acquisition and capitalisation of stock broking activities, leasing operations, channel enhancement, and the establishment of a training school.

FirstBank’s Market Capitalisation Hits N1tr Mark
02.13.2008


Thisday Special Release

Nigeria’s premier financial institution, FirstBank of Nigeria Plc, made history on Monday, February 11, 2008. At the close of business on the floor of the Nigerian Stock Exchange, the Bank’s market capitalisation closed at N1,039,254,191,332.50k, thus making it the first Nigerian financial institution, and indeed, the first quoted company in Nigeria to achieve that feat.
According to a statement signed by Hafiz Bakare of the Bank’s Corporate Planning & Group Coordination, the Bank achieved this result when its share price peaked at N52.25k.
Its issued and paid up share capital had increased to 19.89 billion units upon completion of its recent Public Offer, which was oversubscribed in excess of 750 per cent. The share price has continued to appreciate in the last two weeks after recording a low of N42.00 upon resumption of trading post hybrid offer.
With this development, FirstBank became the most valuable company to be quoted on the Nigeria Stock Exchange. The Bank has also demonstrated its capacity to add value to its teeming shareholders in particular and the Nigerian economy in general.
Investors in the company’s shares have recorded about 58 per cent capital appreciation since the completion of its recently concluded offer. FirstBank’s journey to this landmark success began with its Hybrid Offer, “The Big Offer” which sought to raise N100 billion from the existing and new subscribers and was lauded as the biggest and most successful in the history of public offers in Nigeria.
In its recently released nine months unaudited result ending December 2007, the Bank grew earnings by 65.1 per cent to close at N105.2 billion, compared to N63.7 billion it recorded for the same timeline in the previous year. Consequently, profit before tax grew by 70.4 per cent to close at N32.8 billion, compared to N19.2 billion recorded as at December 2006, while profit after tax recorded a 74.9 per cent growth to close at N25.9 billion.
The Bank was recently rated highest in Corporate Governance. Based on JIC Governanceplus (an associate of Moody’s Investors USA) current rating assessment, FirstBank’s industry and global ratings are the highest amongst publicly quoted banks and the top 100 companies in Nigeria.
The report, which was titled “The Basic Corporate Governance Rating Report” was prepared using publicly available information and according to the Code of Corporate Governance in Nigeria issued by the Securities & Exchange Commission (SEC) and Code of Corporate Governance for Banks in Nigeria, post-consolidation, issued by the Central Bank of Nigeria (CBN).
As part of its international business expansion, the Bank recently signed a Memorandum of Understanding with Guangdong Xinguang International Group, a Chinese financial institution, on the financing of a proposed $500 million project in Ogun State Free Trade Zone.
This is in addition to another agreement with China Construction Bank (CCB), which seeks to further strengthen the business cooperation between both parties within the framework of each party’s respective articles and memorandum of association and applicable laws and regulations.
Back to back winner of both local and international awards, FirstBank was the winner of the Emerging Markets Banking Achievement Award for Africa at the World Bank/IMF 2007 meetings, Washington DC; 2007 winner of the Best Bank in Nigeria; 2007 Best Trade Finance Bank in Nigeria and Best Foreign Exchange Bank in Nigeria presented by United States-based Global Finance magazine.
The FirstBank Group, apart from the parent bank, has nine subsidiaries under its umbrella. They include FBN Bank (UK) Limited, First Trustees Nigeria Limited, First Registrars Nigeria Limited, FBN Insurance Brokers Limited, First Funds Limited, FBN Mortgages Limited, First Pension Custodian Nigeria Limited, FBN Capital Limited and FBN Bureau De Change.

first 10 billion dollar capitalised bank...gud news

I think it is about 8.5 billion dollars

hy...it close..lol

still too small.

what do you mean

i think the largest bank in south africa is like 130bn dollars in size. these large naija banks have to merge. they seem content with being large within nigeria, maybe even large within west africa, but not beyond

look they are still growing give it time..they only got serious like 2 yrs ago...meanwhile thm s.a banks have bin there since i was little.....n the largest bank in sa has a market capitalisation of 130 or assets base

you question is significant. it is 169bn dollars in assets, not market cap. market cap it around 20bn$. that changes my criticism.http://www.icbc.com.cn/e_detail.jsp?column=ICBC+NEWS&infoid=1193625041100&infotype=CMS.STD

i read somewhere that the cbn may compel further consolidation because they had hoped many banks would have, by now, joined forces on thier own to be larger players. first bank and ecobank tried, union and some others. i know the SA bank and IBTC were successful, but these banks can do much better. the cbn has loftier goals.

there was an estimate that nigeria would be left with maybe ten banks at this time.

Signs of Nigerian lift-off

01 December, 2007

South African banks remain dominant as Nigeria’s programme of capitalisation starts to bear fruit.

On the surface, nothing much appears to have changed at the top of The Banker’s listing of the Top 100 Sub-Saharan African Banks, with the South African banks continuing to dominate with a 66.6% share of the aggregate Top 100 Tier 1 capital, 78.2% of aggregate assets and 71% of aggregate profit.

The top five places continue to be occupied by banks from South Africa but the sixth ranked bank in the Republic, African Bank, continues to lose ground (from 10th to 12th) as the effects of the Nigerian banks increased capitalisation wash through. Nineteen of the 20 Nigerian banks that feature in our listing are in the top 30. Togo’s Ecobank Transnational has moved up to 10th place from 11th last year following a 57.1% uplift in capital through share placements and loan-to-share conversion as it seeks to establish itself as a pan-African player rather than a regional one and to increase its retail banking scale.

Standard Bank, which tops the list, has continued to look to increase its footprint in the region through acquisition, the latest being those of CFC Bank in Kenya and IBTC Chartered Bank in Nigeria, each of which will be merged with the Standard Bank subsidiary in the respective country. Outside of Africa its focus has been on investment banking, with operations in the UK, the US, Brazil, Russia, Turkey and Asia but this year it has moved into commercial/retail banking in Argentina with the acquisition of BankBoston Argentina, now Standard Bank Argentina. It is an interesting market in which to take such a first step.


Chinese connection


Standard Bank was itself the subject of significant investment in late October, with the announcement of a strategic partnership with the Industrial and Commercial Bank of China (ICBC), under which ICBC will acquire a 20% share in the group through an equity investment of R36.7bn ($5.5bn). This will give ICBC customers doing business across Africa, of which there are an increasing number, access to an established banking network.

The aggregate Tier 1 capital for the Top 100 rose this year by 26.5% to $32.3bn, while aggregate assets grew 21.9% to $507.8bn and aggregate pre-tax profits increased 28% to $11.9bn. The Nigerian banks share of aggregate Tier 1 capital grew only 0.5% this year to 20.5%, while the share of aggregate assets rose to 11.1% from 8.4% and their share of aggregate pre-tax profits increased to 11.7% from 9.5%.

With an estimated 90% of Nigeria’s population unbanked, there is great scope for the provision of suitable banking services and the commensurate rewards for providing the same. Banks in Nigeria are continuing to increase their capitalisation by market placements in a buoyant market for bank shares partly to finance business expansion but also to act as a buffer against further increases by the regulator in the minimum capital requirement.

