About time! This will stabilize commodity prices.

Africa prospects lure investors, but is it ready?

Wed Jul 7, 2010 2:24am EDT Print This Article | Single Page [-] Text [+]
Ethiopia and Rwanda are among the smaller African economies seen as promising. They show how previously ignored countries scarred by war are emerging as possible investment magnets alongside those such as Ghana, a relatively stable democracy which is soon to become an oil producer.

There are risks, though, with concerns over political stability even in bigger economies such as Nigeria and Kenya.

Africa experts underline the fact that new mineral riches have rarely been shared widely, and suggest reliance on such income for national coffers could discourage establishing tax bases that would put states on a sounder footing.

"Where I think the real caution has to come in is the quality of the growth," said Patrick Smith of the Africa Confidential newsletter. "It would be pretty silly to say success is certain."

A big influx of investment funds could in itself pose a problem for African countries less prepared to cope than those in other rapidly growing regions that have felt the pain of such flows in the past.

"Africa has no experience of huge capital inflows," said Renaissance's Jennings. "Under the scenario I'm painting, the capital inflows will be way above and beyond the ability of those countries to absorb them."

Most African countries have small, illiquid markets and little financial infrastructure, raising the chances of economic distortions and asset bubbles that could lead to currency crises and long-term damage.

"People look at how certain African economies have been getting their act together and there is a risk you will get significant capital inflows," said Mohamed El-Erian, chief executive of PIMCO, the world's largest bond investor.:cheers:

February 08, 2011 |
(www.abndigital.com)
Eleni Giokos speaks to Samir Gadio from Stanbic IBTC looking at:
EuroBond Performance
Naira
L36KAQU1aWk

Nigeria’s Amcon to Start New Phase of Bank Debt Purchases (2)
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By Vincent Nwanma

Feb. 22 (Bloomberg) -- Asset Management Corp. of Nigeria, a state-owned company, is seeking approval from the central bank to start the second phase of its program to buy bad debts from banks, Chief Executive Officer Mustapha Chike-Obi said.

“Non-performing loans to be purchased under the second phase will be from the healthy banks and others we missed in the first phase,” Chike-Obi said in a telephone interview from Lagos today.

Amcon, as the company is known, on Dec. 31 signed debt purchase agreements with 21 of Nigeria’s 24 banks and issued 1.04 trillion naira ($6.8 billion) of so-called consideration bonds that are not tradable to buy non-performing loans from them. The corporation will begin negotiations with borrowers of the debts, he said.

The Central Bank of Nigeria in 2009 bailed out the banking industry with 620 billion naira and fired eight bank chiefs after a debt crisis threatened it with collapse.

Amcon delayed issuing 1.5 trillion naira of bonds on Jan. 31 because it had not obtained all regulatory approvals, Foluke Dosumu, executive director for finance, said that day. Part of the debt will replace the consideration bonds and will be tradable.

“The hard deadline” for the bond issuance is March 31, while the recapitalization of the bailed-out banks will be completed in the second quarter, Chike-Obi said today.

The Nigerian Stock Exchange All Share Index climbed for a fourth day, rising 0.1 percent to 26,747.04 by the 2:30 p.m. close in Lagos, according to figures e-mailed today by the bourse.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

Private equity firms go for Union Bank, Afribank
MONDAY, 21 FEBRUARY 2011 00:00 JOHN OMACHONU

The Nigerian banking landscape will change drastically over the next few days. This week, a raft of Memorandum of Understanding (MoUs) will be signed following major acquisitions by three local banks and two private equity firms.

Access bank, one of the banks in the deals, will have a name change while AfriBank and Union will come under Vine Alliance and Capital Alliance respectively. Both private equity firms will become the first to foray into Nigerian mergers and acquisitions (M&A) market since the evolution of the industry in the country; raising the prospect for other private equity firms’ interest in future M&A deals in the banking industry as bankers anticipate more consolidation in the banking space.

Capital market sources said they had been expecting a move by private equity firms and were not surprised they are in the fray.
“The two equity firms had to make a move and this seems like a decent one,” says a stock broker. “It is hard to see what triggered them but it seems very proactive”.

Analysts say irrespective of how each deal plays out, it now seems certain that the Nigerian banking sector is set to re-enter one of its frequent periods of capital market activity.

Access Bank, FirstBank and FCMB are the other new investors, respectively, in the Intercontinental, Oceanic, and Finbank historic M&A deals which mark a significant aspect of the banking reforms started two years ago by the Central Bank of Nigeria (CBN), BusinessDay investigations can now reveal.

The long-mooted deals by the banks are described as a ‘confidence booster’ for the industry by analysts who say they expect them to usher in a new era of aggressive retail banking anchored on high level information technology services and high branch network.

The acquisitions are expected to boost the financial performance of the banks involved, in the coming months after completion, by giving them a broader customer base and economy of scales. But it is not clear what the acquirers are paying per share in the acquired banks, and the total value of each of the deals is still being kept under close wrap.

The shares of the acquiring banks, ironically, dropped after Friday’s trading on the floor of the Nigeria Stock Exchange (NSE). Access Bank and FirstBank shares traded lower Friday, both losing N0.11k and N0.2k to end the day at N10.11k and N15.8k respectively. FCMB was the only gainer at N8 from N7.98k last weekend.

The decision of both Capital Alliance and Vine Capital to acquire Union Bank and AfriBank, respectively, is considered a strategic move to expand their equity assets in the Nigeria equity market. Shares of both Union Bank and AfriBank traded lower Friday, dropping 0.01k to N4.44k from N4.45 and 0.02k to N2.57k from N2.59k, respectively.

Analysts say these deals are certainly not good news for the employees, since layoffs will be expected as the merged entities consolidate their operations.

In consummating the deals, the acquirers relied on old business alliances, financial muscle in the industry, and ownership of preference shares to scale the hurdles in a keenly competitive bidding.

CBN had, following recent shocks in the financial industry, set in motion the M&A discussions with the floating of the Asset Management Corporation of Nigeria (AMCON) to deal with banks’ huge bad debts.

Stanbic IBTC Adopts Holding Company Structure in Nigeria (1)
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By Vincent Nwanma

Feb. 28 (Bloomberg) -- Stanbic IBTC Bank Plc of Nigeria adopted a holding company structure to enable it to keep its non-bank units under a new regulatory framework, Chief Executive Officer Chris Newson said.

“Our view is that investors like our structure,” Newson said in an interview today on the sidelines of a conference in Lagos, Nigeria’s commercial capital.

Stanbic IBTC will carry out its operations under investment banking, personal banking and wealth units, which comprises asset and pension management, he said.

The Central Bank of Nigeria last year asked lenders in the country, Africa’s biggest oil producer, to sell their non- banking units or adopt a holding company model. All financial institutions regarded as universal banks had to comply with the policy.

The rules form part of reforms to the banking industry after the central bank injected 620 billion naira ($4 billion) in 2009 to bail out some banks. The central bank fired the chief executive officers of eight of the country’s 24 lenders. Stanbic IBTC wasn’t one of the banks involved.

Stanbic IBTC made “a small sale” of 14 million naira of bad debts to the Asset Management Corp. of Nigeria, or Amcon, the company set up by the government to buy non-performing loans from lenders, Newson said. Amcon bought 1.04 trillion naira of bad debts from lenders on Dec. 31, and issued so-called “consideration bonds” to fund the purchase.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

CENTRAL BANK OF NIGERIA
PRESS RELEASE
CBN BEGINS SALES OF FOREIGN EXCHANGE
FORWARDS NEXT WEEK

The commencement of sales of foreign exchange forwards earlier scheduled to start from Tuesday, 16th March, 2011 has been rescheduled to start on Wednesday, 23rd March, 2011.

The postponement is necessitated by the introduction of Reserve Averaging which took effect on Wednesday, 9th March, 2011 and being new to the Deposit Money Banks, they require some time to fully digest it.
All stakeholders are to note and be guided accordingly.
(Signed)
M.M. ABDULLAHI
HEAD, CORPORATE COMMUNICATIONS
16th March, 2011

Shareholder banks make 1400% profit in Helios/Interswitch deal
FinanceMar 7, 2011

Stories BaBabajide Komolafe

Shareholders of Interswitch Nigeria Limited made over 1400 per cent return on their initial investment in the company in the recent acquisition of majority stake by Helios Investment Partners.
The Helios/Interswitch deal as been described has the largest electronic payment transaction in Africa.

Investigations revealed that a shareholder bank in the company with initial investment of N30 million in 2002 sold 75 per cent of its holding to Helios for N4.3 billion.
Established in 2001 and commenced operations in 2002, InterSwitch is the nation’s first and foremost electronic funds transfer and transaction processing and switching company. It is presently the only switching and processing company connected to all banks in the country as well as to over 10,000 ATMs and 11,000 PoS terminals.

Prior to the acquisition, the company was owned by seven banks and two non-bank firms.
The banks are First Bank, Union Bank, UBA and Zenith Bank. Others are Guaranty Trust Bank, First City Monument Bank, Wema Bank.

Other shareholders of the foremost electronic payment switching company are Accenture and Techinvest, the investment arm of Telnet, which initiated the company.
In an attempt to acquire majority stake in the company, Helios Investment partners, an Africa-focused investment firm, made generous offer to shareholders, which prompted the banks to sell off completely or some of the shareholding in the company.

One of the banks which invested N30 million hitherto had 20 per cent shareholding in the company, agreed to sell 15 per cent to Helios for N4.3 billion, thus reducing its shareholding to five per cent. Two other banks with five per cent shareholding each, and initial investment of N5 million agreed to sell everything to Helios for N1.1 billion.

Investigations further revealed that all the banks sold part of their holdings in the company and as a result Helios ended up with 69 per cent majority shareholding in the company.
The banks, it was gathered saw the offer from Helios as opportunity to make good profit on their investment, and opportunity to boost their shareholders funds. But most importantly, one or two of the banks needed money to expand their business and hence saw the deal as opportunity to generate the required funds.

Established in 2004 and led by co-founding partners Tope Lawani and Babatunde Soyoye, Helios is one of the largest investment firms focusing on Africa and is among the few independent pan-African private equity investment firms being founded and managed by Africans.

Helios, it was gathered was willing to pay that much because of the premier position of Interswicth in the electronic payment market in Nigeria. The company owns the leanding payment card scheme in Nigeria, hence most of the electronic payment transactions in the country go through its debit card introduced in 2002 and issued by almost all the banks in the country. The company recently introduced the Verve card, a chip and pin debit card to replace the magnetic stripe debit card. The Verve card, which is currently issued by 21 out of the 24 banks in Nigeria, is the first and only chip and PIN card accepted across multiple payment channels including ATMs, Point of Sale (PoS) terminals, online, mobile and at banks, and enjoys the largest range of value added services.

Managing Partner and Co-founder of Helios, Babatunde Soyoye, described Interswitch as, “A Nigerian success story having been led by a superb, highly competent, innovative and entrepreneurial all-Nigerian management team”, With the huge growth prospect for electronic payment in Nigeria, Interswitch, it is believed would continue to grow and hence become a major cash cow in the future. In addition is the regional expansion plan of the company which saw it acquiring two companies in two African countries.

Skye Bank to Raise $1.5 Billion in 2011 for Business Support
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By Sam Olukoya

March 20 (Bloomberg) -- Skye Bank Nigeria Plc, a Nigerian lender, plans to raise $1.5 billion from international funding agencies for onward lending to its customers to support their businesses this year, the bank said in an emailed statement today.

That’s a 200 percent rise in the amount it raised for customers in 2010. The increase this year is “as a result of rising demand from its customers,” says Moji Hunponu-Wusu, the lender’s Head of International Funding Group.

“Among businesses financed under the International Funding Group are infrastructure, hotels, vessels and other service industry that get dollar income,” she said. She did not mention which international agencies the money is coming from.

UPDATE 1-Nigeria's Union Bank agrees $750 mln recapitalisation
Tue Mar 22, 2011 9:35pm GMT Print | Single Page [-] Text [+]
* Union Bank first of nine rescued lenders to announce deal

* Consortium includes U.S.-based institutional investors

* Afribank, Intercontinental expected to announce deals soon

(Adds details)

By Chijioke Ohuocha

LAGOS, March 22 (Reuters) - Nigeria's Union Bank (UBN.LG: Quote) said late on Tuesday it had agreed a $750 million recapitalisation deal with a group of institutional investors led by the African Capital Alliance private equity firm.

Union Bank is the first of nine Nigerian lenders rescued in a $4 billion bailout in 2009 to announce a recapitalisation agreement with new investors.

Central Bank Governor Lamido Sanusi, who led the bailout of the Nigerian banks a year and a half ago, said earlier on Tuesday he expected two more rescued lenders to announce deals in the coming days.

"The bank's recapitalisation by the ACA Consortium will enhance its liquidity, corporate governance and capital adequacy and restore its strong competitive position," Union Bank said in a statement.

It said the agreement was subject to approval by its shareholders, the central bank, the Securities and Exchange Commission, the stock exchange and a federal high court.

Sanusi won international praise for the 2009 bailout and efforts to sanitise the banking system, which was dangerously close to collapse. The removal of several bank chiefs for lax oversight and reckless lending sent shockwaves through a corporate elite which had grown used to impunity.

But uncertainty over how the crisis would be resolved has meant credit flows have not fully recovered and has kept some investors shy of once stellar Nigerian banking stocks.

The consortium led by African Capital Alliance, a private equity firm with investments in Nigeria and the Gulf of Guinea, also includes U.S.-based institutional investors, the Keffi Group and a unit of Banc ABC Botswana, the statement said.

One of Nigeria's oldest banks, Union Bank was at one time operated by Barclays Bank (BARC.L: Quote) and has long been regarded as one of the country's more stable institutions due to its size.

Its shares are largely held by the public, with directors owning only around 1 percent.

MORE DEALS NEAR

Rescued lenders Afribank (AFRIBAN.LG: Quote), Bank PHB (PLATINU.LG: Quote), Finbank (FIRSTIN.LG: Quote), Intercontinental Bank (INTERCO.LG: Quote) and Oceanic Bank (OCEANIC.LG: Quote) have also held talks with potential investors in recent months.

Banking sources have said a consortium involving private equity group Vine Capital has signed an agreement with Afribank, and that Intercontinental Bank is expected to be recapitalised by Access Bank (ACCESS.LG: Quote), one of its healthy peers.

Both deals are expected to be announced in the coming days.

The central bank rescued the nine lenders after auditors deemed them to be so weakly capitalised they posed a risk to the whole banking system in sub-Saharan Africa's second-biggest economy. [ID:nLDE6BD1KO]

It has since sought new investors to recapitalise them and set up an asset management company (AMCON) to help by absorbing bad loans in exchange for government bonds. [ID:nLDE71R14K]

AMCON's role is to soak up non-performing loans and restore shareholder funds to zero, before new investors return the lenders to minimum capital adequacy. [ID:nLDE7201QZ]

AMCON has issued three-year zero coupon bonds with a face value of 1.03 trillion naira ($6.7 billion) to 21 lenders in exchange for their non-performing loans and plans to issue a further 500 billion naira worth of bonds by March 31.

Central Bank prepares market for Chinese Yuan trading

By Stanley Oronsaye

In its bid to diversify Nigeria's foreign reserve base, the Central Bank of Nigeria (CBN) has begun training of staff and operators in trading in the Chinese Yuan.

Lamido Sanusi, CBN governor, has always made a case for diversifying the country's foreign exchange reserve, with a small shift into Asian currencies, in particular the Chinese Yuan.

"If anything is changing from a strategic perspective, it is that we're looking towards the Asian currencies. If you look at surpluses in China and if you look at where the RMB (Yuan) is today and the likely future direction of the Chinese economic policy ... we believe some position in RMB would be good," he told Reuters last year.

Nigeria's foreign exchange reserves, which currently stands at $34.9 billion, is held more than 80 per cent in US dollars, 10 per cent in Euros, and the rest in other investments including gold.

Introducing Chinese Yuan

The introduction of the Chinese Yuan forms part of the CBN strategy to reduce demand for dollars and thus reduce pressure on the naira. In a circular to operators on March 7, the CBN offered free training to authorised currency dealers.

"The Commerz Bank Representative Office (Nigeria) Limited has offered to train staff of the CBN and senior level treasury officers of Nigerian banks on the Chinese Yuan," the circular stated.

However, some operators are sceptical about how much the introduction of the Yuan would take the pressure off the dollar.

Akin Oladeji, managing director of Futures and Bonds Limited, a financial advisory and trading services firm, believes trading in Yuan would deepen the foreign exchange market.

"As you are aware, Nigeria is gradually becoming a major trading point with Chinese, hence more investment will be encouraged.
"There will be more volatility in pricing, since the currency trading power will be tied indirectly by the purchasing power of dollar," Mr. Oladeji said.

He said demand for the dollar will reduce to the extent of demand for Yuan.

"However, this will not be immediate since there will be lag effect for adjustments to market dynamics," he further said.

No significant effect

Razia Khan, regional head of Research, Africa, Global Research, at Standard Chartered Bank in London, also said the introduction of the Yuan may not significantly affect the dollar demand on the long run.

"Is the Yuan fully convertible at the international market? So, the demand for dollar is not going to be affected by introducing the Yuan," she said at a news briefing in Lagos last week.

A currency trader, who did not want to be named, said so far, the CBN has not demonstrated enough willingness to pull it.

"Has CBN told anybody that it is going to sell Yuan at the WDAS? They have never sold anything but dollars at the WDAS.

"So if they make Yuan an authorised currency doesn't really mean anything. I am not even sure the Yuan is fully convertible. It is not a big deal," he said.

Standard Bank intent on Nigeria, Angola growth

By David Dolan and Ruona Agbroko

Standard Bank is looking to ramp up its business in oil-rich Angola, and has no plans to slow down in fast-growing Nigeria, the head of Africa's biggest bank said on Wednesday.

Jacko Maree told the Reuters Africa Investment Summit that while Standard Bank aims to keep costs flat this year, it will still focus on expanding its presence in key African markets.

"We are pushing ahead in Angola, where are starting from scratch building a bank," Maree told the Reuters Africa Investment Summit.

Standard acquired regulatory approval to start business in the southern African nation last year and is concentrating on corporate banking there, said Maree, speaking at Reuters' offices in Johannesburg.

Angola, Africa's second-largest oil producer, is increasingly seen as an important target for South African banks and corporates, as surging oil prices have underpinned rapid growth.

Rival Absa Group is also considering moving back into Angola after leaving a few years ago, CEO Maria Ramos told the Summit on Tuesday.

Absa is the South African lender majority owned by Britain's Barclays.

Standard Bank is struggling to rein in costs after an aggressive push to become a top emerging markets lender.

The bank said this month it would scale back its ambitions and would no longer build or buy domestic businesses in markets outside of Africa.

Maree said Nigeria, Africa's most populous nation, remained a top priority.:banana:

"We are not going to slow down on our plans in Nigeria, whereas there are one or two other markets where we've just said we'll have to go a little bit slower."

There are more opportunities for the bank's businesses in Ghana and Nigeria to cooperate, he said.

The outlook for Kenya was also promising, he said.

"Those would be the four markets that will probably get the most of our attention and to the extent that we're rationing capital expenditure, we won't be rationing in those countries."

Central Bank sells $16.6m at debut auction

March 25, 2011 11:06AM

Central Bank of Nigeria (CBN) sold $16.6 million in short-tenored foreign exchange forwards at its first such auction on Wednesday, at rates which indicated it expected the currency to remain stable or strengthen.

The regulator began offering 1- 2- and 3-month forwards at its bi-weekly foreign exchange auctions on Wednesday as part of efforts to smooth dollar demand and help businesses in sub-Saharan Africa’s second biggest economy hedge currency risk.

It sold $10 million worth of 1-month forwards at 152.18 naira, $620,000 of 2-month forwards at 153.97 naira, and $6 million of 3-month forwards at 154.10 naira at the auction, currency dealers said on Thursday.

The naira, which eased to its weakest level in 18 months last week, ahead of April elections, was trading at 155.90 to the dollar at the interbank market on Thursday, compared to Wednesday’s close of 156.05.

Increase demand

Although demand at the maiden forwards auction was relatively low, analysts expect it to pick up over time.

“Although yesterday’s forward auction could be perceived as a relative failure given the marginal level of demand, we note this was the first attempt by the Central Bank to formally launch derivative products,” said Samir Gadio, emerging markets strategist at Standard Bank.

“This was more a test auction and volumes could still increase in the future as more corporates get set up to bid,” he added.

Dollar demand rose to $584 million at the Central Bank’s bi-weekly spot forex auction, the highest for months, but the regulator sold only $400 million at 151.27 on Wednesday. It met all the demand at the forward auction.

Businesses and rich Nigerians :bash:are going long dollars to hedge against the risk of any prolonged political upheaval due to a April 9 presidential vote, in which President Goodluck Jonathan is seen as the front runner.

Boost liquidity

It is hoped that developing naira forwards will boost liquidity in the foreign exchange market, but analysts say the move may not be sufficient to ward off short-term volatility in the run-up to the polls.

“We expect the forward market to help smooth aggregate forex demand only gradually in the medium to long run rather than immediately, notably given the speculative nature of the current pressures on the exchange rate,” Mr. Gadio said.

BNP Paribas to Open Nigeria Office, Expand S. African Business
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By Mike Cohen

March 29 (Bloomberg) --

BNP Paribas SA, France’s largest bank, is opening an office in Lagos, Nigeria to boost its investment banking business in West Africa, Nicolas Mignot, head of structured trade finance for Europe, Middle East and Africa, said.

The company plans to expand its representative office in Johannesburg, South Africa, where it has about 10 people, he said in an interview in Cape Town today, declining to elaborate on its expansion plans. BNP is also looking at opportunities in southern Africa, Mignot said.

