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24 BUSINESSWORLD THISDAY • WEDNESDAY, MAY 20, 2015 NEWS NEW TASK FOR SEC AS UNCLAIMED DIVIDENDS RISE TO N55 BILLION Framework. However, the President of the Institute of Capital Market Registrars (ICMR), Mr. Bayo Olugbemi, during a visit to SEC last February, said while the registrars were making their own efforts to reduce the unclaimed dividends, there were some factors affecting the operations. He cited poor income from their activities in the market and non-passage of the institute’s bill among others as some of the factors. “We are in support of reduction of fees in the capital market but what we earn is just too small and not a reflection of services we render and the bill for the institute to be chartered has not been passed” Olugbemi said. FEDERAL GOVERNMENT’S DOMESTIC DEBT RISES TO N610BN state governments. We estimate the latter at N2.85trn (bonds and loans combined) and the burden for the widest measure of public debt at 25 per cent of 2014 GDP. “This is the worst possible scenario and assumes, for example, that AMCON achieves no more recoveries. The first quarter increase is generally the highest of the year due to the usual fiscal impasse between the FGN and the National Assembly. This year the front-loading of issuance has been compounded by the slide in the oil price and the election campaign.” They added: “The new administration may develop a new borrowing strategy with different ideas as to ceilings and the appropriate domestic/ external mix. An alternative way to view the public debt stock is as a proportion of that part of the economy which generates the revenue to service it. We would then have a debt stock/formal sector GDP ratio and welcome estimates of this measure.” Energy Editor Chika Amanze-Nwachuku Maritime Editor John Iwori AgriBusiness/Industry Editor Crusoe Osagie Comms/e-Business Editor Emma Okonji Capital Market Editor Goddy Egene Senior Correspondent Raheem Akingbolu (Advertising) Correspondents Chinedu Eze (Aviation) Linda Eroke (Labour) Eromosele Abiodun (Cap Mkt) Ejiofor Alike (Energy) James Emejo (Nation’s Capital) Obinna Chima (Money Mkt) Reporters Nume Ekeghe (Money Market) Nosa Alekhuogie (AgriBusiness) Currency-in-circulation Rises to N1.818trn in March Obinna Chima The total amount of currencyin-circulation in the country increased year-on-year to N1.818 trillion at the end of March 2015, compared with the N1.623 trillion it was as at the end of February, 2015. The Central Bank of Nigeria (CBN) disclosed this in its latest money and credit statistics for March 2015. The data also showed that broad money (M2), which generally is made up of demand deposits at commercial banks and monies held in easily accessible accounts rose sharply year-on-year from N16.546 trillion at the end of February, to N19.142 trillion. Similarly, narrow money (M1), which includes all physical monies such as coins and currency along with demand deposits and other assets held by the central bank also increased year-on-year from N6.047 trillion in the previous month, to N6.994 trillion in March. Also, banks’ reserves edged higher to N4.119 trillion in the month under review, from N4.079 trillion the previous month, just as demand deposits, which are funds held in an account from which deposited funds can be withdrawn at any time without any advance notice to the depository institution jumped to N5.223 trillion in March, compared with the N4.813 trillion it was in February. But credit to private sector reduced slightly yearon-year to N18.579 trillion in the month under review, as against the N18.639 trillion FTSE, Stanbic IBTC Develop Nigeria Pension Fund Benchmark Goddy Egene FTSE Group, the global index provider, in collaboration with Stanbic IBTC Pension Managers Limited, has developed the FTSE Nigeria Investable Pension Fund (IPF) Benchmark. The new index is the first of its kind in the region, encapsulating Nigerian listed companies while adhering to National Pension Commission (PenCom) regulation on investment, safeguarding good corporate governance for users. The index, according FTSE, has been created as a replicable index as well as a performance benchmark. The index methodology has been designed to adhere to PenCom’s regulation on investment of pension fund assets, ensuring that a strong emphasis is placed on governance and best practice. The Benchmark constituents comprised FTSE Frontier Index Series companies listed on the Nigerian Stock Exchange, which are then screened for taxable profits, dividend, free float, sector and individual stock weighting. Commenting on the index, Managing Director, Research & Analytics, FTSE, Jonathan Cooper said: “As FTSE’s global presence continues to expand, we are pleased to launch this new innovative benchmark featuring companies from Africa’s largest economy. Corporate governance plays a vital role in all equity markets and is integral to investor confidence, leading to significant demand for benchmarks of this nature. This is reflected in Stanbic IBTC Pension Managers’ support during its development and immediate adoption on completion. We look