There remains the feeling that the much-reduced number of banks is still too many, and while the Standard Bank acquisition will reduce the numbers by one and possibly the discussions between First Bank of Nigeria and Ecobank Nigeria may lead to another disappearing, another round of consolidation may not be far off.

Once again this year 31 banks in the Top 100 are owned by banks from outside the region although this number may well fall if plans to bring Barclays’ African operations outside South Africa into the ABSA Group come into being.


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Nigerian banks: The race for continental supremacy

There has been a rush by Nigerian banks into the economies of other West African countries lately. Many are wondering why the sudden forays by the Nigerian financial institutions.

Nigerian banks are fast spreading to West African countries, especially Ghana and Liberia; and this, analysts have attributed to the some level of political stability and availability of other infrastructure in the West African sub-region.

The 2006 report of the African Development Bank and the Organisation of Economic Cooperation and Development showed that the consistent economic growth recorded by most African countries helped Africa to record growth in Gross Domestic Product.

The sustenance of sound macroeconomic policies in most of the countries in the sub-region in recent times, experts say, has also increased business confidence, leading to rise in private sector investment generally.

The International Monetary Fund, in September 2006, approved a debt relief for 14 countries within sub-Sahara Africa under its Multi Debt Relief Initiative to release resources for poverty-reducing measures.

The adoption of free trade, liberalisation, improved efficiency, transport and good governance in most countries of the sub-region in recent times, have been adduced as possible factors for the sudden attraction.

The Chairman, Afribank Plc, Alhaji Aliyu Belgore, observed that the expansion was a clear indication that Nigeria was ready to dominate the economic terrain of countries within the West African sub-region.

The Governor, Central Bank of Nigeria, Prof. Chukwuma Soludo, recently stated that, ”If the dominant potential of Nigeria is to be transformed, it needs the financial system to lead. Financial size has become a key success factor if any bank must play in the global market now.”

Soludo made a case for Nigerian banks when he said that their expansion into other countries on the continent was a viable way of managing their huge capital inflow from the capital market.

This is because, apart from the funds that came into the coffers of the banks through stocks, the economy also enjoyed huge foreign investments that came in en route the banks.

This was why Souldo observed, “A nation that receives more that 10 per cent capital inflow for over a sustained period of time becomes vulnerable to financial crisis.”

Finance experts have therefore, concurred with Soludo‘s observation and said that the expansion of Nigerian banks into the economies of other West African countries ”is just a natural way to manage the huge funds at their disposal.”

This is largely because, virtually all the banks that accessed the capital market in 2007 recorded over-subscription of their shares, and this, according to finance analysts, has to be managed profitably.

Soludo had also said that as a pre-requisite for any local bank to be qualified to manage the nation‘s foreign reserves, it must have been recapitalised to the tune of $1bn.

Some of the officials, whose banks have recently established presence in the West African sub-region, said that although the banks were granted permission to make foray into other countries, within and outside the continent their choice depended on the study of the prevailing environment in a holistic way.

According to some finance analysts, there are so many funds at the disposal of the banks, and so much so that would naturally drive any profit-oriented business like banking to venture beyond their local economies.

It will be recalled that Intercontinental Bank Plc, Oceanic Bank Plc, First City Monument Bank Plc, Afribank Plc, Fidelity bank Plc, First Bank Plc, Access Bank Plc, United Bank for Africa Plc, Ecobank, IBTC, Union Bank Plc and Bank PHB, all accessed the stock market to raise additional funds in 2007 alone.

All the banks raised between N50bn to N130bn on the average.

It was observed at each of their completion board meetings that usually heralded the offer openings, that they all projected the utilisation of their offer proceeds to cover branch expansion within local and sub-regional economies

The Managing Director, Afribank Plc, Mr. Sebastian Adigwe, said it would cost at least N80m to open a branch of any local bank within Nigeria.

A critical look at this figure, relative to the amount they raised from the market showed that it was not a difficult task expanding within the local environment.

Finance experts have also observed that the strength of the Nigerian currency against the legal tenders of most West African economies also stands the banks on a vantage position to venture into their economies without much to lose.

Nigerian banks are fast gaining ground in Ghana presently. Some bankers said they are convinced that the security status of the former Gold Coast was a major reason for the sudden scramble for the deposits of the Ghanaians.

The race for Ghana, analysts explained, begun in 2004, immediately the Central Bank of Nigeria made public its intention to recapitalise commercial banks in the country.

The CBN‘s announcement, according to them, led the then Standard Trust Bank, (now United Bank for Africa) into Ghana with the launch of its ”Standard Cashless Account.”

The STB liberalised banking operation in the country and aggressively took banking to the doorstep of the average Ghanaian by creating more awareness on banking.

With that, others such as Zenith Bank Plc, Guaranty Trust Bank Plc, Intercontinental Bank Plc and Fidelity Bank Plc followed suit, with more gearing up to move into the Ghanaian market.

Before the entry of the Nigerian banks into Ghana, major players in the Ghanaian banking industry were Ecobank of Ghana, which had its branch network spread in almost all the streets of Accra; Standard Chartered Bank, Barclays Bank and Stanbic Bank. These are all foreign banks.

Some Ghanaians said that the Nigerian banking system was robust with the latest technology, as they had introduced into their base the use of modern technology. They agreed that Nigerian banks had taken banking in the country to another level.

For instance, Intercontinental Bank Plc recently introduced its I-Cash Mobile and I- Cash International as well as the ATM Connect Services to bridge the distance between Nigeria and Ghana.

With that, customers could withdraw the equivalent of the money in naira from any of the bank‘s ATMs in Ghana in Cedis.

”Ghana is considerably peaceful, so, I am not surprised that Nigerian banks are storming its economy,” a staff of one of the banks said.

Ghanaians themselves seem to understand that their economy is consciously made attractive and they are, therefore, not surprised to see the sudden invasion.

According to an officer in the Office of the Accountant-General, Ministry of Finance and Economic Planning, Accra, Ghana, Mr. Adams Misbahu, the entrance of Nigerian banks into the country has brought about dynamism into the nation‘s banking system.

Misbahu said, “Our Indigenous banks, unlike before, are now becoming more friendly to their customers, knowing fully well that if they do not treat their customers right, they stood the chance to lose them because the customers could go and lodge their money with other banks that are ready to deliver more efficient services.

”We in Ghana believe that Nigerians are very adventurous and industrious, our perception about Nigerians is that of a people who would make the most of every business opportunity regardless of the risk. Nigerians are risk high takers and we will always welcome them to contribute to our economy.

“The competition has become more stiff and the Ghanaian banking industry is gradually wearing a global outlook.”

Misbahu believed that Nigerian banks had created a lot of employment opportunities for Ghanaians.

Also, a staff of the Corporate Affairs of Zenith Bank of Ghana Plc, Accra, who spoke to our correspondent on the condition of anonymity, said that beyond the normal banking practice, the Nigerian banks were also partnering with the Ghanaians in various developmental and economic projects.

But in a bid to consolidate the nation‘s banking industry, the Bank of Ghana, the country‘s central bank, last November, announced a new capital requirement for all universal banks, from the current ¢70bn to between ¢500bn-600bn.

Simultaneously, the Bank of Ghana also announced a new capital requirement for non-bank financial institutions and finance houses, which it put between ¢5bn-8bn, from ¢1bn.