Nigeria's FCMB 2010 profit jumps to 9 bln naira

LAGOS- March 30 | Wed Mar 30, 2011 9:39am EDT
(Reuters) - Nigeria's First City Monument Bank (FCMB.LG) said on Wednesday it pre-tax profit rose to 9.02 billion naira ($58 million) in 2010 from 856.6 million the previous year, and declared a 0.35 naira dividend per share.

Gross earnings rose to 62.67 billion naira from 35.79 billion naira in 2009, the bank said in a filing with the Nigerian Stock Exchange. [nNSEd00086]

http://www.reuters.com/article/2011/03/30/fcmb-idUSLDE72T1M020110330

Nigeria’s Amcon Buys 1 Trillion Naira of Bad Debts (1)
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By Vincent Nwanma

March 31 (Bloomberg) -- The state-owned Asset Management Corp. of Nigeria bought 1 trillion naira ($6.5 billion) of non- performing loans under the second phase of its program to rid the country’s lenders of bad debts, Managing Director Mustapha Chike-Obi said.

“We have bought all the eligible non-performing loans offered to us by the banks,” he said in a phone interview today from Abuja, the capital.

Amcon, as the company is known, will issue 1.7 trillion naira of bonds on April 6, Chike-Obi said. Amcon delayed issuing 1.5 trillion naira of bonds on Jan. 31 because it had not obtained all regulatory approvals, Foluke Dosumu, executive director for finance, said that day. Part of the debt will replace the so-called consideration bonds which it issued to banks that sold 1.04 trillion naira of debts to it on Dec.31.

The latest debt purchases have a face value of “about 500 billion naira,” Chike-Obi said.

The Central Bank of Nigeria in 2009 bailed out the banking industry with 620 billion naira and fired eight bank chiefs after a debt crisis threatened it with collapse.

The Nigerian Stock Exchange All Share Index fell for a second day, losing 0.3 percent to 24,621.38 by the 2:30 p.m. close in Lagos.

Nigeria’s Amcon Buys 1 Trillion Naira of Bad Debts (1)
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By Vincent Nwanma



The Nigerian Stock Exchange All Share Index fell for a second day, losing 0.3 percent to 24,621.38 by the 2:30 p.m. close in Lagos.

That can be very much attributed to the up-coming elections :(

Amcon Starts Book Building for 30 Billion Naira Bonds (1)
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By Vincent Nwanma

April 1 (Bloomberg) -- Asset Management Corp. of Nigeria, a state-owned company set up to buy bad debts from banks, started a process today to gauge investor interest for the sale of 30 billion naira ($195 million) in bonds, Executive Director Foluke Dosumu said.

The bonds are the part of Amcon’s Series 1 debt program of 1.7 trillion naira to be issued on April 6, Dosumu said at a presentation to investors today in Lagos, the commercial capital. The book building is for “price discovery” for the entire series and will be concluded on April 5, he said.

The 30 billion naira tranche is the only portion of the Series 1 bonds that is open to the public, Mustapha Chike-Obi, Amcon’s managing director, said today. The amount “is large enough to determine where the price of the bonds should be today,” he said.

Amcon shelf-registered a 3 trillion-naira debt series with Securities and Exchange Commission and other regulatory authorities, Dosumu said. The company bought non-performing loans as part of a program to clear the country’s lenders of bad debts. The Central Bank of Nigeria in 2009 bailed out the banking industry with 620 billion naira and fired eight bank chief executive officers after a debt crisis threatened it with collapse.

New Nigerian bourse chief to begin work on Monday
Sun Apr 3, 2011 2:00pm GMT Print | Single Page [-] Text [+]

LAGOS, April 3 (Reuters) - The new chief executive of Nigeria's stock exchange, former American stock exchange (AMEX) vice president Oscar Onyema, will begin work on Monday, the Securities and Exchange Commission (SEC) said on Sunday.

Onyema's appointment in January followed the SEC's removal of the former bourse director general last August amid concern about market supervision. Former senior Deloitte accountant Emmanuel Ikazoboh had managed the exchange in the interim.

(For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Reporting by Nick Tattersall)

Nigeria's AMCON bonds priced at 11.8 pct

April 6, 2011 By Chijioke Ohuocha

* Latest two tranches priced with 11.8 percent yield

* AMCON bonds to be eligible for short-selling

- Nigeria's state bad bank AMCON has priced 555 billion naira ($3.6 billion) in 3-year zero coupon bonds at a yield of 11.8 percent, the lead issuing house said on Wednesday.
The Asset Management Corporation of Nigeria (AMCON) was set up last year to absorb bad bank loans, exchanging them for government-backed bonds, with the aim of rebuilding commercial bank balance sheets after a $4 billion bailout in 2009.

The issue is in three tranches.
The first 1.15 trillion naira tranche was issued to be exchanged for AMCON consideration bonds, which were launched in December to absorb non-performing loans from 21 Nigerian banks. That tranche attracted a 10.125 percent yield.
The second 20.7 billion naira tranche was issued via a book building which opened on Friday and was oversubscribed, while the third 535 billion naira tranche was issued to acquire additional non-performing loans from 22 lenders. Both tranches were priced with an 11.8 percent yield.

"This clean-up should bring sector non-performing loans to their lowest levels in over a decade and is a major milestone in the banking reforms," one banker close to the deal said.
"Nigeria has signalled its financial markets are back," the banker said, adding the issue was tightly priced despite uncertainty caused by postponed elections and a surprise 100 basis point interest rate rise to 7.5 percent two weeks ago.
The bonds will be listed on the Nigerian stock exchange.

AMCON Chief Executive Mustapha Chike-Obi told Reuters last month he expected the bonds to stimulate trade in the government debt market by increasing liquidity and making the yield curve more accurate.
Unlike other debt instruments in Nigeria, they will be eligible for short-selling, creating hedging opportunities in the debt market for the first time.
The central bank will target a non-performing loan ratio of 5 percent across the industry after AMCON absorbed lenders' existing bad loans, Samuel Oni, director of banking supervision, said on Tuesday.
That compared to pre-AMCON levels of 50 percent, Oni said.
Seven of Nigeria's 21 locally-listed banks have so far announced positive earnings for 2010, suggesting balance sheets are being repaired faster than expected after heavy write-downs and loan losses due to provisions following the bailout.

Nigeria telecoms outstrips market

Nigeria’s telecoms market outpaced many other sectors, contributing the third-biggest share to GDP last year.
By BiztechAfrica - April 5, 2011, 11:11 a.m.

This is according to a new report by Pyramid Research, which says 2010 was another growth year for the Nigerian telecom sector, with an estimated service revenue of USD8.6bn by year end, a 6.7% year-on-year increase.

The sector is reported to have contributed 8.2% to Nigeria’s GDP – the third-biggest contributor, behind agriculture and trade.

Pyramid says: “since liberalization of the market in 2003, the telecom industry has experienced high growth rates, fueled by new entrants and the launch of mobile value-added and broadband services. With a population of about 150 million and mobile penetration at just 55.8% by year-end 2010, the Nigerian telecom market is forecast to have exceptional continued growth. Total market revenue by 2015 is misleading as a decreasing figure because this decrease is driven by an inflated exchange rate.”

The report notes that the competitive landscape of Nigeria’s telecom sector has forced operators to roll out new infrastructure to improve coverage and quality, which has resulted in a surge of subscription growth and usage.

“We expect growth of total market services revenue to continue over the next five years at a 5.9% CAGR. Pay-TV, fixed VoIP, broadband Internet and mobile data are anticipated to be the fastest-growth segments. Although the growth in the mobile and fixed voice segments are not as striking, they will continue to represent the bulk of the revenue.”

Nigeria’s telecoms market outpaced many other sectors, contributing the third-biggest share to GDP last year. This is according to a new report by Pyramid Research, which says 2010 was another growth year for the Nigerian telecom sector, with an estimated service revenue of USD8.6bn by year end, a 6.7% year-on-year increase. The sector is reported to have contributed 8.2% to Nigeria’s GDP – the third-biggest contributor, behind agriculture and trade. Pyramid says: “since liberalization of the market in 2003, the telecom industry has experienced high growth rates, fueled by new entrants and the launch of mobile value-added and broadband services. With a population of about 150 million and mobile penetration at just 55.8% by year-end 2010, the Nigerian telecom market is forecast to have exceptional continued growth. Total market revenue by 2015 is misleading as a decreasing figure because this decrease is driven by an inflated exchange rate.” The report notes that the competitive landscape of Nigeria’s telecom sector has forced operators to roll out new infrastructure to improve coverage and quality, which has resulted in a surge of subscription growth and usage. “We expect growth of total market services revenue to continue over the next five years at a 5.9% CAGR. Pay-TV, fixed VoIP, broadband Internet and mobile data are anticipated to be the fastest-growth segments. Although the growth in the mobile and fixed voice segments are not as striking, they will continue to represent the bulk of the revenue.”

http://www.biztechafrica.com/section/business/article/nigeria-telecoms-outstrips-market/578/

Double Post.......

Yields on nation’s Eurobond drop to 6.37%
TUESDAY, 12 APRIL 2011 00:00 ANTHONY OSAE-BROWN WITH AGENCY REPORT

…As yields on domestic bonds rise

Nigeria’s $500 million Eurobond, which on issue at a yield of 7 percent in January 2011 was heavily oversubscribed, has seen its yields drop sharply ahead of expectations that the country is now in a better financial shape.

A report by Reuters last week stated that Nigeria’s Eurobond rallied sharply on Friday and its yield premium to US Treasuries fell, as investors bet that oil’s surge to 32-month highs would help investors overcome pre-election jitters. A week ago, JP Morgan had said it was going “overweight” in Nigeria’s Eurobond mainly because of rising crude oil prices and the expectations that Nigeria’s elections would go on smoothly.

Going overweight means it was going to buy more of Nigeria’s Eurobond on the positive expectation that it is a good investment. When yield falls, prices of bonds rise.

This reflects in Nigeria’s Eurobond which was issued in January at a discount of $98.2, but has currently risen 1.8 points in price to $103. The yield fell 9 percent to 6.37 percent, making a year-to-date drop in yields of 63 basis points. Drop in the yields is good news for Nigerian firms that may want to tap into the Eurobond market, as it means that the cost of funds will be lower.

But BusinessDay analyses show that while yields on Nigeria’s bond is falling, yields on Nigeria domestic bonds are on the rise following the rise in the Central Bank of Nigeria’s (CBN) benchmark interest rate, expectations that interest rate will continue to rise as well as tightening liquidity in the money market.

Further analysis shows that average yields across all tenors of Federal Government bonds closed higher on Friday. Average yields on the 20-year bonds closed at about 13.80 percent against the week’s opening of 13.59 percent. Analysts’ expectation is that yields may continue to rise in the domestic bond market, on the back of higher interest rate expectations.

Nigeria Eurobond is however getting a favourable investor review, as they are betting the elections will pass off smoothly while the oil price rise is a boon for Nigeria, which exports 2 million barrels per day of sweet crude that fetches a premium of around $4 to the Brent benchmark.

“Not only is the conduct of the election being done in a multi-party way -- the postponement was agreed on by all parties -- but also generally you can see what’s happening to the oil price,” said Daniel Broby, chief investment officer at Silk Invest, a fund which holds Nigerian bonds.

“There isn’t a credible united opposition so I do expect Jonathan to win quite easily,” Broby added.

Analysts noted the rally also coincides with a buoyant investor attitude towards frontier and commodity-exporting economies -- B-rated Georgia, for example, issued a $500 million bond this week which was six-times subscribed.

“One needs to take into account that the continued surge in oil prices has a favourable impact on the intrinsic risk metrics associated with Nigeria’s electoral cycle,” Standard Bank strategist Samir Gadio said.

Election jitters had caused Nigerian bonds to lag recently, compared with those of African peers Ghana and Gabon. JP Morgan analysts pointed out in a note this week that Nigeria was trading 100 bps wide to fellow oil-exporter Gabon, despite their bonds having been issued at similar spreads. Both carry a BB- rating from Fitch. JPM raised Nigeria to overweight in its model portfolio.

“We see 75 bps of upside if our base-case of smooth elections with Goodluck Jonathan winning materialises,” its analysts told clients in a note.

Was just about to post that. I don't know why that news got me so exited..

Yields on nation’s Eurobond drop to 6.37%
TUESDAY, 12 APRIL 2011 00:00 ANTHONY OSAE-BROWN WITH AGENCY REPORT

…As yields on domestic bonds rise

Nigeria’s $500 million Eurobond, which on issue at a yield of 7 percent in January 2011 was heavily oversubscribed, has seen its yields drop sharply ahead of expectations that the country is now in a better financial shape.

A report by Reuters last week stated that Nigeria’s Eurobond rallied sharply on Friday and its yield premium to US Treasuries fell, as investors bet that oil’s surge to 32-month highs would help investors overcome pre-election jitters. A week ago, JP Morgan had said it was going “overweight” in Nigeria’s Eurobond mainly because of rising crude oil prices and the expectations that Nigeria’s elections would go on smoothly.

Going overweight means it was going to buy more of Nigeria’s Eurobond on the positive expectation that it is a good investment. When yield falls, prices of bonds rise.

This reflects in Nigeria’s Eurobond which was issued in January at a discount of $98.2, but has currently risen 1.8 points in price to $103. The yield fell 9 percent to 6.37 percent, making a year-to-date drop in yields of 63 basis points. Drop in the yields is good news for Nigerian firms that may want to tap into the Eurobond market, as it means that the cost of funds will be lower.

But BusinessDay analyses show that while yields on Nigeria’s bond is falling, yields on Nigeria domestic bonds are on the rise following the rise in the Central Bank of Nigeria’s (CBN) benchmark interest rate, expectations that interest rate will continue to rise as well as tightening liquidity in the money market.

Further analysis shows that average yields across all tenors of Federal Government bonds closed higher on Friday. Average yields on the 20-year bonds closed at about 13.80 percent against the week’s opening of 13.59 percent. Analysts’ expectation is that yields may continue to rise in the domestic bond market, on the back of higher interest rate expectations.

Nigeria Eurobond is however getting a favourable investor review, as they are betting the elections will pass off smoothly while the oil price rise is a boon for Nigeria, which exports 2 million barrels per day of sweet crude that fetches a premium of around $4 to the Brent benchmark.

“Not only is the conduct of the election being done in a multi-party way -- the postponement was agreed on by all parties -- but also generally you can see what’s happening to the oil price,” said Daniel Broby, chief investment officer at Silk Invest, a fund which holds Nigerian bonds.

“There isn’t a credible united opposition so I do expect Jonathan to win quite easily,” Broby added.

Analysts noted the rally also coincides with a buoyant investor attitude towards frontier and commodity-exporting economies -- B-rated Georgia, for example, issued a $500 million bond this week which was six-times subscribed.

“One needs to take into account that the continued surge in oil prices has a favourable impact on the intrinsic risk metrics associated with Nigeria’s electoral cycle,” Standard Bank strategist Samir Gadio said.

Election jitters had caused Nigerian bonds to lag recently, compared with those of African peers Ghana and Gabon. JP Morgan analysts pointed out in a note this week that Nigeria was trading 100 bps wide to fellow oil-exporter Gabon, despite their bonds having been issued at similar spreads. Both carry a BB- rating from Fitch. JPM raised Nigeria to overweight in its model portfolio.

“We see 75 bps of upside if our base-case of smooth elections with Goodluck Jonathan winning materialises,” its analysts told clients in a note.

That is very good news. There is more room for the yeilds to drop further after the elections. :)

First Bank of Nigeria Targets 10% Loan Growth, CFO Says (2)
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By Vincent Nwanma

April 15 (Bloomberg) -- First Bank of Nigeria Plc, the country’s second-biggest lender by market value, plans to grow loans 10 percent this year and boost market share in retail and corporate banking, Chief Financial Officer Bayo Adelabu said.

First Bank’s loans advanced 6 percent in 2010 and the bank will be conservative in its target for 2011 because it doesn’t want to “worsen its loan books,” Adelabu said in a phone interview yesterday in Lagos, the commercial capital. The bank’s non-performing loans ratio fell to 7.7 percent in 2010, from 8.2 percent a year earlier and should decline further this year, he said.

Nigerian lenders are starting to increase lending after cutting back as they tried to recover from a debt crisis in 2008 and 2009 that threatened the industry with a collapse. The Central Bank of Nigeria injected 620 billion naira ($4 billion) into the industry, and fired the chief executive officers of eight of the country’s lenders. First Bank wasn’t one of the lenders bailed out.

First Bank’s net income for full-year 2010 jumped to 33.4 billion naira from 4.9 billion naira, while income before tax more than tripled to 43.2 billion naira, it said in a statement on the website of the Nigerian Stock Exchange yesterday.

Given changes in Nigeria’s banking industry, including mergers and acquisitions, “competition will become more intense,” Adelabu said. “There may not be any small bank anymore.”

Mergers and Acquisitions

Access Bank Plc and Intercontinental Bank, one of the lenders bailed out in 2009, agreed to merge. Afribank Plc, also a bailed-out lender, signed a memorandum of understanding with potential investor Vine Capital Partners Ltd., it said on April 7. Union Bank of Nigeria Plc signed an agreement for a group led by African Capital Alliance to invest $750 million in the bank, the lender said on March 23. FirstRand Ltd., South Africa’s second-biggest financial services company, said yesterday it plans to buy a majority stake in Sterling Bank Plc.

First Bank will respond to these changes by taking advantage of its low-cost deposit base that will “give it a pricing advantage,” Adelabu said.

First Bank declined 22 kobo, or 1.6 percent, to 13.66 naira by the 2:30 p.m. close in Lagos.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Last Updated: April 15, 2011 12:36 EDT

Nigeria's AMCON to list 1.675 trln bond on Thursday
Wed Apr 20, 2011 11:31am GMT Print | Single Page [-] Text [+]
LAGOS, April 20 (Reuters) - Nigeria's state asset management firm AMCON will list 1.675 trillion naira ($11 billion) in zero coupon bonds on the local stock exchange on Thursday, according to MBC Securities, a stockbroker involved in the listing.

The Asset Management Company of Nigeria completed the bond issuance two weeks ago, attracting yields significantly below equivalent government treasuries. [nLDE7350G6]

It issued the 3-year zero-coupon bonds in three tranches.

AMCON was set up last year to absorb bad bank loans, exchanging them for government-backed bonds, with the aim of rebuilding commercial bank balance sheets after a $4 billion bailout in 2009. (For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com/ ) (Reporting by Chijioke Ohuocha; Editing by Nick Tattersall)

Exchange records largest bond issuance as AMCON lists N1.67trn
FRIDAY, 22 APRIL 2011 00:00 REUTERS

The Asset Management Company of Nigeria (AMCON) yesterday listed N1.675 trillion ($10.8 billion) in zero coupon bonds on the Nigerian Stock Exchange.

AMCON was set up last year to absorb bad bank loans, exchanging them for government-backed bonds, with the aim of rebuilding commercial bank balance sheets after a $4 billion bailout in 2009.

The bonds were listed on the Nigerian Stock Exchange in two tranches. The first N1.140 billion naira tranche was priced at 743.88 units with the second N533 million tranche priced at 730.71 units. Face value was 1000 units.

AMCON completed the latest bond issuance two weeks ago, attracting yields significantly below equivalent government treasuries. Banks subscribed the entire issue, which was given to them in exchange for non-performing loans.

“We haven’t seen an issue of this size before,” Mustapha Chike-Obi, AMCON’s chief executive officer, told stockbrokers during the listing. “I suspect the banks will need liquidity and they will be trading it to get liquidity,” he added.

Brokers said it was Nigeria’s largest bond issuance by a single entity. The government issues bonds monthly to fund its operations in sub-Saharan Africa’s second-biggest economy.

Chike-Obi has said he expected the bonds to stimulate trade in the government debt market by increasing liquidity and making the yield curve more accurate.

Unlike other debt instruments in Nigeria, they will be eligible for short-selling, creating hedging opportunities in the debt market for the first time.
The central bank has said it will target a non-performing loan ratio of 5 percent across the industry after AMCON absorbed lenders’ existing bad loans.

Nigerian Banks Winning Mobius With Asia-Like Growth in Africa

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By Renee Bonorchis and Nasreen Seria


April 28 (Bloomberg) -- Twenty-four miles northwest of Accra in Ghana, Anthony Botchway rips a pineapple plant from the ground with his bare hands. Wearing dirty boots, a short-sleeved shirt and jeans, he looks like any other farmworker, in a region where the daily minimum wage is less than $2.

The difference is that Botchway owns 7.2 million of the pulpy, yellow fruits. He rose from poverty to become managing director of Bomarts Farms Ltd., which owns and cultivates 3,000 acres (1,200 hectares) of land, partly because he got financial help, Bloomberg Markets magazine reports in its June issue.

Ecobank Transnational Inc., which operates in more African countries than any other bank, provided an initial loan of $50,000 in 2002. Since then, Botchway has gone from peddling goods on village streets to exporting his extra-sweet pineapples to Europe and the Middle East.

“Any time I request a loan from Ecobank, I get something,” the sinewy Botchway, 53, says with a smile at his farm in Nsuobiri. “Though I may not get everything, it frees funds for growth that would otherwise have been used to pay salaries and bills.” He plans to double production to 14 million pineapples in the next few years.

In Africa, a continent that has been synonymous with poverty, corruption and lagging development, an increasing number of people like Botchway are improving their economic standing. Sub-Saharan Africa will be the fastest-growing region in the world, after developing Asia, this year and in 2012, according to the International Monetary Fund.

Fastest-Growing

Six of the 20 projected fastest-growing countries this year are in Africa. Among them are Ghana, at 13.7 percent; Ethiopia, at 8.5 percent; Angola, at 7.8 percent; and Mozambique, at 7.5 percent, the IMF says.

