BusinessDay 13 Feb 2018
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14<br />
BUSINESS DAY<br />
COMPANIES & MARKETS<br />
Fitch affirms Sterling Bank’s<br />
ratings, outlook stable<br />
C002D5556<br />
Tuesday <strong>13</strong> <strong>Feb</strong>ruary <strong>2018</strong><br />
Hope Moses-Ashike<br />
Fitch Ratings has<br />
affirmed Sterling<br />
Bank’s Long-<br />
Term Issuer Default<br />
Rating (IDR)<br />
of ‘B-’ and National Long-<br />
Term Rating of ‘BBB-(nga)’<br />
with a stable outlook for reasons<br />
that include its coherent<br />
strategy and ability to<br />
attract more stable deposits<br />
in challenging operating<br />
conditions.<br />
Cutting through the<br />
industry’s jaded product<br />
offerings through innovation,<br />
the leading Tier Two<br />
lender’s IDRs are driven by<br />
its standalone creditworthiness,<br />
coherent strategy,<br />
business transformation<br />
initiatives, and strong man-<br />
agement team, in an updated<br />
rating released yesterday<br />
by the global credit rating<br />
agency.<br />
According to Fitch, Sterling<br />
Bank’s Non-Performing<br />
Loan (NPL) ratio, based on<br />
prudential requirements,<br />
was 6.1 percent at end of<br />
nine months in 2017, while<br />
impaired loans ratio and<br />
NPL ratio are below sector<br />
averages.<br />
Remarkably, Fitch noted<br />
that the lender has successfully<br />
attracted more stable<br />
retail deposits. “Positively,<br />
we also noted that the bank<br />
has successfully attracted<br />
more stable retail deposits,<br />
including strong growth<br />
in ‘non-interest bearing’<br />
deposits (albeit from a low<br />
base)”.<br />
It added that Sterling<br />
Bank’s capital adequacy ratio<br />
based on Basel II of 11.4 percent<br />
at end of nine months in<br />
2017 was above the regulatory<br />
minimum of 10 percent. “In<br />
addition to higher retained<br />
earnings and by repositioning<br />
its balance sheet, the bank is<br />
expected to raise subordinated<br />
debt in the domestic market<br />
(which counts towards<br />
Tier 2 regulatory capital) to<br />
improve capital buffers”.<br />
“In the medium term, we<br />
expect Sterling’s prospects<br />
to improve as the franchise<br />
strengthens with the expansion<br />
of its retail/SME and<br />
‘non-interest-bearing’ lines<br />
and business reorganisation.”<br />
Commenting on the rating,<br />
Suleiman Abubakar,<br />
Executive Director, Finance<br />
and Strategy, Sterling Bank,<br />
said “The rating affirms the<br />
potency of our growth strategy<br />
and transformation into<br />
one of the most respected<br />
financial services franchises<br />
in Nigeria offering worldclass<br />
retail and non-interest<br />
banking solutions alongside<br />
the traditional corporate,<br />
commercial and institutional<br />
banking products and<br />
service.<br />
“As we continue to reposition<br />
Sterling Bank towards<br />
achieving its long-term<br />
objectives amid economic<br />
uncertainties and disruptive<br />
technological changes,<br />
agility, flexibility and speed<br />
to market have become our<br />
driving force. We are poised<br />
for sustainable growth and<br />
remarkable long-term profitability.<br />
Inspiration FM<br />
plans radio<br />
conglomerate<br />
JOSHUA BASSEY<br />
Inspiration FM, one of<br />
Nigeria’s radio broadcasting<br />
stations, plans<br />
to transform into a<br />
conglomerate with broader<br />
listenership across Nigerian<br />
cities.<br />
The radio station which<br />
hit the airwaves in 2008,<br />
starting from Lagos, on frequency<br />
92.3fm, is already<br />
operating in Ibadan, Oyo<br />
State, on 100.5fm, and Uyo,<br />
Akwa Ibom, on 105.9fm).<br />
Azubike Osumili, group<br />
general manager of Inspiration<br />
FM, said the radio station<br />
was going beyond the<br />
three stations to establish<br />
in more cities, with same<br />
quality contents and programmes<br />
that give listeners<br />
anywhere in the country the<br />
feeling that they were still<br />
in Lagos.<br />
According to Osumili,<br />
in an interview with <strong>BusinessDay</strong>,<br />
licenses have been<br />
obtained to open two more<br />
stations in other cities.<br />
Osumili told Business-<br />
Day on the sideline of an interactive<br />
forum with stakeholders,<br />
advertisers and listeners,<br />
in Lagos, Thursday,<br />
that there were also plans<br />
to open ten stations within<br />
the next four to five years<br />
amid challenging business<br />
environment.<br />
“The goal of the radio station<br />
as encapsulated in the<br />
vision of our chairman is to<br />
build a radio conglomerate.<br />
In another four to five years,<br />
we plan to have at least 10<br />
stations. Right now, we have<br />
three stations; one in Lagos,<br />
one in Ibadan and Uyo. We<br />
have licenses for two more<br />
stations which are almost<br />
ready.”<br />
Osumili, however, acknowledged<br />
the challenging<br />
business environment,<br />
saying “the radiobroadcast<br />
industry is very challenging.<br />
Being on air for ten years is<br />
a remarkable achievement.<br />
We have done this because<br />
we’re a special brand. Our<br />
contents are about real life<br />
issues that everybody can<br />
relate with. It is the only<br />
brand that has that family<br />