However, there are apprehensions that less than 10 of the 24 banks currently operating in the country can readily meet the new capital requirement announced by the Bank of Ghana within a year, sources said.

The central bank said that the move was to make the industry internationally competitive.

However, some analysts believe that the country‘s economy might not be able to accommodate such volume of money, adding that a gradual step towards the exercise should be embraced. They stated that the banks needed about seven years to reach the $50m mark.

Banks such as Barclays, Ghana Commercial Bank, Ecobank Ghana and SG SSB can readily meet the new banking capital requirement of between ¢500bn-600bn).

But other international banks should be able to meet the new requirements, by seeking recapitalisation from their parent organisations.

i think the largest bank in south africa is like 130bn dollars in size. these large naija banks have to merge. they seem content with being large within nigeria, maybe even large within west africa, but not beyond Yes but remember, the south african banks have been around for hundreds of years, and nothing against Nigeria or any of the other countries in africa, but south africa is the country with the best infrastructure and largest economy in sub-Saharan africa, so obviously they are going to be larger banks. but, by no means is that saying that nigerian banks wont take over from south African banks, because of the seemingly unstoppable economic growth coming and that will come from nigeria with population growth, larger work forces, continued building of infrastructure, etc.
hope that answers your question??
rirwi4

Yes but remember, the south african banks have been around for hundreds of years, and nothing against Nigeria or any of the other countries in africa, but south africa is the country with the best infrastructure and largest economy in sub-Saharan africa, so obviously they are going to be larger banks. but, by no means is that saying that nigerian banks wont take over from south African banks, because of the seemingly unstoppable economic growth coming and that will come from nigeria with population growth, larger work forces, continued building of infrastructure, etc.
hope that answers your question??


True, South Africa has an enomous headstart but Nigerian banks are catching up although it is still a long way to go, we will reach the goal thanks to Obansanjo who gave the right direction.

To hell with democracy and all this stupid legislatures.
Long(er)-term leadership that is stricly bound to the rule of law and puts an emphasis on socio-economic development is better than liberal democracy in the developing world and in Africa in particular. Liberal democracy might work in Europe North and South America (especially the more European influenced countries in Latin America) but it won´t work in Africa....not as long as poverty is still rampant. Just take Egypt once democracy is installed there, you will have an Islamic state, is that what the West wants?

Look at Tunisia which is run by an autocrat for many years and is is constantly improving and getting a lot of investment. Same for Morocco which is a monarchy and therefore gives stability and certainty. Same for all the Gulf countries or Singapore which are run by family dynasties extremely successfully.

Anyway, back to the topic. Nigeria will catch up, also watch out for Angolan banks which are doing pretty fine and expanding rapidly. In ten years time the picture will look different.

The Nigerian Government is actually effectively like a Monarchy. for the past 20 or so years, every Head of State or President have been empowered by a dynasty, some call it the sokoto caliphate. The likes of Abacha, Ibrahim babaginda, Obasanjo and current president Yar'Adua would not have been in power without the support of this group.

There is no such thing as democracy in Nigeria. Take the last election, almost all the states were won by PDP, which has now formed as an arm of this dynasty.

There are people in the country that are more than capable of changing things, but until this larger dynasty is collapesd it will be hard to see progress.

Let us not forget that it took death for Abacha to leave office, Babaginda is still running around in the streets, and the only people being persecuted for their corruptions are those in rifts in the dynasty and not under it's shield.

That is exactly why the military government is no different from the civilian government we have today

People like Ribadu are fighting this dynasty and slowly it is collapsing.

Not only in Nigeria even in advanced democracy like America, it is either The kennedys, The bushs` or The clintons etc etc. But Amricans are pretty tired of the same ol` names. It either McCain or Obama this time.

^^ no there talking about dictatorships, one party state's, etc(except for nigeria, but again Tbite explains that case, i don't think america and nigeria have to much in common on the political framework ie. political dynasties in the us?????).

but seriously, that is a strange point of view? i can't believe anyone, no matter were they come from, age, race, etc, would want to give up there right to vote to a dictatorship? OK, maybe i am being a little rash, seeing as i would have no idea about what politics, etc is like in africa, never having lived there myself, but surely, if an african state puts in a PROPER(i say proper because there are a lot of "so called" democracy in africa which are in fact not "proper" democracy which leaders always end up being elected unfairly in some way. ie. Kenya, Nigeria(as said above)). democracy, it cannot fail? if you do have a democratic framework in place, it gives you a right to vote, to choose your leader? maybe you believe there is a leader that you would love to have forever, but then what happens in 5 years if it turns out there is someone else you would rather have running your country? you have already given up your right to vote and possibly your freedom if it turns out that the leader was indeed not the great man he was portrayed to be? even if he turns out to be, you never have change, always the same leader for years and years and years, i just can't see how that would work?
I'm very interested to hear your reasoning behind your idea about this Matthias Offodile?? because i believe even in africa everyone should have rights and one of those should be the right to vote!!!
rirwi4

but seriously, that is a strange point of view? i can't believe anyone, no matter were they come from, age, race, etc, would want to give up there right to vote to a dictatorship? OK, maybe i am being a little rash, seeing as i would have no idea about what politics, etc is like in africa, never having lived there myself, but surely, if an african state puts in a PROPER(i say proper ]because there are a lot of "so called" democracy in africa which are in fact not "proper" democracy which leaders always end up being elected unfairly in some way. ie. Kenya, Nigeria(as said above)). democracy, it cannot fail? if you do have a democratic framework in place, it gives you a right to vote, to choose your leader? maybe you believe there is a leader that you would love to have forever, but then what happens in 5 years if it turns out there is someone else you would rather have running your country? you have already given up your right to vote and possibly your freedom if it turns out that the leader was indeed not the great man he was portrayed to be? even if he turns out to be, you never have change, always the same leader for years and years and years, i just can't see how that would work?
I'm very interested to hear your reasoning behind your idea about this Matthias Offodile?? because i believe even in africa everyone should have rights and one of those should be the right to vote!!!
rirwi4


Rirwi4,, That´s a downside, you are right but this is why I said that Africa needs a very strict compliance to the criteria of good governance (Singapore, Malaysia etc. style). Africa needs very strong checks and balance system ("horizontal and not just vertical acoountability", very good working administration)

please read what I said carefully. I want an autocratic system that is strictly bound to the rule of law which also inludes the presidents running the office, we don´t have this is Africa. No Singapore like autocracy is anywhere in Africa, when it comes to rule of the law and HDI Index Singapore is very close to Western European countries and at times even tops them.

It is an emprically verified fact that autocracies grow more speedily than democracies.

Moreover, I never said that I am against democracy but not for current misery that still prevails in Africa (boundless poverty).

Good governance not in a democratic sense of the word but in terms of strict set of rules and norms.

Nobody can eat democracy alone, what we have in Africa is neither democracy, there is no rule of law. There are a few "electoral democracies" at best like in Ghana, Benin, Mali or Senegal but people still continue to live in (abject) poverty despite having a democratic more or less functioning system. You still have Senegalese, Malians, Beninese people seeking a "better life" like they did in the Ivory Coast when it was ruled by an autocrat or they go to smaller more or less democratic oil-rich nations to look for work or even further afield. This is the sad truth! if democractic system are so good why don´t they stay in their countries?