A move toward freer economies helped ignite the boom. In the past decade, leaders in Nigeria, Ghana and Rwanda have sold state-owned industries, cut inflation and budgeted more cautiously. Those shifts encouraged the Group of Eight nations to agree in 2005 to let the World Bank, the IMF and the African Development Bank cancel the debts of some poor countries provided they met certain economic goals.

China’s surging demand for copper, platinum and iron ore has also fueled African economies. Today, the world’s most populous country is the African continent’s biggest trading partner.

The strong growth in the region comes on a very low base. Poverty remains widespread: About 400 million Africans lived on less than $1.25 a day in 2009, the World Bank estimates, while 200 million were unemployed. Corruption is still ingrained. Six of the 10 most corrupt countries in the world are in Africa, according to Berlin-based Transparency International.

Nigeria Violence

Political stability remains elusive in such countries as Ivory Coast, where President Laurent Gbagbo clung to power for four months after losing an election to Alassane Ouattara. Gbagbo was dislodged in April with the aid of French and United Nations military forces. In Nigeria, at least 600 people have died in the predominantly Muslim north in violence triggered by the April 16 re-election of President Goodluck Jonathan, said the Kaduna-based Civil Rights Congress.

Still, more Africans are becoming less poor. By 2015, 221 million African consumers will advance from destitution to basic-needs status, making from $1,000 to $5,000 a year, according to a McKinsey & Co. analysis of data from IHS Global Insight, a subsidiary of Englewood, Colorado-based data provider IHS Inc.

There’s more prosperity to come, says Arnold Ekpe, chief executive officer of Ecobank, which has expanded into 32 of Africa’s 53 countries from its base in Lome, the capital of French-speaking Togo.

Retail Lending

The bank increased retail lending more than fivefold from 2005 to 2010, to $5.3 billion, in the region Ekpe calls Middle Africa--spanning from Kenya in the east to Guinea-Bissau in the west and from just below the Sahara to just above South Africa.

“Middle Africa is the fastest-growing part of Africa, and it’s also some of the richest parts of Africa,” Ekpe says. “That’s where the oil, the diamonds, the iron ore and the gold are.”

The 32 countries in Middle Africa as defined by Ekpe are together expected to grow 6.5 percent in 2011, based on a weighted average derived by Bloomberg from IMF statistics.

The doubling of the Standard & Poor’s GSCI index of 24 raw materials since 2005 explains much of Africa’s boom. The continent contains the world’s biggest deposits of platinum, diamonds and manganese. It’s also a significant producer of oil, coal, copper and bauxite, which is used to make aluminum.

Growth Without Minerals

Commodities can’t explain all of Africa’s growth, though. Gross domestic product rose more than 5 percent last year in such East African nations as Tanzania, Uganda and Rwanda, which all lack the mineral wealth of western and southern Africa.

National leaders are altering economic policies to avoid past mistakes, says Paul Collier, director of the Centre for the Study of African Economies at Oxford University and author of “The Bottom Billion” (Oxford University, 2007).

“If you go back 10 years ago, these countries were highly indebted, with very stressed fiscal positions,” he says. “Now, they’ll be the envy of any European country.”

In Nigeria, for instance, government debt is 16 percent of GDP, compared with 130 percent in Greece, 94 percent in Ireland and 83 percent in Portugal, according to IMF figures. In 2004, the government of Nigerian President Olusegun Obasanjo started basing its budget on oil at $23 a barrel to ensure that price declines wouldn’t cause deficits to soar.

Arrears Repaid

Any excess was saved in a separate account that enabled the country to repay $6 billion in borrowing arrears, helping secure $18 billion of relief on debt that totaled $36 billion in 2004.

From 1999 to 2006, Nigeria sold off more than 116 state- owned enterprises, according to McKinsey. President Jonathan is selling power generation and distribution companies this year to expand capacity and end chronic electricity shortages.

Nigeria’s central bank has been a trailblazer for economic change. In 2009, amid a 46 percent slump in local stocks and a halving of oil prices, Nigerian banks were left with $10 billion of bad debts on their books.

Lamido Sanusi, the central bank governor, fired the CEOs of eight of the nation’s 24 lenders and pumped the equivalent of $4 billion into ailing institutions. Later, he created an entity to buy the debt.

“I was shocked by the magnitude of the debt crisis,” Sanusi says in an interview in his office in Abuja. “Cleaning up the system and making sure people were held to account was our contribution to reforming the industry.”

‘Top Reformer’

The turnaround has been especially striking in Rwanda, the landlocked coffee-producing country that was devastated by a 1994 genocide. About 800,000 people, most of them members of the Tutsi minority, were killed. Today, Rwanda’s economy is growing at 5.9 percent annually, and much of the infrastructure destroyed during the killings has been rebuilt.

In 2009, the World Bank named Rwanda the “top reformer” for making the most business-friendly changes to its regulations. It takes just three days to register a company in Rwanda, compared with an average of 45 days in sub-Saharan Africa and 13.8 days in Organization for Economic Cooperation and Development countries, the World Bank says.

Ecobank is just one of the many banks trying to tap into this economic growth. Citigroup Inc., Standard Chartered Plc, Bank of America Corp.’s Merrill Lynch and JPMorgan Chase & Co. all plan to expand in Africa.

Mobius Buys Nigeria

Mark Mobius, the Singapore-based executive chairman of Templeton Asset Management’s Emerging Markets Group, has been buying shares of Nigerian banks.

“Hitting on banks is the first step” toward reaching Africa’s growing middle class, says Mobius, whose $1 billion Frontier Markets Fund had 12.3 percent of its investments in Nigeria at the end of 2010. The fund, which returned 74 percent from its inception in 2008 to the end of 2010, owns shares in Nigeria’s United Bank for Africa Plc and Zenith Bank Plc.

Ecobank, founded in 1985, is one of the few private lenders based in and focused on Middle Africa. Ekpe, 57, says the bank aims to cater to working people and smaller companies, not just existing customers such as the African units of brewer SABMiller Plc and food company Nestle SA.

Half of the region’s population is younger than 20 years old, and there’s an emerging middle class. That gives Middle Africa “terrific demographics,” he says. With assets of $10 billion -- more than twice the size of Togo’s GDP -- the bank has more than 3 million customers.

Mechanical Engineering

Ekpe, who’s tall and slim and who wears a dark-blue suit, glasses and a mustache during a meeting in Lome, was born in a part of the Cameroons that later voted not to join Nigeria. He received a first-class honors degree in mechanical engineering at the University of Manchester in the U.K. and a Master of Business Administration from Manchester Business School.

After running Citibank’s corporate and structured trade finance unit for sub-Saharan Africa, he joined Ecobank as CEO in 1996. He left to work for United Bank for Africa and private- equity firm Africa Capital Alliance before being lured back to Ecobank in 2005.

Ecobank is visible across Middle Africa, with its signage often dominating the hazy skyline in Lome or welcoming airport arrivals in Benin. The only country in Africa that Ekpe hasn’t visited is piracy-stricken Somalia.

No Market Fear

“It helps with a lack of fear of these markets,” Ekpe says over lunch at L’Hibiscus in Lome, where he wields tongs and a fork to consume a plate of escargots. “Africa doesn’t scare me the way it scares most people.”

Even so, Ecobank has faced some harrowing moments. The bank’s profit dropped 46 percent in 2009 after 10 Nigerian banks failed an audit by that country’s central bank and required government support, causing a drop in asset values and a stock market slump. It proved to be a short-lived crisis for Ecobank: Full-year profit in 2010 more than doubled to $112.7 million as net interest income rose and bad loans dropped.

Ekpe says Ecobank’s rapid expansion -- it added 136 branches in 2009 -- is partly to blame for the mediocre results that year. “Profit margins are low because of the cost of growth,” he says. “Banking is a marathon, not a sprint.”

Consistent financial success has been elusive for other banks in Africa, too. Barclays Plc failed to expand on the continent after it said in 2005 that its purchase of a controlling stake in South Africa’s Absa Group Ltd. would allow it to become “the pre-eminent bank of the African continent.”

‘Terrific Opportunity’

Since then, Absa has sold units in Namibia and Angola and now operates in only two countries outside of South Africa: Mozambique and Tanzania. Barclays is undeterred: In February, CEO Robert Diamond said that Africa “presents a terrific opportunity.”

The financial results are apparent at Standard Chartered, the U.K. bank with 148 years of history in Africa and assets worth almost $16 billion in 14 countries. Operating profit in Africa rose almost 10 percent to $103 million in 2010.

Part of the long-term challenge is hunting down customers on a continent where as many as 260 million people, or 80 percent of the adult population, have no bank account, according to McKinsey research.

Investec, a South African private bank and wealth manager, sees opportunity. Banks in Nigeria have granted loans of an average of $350 per person, in a country with a population of 150 million, says Chris Derksen, head of frontier markets at Cape Town-based Investec Asset Management, which says it is the biggest fund investor in Africa.

Loan Potential

In South Africa, the average amount is $5,000, while in Brazil, it’s $1,500, he says. “It gives you an idea of the low penetration of banking in a very big market like Nigeria,” Derksen says.

Ecobank is trying to increase its reach by getting business customers to become personal-banking clients. “We aim to have the managing director of each company as a private customer as well as the financial director and the deputy managing director,” says Nanan Ayoko Eugenie Adjahoto, head of Ecobank Togo. “We map them. It’s like a tree. We call them and ask them to talk to us. We can see people are earning more.”

Because many Africans lack a credit record and don’t earn enough to qualify for loans, Ecobank arranges facilities for private companies to extend loans to their workers, while encouraging governments to set up credit bureaus and judicial systems equipped to deal swiftly with defaulting customers.

Nicoue Raoul Amoyi, manager of the Ecobank branch in Lome’s Tokoin neighborhood, says he increased the number of his customers by 18 percent in 2010 to 6,500 individual and commercial clients.

Evening Approval

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aZfU3Jqle8go&pos=7
Ecobank’s attention to business owners helped win over Roger Bassowou, managing director of electrical equipment supplier Tiex & Co., based in Lome.

Bassowou, 44, sits in a large office with black leather sofas and a television that’s constantly switched on, in a squat building next door to a noisy bar. He’s surrounded by bits and pieces of electrical equipment for power stations. After struggling to get financing, Bassowou turned to Ecobank in 2004.

“I once needed an urgent loan of 95 million Central African francs,” he recalls. “Ecobank called me at 9 p.m. and said it was approved. I was able to sleep that night.”

More Knocks for CBN Over Cash Withdrawal Limit


Lagos — Bank customers have criticised the Central Bank of Nigeria's new policy on cash withdrawal limit, saying that it is capable of discouraging savings culture in the country.

The apex bank had last week said that effective from June 1, 2012, daily cumulative withdrawals and lodgements in banks by individuals will be limited to a maximum of N150, 000.

It also pegged the daily cumulative withdrawals and lodgments by corporate customers at N1 million effective from the same date.

CBN noted that the policy would increase cash dominance in the economy with its implication for cost of cash management to the banking industry, security and money laundering, amongst others.

However, many bank customers, especially business owners, who reacted to the new directive said that it would have negative impact on banks as it would definitely reduce deposits.

They noted that it would lead to high lending rates in the system, thereby discouraging investment.

Read full Article (http://allafrica.com/stories/201105021113.html)

Kingdom Zyphyr opens Lagos office
FRIDAY, 06 MAY 2011 00:00 ANTHONY OSAE-BROWN

Kingdom Zephyr, a pan-African private equity firm, has announced the opening of its new office in Lagos.

Kingdom Zephyr is a leading African private equity firm that partners established African companies, providing them with the growth capital and strategic assistance required to achieve scale across the continent, focusing on investments that meet the needs of the rapidly growing African middle class.

The private equity firm currently has N95 billion ($615m) under management via its Pan-African Investment Partners (“PAIP”) funds.

The equity firm’s current investments include Letshego Holdings Limited, a Botswana-based consumer lender, and Consolidated Infrastructure Group Limited, a South Africa-based power infrastructure company.

In Nigeria, it has investments in United Bank for Africa plc and Ecobank Transnational Incorporated through its Pan-African Investment Partners (“PAIP”) I Fund.
The expansion of Kingdom Zephyr’s activities into Nigeria, sub-Saharan Africa’s most populous country and second largest economy, is seen as an important strategic move for the firm, a statement from the firm stated.

Kingdom Zephyr partner Seyi Owodunni will head the Lagos office. Prior to joining the firm, Seyi was the chief financial officer of Starcomms plc.

“Lagos is a vital location for Kingdom Zephyr’s investment activities within West Africa as we actively look to partner with established, local businesses that have the capabilities to grow and expand across the African continent.

“Nigeria’s economic growth has recovered from the temporary dip in 2009 on the back of higher oil prices as well as industry and government reforms, creating significant investment opportunities in companies positioned to benefit from these transformations.

“Growth will be further aided by key demographic trends such as an expanding workforce, increasing urbanisation and the rapid growth of Nigeria’s middle class; all developments that are consistent with our middle class consumer-focused investment strategy,” stated Seyi while commenting on the firm’s entry into Nigeria.

Also Kofi Bucknor, Kingdom Zephyr’s managing partner, stated that “although Nigeria is still dependent on its oil sector, the government is beginning to take the necessary steps towards economic diversification and market liberalization, while at the same time, corporate governance is steadily improving. This is making Nigeria an increasingly attractive proposition for private equity investors, and we believe it is essential for Kingdom Zephyr to have a local presence to facilitate greater deal flow and execution.”

The International Monetary Fund forecast that Nigeria will be among the world’s top 10 fastest growing economies between 2011 and 2015, with compound growth rate of around 7 percent is seen as a major attraction for private equity firms, which have shown strong interest in Nigeria since the beginning of 2011.

The successful conduct of the recently concluded general elections is also seen as a major catalyst to private sector interests in the Nigerian economy.

The Nigerian economy is set to benefit from the transformation of the banking and financial services, oil and gas and power sectors, all target industries for Kingdom Zephyr.

With its Lagos office, it now operates out of offices in Accra, Johannesburg, Lagos, and London with headquarters in New York. The opening of the Lagos office extends the firm’s local African reach and enhances its ability to source deals in West and Central Africa, noted the statement from the private equity firm.

The firm is a joint venture between Zephyr Management, L.P. (“Zephyr”) and Kingdom Holding Company (“Kingdom”). Headquartered in New York, Zephyr is a global leader in emerging markets private equity, having invested in Africa since the mid-1990s. Kingdom is the investment holding vehicle controlled by HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud of Saudi Arabia, a leading philanthropist and investor in Africa since 1996.

NIGERIAN Capital Markets Conference 2011
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I hope they create jobs opportunity for people

Banking sector to grow 15% in 2011 on toxic assets clean up
TUESDAY, 10 MAY 2011 00:00 IHEANYI NWACHUKWU

•Says cost focus at many banks already paying dividends

The banking sector is forecast to grow 15 percent year-on-year in 2011, as toxic assets of banks are cleaned up by the Assets Management Company of Nigeria (AMCON).

Some top rated banks in the country could grow as high as 25 percent, investment banking analysts, Rencap said yesterday in its Nigerian banking report released in Lagos.

RenCap’s optimism of the growth in credit, follows, recent positive trends from the banking sector, especially with the on-going clean-up process on banks’ toxic assets being undertaken by the Asset Management Corporation of Nigeria (AMCON).

Making reference to financial trends, RenCap noted that credit growth has started to recover and should deliver 15 percent sector-wide growth in 2011 (expected), while margins should see upward pressure from a rising-rate environment.

“Cost focus at many banks is already paying dividends while provisioning charges are falling fast, in line with improving asset quality. On heavy capital bases, Return on Equities (RoEs) are trending to double-digit territory while Return on Assets (RoAs) of 2percent-plus are the norm by 2012-2013, and are more indicative of profitability,” RenCap stated in the Nigerian banking sector report.

The analyst’s report incorporates coverage on: Zenith Bank plc, First Bank plc, Access Bank plc, Diamond Bank plc, Guaranty Trust Bank (GTB) plc, United Bank for Africa (UBA) plc, Skye Bank plc, First City Monument Bank (FCMB) plc and Fidelity Bank plc.

The report also incorporates strong buy recommendation for Zenith Bank, First Bank, UBA, FCMB, Skye Bank and Fidelity Bank as the sector looks to a new growth spurt.

Renaissance Capital, the emerging markets investment bank launched the 2011 Nigerian Banking report re-initiating coverage on those nine Nigerian banks and presenting a positive macro economic outlook - 7-8 percent GDP growth in 2011 for the nation, following the recently concluded elections.

David Nangle, an analyst at RenCap said: “Following the relatively smooth and orderly election process in April and taking into account AMCON’s success at restoring confidence in the Nigerian banking sector, we believe it is poised for a new era of growth. This is based on Nigeria’s strong macro-economic outlook, with growth projected to be between 7-8percent in 2011 and the strong capitalisation in the banking sector, which is majority deposit-funded and ample liquidity provide an enticing structural backdrop for Nigerian banks.”

Highlights of the report indicated macro economy and politics looking good. “In 2011, we think Nigeria is set for another year of 7-8 percent GDP growth (2010: 7.8percent), and with the oil price running north of $100/bbl, the current account should run a surplus of 9percent.

Inflation remains a concern, at 12percent 2011 (expected), while we expect the naira to remain broadly stable. The recent election cycle has, on balance, been positive, and should shift market focus away from political risk,” Renaissance Capital noted.

They (analysts) also made reference to a clean and structurally attractive base at the start of a fresh cycle. “Strong capitalisation, being majority deposit-funded (with low-cost current/savings accounts dominating) and ample liquidity provide an enticing structural backdrop for Nigerian banks. Accompanied by the recent, generous Asset Management Corporation of Nigeria (AMCON) asset quality clean-up process, we believe this leaves Nigerian banks working from a tabula rasa for the next leg of growth,” the analysts stated.

“Our key stock calls: Buyers of Zenith Bank, First Bank and Skye Bank. With this report, we reinitiate coverage of nine Nigerian banks (our ratings and target prices on each are set out below). While taking a positive top-down view on the timing and core investment case for Nigerian banks, we highlight our three favoured names at this juncture: of the modern giants, Guaranty Trusty Bank (GTB) may be our favoured Nigerian bank, but Zenith Bank is our preferred stock on relative valuations.

We prefer First Bank of Nigeria over United Bank for Africa (UBA) in the franchise space, as it provides an underlying multi-year restructuring story on top of impressive franchise potential. From the pool of mid caps, Skye Bank stands out for us, for its focused, midcorporate strategy and still attractive valuations. A word on the risks - We still highlight macro and political risks as key top down concerns, particularly with oil remaining a key factor for Nigeria’s budget and revenues. At the sector level, post the recent crisis, regulation will need to prove itself through the cycle before we are fully comfortable,” they stated.

World Bank, AfDB mull $2bn bond issue for Diaspora Nigerians
FRIDAY, 13 MAY 2011 00:00 ONYINYE NWACHUKWU, ABUJA

About $2 billion Diaspora bond issue is being planned by the World Bank and Africa Development Bank (AfDB) in an effort to pull more resources from Nigerians living abroad for infrastructure expansion in the country.

BusinessDay learnt that the issue could come in the next twelve months, though details are still sketchy.

At the just concluded 21st World Economic Forum (WEF) in Cape Town, South Africa, Mthuli Ncube, AfDB chief economist and vice president said the two banks are convinced that Diaspora remittances would help government tackle the current huge infrastructure financing gap in the country if properly harnessed.

“We are actually working hard at the bank at the moment to launch some instrument for Nigeria and Rwanda, we are at the preliminary stage, we need to verify what figures exist,” Ncube told BusinessDay at the WEF.

Ncube was upbeat about the outcome of the project but would not give more details, because, according to him, “plans are still at the preliminary stage.”

He said the interest in Nigeria was due to the huge untapped resources in the country while Rwanda which emerged from war was considered for help to pull its resources up for the country’s rebuilding.

At the WEF event, participants acknowledged that collaborative programmes with the Diaspora, in terms of financial and intellectual resources could help African countries finance their development needs and achieve competiveness.

AfDB figures show that there are basically about 30 million Africans who reside outside their countries of origin, while about 64 percent of them live within Africa itself, and the rest live outside the continent.

Ncube confirmed that the bank’s study found that these people transmit up to $41 billion back home annually, which according to him is slightly above annual aid flow into Africa. This implies that remittances are beginning to overtake Aid into the continent.

“This means that when you combine remittances and FDIs, Aid is becoming less and less important,” he stated.

In a separate discussion, Oby Ezekwesili, World Bank’s vice president on Africa confirmed the collaborative plans with AfDB to float the bond, which she explained was in response to the huge resource gaps to deal with development challenges on the continent.

She explained that the Diaspora presents a very important group to target, considering their immense resources, and especially, the huge annual remittances into their various countries of origin.

“We are working on the possibility of Diaspora bond and this is simply a response to the fact that you still have huge resources gaps in dealing with the challenges on the continent. When you look at the sources of domestic mobilisation by virtue of government, we are probably reaching the limit of what we can have, so we need the private sector as the part of the combination to tackle the infrastructure deficit. But as part of that private sector, you need a huge population of the citizens on the continent that are in other territories.”

Asked when the bond would most likely come on stream, she said: “We don’t have a time frame as to the earliest time this can happen. This is still work in progress, and I think that the most important issue is that it has been identified as a possible additional source that we need to investigate.”

