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24 — Vanguard, MONDAY, FEBRUARY 24, 2020 FINANCIAL VANGUARD Zenith Bank’s PAT crosses N200bn mark, sets goal for 2020 •All eyes on First Bank, Access, UBA By Peter Egwuatu INDICATION has emerged that banks may have scaled up to new heights in profitability with Zenith Bank Plc reporting a Profit After Tax, PAT, of N208.8 billion, the first Nigerian bank to cross the N200 billion mark. All eyes are now on the remaining three Tier-1 banks, First Bank, Access Bank and United Bank for Africa, UBA, to show-up with similar feat or otherwise within this week. Earlier Guaranty Trust Bank had reported PAT of N146.9 billion for the period under review. According to Zenith Bank’s audited financial results for the 2019 financial year released in Lagos last weekend, it also recorded a growth in gross earnings to N662.3 billion from N630.3 billion reported in the previous year. This growth was driven by the 29 percent increase in non-interest income to N231.1 billion in 2019 from N179.9 billion in 2018. Fees on electronic products continue to grow significantly with a 108 percent Year on Year (YoY) growth to N42.5 billion in the current year from N20.4 billion in 2018. This is a validation of the Bank’s retail transformation strategy which continues to deliver impressive results. Profit before tax increased by five percent growing by N243 billion in the current year from N232 billion in the previous year , arising from topline growth and continued focus on cost optimisation strategies. Cost-toincome ratio moderated from to 48.8 percent from 49.3 percent Although returns on equity and assets held steady YoY at 23.8 percent and 3.4 percent respectively, the Group still delivered improved Earnings per Share (EPS) which grew 8 percent to N6.65 from N6.15. The Bank stated that its Group increased its share of the market as it secured increased customer deposits across the corporate and retail space as deposits grew by 15 percent to close at N4.26 DMO appoints CSL as new stockbrokers to FGN By Peter Egwuatu CSL Stockbrokers Limited, a subsidiary of FCMB Group Plc, has emerged as the new stockbroker to the Federal Government of Nigeria, FGN. The appointment of the firm, as announced by the Debt Management Office (DMO) followed an open competitive bidding process in which other stockbrokers participated. With the appointment, CSL Stockbrokers now has the mandate to execute all transactions of the Federal Government on the Nigeria Stock Exchange (NSE), which includes, posting bids and offer prices of government securities, supporting the DMO’s objective of promoting trading of Federal Government securities on the Exchange and attracting more retail investors to the domestic capital market. In a statement, the DMO said as Government Stockbroker,CSL Stockbrokers is mandated to build upon the achievements already recorded by increasing the participation trillion. Other performance indicators show that total assets also increased by 7 percent to N6.35 trillion from N5.96 trillion. In demonstration of its commitment to its shareholders, the Bank has announced a proposed final dividend payout of N2.50 per share, bringing the total dividend to N2.80 per share. The statement from the Bank added: “In 2020, the Group remains strategically positioned to capture the opportunities in the corporate and retail segments, while efficiently managing costs and expanding further its retail franchise employing digital assets and innovation.” United Capital total asset rise to N150.5bn UNITED Capital Plc, has announced its audited financial statements for the year ended December 31, 2019, recording a total asset of N 150.46 billion representing an increase of 1.2 percent from N148.70 billion in the corresponding period of 2018. Total Liabilities stood at N130.88 billion as against N132.86 billion in the previous of retail investors in all Federal Government Securities. Commenting on the appointment, the Chief Executive Officer of CSL Stockbrokers, Mr. Abiodun Fagbulu, described the development as another year while shareholders’ fund grew to N19.59 billion from N15.83 billion in 2018. Profit Before Tax, PBT decreased to N4.95 billion in 2019, compared to N6.22 billion in 2018. The decrease in PBT was as a result of decline in revenue as well as increase in the cost of doing business. Profit After Tax, PAT stood at N4.97 billion in 2019, compared Zedcrest democratises investment, unveils new asset mgt firm By Princewill Ekwujuru ZEDCREST Capital Limited has launched a new investment/asset management firm, Zedcrest Investment Managers (ZIMVEST), a digital private wealth and investment management company, in a bid to digitally democratise investment in Africa. Zedcrest said in a statement that the new company would help clients grow wealth by beating inflation and currency risks through multicurrency investments and paperless processes. According to the Founder & Group Chief Executive Officer, Zedcrest Group, Saheed Amzat, “ZIMVEST’s differentiating factor will come from the renowned expertise of the Zedcrest group in the global financial markets. This is evidenced by the leadership position of its global markets business, Zedcap Partners, which bagged the 2019 best brokerage service award of FMDQ OTC. “The Group also has a wide distribution experience garnered from setting up another subsidiary, Zedvance, a top-three consumer lender in Nigeria.” The Chairman of Zedcrest milestone in the commitment of the firm to be the investment management services provider of choice in sub-Saharan Africa, driven by deep market knowledge and global standard investment management expertise. to N4.34 billion in 2018, representing a 15 percent Year on Year, YoY increase. During the year under review, the Company’s PAT margin improved to 58 percent compared to the 47 percent in the previous year on the back of the Group’s strategic tax management leading to a deferred tax liability write back during the year. Group and former Managing Partner of Ernst & Young, Adebisi Sanda, said: "The launch of the asset management business ties in nicely