Africa needs fair and just rulers that put socio-economic development above anything else (which means good roads, clean cities, no open sewers, well-equipped modern hopsitals, good schools and universities, free medication from the state for every citizen, eradication of slums, access to clean water, massive social housing for the poor, lavish social welfare coverage system, access to micro-credit, a state that forces its people to work as entrepreneurs) ...believe me if wealth is spread broadly and corruption considerably reduced ethnic conflicts die down.....if these leaders are non democratic - I don´t care - if they are democratic so much the better!!! I am still waiting for them. In short, absolute pririty is ERADICTION OF POVERTY and not some silly elections that keep the status quo.

PEACE

rirwi4And do you think that someone living in the UAE, Malaysia, Tunisia Kuwait Singapore or Brunei want to change his life to make a living in countries like India which is a lot more democratic or even Mali, just to pick an African country?

Nigerian banks in global conquest
By Bukky Olajide

"WHAT holds Africa behind from making progress is just in the mind," said the Governor of Central Bank of Nigeria (CBN), Prof. Chukwuma Soludo as United Bank for Africa (UBA) Plc launches its Europe affiliate, UBA Capital.

As the governor took a look at the background, the context and the vision of UBA Capital Europe, Soludo affirmed that ultimately, part of what holds Africa behind from making progress was just in the mind.

"Only a few years ago, the consolidation of UBA and Standard Trust Bank was completed. The balance sheet of where you are today and if you project that and it grows at 50 per cent, at this rate of growth in the next 10 years, there is no doubt that you will certainly be one of the biggest not just in Africa but in the world. I can only say just keep it up," said the CBN chief.

Soludo, who attended the launch in solidarity with the bank's success, commended the Group Managing Director, Tony Elumelu and his team for the feat. The bank had established a subsidiary in New York before the opening of the UBA Capital Europe, with another still coming up in the Middle East as well as other affiliates in African countries.

Soludo, while congratulating the team stressed that each and every member of the team seems to be formidable.

"You have a very strong team. An institution can only be as strong as the pool of skills within that institution," he said.

Stressing that there was need to celebrate entrepreneurship, Soludo said whenever the public decides to disentangle themselves and move forward, they believe in their capabilities and go out to work assiduously as hard as the UBA team had done in the last few months.

His words: "There is no limit to what is possible. A new Africa is emerging. A new kind of finance for African development is also emerging. Africa is ready for business.

"What we have come to celebrate today is a testimony that if anyone can do it, there is nothing stopping Africa."

The CBN governor reiterated that the banking sector in Nigeria today, which UBA happens to be one of the leading lights, is one the fastest growing banking sector not just in Africa but the world.

Soludo said asset management had been designed to orchestrate and encourage Nigerian banks go global.

"For the first time, we are going to allow Nigerian banks to be part of the management of the nation's foreign reserves and the qualifications, including having a foreign partner," said the governor.

UBA's Chief Executive Officer, Investment Banking, Chika Mordi explained that the Europe affiliate is to serve as link between Africa and the rest of the world.

According to Mordi, UBA capital is a vehicle that is going to connect in a way that is convenient and capable of adding value to people who have interest in Africa on both sides of the Atlantic.

"It's the first effort we are making outside Nigeria in this series although UBA is already in different countries in the Sub-Saharan Africa and by coming to London which is the International financial centre of the world we are making a profound statement," he said.

The birth of UBA capital was the result of the substantial equity investment by UBA in Afrinvest Limited, a privately owned investment banking firm in London specialising in African securities.

The transaction resulted in a name change for Afrinvest, which became UBA capital (Europe) Limited, providing UBA (and its subsidiary UBA Global markets, one of the most innovative local investment banks and leading debt capital market originators and distributors) with a strategic presence in London from which it will be able to distribute primary and secondary securities of African issuers into Europe.

In addition, London will also act as an important addition to UBA's Pan African asset management business, providing to investment opportunities across the African continent.

As Africa's global bank, UBA has been expanding from Nigeria where it has attained dominant status, to other parts of West, East and Central Africa.

The London affiliate will further extend the bank's presence outside Africa in addition to its operations in New York and the Cayman Islands.

Leveraging the group's footprints in Africa, UBA capital (Europe) has extended its range of products and enhanced the liquidity of is existing trade capabilities.

Based on competencies built over the years as a London-based independent investment-banking firm, Afrinvest had become the leading provider of African securities trading to the European investment community in emerging markets.

UBA capital is continuing in this tradition, providing specialised research and investment advice for London-based institutions interested in the African markets, as well as, executing services for international institutional clients seeking to deal in African securities.

In line with UBA's aspiration to be Africa's global bank providing comprehensive financial services, the mission for UBA capital is to become the investment bank of choice for African issuers and international institutional investors.

"We are most delighted at the launch of UBA capital. This marks a significant milestone for us as we leverage his platform for all transactions involving Africa and Africa related businesses," said Tony Elumelu, the group managing director and chief executive officer, UBA.

UBA, with a balance sheet of approximately $15 billion and more than six million customers across the region is a full service financial services institution, offering retail banking, corporate and investment banking, private equity, asset management, stockbroking and custodian services.

UBA has on expanding footprint across the African continent, and its local investment banking subsidiary, UBA Global Markets, had gained a reputation as an innovative originator and leading distributor of securities having transacted over $8 billion in local securities in the past 18 months.

The brief ceremony witnessed by UK and African business leaders, representatives of leading investment banking firms, clients in Europe and key players in the London and African financial markets took place at the historic Duke of Wellington Arch in London.

Access Bank's balance sheet hits N750b
By Gbenga Agbana

THE balance sheet size of Access Bank has hit N750 billion just as the bank's market capitalisation hits N384 billion with the listing of 9.2 billion additional shares on Monday on the Nigerian Stock Exchange (NSE).

The bank's Managing Director, Mr. Aigboje Aig-Imhoknede, who stated this at the presentation of the facts behind the figures at the NSE yesterday, said the growth would be sustained as the bank already had an after tax profit of N8.9 billion in its third quarter ended December 31, 2007.

He disclosed that all forecasts in the bank's prospectus in the recently concluded offering would be surpassed at the end of the current financial year, going by what the bank has recorded as at yesterday.

To sustain the performance and even surpass it in the next financial year, he said the bank had concluded plans to establish more branches locally and establish the bank's presence in Zambia, Congo, Rwanda and other African countries.

Besides, he said the bank would set up some non-bank subsidiaries like registrars, asset management companies, mortgage housing finance company and insurance brokerage company.

The bank had listed 9.2 billion new shares on the floor of the NSE on Monday, bringing to 16.14 billion the total number of the bank's shares listed on the floor

With the conclusion of the offer, the bank has joined the leagues of the most capitalised companies with a shareholders' fund of N166 billion.

The new shares was the outcome of a successful public offer undertaken by the bank in August 2007, which recorded 341 per cent subscription level.

Meanwhile, apparently reacting to the crisis recently rocking Transcorp Plc over the government's decision on the sale of NITEL to the company, investors dumped the company's shares yesterday as they sold 132.5 million units valued at N565.6 million in 355 deals.

In all, 1.12 billion shares worth N14.1 billion changed hands down from 1.2 billion shares valued at N16.35 billion exchanged on Monday.