GTBank plans $500million five-year bond
By Our Reporter 23 hours 14 minutes ago
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Guaranty Trust Bank Plc is planning to launch a $500 million five-year bond, with price talk at a yield of 7.75 percent, banking sources told Reuters yesterday.
Reuters listed JPMorgan and Morgan Stanley as Lead managers to the bond.
GTBank issued a $350 million bond in 2007, which matures in January 2012. The bond has a coupon of 8.5 percent and is yielding 4.8 percent.
Nigeria issued a $500 million debut Eurobond earlier this year. The 10-year bond is yielding 6.1 percent.
GTBank had made history in July 2007 at the London Stock Exchange (LSE) with the listing of its $750 million Global Depository Receipts (GDR), which was oversubscribed by 15 per cent.
Earlier in January 2007, its $350 million Regulation Eurobond, issued without the guarantee of either the Federal Government or any international financial institution was also oversubscribed.
The listing of the $750 million GDR was the first of its kind to be undertaken by any Nigerian bank. A third of the offer, amounting to US$250 million was offered to Nigerian investors while the balance of US$500 million was available to foreign institutional and individual investors.
The GDR is a negotiable equity security held and traded in international capital markets; it gives issuers exposure to the global market outside their home market.
The Nigerian tranche of the GDR offering was a unique vehicle aimed at providing Nigerian investors with the opportunity of purchasing a dollar-based international investment. Dividends on the GDR holdings was made in US dollars.
Menwhile, South Africa’s Standard Bank has expressed an interest in buying one of the nine Nigerian banks rescued by the Central Bank of Nigeria (CBN) last year, the head of Standard’s Nigerian unit said.
The rescued banks are Intercontinental Bank, Oceanic Bank Plc, FinBank Plc, Bank PHB Plc, Afribank Nigeria Plc, Equitorial Trust Bank, Union Bank of Nigeria Plc and Spring Bank Plc. Others, which have since recapitalised are Unity Bank Plc and Wema Bank Plc.
CBN had asked for potential bidders to register their interest in the troubled banks by mid-December to test the appetite for acquisitions as the regulator looks to reshape Nigeria’s banking landscape.
"I can confirm that we registered interest with the central bank to buy one of the Nigerian banks," said Chris Newson, chief executive officer of Stanbic IBTC, a subsidiary of Standard Bank.
"We think there is a more opportunity in Nigeria and so we are exploring either organic or acquisitive growth," he added.

GTBank Eyes 15% Growth in Loans, Advances

16 May 2011
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Acting Managing Director, GTB, Mr. Segun Agbaje
By Goddy Egene

In its determination to support the nation’s economy through regular lending, Guaranty Trust Bank (GTBank) Plc is to grow its loans portfolio by 15 per cent during 2011 financial year, its Acting Managing Director, Mr. Segun Agbaje has said.

Last year, GTBank’s loans and advances stood at N594 billion but speaking during a conference call recently, Agbaje said the bank was targeting a growth of 15 per cent. According to him, the bank had targeted 10 per cent growth last year but did only five per cent, adding that this year would be better due to lending opportunities out there.

“We did only five per cent last year because a lot of high names did not do a lot of capital expenditure and without a lot of capital expenditure your opportunity for project finance and terms loan are just not there. But we are hoping that there will be a bit more projects this year. We have started to see some coming through. There is a sugar refinery, there are some factories coming up, there is the divestment of Shell from its downstream assets and all those should help to grow loan book in 2011 over and above the 2010 level,” he said.

Last year GTBank supported the manufacturing sector of the economy with N117 billion loan, representing 19 per cent of the total loan portfolio of the bank in that year. Oil and gas sector got N138 billion loan representing 23 per cent of the bank’s loan portfolio. Meanwhile, as part of efforts to enhance quality service delivery GTBank recently announced its latest investment in Information Technology infrastructure Agbaje explained in a statement that the move was taken in line with the bank’s reputation, “as a listening bank.”


He said: “We have always sought new ways to serve our customers better. Operationally, these efforts centre on providing convenient and affordable services, without compromising quality. Many times, this has entailed the introduction of cutting-edge technology to ensure our customers can access banking service comparable with what is obtainable internationally.

“It is in this vein, that we recently migrated to a new technology platform called the Superdome server. This enterprise upgrade had been carefully planned with the aim of improving our service delivery in line with projected growth in our customer base. “Unfortunately, this project may also have caused some inconveniences to our customers who have remained loyal and supportive over time. We however assure that the rewards and dividends will be reaped in th form of more secure, stable and efficient banking services.”

According to Agbaje, for over 10 years, the Superdome — HP’s flagship, high-end Integrity server — has powered some of the world’s most demanding, mission-critical environments and is suited as the solution of choice for enterprise-class customers who require high availability, rich virtualization capabilities, and long-term investment protection.

Bailed-Out Nigerian Banks May Seek London Exchange Listing (2)
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By Chris Kay

June 2 (Bloomberg) -- Nigerian lenders bailed out by the central bank in 2009 may seek to list on the London Stock Exchange to raise funds before a deadline to recapitalize, said Ibukun Adebayo, the LSE’s head of primary markets for the Middle East and Africa.

Some of the eight lenders that received funds from the Central Bank of Nigeria have contacted the LSE about possible listings, Adebayo said. The central bank has ordered lenders to boost capital by Sept. 30 or it will withdraw interbank guarantees.

“Financial services in Nigeria are an area where we see increases in listings,” said Adebayo in an interview in London yesterday. He declined to say how many banks had approached the bourse because the discussions are confidential.

The central bank provided 620 billion naira ($4 billion) to eight of the nation’s 24 lenders after loans to equity speculators contributed to 700 billion naira of non-performing debt, according to the Economic and Financial Crimes Commission in Abuja. Governor Lamido Sanusi fired the chief executives of the distressed lenders and set up Asset Management Corp. of Nigeria, or Amcon, to buy bad debts from the banks to help recapitalize them before matching them with potential buyers.

The bailed-out lenders are Afribank Nigeria Plc, Bank PHB Plc, Equatorial Trust Bank Ltd., FinBank Plc, Intercontinental Bank Plc, Oceanic Bank International Plc, Spring Bank Plc and Union Bank of Nigeria Plc.

Meeting Deadline

Oceanic Bank said it will meet the central bank’s deadline for completing its recapitalization and has received “several expressions of interest,” spokeswoman Monye Mpho said by phone from Lagos today. Oceanic Bank will choose the bidder that offers the “best value,” she said.

Oceanic Bank slumped for the seventh day, losing 4.8 percent to 1.6 naira at the 2:30 p.m. close in Lagos. Union Bank dropped 4.9 percent to 2.51 naira. Intercontinental Bank retreated 4.7 percent to 1.23 naira, Afribank fell 4.6 percent to 1.45 naira and FinBank slumped 4.8 percent to 59 kobo.

Oceanic Bank is yet to sign an accord with a potential investor after talks collapsed with First Bank of Nigeria Plc, the country’s third-biggest lender.

FinBank has signed an agreement to merge with First City Monument Bank Plc, FCMB said on May 5. Union Bank said on March 23 it signed an agreement with African Capital Alliance under which the group will invest $750 million into the bank.

Access Bank Plc will merge with Intercontinental Bank, Access said on March 27.

The LSE has 18 companies trading on its main market and 56 on its Alternative Investment Market that are incorporated or have operations in sub-Saharan Africa. Four African companies have global depositary receipts listed on the exchange, including Lagos-based lenders Diamond Bank Plc and Guaranty Trust Bank Plc.

To contact the reporter on this story: Chris Kay in London at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Last Updated: June 2, 2011 12:00 EDT

‘Nigeria Needs Immediate Action on Financial Strategy’

13 Jun 2011
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World Bank logo

By Crusoe Osagie

The World Bank has said that for Nigeria to achieve its Financial System Strategy 2020, it must begin immediate action to achieve this feat.

Lead Economist, World Bank, Ismail Radwan, said that Nigeria must use 2011 as a start off point to achieve FSS 2020

Radwan, who spoke during a book launch titled ‘Achieving Nigeria’s Financial System Strategy 2020’, said there is the need to improve access to finance and the great potential to develop Nigeria’s dormant insurance industry by strengthening re-insurance, improving transparency, updating the legal framework and cracking down on fake insurance companies.

He said that according to a report ‘Making Finance Work for Nigeria’ that accumulating assets could be used to finance long term liabilities such as infrastructure or housing finance. “This can be achieved through the creation of a liquidity facility that could act as a bridge between the primary mortgage institutions and the corporate bond market,” the report said.

He said in 2006, and within the rubric of vision 2020, the CBN outlined a bold strategy for improving Nigeria’s financial sector, the Financial System Strategy 2020 (FSS2020).

“Although FSS2020 was an entirely home-grown initiative, the CBN invited the World Bank to support its efforts to improve the financial sector and to help diagnose the major challenges,” he said.

“Led by the Nigerian authorities, the experts provided suggestions for improvements in the banking sector, rural finance, SME finance, capital markets, housing finance, insurance, pensions and infrastructure finance among other areas,” he added.

According to him this book is a compendium and summary of the analysis of the Nigerian financial sector, produced through this process. He said in each area the book provides a detailed implementation plan that reflects a consensus of key stakeholder views and international best practice.

Meanwhile, the World Bank Country Director in Nigeria, Mr. Onno Ruhl, said Nigeria deserves to be one of the top 20 economies in the world by 2020, adding that the report provides a roadmap towards achieving it.

Ruhl said the analysis undertaken in some cases has already led to quick wins for Nigeria, saying that a recommendation to remove the monopoly enjoyed in remittances to Nigeria led to a dramatic reduction in fee rates from 8 per cent to 5 per cent.

He said it is estimated that this move alone has put an additional $60 million into the hands of ordinary Nigerians instead of the money transfer companies. Further gains are possible

AMCON Set to Restructure Bank Debtors’ Loan

20 Jun 2011
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By Obinna Chima

As the rescued banks continue to grapple with the September 30 recapitalisation deadline, the Assets Management Corporation of Nigeria (AMCON) has reminded bank debtors that it will commence the process of recovering debts owed the banks immediately the recapitalisation exercise is concluded.

Managing Director and Chief Executive Officer, AMCON, Mr. Mustapha Chike-Obi, dropped this hint while delivering a keynote address during the award of ‘Fellow’ to some deserving members of the Chartered Institute of Bankers of Nigeria (CIBN) at the weekend in Lagos.

The AMCON boss insisted that the corporation will ensure that all bank debtors pay back their debt.

Chike-Obi whose speech was titled: “AMCON as a Crisis Resolution Strategy for the Financial Services Industry,” also said that the major task before the corporation is how to manage the Non-Performing Loans (NPL) it acquired from banks.

He also expressed optimism that as the ‘bad banks’ dialogue with the debtors and restructure their loans, some of the NPLs it had purchased from the banks will be returned as ‘healthy, restructured loans.”

He explained: “Let me give you an idea of the scope of the work involved. We acquired about 9, 000 NPLs which is roughly equal to 30 to 40 per cent of the total asset in the banking industry. Since those loans are non-performing, we intend to talk to everyone of those borrowers, we intend to figure out why they defaulted, and we intend to ask them how they intend to pay because they must pay.

“We also intend to work closely with some of them to support their businesses in a manner to help the economy and allow AMCON recover its investment. So, it is a huge job that may be going for the next 10 years. Many of those businesses involved are vital to the Nigerian economy. Many of them have employees of about 10, 000 or more. So it is very important that in dealing with these people that we consider the families of the employees because they have impact in the economy. Things are not done just because one has armor, one just doesn’t create havoc.”

The AMCON boss expressed strong belief that the Nigerian economy, especially the banking industry will overcome some of its present challenges.

“We are on the right path. I used to be in charge of Emerging Markets outside this shore about 15 years ago. And, in my role I visited Brazil very often. Brazil, at a time was the biggest Emerging Market. I have seen what happened in Brazil and what happened in Brazil took place under two Presidents. Under two Presidents, Brazil went from being the next confederation economically to probably the third economy in the world.

“There are many things today that resemble Brazil 15 years ago. All it takes is a determined leadership and populace, honesty from our professionals in top positions and I believe that Nigeria will be the same as Brazil in the next five years,” he added.

The Nigerian Fixed Income Market - Offering value to issuers and investors

Tuesday, June 21, 2011 Vetiva Research

The Nigerian Bond Market has grown at an unprecedented pace in the last few years, driven largely by deliberate efforts by the government to deepen the market on the supply side, and reforms that have encouraged long – term savings. In this report, we review the progress in the market thus far, and provide our thoughts going forward.

FGN Bonds: Issuances likely to remain weighted on the short–end
While issuances in 2011 have fallen from the levels recorded in the previous year, we expect modest issuance level to linger on until the end of the fiscal year, as the government tries to initiate fiscal consolidation and diversify its sources of funding away from the domestic market. In terms of the direction of the bond yields, our base case forecast is an upward shift in the yield curve with a flattening bias, as we think that most of the supply in the rest of 2011 will likely be more focused on the short end of the curve, considering the cost of the long dated ones. Nonetheless, to promote liquidity for the mid and long dated securities, the Debt Management Office (DMO) is billed to re-open the 10–year bond as seen in the Q3’11 provisional issuance calendar with plans to issue N60 – N90 billion. In this instance, long–dated yields may rise quickly, returning to a steepening which will probably see the 20-year between the 13.50% - 14.00% levels.

 Sub – National Outlook: Higher cost of financing
With nine issuances within a 2–year window, some bracing up for come-backs and fresh entries, we can imply Sub–national financing is gradually gaining prominence despite being c.5.5% of Total Public Domestic Debt outstanding. Two trends have contributed to the rising share of sub-national financing in the last few years, and are likely to be the drivers going forward. First, is that states are autonomous, thus giving them spending responsibilities. Second is the rapid urbanization which requires infrastructure deficits to be plugged as soon as possible. We note that sub-nationals have historically issued 5-7 year instruments; and whilst one of the sub-national (Lagos) issuance cleared at 10% (in April 2010), the current yield environment and the outlook for a tighter monetary system, will require a higher premium (100bps – 200bps) on any new issuances to appeal to a competing target market.

Corporate Bond Outlook still unexciting
With five issuances between January 2010 and June 2011, corporate issuances accounted for only 5.6% of total new issuances over the period. Whilst the need for business expansion, investment, and privatization Opportunties suggest a need for corporate financing through the bond market (since the apathy to investing in equities remains), challenges such as regulatory charges and listing requirements are disincentives to most companies. Furthermore, “Blue – chip” firms’ access to low cost bank debt (11%-12%) compares favorably from an all – in cost standpoint (although the bond market provides longer – term financing). These factors support our less bullish outlook for the corporate bond market.

Kindly download the full report.


Authored by: Source: Adedayo Idowu, Research Division, Vetiva Capital Management Limited, Plot 266B, Kofo Abayomi Street P. O. Box 73530 Victoria Island Lagos, NIGERIA Tel: +234-1-4617521-3, 2700657-8; Fax: +234-1-4617524. Website: www.vetiva.com

First City Monument, Finbank merge

Nigeria-based First City Monument Bank (FCMB) is going to undertake recapitalisation of and merge with national bailed-out rival Finbank.

The merger has now been confirmed by FCMB, following news in January FCMB had made a bid for 182-branch strong Finbank.

The merger between FCMB, which has 133 branches across Nigeria, and Finbank is part of FCMB’s ambitions to grow its retail banking franchise as the bank operates predominantly as a wholesale bank.

Read More (http://www.vrl-financial-news.com/retail-banking/retail-banker-intl/issues/rbi-2011/rbi-651-652/nigeria-ma-first-city-monume.aspx)

Nigeria’s Bourse Targets $1 Trillion Market Value in Five Years, CEO Says
By Chris Kay and Oliver Joy - Jun 28, 2011 6:08 PM GMT+0200

The Nigerian Stock Exchange, whose index has tumbled 67 percent from its March 2008 peak, is targeting a market value of $1 trillion in five years as it attracts companies and plans to give shares to members through demutualization, Chief Executive Officer Oscar Onyema said.

“Our goal is to grow our market capitalization from $74 billion to $1 trillion in five years,” Onyema said in an interview in Moscow today. “If we can attract the oil and gas sector, if we can attract the telecoms sector and power sector then we should be able to hit those numbers.”
The bourse, whose index is sub-Saharan Africa’s third-worst performer over the past 12 months after Kenya and Botswana’s, is the second-biggest by market capitalization after South Africa’s, which has a value of $494 billion, according to data compiled by Bloomberg.

Nigerian President Goodluck Jonathan has asked the nation’s Securities and Exchange Commission to get oil exploration and telecommunications companies to trade their shares on the exchange, Arunma Oteh, the regulator’s head, said on Feb. 7.

Oil exploration, power and telecommunications companies aren’t represented on the bourse and “would be totally new areas for the exchange,” said Onyema. Agriculture is “another area where we will be making a push” as it’s underrepresented on the bourse and makes up 40 percent of the West African nation’s gross domestic product, he said.

Nigerian Petroleum Listing

“We really want them because we believe a well functioning capital market is a good barometer for the economy,” Onyema said. “So where these major sectors are not represented in our capital markets today we are not giving you an accurate picture of the economic potential of Nigeria.”

Nigerian National Petroleum Corp., the state-owned oil company of Africa’s top oil producer that holds an average 57 percent stake in joint ventures with companies including Royal Dutch Shell Plc, Total SA and Exxon Mobil Corp., may list after lawmakers pass a bill to regulate the oil industry, Oteh said June 23.

Onyema is “implicitly saying that NNPC is going to get listed and hurray, let’s pop the champagne corks and get the ball rolling,” Christopher Hartland-Peel, a London-based Africa equity analyst at Exotix Ltd., said by phone today. “It’s perfectly feasible” to reach the market-value target “and great news because it means the listing of NNPC with its approximately 1 million barrels a day oil production and reserves that go with it,” he said. All the cement companies, breweries and banks “of any significance” are already listed, said Hartland-Peel.

Demutualization Plan

The exchange of Africa’s most populous country has no time frame for its plans to demutualize and a committee focusing on the process is scheduled to start next month, Onyema said.
“We want to do it right, we don’t want to do it in a rush,” he said. “We want to make sure we take into consideration all the stakeholders and we address all the key questions that need to be addressed as part of the demutualization process.”

The Nigerian Stock Exchange All-Share Index fell for the second day, declining 0.6 percent to 25,023.84 by the 2:30 p.m. close in Lagos, according to an e-mailed statement from the bourse.

Onyema, who started work in April, replaced Emmanuel Ikazoboh who was appointed in August as interim administrator after the Securities and Exchange Commission removed former head Ndi Okereke-Onyiuke, as part of measures to address “inadequate oversight of the exchange,” it said.

Onyema joined the Nigerian bourse from the American Stock Exchange, where he was a senior vice president and chief administrative officer.
To contact the reporters on this story: Chris Kay in London at ckay5@bloomberg.net; Oliver Joy in Moscow via London at ojoy@bloomberg.net

Naira rides on new investment policy to four-month high
THURSDAY, 30 JUNE 2011 00:00 BLESSING ANARO

•Analysts see new high of N145/$

The Naira rose to a 4-month high of N151.79 to the dollar on expectation of inflow of foreign currency after the Central Bank of Nigeria (CBN) lifted restriction earlier placed on foreign investors from trading on government securities.

The central bank sold all the $183 million demanded at 151.79 to the dollar at yesterday’s auction, having sold $314 million at N152.64 to the dollar on Monday.

The naira strengthened to N153.70 to the dollar on the inter-bank market, its strongest since early March, from N153.95 at Tuesday’s close. But the currency depreciated at the parallel market where it exchanged for N159.50 yesterday from N158.30 to the dollar the previous day.

Analysts say they expect to see further strengthening of the currency at N145 to the dollar by the end of the year.

The central bank announced a removal of restrictions placed on investing on government securities. The restriction ends tomorrow. Analysts say this is expected to open another window for the inflow of foreign currencies into the country, thus reducing the pressure of demand on central bank’s foreign exchange which is sold at the twice weekly Wholesale Dutch Auction System (WDAS).

Also, they hinged the strengthening of the Naira on the recently announced cap on the amount of United States dollar that banks can sell to bureaus de change operators.

The naira stood at N151.91 to the dollar as of 8th April 2011. It then rose to N153.59 to the dollar as of May 27, 2011. But the Naira appreciated to N151.79 to the dollar yesterday.

The naira strengthened to N153.70 to the dollar on the inter-bank market, its strongest since early March, from N153.95 at Tuesday’s close.

Dollar demand at the central bank’s bi-weekly auction, which has regularly stood at around $400 million, has fallen since the new measure was announced, further supporting the naira.

The central bank sold all the $183 million demanded at 151.79 to the dollar at yesterday’s auction, having sold $314 million at N152.64 to the dollar on Monday.

“The central bank has cut off the bulk of demand in the inter-bank with its policy limiting dollar sales to bureau de change and this has helped the naira to gain,” Reuters quoted one dealer.

Dealers said more foreign investors were buying naira, while expectations that energy companies will begin month-end dollar sales soon leant further support.

“We see the naira appreciating further in the coming days as more dollar inflows from energy firms and foreign investors keep coming to the system,” another dealer said.

“Although the naira is trading close to its highs for year, the reforms could help it to advance another 1 percent to 1.5 percent in the coming weeks,” BNP Paribas strategists led by London-based Bartosz Pawlowski wrote in a report.

The currency may strengthen to N145 per dollar by the end of the year after the Central Bank of Nigeria lifts a requirement for foreign investors to hold local-currency investments in government securities for, at least, a year, starting July 1, Sanusi Lamido Sanusi said June 23. “Positive interest rates” will contribute to the gain, he said.

Authorised dealers can sell a maximum of $250,000 to foreign-exchange bureau operators a week, the Abuja-based central bank said in a statement June 24. Operators are only allowed to purchase from one authorised dealer a week, it said.

Samir Gadio, analyst with Standard Bank, London, told BusinessDay: “There are several drivers of this appreciation. First, the CBN has significantly revalued the naira at the WDAS auctions on Monday and Wednesday as demand eased, indicating its preference for a relatively stronger exchange rate.

Second, the new circular on the BDCs released by the central bank has also helped cap speculative demand since the amount of dollars that the banks are allowed to sell to the BDCs has been reduced to USD250,000 per week.

Third, the removal of the 1-year restriction associated with the holding period of the certificate of capital importation for foreign investors in the domestic bond market has boosted expectations of a stronger currency in coming months, especially after CBN Governor Lamido Sanusi suggested the naira could hit the 145 level by year-end as the effects of the above-mentioned reform materialise.