forward to developing more indices for this exciting market.” In his comment, Chief Executive Officer, Stanbic IBTC Pension Managers Limited, Demola Sogunle said “Stanbic IBTC is committed to the growth and development of the financial market. This commitment is part of the reason why we are very excited to be part of this welcome development. The IPF is necessary for measurement of the performance of it attained in February. Also, quasi money, which is made up of highly liquid assets that can easily be converted to cash increased from N10.499 trillion in February, up to N12.148 trillion in March, while currency outside banks stood at N1.471 trillion in March, from N1.233 trillion the previous month. Growth in key monetary aggregate had further decelerated at the end of February 2015. Available data had indicated that interest rates generally rose in February, while all other deposit rates of various maturities had risen from a range of 3.57–10.79 per cent. The average prime lending and maximum lending rates trended upward in February as the spread between the weighted average term deposit and maximum lending rates declined by 0.23 percentage point to 17.08 percentage points at the end of February 2015. The Managing Director/ the equity portion of Pension Funds. It fulfils that need to have an index that is investable, transparent and independent. We believe that it will encourage more participation in the market as investors would be able to track companies that pension funds typically invest in.” Also commenting on the development,mDirector General, PenCom, Chinelo Anohu-Amazu, said the commission is delighted with this commendable initiative by FTSE, as it would provide a good benchmark for Nigerian Pension Fund Administrators (PFAs) and PenCom, to better assess and monitor the performance of the equities portfolio of individual pension funds.” FTSE announced the launch of the FTSE Frontier Markets Index Series in September 2014. The benchmarks covers 26 countries defined as Frontier by FTSE’s Country Classification process, and captures the performance of large, mid and small cap equity securities from eligible markets. There are 39 Nigerian companies currently included in the index. Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu argued that the priority of the country’s policy makers is to grow the economy, then interest rate should be reduced. “Given the depth of investable instruments, rates would come down and economic activities would pick up because companies and individuals need funding to engage in economic activities. But because the cost of funds is so high, a lot of people cannot Adibe Emenyonu in Benin City With an estimated population of 179 million people, 65 per cent of Nigerians still lack access to any form of banking facility or service, the Controller, Benin zonal office of the Nigeria Deposit Insurance corporation (NDIC), Mr. Sunday Oluyemi has said. Besides, the active rural poor people, constitute the bulk of the percentage like the low income earners arising from irregular income, distance to bank branches and the unemployed. Oluyemi disclosed this on Monday at the National Youth Service Corpse (NYSC) `Batch A’ 2015 orientation camp held in Ovia North East Local Government Area of Edo state. Oluyemi who relied on `Enhancing Financial innovation and Access (EFInA), a United kingdom (UK) funded Research Agency, however warned the NYSC members to be weary of ‘Wonder Banks’ agents who may verbally offer them unrealistic interest rates to borrow to engage in economic activities. “We are aware that this would lead to some level of inflation, which was why I said managing an economy is a balancing act. So, we may need to accept that increased level of inflation as a cost of stimulating economic growth. If you look at a country like Brazil, at the height of their hyperinflation, the inflation rate was more than 1,000 per cent, but they were also growing the economy,” he added. PROMOTING TRADE President, Lagos Chamber of Commerce and Industry, Alhaji Remi Bello; Ambassador Extraordinary and Plenipotentiary of the Democratic Republic of Ethiopia to Nigeria, Mrs. Samia Zekaria Gutu, during her courtesy visit to the Chamber in Lagos...recently NDIC: 65% of Nigerians Lack Access to Banking defraud them. “About 65 per cent, mainly people in rural areas and people with low income do not have access to banking. But I want to sound this note of warning here. Even if they come to you, don’t fall into their mouth-watery offer. I fell into such trap in the past. Don’t patronise wonder banks”, he declared. The NDIC state Controller who dwelled on the topic “Deposit Insurance System in Nigeria’’, told the inductees to imbibe the habit of savings and urged the public to resist the temptation of given their personal bank details via the internet so as not to fall prey to internet fraudsters. He said only banks that have been insured by NDIC and the Central Bank of Nigeria (CBN) are statute-bound to provide financial safety nets to protect depositors money in the unlikely event of bank distress or liquidation. Also speaking at the event, Mrs. Mafoluwafo Williams, Assistant Director, NYSC, described the lecture as timely and sued for its sustenance.