The insurance sub-sector sustained its position as the most active yesterday in volume terms, with 498.1 million shares valued at N3.1 billion, followed by banking, where 244.1 million shares worth N6.5 billion changed hands and the conglomerates sub-sector ranked third with 138 million shares worth N736.3 million.

International Energy Insurance Plc sold the highest volume in the insurance sub-sector, followed by NEM insurance Plc with 59 million shares worth N332.6 million.

In the banking sub-sector Diamond Bank traded the highest volume with 39.8 million shares worth N861 million, followed by Platinum Habib Plc, which sold 24.6 million shares worth N739.9 million.

Transnational Corporation Plc (Transcorp) was the most active stock in the conglomerates sub-sector with 132.5 million shares valued at N585.6 million, trailed by Unilever Nigeria Plc, with 3.5 million shares worth N87 million.

But with what I have said, the perception of Nigeria has immensely corrupt is wrong. it is possible for anybody to be elected in the Nigerian Government.

There, are issues of rigging etc, but the fact remains that the reason the Government can continue to shape the picture of things in the country without fail, is due to their control of resources and thus money. This itself highlights that a dynastic government is in place. I believe it was Ibori that funded Yar'Adua's campaign. The potential of corruption in Nigeria seems to be fueled by the economy itself, and without funding those who seek change cannot reach office. so until corruption has withered, there will not be a president that is truly legit.

anyways back to the topic "Banks

damn UBA is making waves

Union Bank Nigeria, UK to partner on business funding
From Mohammed Abubakar and Emeka Anuforo, Abuja

UNION Bank of Nigeria Plc has spoken of plans to partner with Union Bank of United Kingdom to fund good and viable business initiatives that would lead to the growth and development of the Nigerian economy.

At a dinner to introduce members of the UK board of directors of the bank to the Nigerian customers in Abuja Wednesday night, Group Managing Director of Union Bank Plc, Mr. Barth Ebong commended the UK branch for its initiative in venturing into international banking and for choosing to come down to Nigeria.

Ebong stressed, "we believe you will have the opportunity to provide home grown services. The parent company is ready to assist all international business in all spheres of the economy.

"Also the bank is prepared to partner with Union Bank UK to fund good and viable business initiatives that would lead to the growth and development of the economy.

In a speech at the dinner, Managing Director of Union Bank Plc, UK, Dr. Kola Ali stressed that the bank had achieved quite a lot in terms of protecting the interests of Nigerian businessmen and women.

He explained, "we have existed in UK for the past 25 years, we are licensed commercial bank like the Barclays, HSBC and Lloyd Banks amongst others. We have achieved quite a lot in terms of protecting the interests of Nigerian businessmen and women.

"UB UK Plc is the foremost Nigerian in UK as at today, even though, we have other banks in UK that have been making so much noise in UK but we have our difference, which has to with the way we do our business.

"While the parent bank in Nigeria is 90 years today, it has impacted positively on Nigerians. For 25 years, we have assisted Nigerians and Nigerian business. Our visit to the country is not only to introduce the directors but also to contribute to the survival of the country's economy. A lot of our deals in the United Kingdom are to ensure that Nigerian business grows.

"We are assisting Nigerians in Diaspora. We do hope to begin to take stock of our achievements in the last for 25th anniversary later in the year. It is the period that will afford us the opportunity of rolling out our achievements."

FirstBank gets new international rating

FIRSTBANK Nigeria Plc has received a new rating from Standard and Poors (S&P), an international rating agency.

A statement issued by the bank in Lagos recently, said that S&P assigned the bank the "International Long-term" rating of "BB-", which according to it, was the best rating any Nigerian company could get, being the sovereign rating of the country.

"With this, FirstBank remains a national icon after over a century of operations with significant changes in the operating environment and the competitive landscape.

"The ratings of FirstBank, in which it was also assigned a short-term rating of "B" and a stable outlook, reflect the bank's strong market position as Nigeria's leading financial services provider,'' the bank said.

According to the statement, S&P described FirstBank's "position as one of Nigeria's leading financial services providers is largely due to its extensive branch network and strong franchise, which has also afforded the bank a robust funding and liquidity.

"The high credit and operational risks associated with operating in Nigeria are partially mitigated by FirstBank's sound risk governance, which is progressing toward international standards", the agency said.

S&P said that the bank's stable outlook reflected the opinion that FirstBank would maintain a leading position in the Nigerian banking industry, widening its franchise and carving a strong position in retail banking.

The bank said that this would be the second time it would be assigned a foreign currency rating, otherwise known as the international rating.

It said that Fitch Ratings, one of the world's foremost rating agencies, had assigned the bank the international long-term and short-term ratings of "B+" and "B" respectively.

Nigerian banks expanding into Africa and beyond, this is what a I want to see!!:cheers::cheers:


Nigeria´s Access Bank to Open Branches in Zambia, Congo, Côte d´ivoire and UK

From Simon Kolawole in London, 03.05.2008

Access Bank Plc of Nigeria will soon have branches in Zambia, Congo, Cote d’Ivoire and other African countries as part of its aggressive pan African expansion vision.
The bank will also open its London, UK branch this year in its attempt to be a reference point for African banks operating in the global market.
These plans were revealed to the bank’s investors yesterday at its inaugural forum for Global Institutional Investors held at The Dorchester, London – the first such forum for foreign investors by a Nigerian bank.
Mr. Aigboje Aig-Imoukhuede, Access Bank’s Group Managing Director/CEO, said the bank was targeting post-conflict African countries such as Congo, Rwanda and Burundi for expansion because of the potential for political stability and economic growth.
“After a war, experience shows that the probably of another war is lower. This offers a good ground for investment and growth,” he said, pointing out that Zambian government officials recently paid a visit to the government of Nigeria because of the investment Access Bank is pumping into the economy.
Already, the bank is in Sierra Leone and The Gambia – and it is currently rated one of the top four banks in The Gambia even though its foray into the country is barely up to a year.
Aig-Imoukhuede told the audience, representing over 200 foreign institutional investors in the bank, that Access Bank’s target was to be one of the top five banks “out of Africa” that will compete favourably with HSBC, one of the world’s largest commercial banks, “in the next 20 to 30 years”.
He also said because of the recruitment policy of the bank and its emphasis on human resource development, “the bank will in the next five years boast of over 6000 employees in its global operations that will be rated among the best and brightest not just in Africa but all over the world”.
Explaining the rationale behind the investors’ forum, he said a similar event is held for local investors in Nigeria every year and there also was the need to carry along the foreign investors who hold over 15 per cent of the bank’s stocks.
“The market is very competitive,” he said. “If you do not communicate effectively with your investors, you will get punished. Investors will certainly reward those who communicate well with them.”
He said the bank was working in conjunction with Africa Practice and Financial Dynamics (APFD) to establish a global-standard investor relations profile.
“This marks a milestone in the bank’s development and commitment to applying best practice in the way we communicate to our stakeholders, it also reflects the bank’s increasing international profile and fast expanding international investor shareholder base,” he said.
He presented a progress report on the bank, announcing that from 10,000 shareholders in 2002 when the current management took over the old Access Bank, there are now over 500,000 shareholders with forecasts that this will grow to 2.5 million in the next two years.
The bank’s shareholders funds have also grown from N25 billion in 2005 to over N160 billion last year, he said.
“By all indices, we are the most efficient bank in Nigeria,” he said, informing the audience that the bank was recently named joint winner of the Brand of the Year Award by THISDAY.
“We were named along with Coca-Cola, which is the kind of company we like to keep,” he said.
“In the years to come, we will not only be an awesome competitor, we will be an incredible competitor,” he declared.

excellent News

Ecobank acquires Malawian bank

THE Ecobank Group has acquired a majority interest in Loita Bank Malawi, a subsidiary of Loita Capital Partners International. The bank will change its name to Ecobank Malawi.