Fourth, oil companies tend to send dollars to the market during this part of the month; such a cyclical factor could potentially translate into further currency strengthening in the immediate short-term.

We think some currency appreciation is likely to take place in 2011, but the magnitude of the move will depend on global risk metrics in H2:11, the possibility of further oil price correction as well as the extent to which some fiscal consolidation materialises in Nigeria and results in a rebound in foreign reserves. For now, Nigeria’s fiscal metrics and oil revenue leakages still represent an important risk to the exchange rate outlook and a constraint on a sustainable shift in domestic confidence.”

Bond market peaks as CBN lifts one-year restriction for foreign investors
THURSDAY, 30 JUNE 2011 00:00 IHEANYI NWACHUKWU

…Analysts expect yields to further trend downwards

Ahead of tomorrow (July 1, 2011) set by the Central Bank of Nigeria (CBN) to lift the one-year restriction on Nigerian bond holding by foreign investors, the market is expected to boom this week, investment analysts have speculated.

The optimism over bond market rise this week follows analysts’ views that local banks are taking position in government bonds, in anticipation of a scramble by foreign investors as soon as the CBN implements its decision tomorrow.

“Given the recent announcement by the CBN to lift the one-year restriction on bond holding by foreign investors, bond market activity is likely to increase supported by a relatively liquid market. As a result, bond yields are expected to further trend downwards or remain at current levels,” said analysts at Access Bank plc.

Market reports from analysts had shown how bond prices for all maturities in Over-The-Counter (OTC) picked up, resulting in a decrease of their respective yields following an improvement in financial system liquidity.

“In the current week, we expect this trend to continue as local banks take position in government bonds in anticipation of a scramble by foreign investors from July 1, 2011, when the CBN will remove the one-year minimum holding period for Nigerian bonds imposed on foreign investors,” noted analysts at Cowry Asset Management.

These analysts also noted the possibility of this development being moderated by the tightening of system liquidity due to end of month reporting pressure.

Bond market review and outlook by Cowry Asset Management showed that in the just concluded week, OTC bond saw on a week-to-week basis, the 20-year, 10 percent FGN July 2030 Bond gain N1.37 kobo to close at N79.57 kobo, while yield decreased to 12.87 percent.

“The 10-year, 7 percent FGN October 2019 paper rose by N1.55 kobo to N72.11 kobo (yield fell to 12.44 percent), while the 7-year, 9.25 percent FGN September 2014 Bond appreciated by N1.24 kobo to N93.46 kobo (yield declined to 11.65 percent).

“Also, the 5-year, 4 percent FGN April 2015 Bond climbed by N1.19 kobo to N75.18 kobo (yield dropped to 12.26 percent) even as the 3-year, 5.50 percent FGN February 2013 Bond firmed by N0.92 kobo to N93.30 (yield retreated to 9.94 percent),” the report stated.

Also in a related development, the equities market is expected not to see a different trend, despite a bearish resumption this week. This expectation of a bullish trend in equities market follows analysts’ optimism on the Nigerian economic outlook, particularly in the third quarter and beyond even as the Federal Government streamlines its focus on governance.

“The capital market is expected to swing along as economic activities improve with foreign capital inflows; hence, we remain optimistic of a sustained market rally. We therefore maintain a medium/long-term investment tailored towards stocks with good fundamentals and high growth potential.

“This week, we expect to see a continuation of the bull run experienced towards the end of last week for both bargain hunting and speculative purposes as the market offers more opportunities,” Cowry Asset Management added in their report.

African Alliance Securities Delays Mauritian Plan Amid Low Trading Volumes

By Chris Kay - Jul 21, 2011 9:18 AM GMT+0100

African Alliance Securities, the brokerage with offices in 10 countries on the continent, has abandoned plans to open in Mauritius this year because of low- trading volumes, Chief Executive Officer Patrick O’Flaherty said.

African Alliance Securities, which is based in Johannesburg, already has a trading license in Mauritius and the office would have been a “small start up operation with three or four people,” O’Flaherty said.

“Mauritius I’ve put on hold for now, I don’t think the current liquidity in the market is suitable to sustain a stock broking business,” O’Flaherty said in an interview from Johannesburg on July 19. “If you look at some of the smaller African markets they have been really impacted by the global financial crisis and they really haven’t recovered.”

The total value of transactions on the exchange fell 23 percent between the first-half of 2007 and the same period this year to 5.1 billion Mauritian rupees ($180 million), according to central bank data. Mauritius Commercial Bank (MCB) is the largest company on the 38-member Stock Exchange of Mauritius by market value.

The Indian Ocean island nation’s exchange is sub-Saharan Africa’s fourth-biggest after those in South Africa, Nigeria and Kenya. The Mauritius SEMDEX Index fell for the fourth day, retreating 0.2 percent to 2,042.03 as of 11:37 a.m. in Port Louis, heading for the lowest close since April 12.
Deferring Entry

Turnover on the Mauritian Stock Exchange in Port Louis was $817,000 yesterday, according to Renaissance Capital. That compares with $9 million in Nigeria, $6.2 million in Kenya and $2.5 million in Zimbabwe.

“By no means are we saying that Mauritius is no longer on our radar, we’re just saying we’re deferring our entry into Mauritius until sometime as we believe the market can sustain an operation there,” he said. “I would rather focus management time on our existing markets and more specifically getting Nigeria up and running.”

African Alliance Securities was issued a license last year to operate in Nigeria and will appoint a CEO within “the next few weeks” to head its Lagos office, which is expected to be “up and running” by year-end in Africa’s largest oil producer, said O’Flaherty.

The brokerage has offices in South Africa, Swaziland, Botswana, Namibia, Zambia, Malawi, Kenya, Uganda, Rwanda and Ghana.

“Nigeria is probably the most significant market outside of South Africa when you’re talking sub-Saharan Africa. So we believe that’s a market where you can make a very significant case for a business,” said O’Flaherty. “We have a long term view that African financial markets will be exponentially bigger than they are now in five to 10 years.”

To contact the reporter on this story: Chris Kay in London at ckay5@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg

Source: Vanguard News (http://www.vanguardngr.com/2011/07/uba-records-67-growth-in-first-half-profit/)
UBA records 67% growth in first half profit

United Bank for Africa, UBA, Plc has recorded a 67.42 per cent growth in profit after tax for its half year 2011 financial performance.

According to its unaudited financial result, for the period ended, June 30, 2011, presented to the Nigerian Stock Exchange, NSE, its profit after tax rose to N8.12 billion from N4.85 billion recorded in similar period in 2010, while profits attributable to the Group rose by 90.3 per cent to N8.2 billion

However, its gross earnings dipped by 6.41 per cent to N87.66 billion from N93.66 billion recorded in 2010.

The bank posted a profit before tax of N10.11 billion, rising by 17.01 per cent from N8.64 billion recorded in 2010, while its total assets grew by 12.37 per cent to N1.817 trillion from N1.617 trillion recorded in 2010.

Non-interest revenues grew by 17 per cent to N30.3 billion, leading to an increase in the proportion of fee-based income to 35 per cent in the first half of 2011.

According to a statement by the bank, the benefits of risk asset expansion are yet to impact on fund based incomes, thereby presenting ample room for revenue expansion in the second half of the year.

Its operating income rose to N65.5 billion on the back of strong fee-based incomes, compared to N63.7 billion in 2010.

Commenting on the bank’s performance, Mr. Emmanuel Nnorom, Executive Director – Finance, said, “UBA’s performance was bolstered by Management’s concerted efforts to curtail operating costs evidenced by a 2.4 per cent reduction in operating expenses from N51.8 billion in June 2010 to N50.6 billion in June 2011; in spite of the N4.9 provision charge made to the income statement.”

The statement noted that overall, the balance sheet size strengthened further with total assets and contingents closing 17.1 per cent higher than the full year 2010 position to N2.66 trillion.

This growth, according to the bank, was driven by risk asset expansion recorded during the period under review, while attesting to the essence of its wide distribute its deposit base grew by 11.4 per cent to N1.41 trillion compared to N1.27 trillion in December 2010.

“In line with full year projections, loan book has also grown by almost 14 per cent to N715.8 billion, bringing Group loan-to-deposit ratio to about 51 per cent.

Whilst the “Group looks forward to enhanced interest revenues from increased lending, it continues to seek avenues to extend quality credit to its teeming customers and clients.

“Notwithstanding, UBA maintained a good proportion of liquid assets in its aggregate asset base closing with a liquidity ratio of 42 per cent at the end of the period.

“Driven by solid shareholder funds of N187.1 billion (N179.4 billion in December 2010), capital adequacy ratio remained strong at 17 per cent,” the statement explained.

The statement further noted that the release of the half year result coincides with the announcement of key Management appointments, as part of the steps required to re-organizing its operations in line with the Financial Holding Company model.

Source: Vanguard News (http://www.vanguardngr.com/2011/07/nse-to-commence-short-selling-securities-lending/)
NSE to commence short selling, securities lending
The Nigerian Stock Exchange, NSE, has announced plans to commence securities lending and short selling.

Short selling is the selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. In short selling, sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Security lending, on the other hand, is a loan of a security from one broker/dealer to another, who must eventually return the same security as repayment. The loan is often collateralized.

Securities lending allows a broker-dealer in possession of a particular security to earn enhanced returns on the security through finance charges.

Mr. Oscar Onyema, Chief Executive Officer, NSE, said the Exchange is collaborating with industry participants to ensure a smooth take off of the proposed initiatives.

He lamented the fact that traders only make money in Nigerian market today when the market goes up, saying that participants should be able to make money whether the market is up or down if they can short securities.

He also promised that his management would encourage and support the introduction of Hedge funds into Nigerian capital market and he highlighted trading of bonds in the secondary market, among others as priority areas.

meanwhile, a group of foreign institutional investors from UBS Wealth Management have indicated interest in investing in the Nigerian capital market.

The investors, accompanied by Dr. Kalu Idika Kalu, Chairman, BGL Plc, on a fact-finding mission to the Nigerian Stock Exchange, NSE, Wednesday, noted that their interest was as a result of the opportunities inherent in the market and the country in general.

Kalu explained that the Nigerian capital market has remained attractive to discerning investors and that the visitors were in the market because they saw value in the market. He said that BGL is on a quest to encourage international investors to participate in Nigerian markets and that once they come, it would encourage local investors to do same.
[....continued]

^^ UBA actually started a commercial venture with Kenya Airways to advertise its services on KQ's in-flight communication and & other channels this month. It's the first time any company has been allowed to do so. That should definitely be a plus for UBA seeing as KQ is the 3rd largest carrier in SSA and has a fast expanding fleet.

Excess liquidity: Govt securities record 152% oversubscription Monday, July 25, 2011

By Babajide Komolafe

Government securities last week recorded oversubscription of 152 per cent, reflecting surplus of money in the interbank money market.

Results of trading in government securities for the week showed that the total public subscription to the N140 billion worth of treasury bills(TBs) on offer stood at N354.599 billion, indicating oversubscription of N214.549 billion. The Central Bank of Nigeria, however, sold N139.715 billion.

At the primary market where new TBs are issued, N70 billion TBs were on offer whiletotal public subscription stood at N161.92 billion. At the secondary market where existing TBs are traded, N70 billion TBs were on offer while public subscription stood at N192.569 billion.

Details of the primary market trading show that the three-year TBs attracted N65.94 billion subscription as against N30 billion on offer. The range of bids was from 6.0 to 12.99 per cent while the stop rate was 10.2499 per cent.

The five-year TBs attracted N46.32 billion as against N15 billion on offer. Range of bids rate was from 9.0 to 14.04 per cent while the stop rate was 10.7 per cent.

The ten-year TBs attracted subscription of N45.7 billion as against N25 billion on offer. Bid rates ranged from 9.94 to 13.5 per cent while the stop rate stood at 11.4989 per cent.

At the secondary market, the 161 days bills attracted N47.855 billion subscription as against N20 billion on offer. Bid rates ranged from 6.9 to 9.249 per cent while the stop rate was 7.4389 per cent. The 203 days bills attracted N61.75 billion subscription as against N20 billion on offer.

Bid rates ranged from 7.0 to 9.249 per cent while the stop rate was 7.741 per cent. The 322 days bills attracted N62.963 billion subscription as against N30 billion offered. Bid rates ranged from 7.5575 to 10.01 per cent while the stop rate stood at 8.8997 per cent.

The oversubcription recorded by government securities was occasioned by increased market liquidity (funds) buoyed by N270 billion statutory allocation funds that hit the market last week.

Vanguard investigation reveals that the amount of funds in the interbank money market rose bymore than 100 per cent to N419.42 billion on Friday from an opening figure of N176.30 billion on Monday.

The surfeit of funds in the market caused cost of funds to decline on the average by 133 basis points during the week. According to data from Financial Market Dealers Association (FMDA), Call lending dropped to 7.79 on Friday from 9.45 per cent the previous week. 7-Day lending and 30-Day lending also declined to 8.5 and 10.13 per cent from 10.125 and 11.833 per cent respectively.

This trend is likely to continue this week as the excess liquidity in the market is expected to persist this week.
...

Access Bank launches on-line FX dealing service




July 26, 2011

ACCESS Bank Plc has announced the launch of Nigeria’s first online foreign exchange dealing service to support its growing corporate and institutional client base.
Access FX is an innovative product that provides corporate and institutional customers online access to executable foreign exchange rates across a wide range of currency pairs in spot, swap and outright forward contracts.

The service is delivered to the bank’s customers via secure Internet straight to their browser and allows the bank’s customers to trade their foreign currencies from their homes and offices anywhere in the world.
Announcing the new service Aigboje Aig-Imoukhuede, group managing director/CEO, Access Bank said: “With the launch of Access FX, we are continuing to deliver on our promise of service excellence and innovation to our esteemed customers. We believe this product also affirms our reputation as the dominant trade finance bank in Nigeria.”

He added that the introduction of Access FX is a demonstration of the bank’s quest to continuously elevate its service standards.
Velsys Chairman/CEO Kevin Ashby said: “Velsys has worked closely with Access Bank to create a solution using our V-FX trading product to meet the specific needs of the bank and its clients. We look forward to expanding our relationship with Access Bank with a continued focus on enhancing the trading experience for clients.”

9 Nigerian Banks Make Top 1000 World Banks Ranking


On July 27, 2011 · In News ,
By Babajide Komolafe with Agency reports
Lagos — Nine Nigerian banks have made the list of the Top 1000 World Banks Ranking by Tier One Capital in the 2011 edition by The Banker magazine as published in its current edition.

According to a statement signed by the Country Representative of The Banker, Mr. Kunle Ogedengbe, Zenith Bank and First Bank are the two top ranked banks in Nigeria. While Zenith is ranked 296, First Bank of Nigeria Plc is ranked 310.

Other Nigerian banks that made the Top 1000 World Banks list are Guaranty Trust Bank ranked 444, Access Bank (495), United Bank for Africa (513), Fidelity Bank (567), First City Monument Bank (586), Diamond Bank (650) and Skye Bank (657).

Apart from featuring in the top 1000 World Banks, the banks also made the Top 25 banks in Africa with Nigeria being the only country in the continent that has nine banks in the African Top 25 ranking schedule.

CBN raises policy rate
Meanwhile, the Central Bank of Nigeria, CBN, yesterday raised the Monetary Policy Rate (MPR) to 8.75 per cent, to further tighten money supply in anticipation of future rise in inflation. The MPR is the benchmark for interest rate in the economy.

The CBN also reported that the nation’s real gross domestic product (GDP) growth slowed down in the first quarter to 6.64 per cent from 7.36 per cent in the preceding quarter, warning that security challenges, infrastructural bottleneck and government spending could undermine investors’ confidence and output growth in the near term.

In a communiqué issued at the end of its Monetary Policy Committee (MPC) meeting, the CBN explained the rational for raising the MPR for the third time this year.

It said, “The Committee observed that the inflation outlook appears uncertain owing to the expected implementation of the new national minimum wage policy and the imminent deregulation of petroleum prices. Significant injection of liquidity from FAAC in the third quarter coupled with the impact of AMCON recapitalizing intervened banks to the tune of N1.6 trillion will both add to inflationary pressures.

South Africa and Egypt have five banks each, Morocco has three while Togo, Angola and Mauritius have one each.
With the first listing published in 1970, The Banker Top 1000 ranking has for over 41 years served as a credible source for the measurement of the stability of global banks along with in depth analysis of the global financial industry.

In the 2011 ranking, the United States of America maintains number one position through Bank of America, followed by JP Morgan Chase & Co., while HSBC of the United Kingdom moved to third from fifth ranked position last year
New comers to the top 10 compared to last year are Mitsubishi UFJ Financial Group Japan, China Construction Bank Corporation and Bank of China while those who did not make the top 10 this year compared to last year are BNP Paribas, France; Barclays Bank, UK and Banco Santander, Spain.

The rankings are based on the definition of Tier One Capital as set out by Basel’s Bank for International Settlements (BIS) and the object of the survey is to show the banks’ soundness in relation to the Basel requirement of a minimum ratio of Tier One Capital to risk-weighted assets of 4 per cent (increasing to 7 per cent by 2019) and a minimum ratio of total capital to risk-weighted assets of 8 per cent.

http://www.vanguardngr.com/2011/07/9-nigerian-banks-make-top-1000-world-banks-ranking/

I remember that list of Africa's largest banks (can't remember what it was measured by), but the list didn't have many Nigerian banks on it..I think it was outdated, but if it wasn't it surely is now.

I remember that list of Africa's largest banks (can't remember what it was measured by), but the list didn't have many Nigerian banks on it..I think it was outdated, but if it wasn't it surely is now.

Well, according to the list, this ranking was made on Tier one capital, as at the end of first quarter 2011

First Bank of Nigeria to Acquire Banks in 3 African Countries By Year-End

By Emele Onu - Jul 28, 2011 4:37 PM GMT+0100

First Bank Plc, Nigeria’s third- biggest lender by market value, plans to acquire banks in three African countries before the end of next year, Chief Financial Officer Bayo Adelabu said.

“We are about to close the deal on one of the target banks,” Adelabu said in an interview today in Lagos, the commercial capital, without naming the banks or the countries. “We will buy majority or total stakes in medium-sized banks” in the chosen countries.

The lender is also planning to sell Eurobonds to refinance maturing debt, with the amount and date of issue yet to be determined, he said.

Under a new licensing rule introduced by regulators, First Bank adopted the holding company structure, aiming to expand across 10 sub-Saharan African countries while divesting its record-keeping business and non-core real estate assets, it said.

First Bank wasn’t seeking acquisitions in Nigeria after a failed attempt to buy Oceanic Bank International Plc (OCEANIC), one of eight banks bailed out by the Central Bank of Nigeria in 2009, Adelabu said.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net
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FBN Eurobond trades at 4.30 percent yield
Thursday, 04 August 2011 00:00 Godfrey Obioma
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First Bank’s Eurobond 9.75% due 2017 traded at a premium of US$103.49 at the yield: 4.30 percent July 29, 2011. This is an improvement over its recent trading profile when it rose to $100.75 A Eurobond is a debt contract which records the borrower’s obligation to pay interest at a given rate and the principal amount of the bond on specified dates. The issue has a specific structure and is defined in the European Union Prospectus Directive (89/298) as transferable securities.

The Federal Government Eurobond closed at a premium of US$106.84 at a yield of 5.80% as at July 29 2011. GT Bank issued its 2nd Eurobond in May 2011, setting the pace for other Nigerian corporate issuances. Like the Sovereign Eurobond, GT Bank’s US$500 million 7.50% due 2016 is currently trading at a premium of US$104.63 at the yield of 6.36%.

The advent of Nigeria’s sovereign debt issue has paved way for Nigerian corporates to access the international debt markets. Nigeria’s debut Eurobond, US$500 million 6.75% due 2021, was oversubscribed at issue in January 2011.

Analysts said the performance of the Nigerian fixed-income instruments in the international capital markets should encourage other blue chip corporates to use this avenue to access relatively cheaper and longer dated funds. With the exception of GT Bank’s Eurobond issue discussed above, corporate and state government bonds are yet to debut in the domestic bond market in H1-11, delayed by the implications of rising yields on fixed income instruments and also the April elections.

Interest in Eurobonds issued from Nigeria is attributed to the success of the general election, efforts towards fiscal consolidation, successful reform in the banking sector and fairly consistency in policies. The Nigerian economy has also recorded appreciable growth in GDP. The Nigerian economy grew 7.43% in 1Q11, compared with growth of 7.36% a year earlier. The growth was largely driven by the non-oil sector, which grew 8.46% compared with the oil sector’s expansion of 2.90%.

Services, commerce and agriculture were the main drivers of growth. A recovery in capacity utilisation in 4Q10 reflects the increasing activity of the industrial sector, which currently produces about one-quarter of GDP. The significant 2.8 ppts increase in the capacity utilisation rate in 4Q10 has been attributed to increasing business confidence and a moderate improvement in the electricity supply. Oil production is growing off a high base, hence its modest growth relative to that of the non-oil sector.

Nigeria’s Interswitch Plans Africa Buys With Helios Cash After Uganda DealBy Emele Onu - Aug 11, 2011 4:34 PM GMT+0100 .

Interswitch Ltd., a Nigerian company that processes payments for banks in the West African nation, took a 60 percent stake in Uganda’s only company of the kind amid plans for more African acquisitions.

Lagos-based Interswitch will use the 26 billion naira ($170 million) injected into it by Helios Investment Partners LLC in December for expansion on the continent, Chief Executive Officer Mitchell Elegbe wrote in an e-mailed response to questions yesterday.

“We are targeting acquisitions in other countries, and where we can’t acquire, we will partner with the owners,” he said. Interswitch concluded the deal for the majority stake in Kampala-based Bankom Ltd. yesterday, Elegbe said. He declined to say how much was the deal was worth.