touch in the country today,”<br />
said Osumili.<br />
The group GM, who decried<br />
high cost of broadcast<br />
equipment and import duties<br />
payable on them, said<br />
notwithstanding the challenges,<br />
the station looked<br />
to a brighter future with a<br />
possibility to delving into<br />
television broadcasting.<br />
“It is not impossible to go<br />
into television. It is a digital<br />
broadcasting era, so if we<br />
have license for TV, why not,<br />
we do it,” he said.<br />
Didi Chuxing tests self-driving taxis on public roads<br />
Chinese group takes a lead in global race for autonomous ride-hailing service<br />
Peter Campbell in London<br />
and Yuan Yang in Beijing, FT<br />
Didi Chuxing has<br />
been testing two<br />
self-driving vehicles<br />
on public<br />
roads for several months,<br />
putting the ride-hailing<br />
group further ahead in the<br />
race to develop autonomous<br />
taxis than had been<br />
believed.<br />
The company used two<br />
modified Qoros 5 sports utility<br />
vehicles for the tests, which<br />
took place on a purpose-built<br />
testing track near Shanghai<br />
and on public roads, the<br />
Chinese carmaker told the<br />
Financial Times. Didi Chuxing<br />
declined to comment.<br />
On Friday the FT revealed<br />
that Didi had tested its own<br />
autonomous cars.<br />
Testing in real-world<br />
conditions is essential for<br />
driverless cars to learn from<br />
unexpected situations that<br />
would be difficult to simulate,<br />
such as how human<br />
drivers react to a self-driving<br />
vehicle. Studies have shown<br />
that aggressive drivers block<br />
driverless cars at junctions,<br />
so the vehicles need to be<br />
made more assertive.<br />
Developing autonomous<br />
vehicles is essential for ridebooking<br />
groups to reduce<br />
costs by eliminating drivers,<br />
as well as to increase fleet<br />
utilisation.<br />
Uber has said it expects to<br />
have fully autonomous cars<br />
in operation as early as next<br />
year, while Grab, a Southeast<br />
Asian rival, plans to launch<br />
its own driverless service<br />
by 2022.<br />
Didi has not publicly given<br />
a timeline for the launch<br />
of its autonomous service,<br />
though earlier this month it<br />
struck partnerships with 12<br />
brands to purchase vehicles<br />
in the future.<br />
Qoros, a carmaker based<br />
in Shanghai, has been working<br />
with the ride-booking<br />
group for several months,<br />
the company said. The group<br />
provided the vehicles for the<br />
tests and integrated Didi’s<br />
software and sensors into<br />
the cars.<br />
Didi employees spent<br />
several months at the company’s<br />
plant in Changshu,<br />
about 50 miles from Shanghai.<br />
Qoros also ran the trials,<br />
which took place first on the<br />
company’s own test track<br />
outside its plant and then on<br />
public roads.<br />
Qoros was founded in<br />
2007 as a joint venture between<br />
Chinese carmaker<br />
Chery and Israeli group Kenon<br />
Holdings. Last month,<br />
Chinese conglomerate Baoneng<br />
took a 51 per cent<br />
stake in Qoros for $1bn, with<br />
a pledge to buy 100,000 vehicles<br />
a year from the company<br />
for at least the next<br />
three years.<br />
It also has the option<br />
to buy Kenon’s remaining<br />
shares for $500m.<br />
- Culled from Ft<br />
Amgen ‘looking hard’ at striking deals using $27bn cash pile<br />
Chief financial officer of world’s largest biotech company cautions on high valuations<br />
David Crow in New York,<br />
Amgen, the world’s<br />
largest biotech company,<br />
has said it is<br />
“looking hard” for<br />
deals to deploy its $27bn cash<br />
pile but warned it is struggling<br />
to find targets amid soaring<br />
valuations in the life sciences<br />
sector.<br />
The note of caution comes<br />
as mergers and acquisitions<br />
activity in the healthcare sec-<br />
tor recorded its strongest<br />
start to a year in more than a<br />
decade, with almost $32bn of<br />
global deals announced since<br />
the start of January.<br />
However, buyers have<br />
been offering record premiums<br />
to clinch deals, with<br />
Celgene agreeing to pay<br />
$9bn for cell therapy group<br />
Juno — almost twice its<br />
undisturbed market value.<br />
Sanofi paid a 63 per cent<br />
premium for haemophilia<br />
specialist Bioverativ.<br />
“We want to deploy any<br />
excess cash and our first<br />
priority is to do acquisitions<br />
and invest in the business,”<br />
said David Meline, Amgen’s<br />
chief financial officer, in an<br />
interview with the Financial<br />
Times.<br />
But he added: “We see all<br />
of these deals announced,<br />
and we participate pretty actively<br />
in considering whether<br />
to bid, but we haven’t been<br />
able to come up with a business<br />
case that would make a<br />
return for our shareholders.<br />
“We will keep pushing<br />
ourselves and keep looking<br />
ourselves, because we have<br />
lots of financial flexibility.”<br />
He cautioned it would be<br />
difficult “as long as people<br />
are willing to pay levels above<br />
what we deem we can make a<br />
return on”.<br />
Mr Meline was talking<br />
before the recent market gyrations,<br />
which have sent valuations<br />
for biotech groups lower.<br />
- Culled from Ft