This acquisition extends the Ecobank Group's reach to Southern Africa.

Loita Bank Limited has been a long-standing provider of financial services, specialising in structured finance and trade finance services in Malawi.

"Moving to Malawi is in line with our overall objective to expand the operations of Ecobank across Central Africa," said Mand Sidiba, chairman, Board of Directors of the Ecobank Group.

"With its entry into Malawi, Ecobank is determined to develop Ecobank Malawi into a leading and profitable bank that will play its role in the economic development of the country," said Arnold Ekpe, Group Chief Executive Officer.

Albert Essien, Ecobank Regional Director in charge of Eastern and Southern Africa, added: "Ecobank will seek to provide enhanced products and services to customers in Malawi."

"In order to expand our range of services, we have sought to introduce a leading and dynamic African bank as our partner. We are pleased that our discussions with Ecobank in the recent months on how to better serve the community in Malawi have led to this important investment," said Justin Chinyanta, chairman, Board of Loita Bank.

Hipolyte Mushi, Managing Director, British Petroleum in Malawi, and a customer of the bank, said the development was good for the Malawian economy, as it would bring about healthy competition in the banking industry.

First Inland Bank targets 200 branches by 2010

THE management of First Inland Bank last week in Lagos hinted of plans to grow its branch network by 200 across the country within two years in a bid to bring its array of products and services closer to the populace.

Speaking at the opening of a branch in Lekki, Lagos, the bank's Managing Director and Chief Executive, Mr. Okey Nwosu, noted that the new branches would further enable First Inland Bank contribute more meaningfully to enhance savings culture among Nigerians.

Nwosu also restated the bank's desire to play a more significant role in enhancing consumer credit, which is almost non-existent in the country today because of lack of database.

The re-emergence of the Middle Class in the country, he believes, provides a springboard for most banks to extend credit to that class of people, made up of young, mobile and productive individuals.

Contrary to complaints among a lot of people that Nigerian banks shy away from extending credit, Nwosu lamented that the bad experience of the past dictated that the banks should be more careful, especially in the absence of a credible database or credit bureau and the poor state of infrastructure in the country.

Shareholders, he told the gathering, would not want to be told that the money sourced from the capital market was lost, hence the need to do proper due diligence to ensure that the business being extended credit could repay the principal and interest on the loan.

He, however, assured the gathering that the future remained bright for First Inland Bank, even as it moved to take its range of products beyond the shores of Nigeria to other parts of Africa and beyond.

The new branches, Nwosu believes, will help the bank reach out to more of the un-banked populace, especially with technology-based products and services, including automated teller machines.

FCMB introduces central processing centre

By Femi Adekoya

TO further enhance effective service delivery to its customers, First City Monument Bank Plc (FCMB) has introduced a production platform, Central Processing Centre (CPC) - a transaction in which customers do not require direct contact with the processors.

Under this new technology, initial contacts for all transactions for which the customers do not require an immediate output or direct contact with the processors, are carried out at the branch, while maintenance on customers' accounts and transactions processing on products are done back-end via an interface mechanism on a workflow engine and the banking application.

Explaining the nature of the new technology to journalists recently, the bank's Group Head of the Central Processing Centre and Shared Services, Mr. Kayode Adigun said that the CPC was a dream unique to FCMB designed to reduce paperwork, less distractions and drastic reduction in errors, effective control model, better turn around time on processes/transactions as well as reduce work induced stress on staff.

According to him: "In the old order, we were just doing exactly what other banks are doing now. We collect transactions from the customer and process them at the branch. Now, we employ cutting edge technology to process those transactions in the 'factory,' in a faster, more accurate and more efficient way.

"With the introduction of CPC, our customers now become the focus of the staff in our 'showrooms' or branches, not transaction processing. They now enjoy faster, cheaper, error free, value added services from staff. In addition, our staff are able to enjoy better work-life balance which further enhances their creativity," he added.

He further said that the new technology was in line with the bank's dream of transforming the bank and closing the profitability, services and efficiency gap between FCMB and existing banks.

Adigun noted that although, all of the bank's branches in Lagos State were embedded in the CPC technological platform, full integration of the technology in its banking application nationwide, will be done in April.

He added that another CPC platform would be set up in April to serve as a back up for the main infrastructure to work against risks and mitigation.

On the benefits accrued from the CPC technology, Adigun said that within the first one month of its integration, the bank's ledger balance grew by 17 per cent, while its account balance grew by about 22 per cent across its network.

Furthermore, the over-subscription recorded in the recently concluded public offer of the bank was attributed to the innovation of the CPC while processing of the offer documents was also enhanced by the technology.

Corroborating the views of Adigun, the bank's head, Business Process Improvement Unit, Mr. Olaitan Aina said, "Our workers are no longer transaction processing people but rather customer-oriented people as the innovation will enable them work more effectively within a shorter period of time. The difference between now and before is that emphasis have shifted from mundane activities to the customers. Similarly, our workers now have less work and burden on them, therefore, allowing them to focus on customers.

"Banking functions like the financial process, security of customers' asset and advisory services have been put into the CPC project in order to encourage and improve customer satisfaction," he added.

GTBank, Zenith Top KPMG Customer Survey






By Crusoe Osagie, 03.26.2008

A survey by KPMG professional services has named GTBank and Zenith Bank as the nation’s best banks in terms of customer satisfaction. While GTBank led in retail banking, Zenith Bank retained its top position from last year as the best in corporate banking.
In the retail-banking segment, the survey released yesterday, showed that GTBank led other banks in customer satisfaction with 80.03 points. Zenith Bank and Intercon-tinental Bank followed in the second and third positions respectively.
Zenith Bank however led in the corporate banking segment, while GTBank and Stanbic-IBTC followed in the second and third positions.
The 2008 survey was expanded to achieve more national coverage and to incorporate feedback from the retail segment in addition to the corporate customers on which the 2007 edition was focused.
The survey canvassed the opinion of about 5,000 individuals and 260 businesses on the quality of service delivery by Nigerian banks.
In the 2008 survey, service quality displaced financial stability as the most important factor in the choice of a bank by Nigerian customers.
The survey, which was conducted over a period of seven weeks in January and February, was carried out in eight locations across the country - Aba, Abuja, Calabar, Ibadan, Kano, Kaduna, Lagos and Port Harcourt.
Retail customers were randomly selected in each location while corporate customers were sampled from the 2007/08 edition of the top 500 companies in Nigeria published by GoldStar Publications.
In the survey, a deliberate attempt was made to ensure that the corporate respondents included the biggest companies in each sector of the economy.
Feedback was through interviews with each organisation’s chief finance officers, finance directors, treasurers and other personnel playing a major role in the banking relationship interface.
According to the survey, while respondents expressed a generally good level of satisfaction with the banks, there was minimal differentiation in ratings below the top two positions.
“This represents an opportunity for banks in that band to break away by seeking ways to further improve their existing service delivery frameworks and providing a ground- breaking experience.
“In the retail banking sector, GTBank came ahead of the other banks, coming first in three categories, with Zenith Bank following closely behind. Diamond, on the other hand, was first in one category and third in three other categories,” the survey stated.
According to the survey, “Zenith Bank held tenaciously to its position as the most customer focused bank for the corporate banking segment. Following closely in the second position was GTBank and in the third place was Stanbic-IBTC.
“Despite the fact that corporate banking customers generally expressed above average satisfaction (about half of the banks obtained a rating of 75 per cent and above), corporate customers appeared slightly less enthused this year. It was observed that there was a general drop in the satisfaction rating among the top ten customer-focused banks in this segment compared with last year’s figures.”
The survey showed that Zenith Bank’s corporate customers rated the bank best in two customer service areas - transaction methods and systems and convenience - where the bank took the lead position.
In addition, the bank came second in two other categories - customer care and product/ service offerings.
Three other banks - GTBank, Diamond Bank and Afribank - took the first position in the customer care, product/service offering and pricing categories respectively.