The growth plans for Interswitch, which also runs a network of 10,000 automated-teller machines and 11,000 point-of-sale terminals, come as the Nigerian central bank seeks to encourage more non-cash transactions in sub-Saharan Africa’s second- biggest economy. A cash-withdrawal limit of 150,000 naira for individuals and 1 million naira for companies will take effect in June 2012.

Growth Phase

London-based Helios, a closely held investment company that focuses on Africa, bought into Interswitch “at a time when Nigeria is getting set for the next phase of growth in electronic payments,” said Elegbe. “We think the partnership will enhance Interswitch’s strong growth within and outside the country,” he said.

No official at Helios’s London office was available to comment on the deal, a company representative said when Bloomberg news called.

Interswitch was established by seven Nigerian banks, four of which still hold shares in the company, including First Bank of Nigeria Plc (FIRSTBAN), Union Bank of Nigeria Plc, United Bank for Africa Plc (UBA) and Zenith Bank Plc (ZENITHBA), according to its website. Adlevo Capital of Mauritius and TechInvest Ltd., the holding company of Telnet Nigeria Ltd., also hold stakes.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net
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Nigeria taking lead in African local debt
Thu Aug 18, 2011 4:23pm GMT


By Tosin Sulaiman

JOHANNESBURG (Reuters) - Nigeria looks set to overtake South Africa as the continent's biggest issuer of local government debt with a planned $650 million auction by one of its states in October, but sub-national bonds remain far off for much of Africa.

Capital markets can prove cheaper than bank loans -- and may be the only option -- for some governments seeking to fill budget gaps or fund big infrastructure projects, but in much of Africa the growth of local debt issuance has been slow to take off.

A planned 100 billion naira bond issue by Rivers State in Nigeria's oil-producing Niger Delta would take Nigeria's total local debt stock to more than $2.3 billion compared to South Africa's $1.9 billion in municipal bonds.

"Banks in Nigeria have only a small direct exposure to Nigerian sub-nationals, about 5-10 percent of their total loans," said Maciek Szymanski, an investment analyst at African Alliance, explaining why Nigerian states are keen to issue bonds.

"In South Africa, the banking sector is more consolidated and has more capacity to lend to municipalities."

South Africa's business centre Johannesburg became the first local authority to tap the bond markets in 2004 and has since been joined by neighbouring Ekurhuleni and the port and tourism capital of Cape Town.

But the outstanding issues still account for only about 1 percent of South Africa's bond market -- Africa's biggest by far.

In contrast, Nigerian state bonds have mushroomed since 2008 to 7 percent of the overall bond market. Nine of Nigeria's 36 states, including the commercial hub of Lagos, now have bonds. Initially, states sought funds for local budgets after falling oil prices reduced the amount they received from central government, but they have since sought funding for everything from roads to a luxury resort.

Rivers State plans projects including a monorail and an entertainment complex.

NO YIELD CURVE

Nigerian state bonds are tax-exempt and all except those of Lagos are backed by a payment order from the central government, which deducts coupon and principal payments from the amounts the states receive from the overall budget.

"It's virtually impossible that you could have a default unless the sovereign defaults itself," said Samir Gadio, an emerging markets strategist at Standard Bank.

The return on local debt is higher than for sovereign debt, although the lack of a secondary market means there is no yield curve, said Gadio.

However, there has been virtually no participation from foreign investors despite the guarantee from central government.

"They don't really understand how it works. There's a fear that there's a lack of fiscal transparency at the (federal) government level. They think this is worse at the state level," said Gadio.

With some of the issues as small as 6 billion naira, the lack of liquidity is also a discouragement.

Although South African municipal bond auctions had tended to be oversubscribed, a secondary market had not developed there either, said Francesco Soldi of Moody's, the credit rating agency.

He nonetheless saw growth in the municipal bond market as cities sought others sources of funding.

In the rest of sub-Saharan Africa, municipal bonds may be at best a long-term aspiration while other domestic debt markets are still in their infancy.

Nairobi in Kenya and Rwanda's capital Kigali have announced plans to issue municipal bonds in recent years but they have yet to happen. The City of Douala in Cameroon issued a 5-year bond in 2005, but that is very much an exception.

It will be another five to 10 years before municipal bond issuance becomes widespread as many local governments lack the financial skills to come up with viable projects that generate revenue, said Szymanski.

"It's one thing to invest in infrastructure, it's another thing to make it pay back," he said.

© Thomson Reuters 2011 All rights reserved

Nigerian Credit Increases First Time Since November 2010
August 19, 2011, 12:57 PM EDT

By Emele Onu

(Updates with analyst’s comments in third paragraph)

Aug. 19 (Bloomberg) -- Nigerian credit to the private sector rose 0.6 percent in July, the first increase since November 2010, as the banking system stabilized.

Private-sector lending advanced to 9.9 trillion naira ($64.4 billion) last month, the central bank said on its website today. The M2 money supply climbed 13 percent, up from 12 percent in June, the Abuja-based bank said.

The central bank set up the Asset Management Corp. of Nigeria, or Amcon, last year to buy the bad debts of banks to prevent a collapse in the industry. Banks received bonds for their debts that can be discounted for cash to enable them resume lending.

That injected more funds into the banking system, aiding the “rise in money supply and the marginal growth in credit,” Bismark Rewane, analyst and chief executive officer of Lagos- based Financial Derivatives Co., said by phone.

Still, credit growth remains weak as banks continue to avoid risk while rebuilding their balance sheets, Rewane said.

--With assistance from Dulue Mbachu in Abuja. Editors: Nasreen Seria, Gordon Bell

Naira Slips Most in Five Months After Nigeria Lifts Curbs on Dollar Sales
Bloomberg (http://www.bloomberg.com/news/2011-08-01/nigeria-naira-heads-for-biggest-gain-in-3-weeks-on-dollar-sales-to-bureaux.html)

Nigeria’s naira depreciated the most since March after the central bank lifted curbs on dollar sales to foreign-exchange bureaus.

The currency of sub-Saharan Africa’s second biggest economy weakened 1.4 percent against the dollar to 155.95, the biggest decline since March 10 on a closing basis, at 5:45 p.m. in Lagos.

Foreign-exchange bureaus increased dollar purchases after Nigeria’s central bank said on Aug. 19 it removed a $1 million cap on the amount of foreign exchange that bureaus may buy from lenders per week, according to Afrinvest, a Lagos-based brokerage.

Nigeria sold $400 million at a foreign-exchange auction today, less than the $562 million demanded by lenders, the Abuja-based Central Bank of Nigeria said in an e-mailed statement. The marginal rate, which is also used as the prevailing exchange rate, was 151.85 naira, compared with 151.35 naira at the previous auction on Aug. 17.

Nigeria’s external reserves stood at $34.58 billion as at Aug. 18, compared with $37.99 billion a year ago.

Access Bank to pay N50bn for 75% stake in Intercontinental
Wednesday, 31 August 2011 00:00 John Omachonu & Osae Brown
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•AMCON to retain 15% stake, shareholders may get 10%

In what analysts regard as a ‘good buy’ Access Bank is to pay N50 billion for a 75 percent equity stake in Intercontinental Bank Plc, a development that will make the bank, the first to announce a meeting for the consummation of the deal by the shareholders.

Access Bank has fixed September 26 for the extra-ordinary general meeting in Lagos, to seek the approval of shareholders. In an advert in BusinessDay, Access Bank said, the meeting will transact the following special business, “That subject to any required approval from the regulatory authorities, the Directors be and are hereby authorized to enter into a transaction for the acquisition by the bank through a Special Purpose Vehicle of 75 % controlling equity interest in the Authorised Share Capital of Intercontinental Bank Plc(the company) under a private placement.

An analysis by Renaissance Capital, shows that Access Bank’s acquisition of Intercontinental Bank will catapult the bank into becoming Nigeria ’s third biggest bank by assets ,with a potential market share of 10.1 percent. Access Bank is expected to run Intercontinental Bank as a stand-alone subsidiary for about 12 to 24 months, before collapsing Intercontinental Bank’s operations into its own operations.

Access Bank currently ranks as Nigeria ’s seventh biggest bank, by assets, with a market share of five percent.

Analysts who spoke with Business Day yesterday, said the Asset Management Corporation’s total investment of about N540 billion would give it 15 percent equity ownership, while the shareholders may take the remaining 10 percent.

While analysts say the transaction is ‘extremely favourable’ to Access Bank, they wondered how the shareholders of Intercontinental Bank, who have been told by the Central Bank of Nigeria (CBN) and AMCON that they have lost all their shares in the bank, would come and vote for a deal that they are said to be ‘technically out of’.

In a different advert placed by Intercontinental Bank over the weekend, it also stated that it will be issuing 15 billion shares to Project Star Limited, in consideration for the investment amount of N50 billion. Project Star Limited is believed to be the acquisition vehicle set up by Access Bank to acquire Intercontinental Bank.

Intercontinental Bank and Access Bank had earlier signed a Transaction Implementation Agreement (TIA) agreeing to merge their operations.

Intercontinental Bank further stated that it would be seeking shareholders approval to also issue three billion shares to the Asset Management Corporation of Nigeria (AMCON) “in consideration of the injection of the financial consideration amount”. The bank did not state the “financial consideration amount, but it is known that AMCON had to close the negative capital position of the bank.

As at December 2010, the negative capital position of Intercontinental Bank stood at N330 billion, according to the Central Bank of Nigeria (CBN). AMCON had earlier stated its intention to close this negative capital position, while a core investor is expected to invest the extra money to take Intercontinental Bank to a minimum capital adequacy ratio of 10 percent, as required by CBN regulations.

Analyst at Renaissance Capital, note that the N53.5bn, Access Bank seeks to use for the purchase of Intercontinental Bank “ would represent 55% of Access Bank’s excess capital as at end-June 2011, and the investment could reduce its Capital Adequacy Ratio (CAR) by some 200 basis points, to 20 percent - still well in excess of the 10 percent regulatory minimum.”

BusinessDay analysis also shows that the 15 billion shares issue to Access Bank indicates that the bank will be paying an average of N3.33 per share for Intercontinental Bank Plc. This is about five times, Intercontinental Bank’s current market price of 70 kobo per share on the Exchange.

Bank analysts note that the 75 percent shareholding given to Access Bank, leaves 15 percent of the shares to AMCON which put in about N330 billion into the bank, to close its negative capital position and 10 percent possibly to existing shareholders.

“The N330 billion AMCON put into the bank to close its negative capital position, should be seen as the cost of resolution” a banking analyst said.

There are several questions still unanswered say banking analysts. These questions include what happens to the bank’s 18.8 billion of Intercontinental Bank’s shares in issue and listed on the Nigerian Stock Exchange (NSE).

“Intercontinental Bank’s 18.8 billion shares listed on the Exchange, have shrunk to 7.594 billion shares. Part of it is what will be issued to Access Bank and AMCON, while existing shareholders will be left with about two billion ordinary shares, which is about 10 percent of the new Intercontinental Bank’s authorised capital of 20 billion shares” said a source familiar with the deal.

Nigeria to hold 5-10 pct of forex in Chinese yuan

Mon Sep 5, 2011* Nigeria central bank seeks to end over-reliance on dollar

* Reserves stand at $32.96 billion

LAGOS, Sept 5 (Reuters) - Nigeria's central bank is diversifying its foreign exchange reserves away from the U.S. dollar and will hold between 5 to 10 percent of them in Chinese yuan, central bank governor Lamido Sanusi told CNBC news on Monday.

The central bank has been considering changing its foreign exchange reserves so that it is less reliant on the U.S. currency.

"We are looking at anything to start with from 5 to 10 percent of our reserves," Sanusi told CNBC by telephone from China.
But he added: "The dollar and the euro ... are not going to disappear. They are going to remain an important part of our holdings."

Total reserves currently stand at $32.96 billion, according the bank's website.

Deputy governor Kingsley Moghalu told Reuters last month that the decision to diversify away from the U.S. dollar had been taken before Standard & Poor's cut the United States' triple-A credit rating.

Nigeria's central bank said in January it had added the Chinese yuan to a list of currencies that can be used for trade settlement in the domestic foreign exchange market as trade flows with China increase.

China is encouraging countries to use the yuan for trade and diversify

Oceanic Bank of Nigeria Shareholders to Discuss Ecobank Deal
Bloomberg (http://www.bloomberg.com/news/2011-09-02/oceanic-bank-of-nigeria-shareholders-to-discuss-ecobank-deal-1-.html)

Shareholders of Oceanic Bank International Plc (OCEANIC), a Nigerian lender that was bailed out by the central bank in 2009, will meet on Sept. 27 to decide on a plan by Ecobank Transnational Inc. (ETI) to acquire it.

Investors will discuss the transfer of 55 billion naira ($355 million) worth of shares to Lome, Togo-based Ecobank Transnational, the lender that operates in more than 30 African nations, according to an e-mailed statement from Oceanic.

Shareholders will also decide how much stock will remain in the hands of current investors in the Lagos-based lender and approve giving shares worth 290 billion naira to the Asset Management Corp. of Nigeria, known as Amcon, in order to bring shareholders’ funds from negative to zero.

Oceanic Bank was among eight lenders whose chief executives were fired by the Central Bank of Nigeria in 2009 after a lending crisis threatened to collapse some of the country’s financial institutions.

The central bank bailed out the lenders with 620 billion naira and created Amcon to buy non-performing loans of the banks to enable them to rebuild their balance sheets and resume lending. It gave the banks a Sept. 30 deadline this year to recapitalize or face liquidation or nationalization.

BlackRock's Vecht brushes off Frontiers fund losses

* Story by: Rebecca Clancy
* Magazine: InvestmentAdviser
* Published Tuesday , August 30, 2011

BlackRock's Sam Vecht is standing firm with the asset allocation on his recently launched £69.7m Frontiers investment trust, after its shares have lost 30 per cent since it started trading.

The shares initially started trading at a premium on December 17 at 104.5p, but by Friday last week (August 26) they had slumped to 73.1p - a 5.3 per cent discount to the trust's net asset value.

This came as investors' appetite towards risk assets has waned in the face of the dire macroeconomic outlook and worsening sovereign debt crisis.

But Mr Vecht insisted the long-term investment case would shine through on the trust, which targets economies that have not been awarded 'emerging market' status such as Nigeria and Qatar.

He said: "I invest on a five year basis and the underperfomance is a reflection of that. Stocks I hold won't necessarily perform over six months but frontier markets offer real opportunity for clients looking over a five-year horizon."

Mr Vecht said some holdings in Romania, one of his favoured markets, had weighed on his performance, but he would maintain his position as he expected them to outperform in the longer term.

He also said he continued to believe that Nigeria, a 14 per cent weighting in the fund, would shine through.

"The country's banking system has come out of a challenging financial crisis well and has been cleaned up by an excellent central bank governor and the country now has a collection of banks that trade just above book value and generate high return on equity," he said.

The manager's largest individual holding is Zenith Bank, based in Nigeria, which accounts for 4.7 per cent of the trust. As at Friday the bank's shares were trading at 12.5 naira, 20 per cent lower than their peak at 15.6 naira in May.

Paddy im surprised you haven't jumped on this one yet

tikLDsOJegE

Paddy im surprised you haven't jumped on this one yet

tikLDsOJegE


pls see my take on this in the link below,thats where i mostly go to discuss economic issues.Reproduced below

http://www.stockmarketnigeria.com/forums/personal-finance-financial-planning/2189-economicwatch-177.html

Bolded point is noted.

However i believe our CBN can achieve ER Stability by
1) maintaining consisstent well thought out policies,instead of the hasty BDC policy saumersalt of recent.

2) Maintain a closer to market rate for the USD/NGN pair instead of the current arbitrary N150/$1 policy(apparently pulled out of a hat if u ask me).
What this does for u is lessen the pressure on the reserves,and as the reserves grow,the currency will naturally strengthen as confidence returns.Not to talk of eliminating artificial/Speculative demand from roundtrippers.right now the policy is a. . Backwards.

3) Can i buy the yuan sufficiently on the black market?, If the answer is no as i suspect,then this action is meaningless.Most traders that ship goods from china,buy most of their FX from the black market.and i presume they will still be purchasing dollars.

4) As with all things SLS i believe this is nothing more than a "for show" statement,that will ultimately ring hollow.

5) Finally some Influential analysts(in the minority for now),predict that china will be the next shoe to drop(within the decade),with overleveraged banks and a bubble in the real estate market and credit extension in general. Of course our expected yuan holdings(as announced) r still small for now,but u never know with this CBN governor.

cheers

Nigerian Inflation Stays Near Target, GDP Growth Accelerates


September 14, 2011, 9:43 AM EDT


Sept. 14 (Bloomberg) -- Inflation in Nigeria, Africa’s biggest oil producer, stayed near the limit of a central bank target and the economy expanded 7.72 percent in the second quarter, keeping pressure on the bank to raise interest rates.

The inflation rate fell for a second month to 9.3 percent, the lowest level in more than three years, from 9.4 percent a month earlier, Yemi Kale, head of the National Bureau of Statistics told reporters today in Abuja, the capital.

“Much of the improvement in headline consumer price inflation can still be explained by the positive influence of domestic food prices, and this should continue in the months ahead,” Razia Khan, the London-based head of African economic research at Standard Chartered Bank Ltd., said today in an e- mailed note to clients.

The central bank raised its benchmark interest rate on July 26 for the fourth consecutive time as it sought to stabilize the naira and slow inflation to below its 10 percent target. The bank is determined to make sure inflation remains under control, Governor Lamido Sanusi said Sept. 7. Policy makers give their next decision on interest rates on Sept. 20.

With fiscal policy contributing to “excessive liquidity conditions” and plans by the state-owned Asset Management Corp. of Nigeria to increase debt issuance, even a pause in inflation “is unlikely to be the end of Nigeria’s tightening cycle,” Kahn said.

Nigeria’s economy, the second-biggest in sub-Saharan Africa after South Africa, expanded 7.72 percent in the second quarter, compared with 7.69 percent a year earlier, Kale said. Growth was driven by the non-oil sector, which expanded 8.82 percent, he said.

Crude oil production rose to an average of 2.45 million barrels a day in the second quarter, compared with 2.35 million barrels a year earlier, boosted by less violence in oil- producing areas, Kale said.

--Editors: Gordon Bell, Antony Sguazzin

To contact the reporter on this story: Elisha Bala-Gbogbo in Abuja at ebalagbogbo@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

Standard Bank May Buy Guaranty of Nigeria, Analysts Say
Q
By Renee Bonorchis - Sep 29, 2011 9:58 AM GMT+0100

Standard Bank Group Ltd., which this year reversed international expansion plans to focus on Africa, may consider buying a stake in Nigeria’s Guaranty Trust Bank Plc (GUARANTY), the most profitable of the country’s biggest banks.

Africa’s largest lender said last month it may buy a consumer bank in Nigeria. Guaranty, Nigeria’s second-biggest lender, is the most likely target because of its high return on equity and wide margins, according to Ilan Stermer, a Johannesburg-based banking analyst at Renaissance Capital.

“The expansion of Standard Bank’s retail business in Nigeria is critical to its success in Africa,” said Faizal Moolla, a banking analyst at Avior Research Ltd. in Cape Town who has a “buy” rating on the lender. “Nigeria has a huge population and given its growth prospects, the bank needs to have a bigger presence.”

Nigeria is forecast to overtake South Africa as the continent’s largest economy by 2025, Morgan Stanley economists said in a report in June. Rising oil prices and consumer spending are helping the expansion, according to Morgan Stanley. That growth is attracting overseas lenders from the U.K.’s Barclays Plc (BARC) to South Africa’s FirstRand Ltd. (FSR)

Standard Bank is seeking to revive the profitability of its operations in Africa after aborting plans to expand in Russia and Argentina. The lender is the worst-performing stock on the six-member FTSE/JSE Africa Banks Index after dropping 10 percent this year, three times the benchmark’s 3.1 percent decline.
Return on Equity

Johannesburg-based Standard Bank will have about $1 billion in surplus capital during 2012 after disposing of its Russian venture and selling stakes in its Argentine units.

The lender isn’t in talks or conducting due diligence on any Nigerian lenders, spokeswoman Kate Johns said. Guaranty is not in talks with Standard Bank, Lola Odedina, a spokeswoman for the Nigerian lender, said.

While Standard Bank’s overall return on equity rose to 14.5 percent in the first half, from 13.5 percent a year earlier, its operations in 16 African nations outside South African posted a return of 7 percent, after taking into account goodwill, development costs and converting earnings back into rand.

Guaranty’s 19 percent return on equity surpasses that of Nigerian rivals United Bank for Africa Plc (UBA), First Bank of Nigeria Plc (FIRSTBAN) and Zenith Bank Plc (ZENITHBA), according to data compiled by Bloomberg. The Lagos-based lender has the widest net interest margin at 7.8 percent, the data show.

The bank may post a 23 percent return on equity this year, more than First Bank’s 16.4 percent and Zenith’s 15 percent, according to Renaissance estimates.
Nigerian Banks

Guaranty is Nigeria’s second-best performing lender on the 10-member Bloomberg NSE Banking (NGSEB10) Index after Standard Bank’s Stanbic IBTC Bank Plc. Guaranty is down 15 percent this year as compared with the average decline of 31 percent. Standard Bank combined its Nigerian branch with Lagos-based IBTC Chartered Bank Plc in September 2007 and bought control of the combined company for 2.8 billion rand ($358 million).

“Valuations in Nigeria are less demanding now than they’ve been for a long while, so the timing makes sense for Standard Bank,” said Lisa Haakman, an analyst with London-based Religare Capital Markets. “Guaranty makes sense,” she said, adding that Standard Bank is likely to partner with a local investor to buy a majority stake.