THISDAY • WEDNESDAY, MAY 20, 2015 BUSINESSWORLD 25 EQUITIES WATCH Wema Bank Shows Resilience at 70 After 70 years, the only surviving indigenous bank, Wema Bank Plc, remains competitive, rendering satisfactory services and reporting improved results, writes Goddy Egene Wema Bank is regarded as the only surviving indigenous bank. The bank is celebrating its 70th anniversary. Wema Bank has, over the years, survived several restructuring and challenges in the financial sector. Even when some banks went under and others got swallowed up during the 2005 banking consolidation, Wema Bank survived. Today the bank continues to survive in the competitive banking environment and is putting in place strategies to perform better in the years after operating for 70 years. Corporate History Widely reputed as the longest surviving and most resilient indigenous Nigerian bank, Wema Bank Plc was Incorporated in 1945 as a Private Limited Liability Company (under the old name of Agbomagbe Bank Limited). It commenced banking operations in Nigeria the same year and later transformed into a Public Limited Company (PLC) in April 1987 and was listed on the floor of the Nigerian Stock Exchange (NSE) in January 1990. On February 5, 2001, Wema Bank Plc was granted a universal banking licence by the Central Bank of Nigeria (CBN), thus allowing the bank provide the Nigerian public with diverse financial and business advisory services. But in 2009, Wema Bank underwent a strategic repositioning exercise spearheaded by a new management team that has seen its profile rise considerably, which finally culminated into its taking a sound strategic decision to operate as a commercial bank with regional scope in South-South, South-West, Lagos and Abuja in 2011. Wema Bank board is led by Mr. Adeyinka Asekun as the chairman while Segun Oloketuyi is the Managing Director/CEO. Nurudeen Adegbenro is executive director, South-West Bank; Ademola Adebise, executive director (Lagos and South-South Bank) and Moruf Oseni, Abuja Bank. Other non-executive directors of the bank include: Wole Akinleye, Abubakar Lawal,Folake Sanu, Adebode Adefioye, Samuel Durojaiye, Samuel Durojaiye, Tina Vukor-Qaushie, Babatunde Kasali and Abolanle Matel-Okoh. Financial Performance Like most banks, Wema Bank Plc posted impressive performance for the year ended December 31, 2014. The bank reported a 58.8 per cent growth in its profit before tax for the year. The bank also grew its total asset grew by 15.6 per cent in the year under review. The bank’s profit before tax climbed from N1.9 billion in 2013 to N3.09 billion in 2014. It total assets also climbed by 16 per cent to N382.6 billion, compared with N330.9 recorded the corresponding year. Also, gross loans and advances to customers jumped by 51 per cent to N149.3 billion in 2014, up from N98.6 billion recorded in December 2013. Similarly, its customer deposits at the end of 2014, was up by 19 per cent to N258.9 billion, while net interest income stool at N18.5 billion. The bank said it recorded a 19 per cent growth in customer deposit volumes largely from its commercial and retail segments of the market in spite of the tightened liquidity regime exacerbated by the hike in cash reserve requirement. Commenting on the results, Oloketuyi said: “It gives me great pleasure to report that Wema Bank continues to record year-on-year improvement in its financial performance. The bank has improved significantly on its profitability and customer base despite shrinking margins and intense competition. The progress recorded is a result of the continued execution of our three-year growth strategy.” According to him, loans and advances to customers increased by 51 per cent guided by a strong risk management structure, which is evidenced by the level of non-performing loans at 2.49 per cent. Oloketuyi “Wema Bank has become a stronger, more efficient, resilient and customer-focused organisation with a robust risk and governance structure. The bank has realigned its business focus to concentrate on its key area of strength – retail banking. “We have used technology to our advantage, deploying in-branch solutions, mobile and internet applications and other social media tools to drive customer patronage and to reduce our cost to serve. We have continued to contain our operating expenses despite the increased inflationary environment while at the same time there was significant improvement in our fee-based income lines. “As we turn 70 as the premier indigenous bank in Nigeria, we are glad to unveil a “NEW” Wema Bank that responds faster and better to customers’ needs whilst adapting more quickly to the ever-changing dynamics of the industry,” it added. According to the statement, the differentiating factor in what it described as the new Wema Bank is its agility “in responding to our constantly changing business environment; our firm commitment to being the bank of choice; our relentless determination to continue to raise the 400 350 300 250 200 150 100 50 5 4 3 2 1 0 FINANCIAL HIGHLIGHTS DEC. 2014 