Zenith Bank partners Rivers on infrastructure


From Business desk
Friday, March 14, 2008


Zenith Bank Plc is set to replicate its private/public sector partnership (PPP) initiative in Rivers State as the bank’s management last week in Port Harcourt, Rivers State signed a Memorandum of Understanding (MOU) to partner the state in its infrastructure development and vision to make Port Harcourt a mega city, with the reconstruction of the Trans Amadi Industrial highway in the state capital.

The adoption of the model with the Lagos State government in 2006, resulted in the reconstruction of Ajose Adeogun Street in Lagos which remains one of the most beautiful streets on the Victoria Island , till date.

Speaking at Government House, Port Harcourt during the brief ceremony, the managing director/chief executive of the bank, Mr. Jim Ovia said that Zenith Bank was willing and ready to strengthen its partnership with Rivers State government because experience both at the federal and state levels has shown that it was the only viable model for developing the country’s infrastructure.

Ovia said the bank’s intention was to make the ever-busy stretch of the road a model with the most modern facilities, including covered drainages, well maintained lawns and unfailing street lights, side walks among others.
Other areas of collaboration in the partnership also highlighted include e-govt and state-of-the-art ICT centre.

In his response, the Rivers State governor, Rotimi Ameachi commended the bank for the initiative stating that Zenith Bank has built for itself a towering image as a very public- friendly institution.
Zenith Bank has maintained the leadership role in corporate social responsibility and only last year spent N1 billion on the execution Ajose Adeogun road project.

The bank has been at the forefront of Corporate Social Responsibility initiatives in Nigeria . Last year, the bank emerged the most corporate socially responsible bank in Africa from survey conducted by African Banker magazine right on the heels on a similar endorsement by ThisDay newspapers which awarded Zenith Bank the Most corporate socially responsible company in Nigeria.

Independent Forecasts and Competitive Intelligence on Nigeria's Commercial Banking Industry

(http://www.researchandmarkets.com/reports/c89073) has announced the addition of Nigeria Commercial Banking Report Q1 2008 to their offering.

The Nigeria Commercial Banking Report provides independent forecasts and competitive intelligence on Nigeria's commercial banking industry.

From Q108 we will be calculating the Commercial Banking Business Environment Rating (CBBER) for each of the countries surveyed by BMI. This will permit a more systematic and comprehensive comparison of the conditions within the banking industries of the various countries than was possible in the past. For each country, it will also facilitate a comparison of the conditions within the banking sector and conditions prevailing in other sectors.

Nigeria's overall CBBER is 48.0. The equivalent figures for the USA and the eurozone are 84.8 and 81.4, respectively. Nigeria's CBBER is in the upper bottom-half of the countries in the Middle East and Africa surveyed by BMI.

Within the CBBER, the most important aspect is the (banking) market element of the limits of potential returns. This element accounts for 42% of the overall CBBER. Nigeria's rating for this element - 48.8 - is almost exactly equal to the overall CBBER, and only slightly higher than the country element of the limits of potential returns - 44.3. This indicates that although the banking sector is not especially large or highly developed the extent of its development as a sector is nonetheless roughly on a par with the general wealth, stability and financial infrastructure of the country. This reflects the small size of the total assets of Nigeria's banking sector relative to other countries. Moreover, although growth rates will be high, the absolute growth in total assets and client loans during the 2007-2012 forecast period will be inhibited by the current small base from which it is growing.

The CBBER highlights clearly some of the factors that are holding back Nigeria's banking sector. One is the extremely low level of per-capita GDP (which is exacerbated by the uneven distribution of income). Another is the potential volatility of GDP and the Nigerian economy more generally. Figures of Q307 point to higher growth for the Nigerian economy, although the potential for inflation remains. Recent figures from the third quarter are broadly in line with our own views for Nigeria, although we have raised our 2007 real GDP growth estimate to 5.8%. We forecast a real GDP growth rate of 9.2% for 2008. Real GDP growth was driven by the non-oil sector, which grew by 9.5% in Q307 and increasingly accounts for a larger share of total GDP (82% in Q307 at 1990 constant prices). We see this trend continuing into Q407 before undergoing a seasonal dip in Q108, and therefore estimate a Q407 real

GDP growth rate of 6.1%, continuing the trend for relatively high growth rates in the fourth quarter of the year. The trend towards less dependence on the oil sector and the government's 2008 budget, which included a medium term plan for dealing with oil market volatility are both healthy signs for Nigeria's longer term prospects.

There is good reason to worry about inflation in 2008, and we are particularly concerned about inflation pressures emanating from a growth in 2008 state government expenditure, in response to a surge in oil revenues flowing to state coffers from the federal government. The federal government was expected to transfer almost US$6bn of oil savings to state governments, and depending on how the state governments allocate the revenue, this could result in an inflation spike via a liquidity surge. We continue to forecast significant upside potential to the naira and have revised our 2008 year-end forecast to NGN114.0/US$, on the back of projected further inflation risks.

For more information visit http://www.researchandmarkets.com/reports/c89073

S&P Africa 40 Index: Intercontinental listed among top 10 banks in Africa
Thursday, April 17, 2008

Intercontinental Bank Nigeria Plc has emerged one of the top 10 largest and most liquid companies in Africa, according to a recent ranking of Standard & Poor's (S&P).

The ranking was based on S&P’s three newly launched benchmark and investible indices designed to provide investors with access to Africa's developing equity markets, as well as being a measurement tool for the performance of these markets.

Photo: Sun News Publishing

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The indices aim to capture 80 percent of the total market capitalization of each country and thus provide investors with a comprehensive benchmark on African markets, according to S&P.

The S&P African Frontier Index gained over 52 percent over the last three years, while the S&P Pan-Africa Index has gained over 18 percent in the same period, according to the company.

The third new offering is the S&P Africa 40 Index, designed to provide tradable exposure to 40 of the largest and most liquid companies that operate purely in Africa. Companies must be domiciled in Africa or have the majority of their assets and operations in Africa.