Buying control of Guaranty, with a market value of $2.2 billion, would give Standard an extra 186 branches in Africa’s most populous nation, tripling the value of its operations in a country where 70 percent of citizens don’t have bank accounts.
Benchmark Bank

“Guaranty is widely seen as the benchmark for Nigerian banks, given its efficiency, use of technology and brand strength -- all off a relatively small physical network,” Stermer and Adesoji Solanke wrote in a report in August. “It is also the benchmark for corporate governance in the sector” because it publishes accounts under International Financial Reporting Standards.

Other potential targets in Nigeria, according to Renaissance, include First Bank, United Bank for Africa and Zenith. First Bank is Nigeria’s largest bank by assets while United has the most branches. Zenith has 315 branches according to Renaissance, and is the biggest bank by value.

Central Bank of Nigeria Governor Lamido Sanusi in 2009 fired the CEOs of eight of the nation’s lenders, spent about $4 billion to prop up failing lenders and created an entity to buy bad debts. Overseas and local companies were invited to bid for stakes in the West African country’s banks, both healthy and distressed. FirstRand entered talks with Sterling Bank this year and walked away after the two disagreed on price, according to FirstRand. No overseas banks have taken a controlling stake in a Nigerian lender since the changes in 2009.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

Nigeria Seeks Emerging-Index Addition to Increase Volumes

Nigeria is aiming for inclusion into emerging-market indexes by introducing measures and new listings to increase trading volumes, Nigerian Securities and Exchange Commission Director General Arunma Oteh said.

The regulator and the Nigerian Stock Exchange plan talks next year with index providers such as Morgan Stanley (MS) and JPMorgan Chase & Co., Oteh said in an Oct. 28 interview in her office in Abuja, the capital. Sub-Saharan Africa’s second- biggest economy will increase market depth to boost its prospects of inclusion by introducing securities lending, short- selling and changes to market-making rules, she said.


The SEC approved securities lending and short selling and the exchange is working on introducing them, Oteh said. The regulator expects the exchange to submit new rules by year-end to encourage market-making, she said. The bourse aims to introduce its first exchange-traded fund next year as well as options and financial futures within five years, Nigerian Stock Exchange Chief Executive Office Oscar Onyema said yesterday at a conference in Abuja.

The Nigerian Stock Exchange, whose index is sub-Saharan Africa’s second-worst performer this year after Kenya, is targeting a market value of $1 trillion by 2016.

Nigeria exchange to list first gold-backed ETF
Fri Dec 16, 2011 3:53pm GMT

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[-] Text [+]

LAGOS Dec 16 (Reuters) - Nigeria's bourse is to list its first exchange traded fund (ETF) on Monday, a South African gold-backed fund that will broaden the exchange's range of products beyond equities and bonds, the stock exchange said on Friday.

NewGold, originated by South Africa's Absa Bank Limited , has a primary listing in South Africa and before its Nigeria debut had one other listing on Botswana's bourse.

The fund will open on an initial offering of 1.096 billion naira ($6.76 million), split into 400,000 units, to test demand before any possible expansion into something bigger, a source at the stock exchange told Reuters.

"You don't want to list a million units and find out that it's not trading. They (ABSA) are testing the waters with this and I am certain that this figure will go up based on the uptake," the source said, adding that ABSA plans to expand the ETF around Africa, including in Ghana.

ETFs track equity or derivative indexes or a commodity but trade like a stock on an exchange, giving investors exposure to the underlying assets but at a much lower cost and with more short-term flexibility.

Listing on the Nigerian bourse, sub-Saharan Africa's second-biggest, will increase liquidity for the security and help diversify the stock exchange away from the equities that currently dominate it, he said.

"We are trying to deepen and widen the capital market. We want to provide different products not just plain vanilla," the source added.

"I see a lot of EFTs being listed earlier next year. We already have an application to list another equity-based ETF next year by a local issuer and they want ... it by January."

Nigerian equities have touched 8-year lows in recent weeks, dragged down by banking and oil stocks, as foreign investors spurn frontier markets and domestic funds to buy bonds in search of better yields.

The all-share index is down almost 20 percent so far this year from a gain of 19.67 percent achieved in 2010.

Regulators have been trying to diversify the bourse to position it as a regional trading hub rivaling South Africa.

The source at the stock exchange said some of the mutual funds in the country were considering converting their funds into listed ETFs. ($1 = 162.2000 naira) (Reporting by Chijioke Ohuocha; Editing by Tim Cocks and Jane Merriman)

Analysts Predict 13.3% Growth for Stock Market in 2012

http://www.thisdaylive.com/articles/analysts-predict-13-3-growth-for-stock-market-in-2012/106250/
Some market analysts are very upbeat about the market and have projected a growth of 13.3 per cent.

Contrary to high expectations, the stock market declined by 16.3 per cent in 2011 compared with an appreciation of 18.9 per cent in 2010.

Despite the negative growth recorded last year, analysts at FSDH Securities Limited, have said that 2012 would be better for equities investors as the global and domestic economies were set for improvement.

According to the analysts, in their review of the financial market performance made available to THISDAY last week, their optimism is based on factors such as improved corporate earnings, less aggressive monetary policy implementation by the Central Bank of Nigeria (CBN), among others.


They said: “Other catalyst for the market in 2012 are: improved disclosure by quoted companies as they adopt International Financial Reporting Standard (IFRS); concerted efforts of the Federal Government of Nigeria to improve infrastructure in the country; the current low valuation of quoted companies. On account of these factors, our forecast growth rate for the NSE All-Share Index for 2012 is 13.3 per cent.”

SEC, NSE Approve N27bn Bond For Ondo


http://www.leadership.ng/nga/articles/12157/2012/01/02/sec_nse_approve_n27bn_bond_ondo.html
The Securities and Exchange Commission(SEC) and the Nigerian Stock Exchange(NSE) at the weekend approved the bid by the Ondo State Government to raise fresh funds through its N50billion Debt Issuance Programme under which the State intends to issue a first tranche of N27 billion.

The Ondo State Government said recently that it had embarked upon an aggressive redevelopment of the state even as it was endowed with abundant natural resources, huge mineral deposits and rich forest reserves which create enormous potential for industrial and economic growth.

The State has also experienced strong growth in its revenue potentials with its IGR and VAT growing by a compound average growth rate (CAGR) of 23 per cent and 25 per cent respectively between 2006 and 2010. A clear manifestation of the increasing levels of economic activities within the State.

The government has projected a further 52 per cent increase over its 2010 IGR of N5.5billion to N8.4 billion in the 2011 fiscal year and a CAGR of 22 per cent till 2014.

The State expects to achieve this IGR growth through initiatives which facilitate the reduction of fiscal leakages, upward review of economic rates, aggressive mobilisation of taxes and introduction of electronic governance in its revenue collection activities.

Dangote Cement Closes As Most Capitalised Company

http://www.leadership.ng/nga/articles/12151/2012/01/02/dangote_cement_closes_most_capitalised_company.html
As the trading activities on the floor of the Nigerian Stock Exchange drew to a close at the weekend, Dangote Cement Plc, one of the leading cement companies in the country sustained its leadership status as the most capitalised company at the stock market.

The company’s equity ended the year with a market capitalisation of N1.716 trillion notwithstanding the downturn that saw the Nigerian Stock Exchange (NSE) All-Share Index close 2011 with a decline of over 16 per cent,

The equity was trailed by Nigerian Breweries Plc which closed the year with capitalisation of N714 billion.

Already, shareholders are looking up to a bountiful harvest for the year ended December 31, 2011 as the company is expected
to surpass the N65.84 billion paid out in 2010 as profit.

Shareholders of the company had harvested a dividend of N4.25 per share for 2010, comprising N2 interim and N2.25 final dividend. The third quarter results ended September 30, 2011, has already raised investors’ hope for improved returns.

In the result, Dangote Cement posted turnover of N173 billion, showing an increase of 18.6 per cent above the N146.6 billion in the corresponding period of 2010. Profit after tax rose by 22 per cent to hit N92.8 billion.

CBN: Credit to Private Sector Rises to N12.213tr

http://www.thisdayonline.com/

The total value of banking sector credit to the private sector rose by 9.8 per cent to N12.213 trillion as at the end of October last year, the Central Bank of Nigeria (CBN) has said.

The amount represented an increase by N244 billion, compared with the N11.969 billion it stood the preceding month.

The apex bank, which disclosed this in its economic report for the month of October 2011, which was posted on its website yesterday, said the development “reflected wholly”, the rise in the Deposit Money Banks’ (DMBs’) claims on the core private sector.

It explained that in comparison with the level at end-December 2010, banking system’s credit to the private sector rose by 24.2 per cent, compared with 13.2 per cent at end-September 2011.

However, the report showed that aggregate banking sector credit to the domestic economy also increased 8.7 per cent to N10.848 trillion at end-October 2011, as against the N9.437 trillion, it stood as in the preceding month.

It said the development largely reflected the 9.8 per cent increase in claims on the core private sector.

Nigeria raises N89.76b bonds

http://www.thenationonlineng.net/2011/index.php/business/34701-nigeria-raises-n89-76b-bonds.html
Nigeria raised N89.76 billion ($561.46 million) at an auction of government bonds on Wednesday, its first debt auction this year with yields higher than at its previous auction, the Debt Management Office said yesterday.

The debt office according to Reuters News said it auctioned N19.76 billion in the 10-year bond due to mature in 2018 and 35 billion each in the bonds maturing in 2019 and 2022 respectively.

Two of the instruments on auction are re-openings of previous issues, while the one maturing in 2022 is new.

The paper maturing in May 2018 was issued at 16.98 per cent, compared with the 15.93 per cent marginal rate at the previous auction in December, while the bond maturing on October 2019 was sold at 16 per cent, higher than the 15 percent previously.

The marginal rate for the fresh issue was set at 16.39 percent.

Total subscription at Wednesday’s auction stood at 109.35 billion naira.

“The original coupon rates of 10.70 percent and 7.0 percent for the May 2018 and October 2019 respectively will be maintained, while the coupon rate for the January 2022 is set at 16.39 percent,” the debt office said in a statement.

External Reserves Hit 6-Month High

Nigeria's forex reserves, which have been bullish since this year attained a six-month high of $35.036 billion on February 13.

Data obtained from the Central Bank of Nigeria's (CBN's) website showed that the last time was around it current value was on September 12, last year, when it stood at $35.072 billion.

At its current position, THISDAY findings showed that the reserves had gained a total of $2.137 billion this year, compared with the $32.899 billion it was as at December 29, 2011.

Financial market experts had attributed the accretion in the forex reserves to the steady rise in oil prices in the international market since this year as well as the moderate demand for forex at the CBN's official forex market -the Wholesale Dutch Auction System (WDAS).

Oil prices climbed further yesterday after Iran said it would cut off some crude exports to Europe in retaliation for a planned embargo later this year. Specifically, the benchmark United States crude rose by $1.08 to $101.82 per barrel in New York. Brent crude, which is used to price foreign oil that's imported by refineries, rose by $1.53 to $118.88 per barrel in London

Read More (http://allafrica.com/stories/201202170218.html)

CBN TO COMPEL BANKS TO OPEN SPECIAL BRANCHES FOR PHYSICALLY CHALLENGED PERSONS, SAYS SANUSI

CBN to compel banks to open special branches for physically challenged persons, says Sanusi NAN-H-91 Banks Abuja, March 1, 2012 (NAN) Malam Sanusi Lamido Sanusi, the Central Bank Governor (CBN), says the apex bank is planning to compel banks to open special branches for persons with disabilities nationwide. The CBN governor made this known on Thursday

Link (http://www.nanngronline.com/section/economy/cbn-to-compel-banks-to-open-special-branches-for-physically-challenged-persons-says-sanusi)

Nationalised Banks Face Pre-Sale Scrutiny

Last week's process commencing the sale of the three nationalised banks by the Asset Management Company of Nigeria, afforded the management of the banks the opportunity to give their stewardship in the past six months, report Festus Akanbi and Malachy Agbo

Six months after the nationalisation of three banks that were unable to meet the recapitalisation deadline set by the Central Bank of Nigeria, the Asset management Company of Nigeria has set in motion the process for their sale to prospective investors. The affected banks are Mainstreet Bank (former Afribank Plc), Keystone Bank (Bank PHB Plc) and Enterprise Bank (Spring Bank Plc).

Their licences were revoked by the CBN, because they could not meet the deadline for recapitalisation of rescued banks. AMCON subsequently injected N679 billion into the three banks, to bring them to the right capital adequacy levels and strengthen them to meet their obligations to depositors.

However, AMCON, the major shareholder of the affected banks, in line with its resolve to accelerate the transfer of ownership of the banks into private hands last week began a process which it said would eventually lead to the sale of the three banks.

Read More (http://allafrica.com/stories/201203051393.html)

The banking reforms spearheaded by the Central Bank of Nigeria resulting in capital adequacy in money deposit banks in the country, may have led to corresponding reduction in the pressure for raising additional capital by banks.

According to a report on the performance of Nigerian banks in 2011 by the international investment firm, Renaissance Capital, since majority of banks now boast of robust capital bases, with many of them comfortably surpassing the mandatory capital adequacy ratio, a recourse to the capital market for additional funds appears unlikely this year, except for few operators who might seek to bolster their capital bases to accommodate expansionary goals.

The CBN stipulates that Nigerian banks must maintain a minimum capital adequacy ratio of 10 per cent and at least 50 per cent of a bank's capital must comprise paid-up capital and reserves (that is core or Tier 1 capital).

However, Rencap in its 2012 report on the banking sector released last week explained that most of the banks prefer to keep a minimum of 15 per cent to provide some capital buffer, adding, however, that banks would start considering capital raising if the CAR approaches the 12-15 per cent level.

In the report, the investment firm held the view that all the banks it covers have reported CARs well above the minimum stipulated level of 10 per cent. "We note that some banks have maintained overly generous balance sheets - notably Fidelity Bank Plc, Zenith Bank Plc and FCMB Plc.

Read More (http://allafrica.com/stories/201203051398.html)

Airtel, FirstBank partner on mobile money service

e-Banking services in Nigeria is set to witness a shift as FirstBank of Nigeria Plc (FirstBank) and Airtel Networks Limited have agreed to combine their strengths to provide mobile money services to millions of Nigerians.

Speaking at the signing of a Memorandum of Understanding (MoU) between the two companies recently in Lagos, the two companies promised to combine their strengths to provide secure, convenient and user-friendly mobile banking services to unbanked people throughout via mobile phones.

Mobile banking is the use of mobile phones to remotely access bank accounts, primarily for account inquiry, mobile transfer, retail payments, micro insurance, savings remittances, mobile top-up, utility bill payments and government collections among others.

CEO and managing director, Airtel Nigeria, Rajan Swaroop said, "Partnering First Bank to bring mobile financial services to all corners of country further demonstrates Airtel's commitment to Nigeria and supports the concept of borderless mobile telecoms services across the country.

"Indeed, we are excited to partner with one of the biggest financial institutions in the country. This partnership will, without a doubt, assist us in realizing our vision of empowering more Nigerians with innovative and affordable mobile financial services. At Airtel Nigeria, we are committed to creating value propositions that will delight, enrich and benefit our customers regardless of their income level and location."

Commenting on the initiative, FirstBank's managing director and CEO, Bisi Onasanya said mobile banking is hinged on three planks which are defined in terms of financial inclusion for the unbanked and the underbanked, person to person transaction in terms of sending and receiving money as well as retail payment for the purchase of goods and services. He added that "With over 600 branches and thousands of business partner outlets in strategic proximity to the people, coupled with over 1 500 ATMs including cash deposit ATMs, cardless and biometric ATMs, over 5million active accounts and more than 1 200 point of sale terminals, FirstBank has always been at the forefront of innovative financial services solutions.

Read More (http://www.bizcommunity.com/Article/157/87/71015.html)

FirstBank named best retail bank in Nigeria

A firm commitment to innovative development of retail banking products and processes has earned Nigeria’s foremost financial institution, First Bank of Nigeria Plc “The Best Retail Bank in Nigeria Award” at the just concluded Asian Banker International Excellence in Retail Financial Services Awards in Singapore.

Organised annually by the Asian Banker magasine, the award is renowned for its rigorous and transparent process in selecting outstanding financial institutions in retail banking.

According to Chris Kapfer, director of research of the Asian Banker, the awards represent the undisputed benchmark for measuring the performance of banks in retail banking across Asia Pacific, Central Asia, The Gulf Region and Africa. Along with FirstBank in Africa, Kenya Commercial Bank, Absa Bank of South Africa and National Bank of Egypt were nominated and won in their various categories.


http://businessdayonline.com/NG/index.php/news/76-hot-topic/35565-firstbank-named-best-retail-bank-in-nigeria

CBN to Withdraw N141 Billion From Circulation

In line with its monetary policy position, the Central Bank of Nigeria, will this week mop up a total of N141 billion through the sale of treasury bills.

The banking sector watchdog issues treasury bills to reduce the volume of money supply in the system as well as to help control inflation.

THISDAY gathered that the bills to be sold would range from 3-month to 1-year maturities at its bi-monthly debt auction. A breakdown of the auction showed that the apex bank would sell N34.88 billion in 91-day paper, N45 billion in 182-day bills and N60.73 billion in 364-day bills this Thursday


AllAfrica.com (http://allafrica.com/stories/201204230736.html)

Nigerian banks receive ACI’s African Payments Awards

ACI Worldwide, a leading international provider of payment systems has hon*oured five Nigerian banks for outstanding achievements. The awards were presented by Raymond Moodley, sales director, Africa for ACI at the Nigerian user group meeting held in Lagos.

All of the major banks in Nigeria now process electronic transactions on an ACI plat*form. These banks are linked to the central Postilion switch operated by Interswitch, where inter-bank transaction switch*ing takes place

Read More (http://www.businessdayonline.com/NG/index.php/banking-a-finance/36996-nigerian-banks-receive-acis-african-payments-awards)

FirstRand fine tunes plans to enter Ghanaian and Nigerian markets

http://kitnes.net/1_188398/300..1.867707.jpg

South African Bank, FirstRand says it is about to finalize a deal to enter Ghana and Nigerian markets.

The Group CEO of the Bank Sizwe Nxasana made the comment in Mumbai, India this week as FirstRand opened a unit in that country.
There were earlier merger talks between FirstRand Bank and Merchant bank to expand its operations in Ghana.

It is unclear though whether earlier reports that talks between the two banks had broken down, have been rectified or not.

The Group CEO Mr Nxasana in his statements said the bank is exploring opportunities for both acquisitions and new licences in Ghana and Nigeria

Read More (http://www.citifmonline.com/index.php?id=1.867724)

^^ oh noooo!! :gaah:

why? oh noooon:lol:

Doesn't Nigeria have enough banks with licenses to operate in the nation?:? I can count 6 domestic on my own not including others + international banks present too.

exactly!!!, we dont need too many banks, that is why each banks, arent VERY Strong, on a GLOBAL Stage

we know, there are many People in Nigeria, but what percent of them, are even financially literate??......I say 40% at most.
others would just tuck cash, under their pillows, or something :lol:

but, im sure, the cashless economy thing, will change things, a bit/.

Good news! You can never have too many strong banks, and First Rand would be one of the strongest in Nigeria.

Retail banking is a great tool to mobilize savings and empower entrepreneurs, but banking is more than just getting all of those traders and market women to move their Naira from underneath the mattress into bank vaults, which most Nigerian banks are still struggling to pull off. Banks like First Rand have access to those very large pools of external capital (which means it is adding to aggregate money supply in Nigeria) that is required to make long-term investments in things like manufacturing and infrastructure (including power) that Nigerian banks are often ill-equipped or mismatched (because they mostly have access to only short-term sources of capital) to provide.

Nigeria Backs Establishment of Regional Maritime Devt Bank

Nigeria has expressed her commitment towards a Regional Maritime Development Bank (RMDB) for the West and Central Africa sub-regions, which is to be established in the country.
To this end, the Federal Government (FG) has said it would do everything possible to ensure the actualisation of RMDB for the West and Central Africa sub-regions.

The bank, which is to be established under the auspices of the Maritime Organisations of West and Central Africa (MOWCA), is expected to boost human capacity development, create jobs and create avenue for the provision of cheap funds to finance the acquisition of vessels and other projects in the West and Central Africa sub-regions.

Minister of Transport, Senator Idris Umar, dropped the hint when he played host to the new Secretary General of MOWCA, Mr. Alain Michel Luvambano, in his office in Abuja. He said the FG was aware of the high expectations from Nigeria especially as Nigeria is the major financier of the organisation.

Umar, who, prior to his appointment, was a member of the National Assembly, assured that Nigeria was ready to shoulder and carry others along in the discharge of her responsibilities in establishment of the specialised financial institution called MOWCA Bank.
The Minister told his guest he had called for and received a brief on the establishment of the bank and assured of Nigeria’s commitment to its actualisation.

He however added that Nigeria needs the cooperation and collaboration from other member states and institutions like the World Bank, International Monetary Fund (IMF) and the African Development Bank (ADB) to ensure the smooth take-off of the bank.
Luvambano had earlier in his opening remarks delivered the condolence message of the Chairman of MOWCA who is also the Minister of Merchant Marine in Democratic Republic of Congo on the recent air crash involving an aircraft belonging to Dana Airline Limited, in which no fewer than 160 persons lost their lives.

The Secretary General pledged the support of the 25-member body to Nigeria in her moment of grief.
He said he came to visit the Minister in order to present himself formally to him having taken office in October, 2011 and to inform him that the organisation is looking up to Nigeria for the actualisation of the MOWCA bank, which would have its headquarters in Nigeria.
According to him, “Nigeria is the key actor in MOWCA affairs. I appreciate the support and co-operation of Nigeria up till this moment and hoped that Nigeria would continue to perform these roles creditably in the years ahead.”
He reminded the Minister that it was the Kinshasa declaration which recommended the establishment of the specialised bank for the sub-regions.