N3.1bn DEC. 2013 N1.9bn PROFIT BEFORE TAX DEC. 2014 N2.4bn DEC. 2013 N1.59bn PROFIT AFTER TAX standards of customer service; whilst ensuring that we consistently deliver superior returns to all stakeholders. “We are focused on stepping further to becoming one of the most efficient mid-tier banks in Nigeria in no distant future. We are confident that we will sustain the momentum and improve on our profitability and volume growth in 2015.” Turning 70 years Although the bank is 70 years this year, Oloketuyi said they believe and act like a young, contemporary and vibrant organisation. “Managing any institution irrespective of its age requires a deliberate and conscious effort in building organisational capability, best-in-class structures, processes and controls. For Wema Bank specifically, yes we are 70 in age, but we believe and act like a young, contemporary and vibrant organisation. We have spent a significant amount of time in discarding old processes and techniques and make sure we adopt global best practices. We focus a lot on talent and skills development, we ensure we improve in our service delivery and customer experience. For us, every day is a new learning DEC. 2014 N149bn DEC. 2013 N98.6bn LOANS AND ADVANCES DEC. 2014 N258bn DEC. 2013 N217.7bn CUSTOMER DEPOSITS DEC. 2014 N382bn DEC. 2013 N331bn TOTAL ASSETS experience; we aim to improve and get better every day. It’s been tough, yet rewarding and we are glad that the hard work over the years is yielding positive results,” he said. Unveiling New Brand As part of activities to celebrate the 70th anniversary, Wema Bank unveiled its new logo and brand identity. According to the bank, the identity is continuation of the strides the bank has made in the past three years to revamp the brand and position itself as a modern, more customer-centric organisation. “The rebranding has been a thorough business evolution. It speaks about the evolution of the relationships built with all stakeholders over the years as signified by interconnecting lines which form a W,” the MD explained. He noted that as part of the rebrand, the bank’s traditional Purple colour has been revised to project a more vibrant, welcoming and modern outlook. “The customer at the centre of everything we do and nurturing great relationships has been a hallmark of Wema Bank since its inception. We have also made significant investments in people, technology and process improvements in the last few years to lay a solid foundation for this rebranding to come to life.I am very proud to see the great changes that have taken place internally and externally at Wema Bank and we are committed to offering even better services into the future”, Oloketuyi stated. The Wema Bank boss said it turn 70 as the longest surviving indigenous bank in Nigeria, “we are glad to unveil a New Wema Bank that responds faster and better to customers’ needs whilst adapting more quickly to the ever-changing dynamics of the industry. We are focused on moving Wema Bank to become one of the most efficient mid-tier banks in Nigeria in no distant future. We are confident that we will sustain the momentum and improve on our profitability and volume growth from year to year.” Regaining National Bank Status Wema Bank is currently operating with regional authorisation from the CBN, operating in the 12 states of the South-West and South-South geo-political zones and the Federal Capital Territory. However, it is making efforts to return as a national bank. Prior to the new licensing regime, Wema Bank had operations in 158 branches across 27 states of the federation. Oloketuyi said the decision to scale down operations in 2010 and operate as a regional bank was a deliberate interim measure to reposition the bank for better performance. “The resultant shrinkage in the geographic space of operations enabled us to focus business development on our areas of strength as a repositioning strategy in the short term. We were also able to wind down operations in locations where the bank did not have viable business. Having stabilised the bank through improved processes, systems and people, we are well positioned to replicate our new and tested service delivery model in other locations outside our current geographic space. The bank has applied to the CBN for a national licence and we are following up to fulfill all necessary conditions for the final approval. We hope to conclude the process this year,” he said. The CEO said Wema Bank has become a stronger, more efficient, resilient and customerfocused organization with a robust risk and governance structures in place to support its growth plan. “The bank has realigned its business focus to concentrate on its key area of strength, which is retail banking. We have used technology to our advantage, deploying in-branch solutions, mobile and internet applications and other social media tools to drive customer patronage and to reduce our cost to serve. We have continued to contain our operating expenses and at the same time reporting significant improvement in our fee-based income lines,” he said.
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