The index is dominated by companies from the financial, materials, telecommunications and industrial sectors, with MTN Group (South Africa), Orascom Construction (Egypt), First Quantum Minerals (Zambia) and Standard Bank Group (South Africa) and Intercontinental Bank (Nigeria) among the largest constituents.

On a historical basis, the S&P Africa 40 recorded returns of 36.35 percent from March 2007 to March 2008, and 49.78per cent annualized on a three year basis, according to S&P.

The S&P Pan Africa Index covers 12 African markets: Botswana, Cote d'Ivoire, Egypt, Ghana, Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia and Zimbabwe.

The S&P Africa Frontier Index covers eight smaller frontier markets from sub-Saharan Africa, including Botswana, Cote d'Ivoire, Ghana, Kenya, Mauritius, Namibia, Nigeria and Zimbabwe.

To further consolidate its dominance on the African and global scale, Intercontinental Bank will on Thursday unveil a new banking service that will take wealth management to another level in the country.

The bank has created a Wealth Management Group that is equipped to provide upscale and world class services in the area of investment management, financial planning, retirement and estate planning for its customers.

The bank’s Group Chief Executive, Dr. Erastus B O Akingbola, said the bank is poised to surpass this record.

‘‘We are encouraged by our drive, vision and capacity to double, year on year, all the performance indicators of the bank. We intend to beat our record and we shall,’’ he said.

It would be recalled that Intercontinental Bank is the only Nigerian bank to be listed among top 500 financial institutions in the world.

FACTBOX-Nigeria's fast-expanding banking sector

May 30 (Reuters) - Analysts question whether all Nigerian banks will be able to manage risks amid explosive growth on the back of high oil prices, an expanding middle class and corporate lending appetite.

For an ANALYSIS story -- Stellar Nigerian banking growth brings high risks -- double click on [nID:L29322734]

Here are some details on 15 of Nigeria's leading banks. Please note financial years vary.

ACCESS BANK ACCE.LG

One of Nigeria's fasting growing banks, with more than 80 branches around the country. Began operations in 1989. Announced in May it had bought stakes in Banque Privee du Congo, Rwanda's Bancor Bank and Omnifinance Bank of Ivory Coast.

Posted profit after tax of 8,994 million naira for the nine months to end-December, 2007, up 177 percent on previous year.

AFRIBANK AFRB.LG

Commercial and retail bank with more than 250 branches. Began operations in 1960 and was once one of top ten in Nigeria by assets. It is seen as a potential takeover target.

Posted profit after tax of 7,511 million naira for the nine months to Dec. 31, 2007, up 207 percent on previous year.

DIAMOND BANK DIAM.LG

Focused on commercial banking since starting operations in 1991, it is seeking to expand its retail business from a current 132 branches in effort to improve margins.

Posted profit after tax of 9,573 million naira for the nine months to Jan. 31, 2008, up 107 percent on previous year.

FCMB FCMB.LG

Pioneer investment bank which started operations in 1983 serving corporate clients, it opened its doors to retail customers in 2001. Continues to generate fees as advisor on capital raisings but seeking to expand in retail sector.

Posted profit after tax of 8,995 million naira for the nine months to Jan. 31, 2008, up 153 percent on previous year.

FIDELITY BANK FUMB.LG

Started as a merchant bank in 1988, converting to commercial banking just over a decade later and becoming a universal bank in 2001. Plans to expand in oil and gas financing and push ahead with significant retail branch expansion.

Posted profit after tax of 9,344 million naira for the nine months to March 31, 2008, more than triple the previous year.

FIRST BANK FBNP.LG

Nigeria's oldest bank, incorporated in 1894 with a head office in the United Kingdom, it remains the country's most profitable with more than 400 branches and ATMs. Seen as potential market leader in retail lending.

Posted profit after tax of 25,922 million naira for the nine months to Dec. 31, 2007, up 75 percent on previous year.

GUARANTY TRUST BANK GTB.LG

Focused on retail and corporate banking, it began operations in 1991. Quick to introduce mobile, telephone and internet banking in 2002 it has been aggressively rolling out new branches. Has subsidiaries in Gambia, Sierra Leone and Ghana.

Posted profit after tax of 11,808 million naira for the nine months to Nov. 30, 2007, up 57 percent on previous year.

IBTC CHARTERED BANK IBTC.LG

IBTC began operations in investment banking and asset management in 1989 before merging in 2005 with Chartered Bank and Regent Bank, bringing retail and commercial capabilities.

South Africa's Standard Bank (SBKJ.J: Quote, Profile, Research) bought control of IBTC last August. The bank has handled some of Nigeria's largest equity capital raisings.

Posted profit after tax of 4,509 million naira for its half-year to Sept. 30, 2007, up 38 percent on previous year.

INTERCONTINENTAL BANK INBK.LG

A pure merchant bank when it began operations in 1989, it has become a major commercial player in the oil and gas, and telecoms sectors. It is also expanding its retail business, aiming for close to 300 branches.

Ranked among the 1,000 largest banks in the world, it is in technical partnership with France's BNP Paribas (BNPP.PA: Quote, Profile, Research) in the management of Nigeria's foreign reserves.

Posted profit after tax of 11,317 million naira for its half-year to Aug. 31, 2007, up 73 percent on previous year.

OCEANIC BANK OCBK.LG

Focused on retail banking, it began business in 1990 and has expanded rapidly with a broad range of consumer products. Commercial lending primarily to real economy, manufacturing and mining firms, as well as to federal and state governments.

Posted profit after tax of 8,847 million naira for the three months to Dec. 31, 2007, up 153 percent on previous year.

BANK PHB PLAT.LG

Formed out of a merger in 2005 between Platinum Bank and Habib Nigeria Bank, it is a commercial bank heavily involved in public sector finance and has been aggressively growing its retail client base.

Posted profit after tax of 14,846 million naira for the nine months to March 31, 2008, up 229 percent on previous year.

SKYE BANK SKYE.LG

Created by the merger of five banks in 2006, it is full service bank offering real estate development finance, public sector banking and has been developing corporate banking in the oil and gas, and telecoms sectors.

Posted profit after tax of 7,663 million naira for second quarter to March 31, 2008, more than four times previous year.

UBA UBA.LG

Originally founded in 1961, United Bank for Africa merged with Standard Trust Bank in 2005 and aims to lead growth in consumer finance, develop private/public sector financing and expand across Africa.

Posted profit after tax of 18,420 million naira for its half year to March 31, 2008, up 71 percent on previous year.

UNION BANK UBNP.LG

Established in 1917, previously owned by Barclays (BARC.L: Quote, Profile, Research), it has a broad, loyal customer base but is seen as slow to respond to market changes. Global banks have expressed interest in taking a strategic stake.

Posted profit after tax of 13,500 million naira for its half year to Sept. 30, 2007, up 60 percent on previous year.

ZENITH BANK ZETH.LG

Focused on low-cost commercial, public sector and retail deposits and lending to low-risk large corporates, it has built a reputation for high asset quality and is pushing ahead with a rapid roll-out of new branches across the country.

Posted profit after tax of 33,323 million naira for its 9 months to March 31, 2008, up 137 percent on previous year

mm

how do we mobe this to the new nigerian section

Good point OFFODILE. put socio-economic above everything else.