Diamond Bank’s second quarter profit rises by 408%

http://www.vanguardngr.com/2012/07/diamond-banks-second-quarter-profit-rises-by-408/
Diamond Bank Plc has declared profit after tax of N9.995 billion for the second quarter ended 30th June, 2011. This compared to N1.967 billion recorded in equivalent period of 2011, represents significant 408.1 per cent improvement.

The bank’s unaudited quarter two financials made available to the Nigerian Stock Exchange (NSE) indicated that profit before tax also rose by the same margin to N15.5 billion, compared to N11.2 billion in the same period of 2011.

The gross earnings witnessed 43.62 per cent increase to N64.77 billion, as against N43.62 billion recorded in 2011, while Loans and advances to customers grew to N505.7 billion up from N433.5 billion in March 2011, amounting to 17 per cent increase and up 29 per cent to N392.0 billion in December 2011.

The results showed that Provisioning for bad debt during the period stood at N10.1 billion, as against N11.2 billion in June 2011. The total Assets was N960.1 billion, up by 12 per cent from N855.3billion in March 2012 and up 20 per cent from N802.7 billion in December 2011.

GTBank unveils new current account for senior citizens
http://www.vanguardngr.com/2012/07/gtbank-unveils-new-current-account-for-senior-citizens/

Guaranty Trust Bank ( GTBank) Plc, has introduced a new current account for Senior Citizens called ‘The GTBank Seniors Account’.

The new banking product, which is the first offering of its kind by any Nigerian Bank, is designed to allow indigenous persons aged 70 years and above enjoy all banking services offered by GTBank for free.

According to Mr. Segun Agbaje, Managing Director/CEO of the Bank, the essence of introducing this premium account is to recognize, applaud and appreciate the invaluable efforts and contributions of the present day Nigerian’s Senior Citizens towards national development over the years.

He further stated that GTBank Seniors Account Holders will not only enjoy free cheque book and ATM card issuances but would not pay COT or other Bank charges whilst enjoying priority treatment at all Guaranty Trust Bank branches nationwide.

[QUOTE=JoblessBeggar;91388073]Good news! You can never have too many strong banks, and First Rand would be one of the strongest in Nigeria.

I agree First Rand will be one of the strongest in Nigeria. This is where I bank, and recommend this to my friends

Nigeria's External Reserves Hit U.S.$45.68 Billion - Sanusi

Lagos — Nigeria's external reserves have risen to $45.68 billion, which is the highest in more than two years.

Governor of Central Bank of Nigeria, CBN, Mallam Sanusi Lamido Sanusi, disclosed this at the 46th annual dinner of Chartered Institute of Bankers of Nigeria (CIBN), weekend, in Lagos.

According to Sanusi, "as at close of business today (Friday), our foreign reserves stand at $45.68 billion. We have kept exchange rate stable within our announced band of N155 +or - three per cent."

The external reserves as at the end of October were $42.67 billion. This implies that the reserves rose by $3.01 billion or 0.7 per cent between October 31 and November 16

Read More (http://allafrica.com/stories/201211190541.html)

UBA Wins African Bank of the Year

The Banker Magazine, a publication of Financial Times, has named United Bank for Africa Plc (UBA), the Bank of the Year, Africa. UBA carted home the regional award for the continent yesterday at the Banker Awards ceremony in London, joining the ranks of other regional winners like Scotiabank-Global Americas, Nordea-Western Europe, Raiffeisen Bank International -Central and Eastern Europe, DBS-Asia\Pacific and Qatar National Bank-Middle East.

The "Bank of the Year" is selected based on the overall performance of the financial institution and the opinion of leading financial analysts from the world's financial markets. Winners were recognized and presented with awards in the presence of over 450 leading bankers across the globe.

In a show of dominance, UBA also won the country awards for Senegal and Cameroon, bringing to a total of three, the number of awards received that night by UBA.

The awards further attests to UBA's growing recognition as the leading pan-African financial services institution and as Africa's global bank.

The awards were received by the Bank's Deputy Managing Director, Mr. Kennedy Uzoka; MD, UBA Cameroon, Mr. Georges Wega; MD UBA Capital Europe, Mr. Ebele Ogbue and Head UBA Representative Office Paris, DeMontalivet Edouard.

Explaining the rationale for the awards, the Banker said UBA was chosen on account of the Bank's successful turnaround to profitability following the write-offs and clean-up of its balance sheet in 2011.

The Banker also stated that other reasons for the selection of UBA were the notable consolidation of UBA's business across Africa as well as its innovative cross border payment/remittance products and platforms, which have made trade and financial transactions easier and more convenient in the continent.

Commenting on the awards, Group Managing Director/CEO, UBA Plc, Mr. Phillips Oduoza said they validate UBA Group's leadership position in the continent and lends credence to its expansion across Africa and promotion of industry wide excellence in the global banking community.

"Winning the three highly coveted awards is a great accomplishment and it also reinforces UBA Plc's collective steadfastness and drive to becoming the bank of choice in Africa, in line with the Bank's positioning as Africa's global bank. We dedicate it to all our stakeholders across the continent and are further encouraged to work harder" he enthused.

The UBA Group is an acknowledged industry leader in Commercial and Retail Banking across Africa with operations in 19 African countries serving over 7 million customer accounts through multiple channels and remote locations.
http://www.nationalturk.com/en/banking-in-africa-united-bank-for-africa-uba-named-african-bank-of-the-year-in-london-29326

http://m.allafrica.com/stories/201212080294.html/

Cheers, UBA......
May other Nigerian financial institutions spread out, like you have.

I want to share this really awesome website i came across while searching for nigerian stocks investment forums. its called www.easykobo.com (http://www.easykobo.com) and its most comprehensive website that I have ever used to track Nigerian stock market.

they even have a stock game for Nigerian investors.

So if you invest in Nigeria then you will find this website very useful for yourself and your investment:banana:

Nigerian Economy Benefits Over $226m From Lagos Free Zone



Posted on August 18, 2012 01:57 pm under Business, Retail & Manufacturing
Enlarge image lekki-free-trade-zone-architechtural-model

VENTURES AFRICA – The MD of Lagos Deep Offshore Logistics Base (LADOL), Dr Amy Jadesimi has disclosed that the Lagos Free Zone (LFZ) so far has pooled investments worth at least 36 billion naira ($228 million) and $226.5 million into Nigeria’s economy.

She said this at a presentation in Lagos, during a farewell tour of LFZ by the outgoing MD of Nigerian Exports Processing Zones Authority (NEPZA), Dr Adeshina Agboluaje.

Dr Agboluaje, who is a long-time player in Nigeria’s free zone sector, said the sector has enough potential to develop the country’s economy to globally competitive levels.

According to Nigeria’s top business daily BusinessDay, the outgoing MD said at the event: “Free zones sell ideas… Every free zone has its own peculiarity.” He said: “It is actually the direction to go for Nigeria to take a leap… This is the future, and the future lies with free zones operation both in the areas of manufacturing for export and in jobs creation.”

During her presentation, Dr Jadesimi gave a breakdown of LADOL’s remunerations to the Federal Government and national export entities.

From reports, Dr Jadesimi made it known that through LADOL’s operations, Nigeria’s Federal Government has earned nothing less than 12 billion naira ($76 million) and $22.404 million; the Nigerian Ports Authority (NPA) generated revenue of about 3.537 billion naira ($22 million) and $22.4 million; and 94.8 million naira ($601,522) and $600,000 has been remunerated to NEPZA.

She also added that Lagos Free Zone which had earlier attracted investments worth 791 million naira ($5 million) and $125 million has created over 500 direct jobs, and about 5,000 indirect jobs over the years, through environmental specialised works at the operation base.

LADOL is a Nigerian ultra-modern base for deep offshore operations. The operational base of LADOL, operator of LFZ, is located in the estuary of Atlantic Ocean, Apapa, Lagos.


(best nigerian business news site i've ever seen)
http://www.ventures-africa.com/2012/08/nigerian-economy-benefits-over-226m-from-lagos-free-zone/

Nigeria Stock Market Up By 34% In 2012, More Gains Expected- REUTERS

Nigerian stocks rose to a 32-month high on Monday, ending the year up 34 percent in the index’s best performance since 2007, led by growth in the consumer goods and banking sectors which is expected to continue into the new year.

Africa’s second biggest economy and top oil producer is growing in popularity as an investment destination, offering the promise of high economic growth and a consumer market of 160 million people. Its sovereign debt has soared since JP Morgan added it to its emerging market bond index this year.

“With continued interest in financials and consumer goods, we expect the market to extend gains into the New Year,” analysts at Vetiva Capital said in a note to Reuters, adding that banks would lead the charge in 2013, reports Reuters.

Nigeria’s naira currency closed flat at 156.20 to the U.S. dollar, but gained 1.8 percent over the year, supported by forex inflows from foreign investment into the local debt market and the Central Bank’s tight monetary policy.

Stocks rose 0.76 percent on Monday, to cross a 28,000 point psychological level and closed the year at 28,079 points, a level last seen in April 2010, to become the second best performing index in sub-Saharan Africa, after Uganda.

This year’s performance was supported by a stable naira, a flurry of strong earnings results and a new market-making system, attracting foreign investors and local fund managers back to equities, analysts and stockbrokers say.

The index of Nigeria’s top-10 consumer goods stocks ended up 41.3 percent, to become the best performing sector, while banking stocks finished up 21 percent.

Nigerian stocks recovered after falling 16 percent last year but the market is still less than half the value it was, prior to the 2008 collapse, which wiped off 60 percent of stock values and coincided with a banking crisis.

The index rose 70 percent in 2007.
Nigeria trade closed after a half day ahead of the New Year’s holiday.


http://www.businessdayonline.com/NG/index.php/news/76-hot-topic/49693-nigeria-stocks-up-34-in-2012-gains-to-continue

January 30, 2013 18:25
NAN-H-90

Market

Abuja, Jan. 30, 2013 (NAN) Securities and Exchange Commission (SEC) plans to introduceproducts into the Nigerian capital market to enable it to address problems of mortgage financing, the Director General, Ms Arunma Oteh, said.
Oteh told newsmen in Abuja on Wednesday that the product would also help in agriculture and infrastructure financing.
She said a three-day workshop to build capacity of staff of the commission in the area of securitisation, mortgage-backed securities, covered bonds and liquidity facility was ongoing in Abuja.
Oteh said the plans would enable the Federal Government to come up with a framework on securitisation.
She added that the products would deepen the market and form a critical aspect of the transformation agenda of President Goodluck Jonathan.
Securitisation allows securities issued at the capital market to be backed by hard assets, such as residential portfolio, infrastructure or income streaming projects
``There is a great recognition in the country that the Nigerian capital market is important for long term financing.
``We must have a market that engenders confidence and we believe it is critical to bridge the gaps in medium to long-term financing for housing, infrastructure and agriculture and that is why we are doing this,” Oteh said.
She noted that there were only 20, 000 mortgages in the books of banks in Nigeria but described the figure as low when considered from the standpoint of the importance of mortgage to mass housing.
Oteh also said that apart from the securitisation product, a Nigerian Mortgage Facility ,which is being coordinated by the minister of Finance, would be unveiled before the end of the year.
She said the facility would assist the country toincrease mortgages from the current 20,000 to about 200,000.
She said the facility would also help to reduce the interest rate for housing financing.
On building investors confidence in the capital market, she said that the commission would continue to strengthen its enforcement mechanism.
Oteh added that a framework that would enable it to address investors’ complaints within five days was being worked out.
She added that the revamping of the Nigerian Investor Protection Fund and the framework forthe collective investor scheme would help to increase the confidence of more investors in the capital market.
Prof. Penn Graham, the Resource Person for thesecuritisation programme, said the driving force of the product was anchored on the need to drive low cost of lending for infrastructure projects.
He, however, said the impediments associated with such mode of financing needed to be addressed for it to be successful.
Some of the challenges are in the areas of tax regime and legal framework, he said.
Mr Osaro Eghobamien, a lawyer, said that in introducing the securitisation product, the issueof taxation would pose a peculiar challenge.
He noted that the commitment of the Federal Government in ensuring its success was vital.
``Tax issues will present peculiar problem if the structure is not understood.
``So, there will be a need to address the tax challenge but the commitment of the tax agency will be critical.
``The legal framework needs to be done in such a way that it would need to guarantee investor confidence,” he said. (NAN)


http://www.nannewsngr.com/section/economy/sec-plans-products-to-address-mortgage-agric-infrastructure-financing

Diamond Bank's balance sheet now N1tn

by Jude Owuamanam, Jos

Monday, April 22, 2013



The Managing Director, Diamond Bank Plc, Dr. Alex Oti, has said the bank's balance sheet in 2012 hit the N1tn mark.
He also said the bank would open more branches to meet the demand of its growing customers.
The managing director, who spoke in Jos at a customer forum, said the bank posted a profit after tax of N27bn in the 2012 fiscal year but regretted that dividend would not be paid to shareholders as it intended to plough back the amount set aside into the business as retail earnings.
Oti was represented by the Regional Manager, Northern Operations, Mr Dele Balogun.
Explaining why the bank could not pay dividends, Oti said the gains came after three years of no returns and could not pay dividend at the same time asking the same shareholdersto give it capital.
He, however, appealed to them to remain calm and expect robust returns on their investments because of the many products and innovations the bank had introduced.



http://odili.net/news/source/2013/apr/22/805.html

Cash-less: Skye Bank to roll out 15,000 PoS

by Ademola Alawiye

Monday, April 22, 2013


Ahead of the expansion of the cash-less policy to some states other than Lagos State, Skye Bank Plc has concluded arrangements to roll out some 15,000 points of sale terminals in the states covered by the second phase of the policy.
The Central Bank of Nigeria had recently announced that by July this year, the cash-less policy would be extended to states such as Ogun, Anambra, Rivers, Abia and the Federal Capital Territory, Abuja after a successful pilot test in Lagos.
A statement by the bank on Friday quoted the Group Head, E-Channels, Skye Bank, Mr. Chuks Iku, as saying that the bank had deployed about 7,000 point of sale terminals in Lagos State alone, adding that another 8,000 units would be deployed in the next phase of the rollout.
To ensure the success of the exercise, Iku said branches of Skye Bank in Kano and the FCT hadbeen trained and consequently commenced customer education in relation to how PoS could be used, providing product knowledge and creating awareness about the policy and other payment channels.
He said the awareness exercise would commence in other states ahead of the roll out.
He said, "The bank's staff in the states which would be covered under the second phase are undergoing training to ensure that they treat customers' issues proactively and professionally to make the exercise a success."
He listed some benefits of the new cash-less policy as safety of transactions, convenient payment arrangement, security and flexibility, among others, saying it would boost trade and commerce.
Iku urged members of the public in those statesnot to resist the cash-less policy but embrace itas its benefits were numerous.
According to him, carrying cash has become very dangerous and unsafe.
The CBN had come up with the cash-less policyin 2011 as a strategy for changing the economyfrom the cash-based to an economy thriving onelectronic payment systems and funds transfers.
In January 2012, the pilot scheme took off in Lagos and has been adjudged to be successful in view of the reduction in cash-based transactions.

http://odili.net/news/source/2013/apr/22/802.html

Banks see big opportunities in Nigerian syndicated loans

Nigeria's borrowers have led the way in Africa's syndicated loan market so far this year, with more than $10 billion of deals signed or in the market.
The appetite has been driven by a growth in confidence among international lenders as the continent's second-largest economy makes inroads into resolving transparency and credit risk concerns.



MTN Nigeria became the latest borrower last week when it agreed a $3 billion loan to expand its network through Nigeria's Guaranty Trust Bank and other lenders Citigroup , Standard Chartered, Industrial and Commercial Bank of China, China Development Bank and China Construction Bank.
Meanwhile, Dangote Group, West Africa's largest conglomerate, is in talks to raise a debut $3.5 billion loan to fund fertiliser and oil refinery projects with lead banks Barclays, Guaranty Trust Bank, Standard Bank and Standard Chartered.
Combined, the two jumbo loans almost match the $7.96 billion Nigerian borrowers raised throughout 2012, which is the country's highest-ever annual loan volume.
"The feeling is that Nigeria will have outstripped South Africa as the top market by 2015 from a loan market perspective. You have already seen that this year - you can't ignore Nigeria," one London-based banker said.
Also this year, Nigerian National Petroleum Corp agreed a $1.5 billion corporate deal in January, Indorama Eleme took a $800 million project finance loan in mid-February to fund a $1.2 billion green field fertiliser project, and oil and exploration company Neconde Energy marked its debut in the market with a $470 million corporate deal in early April.
Nigerian banks have traditionally been rare borrowers in the loan market, but Skye Bank became the first since 2008 when it agreed a $150 million debut in May last year, while Fidelity Bank recently agreed an oversubscribed $100 million debut deal through co-ordinators Citigroup and HSBC.
The deal's success is expected to buoy appetite from fellow bank borrowers, with First City Monument Bank expected to return after a four-year hiatus and Skye Bank already eyeing the market for a speedy return.
"Nigerian banks have been through their reshuffle and I think there is a bit more trust and transparency from the banks than there previously was," a second London-based banker said.
INTERNATIONAL APPETITE
Increasing transparency and the rapid growth of strong parent companies -- South Africa's MTN Group for MTN Nigeria's multi-billion deal, for example -- means more international banks are opening up their books to cash in on what is considered a huge potential market.
"Nigeria is a big economy and it poses as a very good window for investors to get started on the continent, which will benefit the whole of Sub-Saharan Africa," a third London-based banker said.
The International Monetary Fund forecasts 7 percent growth in Nigeria over the next two years, in contrast with South Africa's -- historically a syndicated loan hot spot -- forecast of 2.8 percent in 2013 and 3.3 percent in 2014.
Nigeria's foreign direct investment is projected to continue rising, from $5.8 billion in 2011 to $6.8 billion for last year, once the figures are in, the IMF said. It projects FDI to grow to $7.3 billion this year, $8.7 billion next year and $9.6 billion in 2015.
Much of the investment requirements are focused on oil and gas, reflecting Nigeria's status as Africa's top oil producer, as well as the power and infrastructure sectors.
Dollar financing is being increasingly sought for infrastructure projects, especially from power companies buying state assets under a privatisation programme launched this year.
Further debt demands from the country's telecoms companies is expected, as they look to expand networks to tap into the West African nation's 162 million population.
That growing demand for funds will be partly met by a vast increase in available liquidity open to potential Nigerian borrowers.
"It is not just four international banks in Nigeria any more, consisting of ABSA, Citigroup, Standard Bank and Standard Chartered. There are at least 15 strong international banks that are keen to do deals now," a fourth London-based banker said, citing French lenders such as Societe Generale and Natixis.
Japanese banks Bank of Tokyo-Mitsubishi UFJ, Mizuho and SMBC are also beginning to show an interest in Nigeria's loan market, while South Africa's Investec Bank, Nedbank and Rand Merchant Bank are increasingly active.
STEP BY STEP
Despite the increasing desire to undertake deals in Nigeria, international lenders, particularly those with little or no historical presence in the country, have to adhere to strict credit and country risk criteria, as well as higher pricing.
Interest margins are expected to hover around 400 bps, in line with the 375 bps margin on NNPC's $1.5 billion deal in January.
Pricing will vary depending on the borrower, but nearly all deals are expected to be above Nigeria's five-year credit default swaps, which were quoted at 271.81 bps on April 29, according to Thomson Reuters CreditViews.
The seven-year maturity secured by MTN Nigeria on its multi-billion deal and now being targeted by Dangote Group is deemed possible because of both borrowers' national and continental prominence - although other borrowers with weaker credentials cannot guarantee to get the same treatment, unless pricing fully compensates the risk for lenders, bankers said.
"Borrowers start getting into a finite space for tenors of five years or more, even for a strong credit. One thing that may get the deal get through is the Africa growth story," the first banker said.

http://www.reuters.com/article/2013/04/29/nigeria-loans-idUSL6N0DG28220130429

First Bank of Nigeria to Offer $500 Million
Eurobond This Year

By Emele Onu
May 07, 2013 12:17 PM EDT


FBN Holdings Plc (FBNH), owner of First Bank
Nigeria, plans to raise $500 million by selling a Eurobond this year after abandoning a similar offering last year.
The money “is needed to finance investments in loans and infrastructure,” Chief Executive Officer Bello Maccido said today by telephone from Lagos, the country’s commercial capital. “The bank intends to expand its investment banking and commercial business as well as insurance.”
First Bank, the West African nation’s third-largest lender by market value, suspended plans to issue the bond last year because of market conditions, Maccido said. “We believe conditions will be favorable this year,” he said today.
The lender is joining other Nigerian banks in
raising funding in dollars to help finance
infrastructure projects in Africa’s top oil
producer. Fidelity Bank Plc (FIDELITY) sold a
$300 million five-year bond on May 2. Diamond Bank Plc (DIAMONDB) is planning to raise as much as $750 million this year, it said in April,while Skye Bank Plc plans to raise $150 million next quarter.
The stock rose 0.5 percent to 19.71 naira at the close of Lagos trading. The stock has gained 25 percent this year, beating the 18 percent rise in the Nigerian SE Banking Index, which tracks the performance of Nigeria’s 10 biggest banks.


www.bloomberg.com/news/2013-05-07/first-bank-of-nigeria-to-offer-500-million-eurobond-this-year.html

Good! I just hope some of the loans get to be extended to SMEs as oppose to the habitual trend of extending such facilities to oil companies and multinational institutions. This would serve the dual purpose of spurring growth and more importantly, creating much needed JOBS.

^^True. In the long run, developing the domestic bond market would be the best way to ensure SMEs, federal/state/local governments and their agencies, and corporations can secure long-term financing for infrastructure, etc. It'd definitely help bolster growth and wealth and job creation.

Exactly! The NSE has just recently adopted mechanisms that would encourage SMEs to list and source capital from the market. This should boast the economy and create much needed jobs.