with our plan to dominate every important vertical of financial services - our four pillars of global markets, investment management, lending and payments. BEARISH TREND: Operators advise investors to be cautious •N188bn lost in bearish run By Nkiruka Nnorom OPERATORS in the capi tal market have called for caution in stocks investment as the equities market closed in fourth consecutive week of bearish trend, resulting in loss of N188 billion to investors. The operators, who argued that the recent increase in Cash Reserve Ratio (CRR) by the Central of Bank Nigeria (CBN) is contributing to the downturn, advised investors to consider investing in fundamentally sound stocks. The CBN had on January 24, 2020, raised the banks’ CRR to 27.5 percent from 22.5 percent, a development securities dealers said immediately triggered selloff by investors. “Amidst continued weak market sentiments, we advise investors to trade cautiously, taking positions in fundamentally justified stocks,” analysts at Cordros Capital, a Lagos-based investment banking firm said. The equities market capitalisation had fallen to N14.268 trillion from N14.456 trillion in the previous week amidst the continued risk-off sentiment. The All Share Index (ASI) also fell to 27,388.62 points from 27,755.87 points, indicating 1.32 percent negative returns. Victor Chiazor, Head of Investment and Research, FSL Securities, argued that the decline in the equities market in the last three weeks could not be entirely attributed to the increase in banks’ Cash Reserve Ratio. He said that investors are taking profit given the rise in stock prices at the tail-end of 2019 and beginning of the year, 2020. “With regard to the equities market, it may be unfair to totally resolve that the drop in the equities market is directly as a result of the rise in CRR. As we all know, the equities market revolves in cycles and despite it being information driven market, I don’t think the drop in the market can totally be attributed to the rise in CRR. “I believe the market having closed the year 2019 on a negative note with stock prices much lower, investors took positions in the early part of the New Year ahead of the companies’ full year earnings and dividend declaration and as expected, some investors are already booking their profit given the rise in stock prices over the period,” he said. “Going forward, as we begin to see company earnings and dividend declared, we will begin to see a gradual return to the market and prices are expected to rise in reaction to most of the positive earnings that are expected to hit the market,” he added.
FINANCIAL VANGUARD The North has already destroyed itself We have been saying this for 20 to 30 years. If the North does not change, the North will destroy itself. The country is moving on. The quota system that everybody talks about must have a sunset clause —The Emir of Kano, Muhammadu Sanusi II, Punch, February 19, 2020. THE Emir of Kano is lead ing the pack of modern Northern thinkers and leaders who can now see the handwriting on the wall. But, even at that he is hesitant to go the full distance to tell his fellow Northerners the truth. He talks as if the destruction of the North is something still to occur. That is totally false. At least from the standpoint of economic development, the North has already destroyed itself. It only remains for it to destroy the South as well. That is a distinct possibility within the next three years as Buhari takes the nation deeper into the debt trap. Gradual end to the Age of Oil Even if Buhari and his Economic Management Team, EMT, from 2015 to 2019 had been the most competent set of managers, the nation would still have gone into a mild recession in 2016. The exceptional Gross Domestic Product, GDP, growth experienced from 2011 to 2013 had nothing to do with Jonathan’s good management of the economy. Even Dr. Ngozi Okonjo-Iweala’s leadership of the EMT at the time did very little to prepare the country for the gradual end to the Age of Oil. Strictly speaking, judged on the basis of what could have been done differently but was left undone, Jonathan/Okonjo-Iweala were compound failures. The former World Bank Managing Director was long on talk but short on action. FINANCIAL VANGUARD While she advocated diversification of the economy at every forum, she did next to nothing to bring it about. Close to 80 per cent of the investments which propelled the GDP growth to 6-7 per cent were in the oil sector. The downward trend of the price of crude oil which started in the middle of 2013 and has continued till today was a warning the PDP administration ignored. They failed to prepare Nigeria for what was already being predicted by several observers - including me. So, to some extent, the economic predicament in which Nigeria finds itself has its origins in the mistakes of 2010-2014. That said, the fact still remains that any group seeking political power must conduct a study of the current economic situation as well as the trend in the short, medium and long term. An incoming administration must have an idea of what it will inherit and have the appropriate plans to deal with them. This is what Buhari administration failed to do. Incidentally, had Buhari won in 2011, he would have had such a perspective study ready before his inauguration. I was involved in that and there are several former members of CPC as my witness. The country’s fate was hanging in the balance on May 29, 2015. Economic recovery would have been extremely difficult given the heavy dependence on oil even if the security situation has improved. The global investment community, like Nigerians, had hopes that with a Northerner and Muslim as president Boko Haram would gradually allow peace to be restored. Then possibilities for agroallied projects can be explored with the entire North as the epicentre of the activities. Perhaps, Buhari also thought that his presence in Aso Rock was sufficient to procure peace without putting up a fight. He was wrong on Boko Haram. He was slow to act decisively. Even if all the bandits, kidnappers, herdsmen and Boko Haram stop their atrocities, the North has already destroyed itself The real destruction, however, was not caused by Boko Haram - which was locked mostly in the North East. A lot of projects can be established outside the zone which could accelerate economic growth to over four per cent or more. It was the “terrorist without boundaries”, called herdsmen, who heightened national insecurity and created a situation in which no part of Nigeria is safe. Under the circumstances, local and foreign investors Vanguard, MONDAY, FEBRUARY 24, 2020 — 25 simply stopped searching for possible areas of investment in Nigeria. All interests in Nigeria were shelved indefinitely. That was not all, bandits and kidnappers, now mostly in the North added to the feeling of insecurity. When the President announced that 90 per cent of victims of violence and insecurity in the North were Muslims, he was mostly right and it was somewhat disturbing to read that the Christian Association of Nigeria, CAN, was disputing it. My friends, still lucky to be alive in Kaduna, Katsina and Zamfara have confirmed that there is probably no Christian left in most of the communities now under siege in those three states. Obviously, when any of the settlement is razed only Muslims are slaughtered. But, that fact carries with it the seeds of the North’s self-destruction. In virtually all those rural communities Christians constitute the vast majority of teachers. In effect, even the kids who are supposed to be in school might as well stay home since there are no teachers. Basic education It is difficult to imagine a better way to destroy a region or country than to deprive its youngest citizens of basic education. So, even if all the bandits, kidnappers, herdsmen and Boko Haram stop their atrocities, the North has already destroyed itself. Whatever pervasive violence has failed to demolish, population explosion is wiping off. Sanusi recently made the following observation which is more explosive than he realises. “The poverty level of the North is 80 per cent; while in the South, the percentage is 20 per cent, simply because of the culture of marrying many wives and producing many children who, at the end, are left on the streets to beg for what to eat.” - The Emir of Kano, Muhammadu Sanusi II. Punch, January 27, 2020. Unknown to the Emir, it is not only the illiterates and the poor in the North who overpopulate the country. An elected member of the Federal House of Representatives, and a Majority Leader, for that matter put up an exhibition in the House recently. He brought his four wives and boasted of having 19 children and still expecting more. His father had over 20 wives and scores of children. He is definitely not alone; he was only the most ridiculous. It never occurred to him that most of his siblings are living in poverty. Furthermore, even as an elected member of the House, the per capita income of his own household is already very low. When he dies, he will most probably leave behind a lot of people barely able to eat two meals a day. Now, with leaders like these, setting bad examples, what else is needed to destroy the region? It is a fact that there is no nation on earth which had conquered poverty without population control. Most Northern leaders don’t want to promote it because it is politically risky. Yet, without the courage the North is already destroyed – almost beyond redemption. ECONOMY SON is establishing products lab in 6 geo-political zones THE Standards Organisa tion of Nigeria, SON, is putting structures in place to establish regional laboratories in the six geo-political zones of Nigeria for testing products and ensuring that standardization is deepened in the country. The Special Assistant to the Director General, SON, Mr. Bola Fashina, disclosed this in an interview with newsmen in Abuja. According to Fashina, the organisation already has in its 2020 budget, plans to establish laboratories in the six zones to ensure that made-in- Nigeria products meet required standards for certification for local consumption and export in order to take optimum advantage of the implementation of the African Continental Free Trade Agreement, AfCFTA. He said SON would ensure that products within each region could easily be tested at the regionally laboratories, instead of sending them only to its laboratories in Lagos, Kaduna or Enugu from all other parts of the country. “In the last four to five years, we have had a new laboratory complex consisting of about 32 laboratories in Ogba Industrial Estate in Lagos up and running. A lot of the laboratories there have already attained international accreditation to ensure that the results of whatever tests that are carried out there are acceptable globally,” he said. Fashina noted that the establishment of the laboratories was aimed at supporting the government’s Economic Recovery and Growth Plan, ERGP, to ensure that Nigerian products and produce were easily exported without rejection. “Apart from these ones, we have other laboratories, namely textile and leather laboratory located in Kaduna, civil and mechanical engineering laboratory in Enugu, and other laboratories in our operational headquarters in Lekki, Lagos,” he added. The Head, Public Relations, SON, further said that a national metrology institute was being constructed to take care of the science of measurement and accuracy in Nigeria and West African to support rapid industrialization. He explained that the institute would provide the primary source of standards for measurement to ensure accuracy in length, volume or mass, among others to ensure that manufacturing and trading were done with accuracy. Fashina said that the Institute would also ensure that machines used in manufacturing in the country were calibrated from time to time to ensure accuracy. “It is an ongoing project that was being funded in collaboration with the United Nations Industrial Organisation (UN- IDO) because laboratories evolve with technology as taste of people change all over the world and in view of the fact that standards are not static,” he said.
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