Clear facts have indicated that Access Bank Plc plans to raise about N70.343bn from the capital market through public offering of 4.721billion ordinary shares of 50 kobo at N14.90 per share.
The bank in May applied and received the approval of the Nigerian Stock Exchange for the offer. The offer is coming at a discounted value of N4.42, as the stock of the bank is under technical suspension at a price of N19.32.
The Group Managing Director of the bank, Mr. Aigboje Aig – Imoukhuede, said the offer proceeds will be used to finance business growth and branch expansion locally and offshore; boost the capital base of the bank. He added that the bank would invest heavily in information technology and increase its working capital in order to position it for the emerging opportunities in the global financial space.
The bank opened this year at N7.00 and has appreciated by over 160% this year.The bank also has alliances with international financial institutions, which in turn have contributed to the profitability of the bank. The banks retail banking product tagged “EMPOWER” has also helped the bank in reaching out to a wider coverage of customers.
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Tuesday, June 12, 2007
Tuesday, June 5, 2007
Return prospects in FBN N100bn offer
Business summary and analysis First Bank of Nigeria Plc was incorporated in Nigeria as a private limited liability company in 1969 after commencing operations in 1894 as a branch of Bank of British West African Limited.
The bank was converted to a publicly quoted company in 1970 and quoted on Nigerian Stock Exchange in 1979. The bank has grown consistently since inception to become the biggest bank in Nigeria with current Market Capitalisation of N=418.53 billion as at May 11, 2007.
The bank is wholly owned by Nigerian Citizens, and Associates. As at 31st March 2006, the bank has eight subsidiaries, one Associate and four affiliate companies. These are:
Subsidiaries
•
FBN Bank (UK) Limited established to meet the banking requirements of Nigerian business men and high-net-worth individuals in London.
•
FBN Insurance Brokers Limited which transacts all classes of Insurance brokerage businesses
•
FBN Mortgage Limited which is the Mortgage Finance outfit to improve the access to home ownership by majority of Nigerians
•
First Funds Limited established to manage FBN group Small and Medium Enterprises Equity Investment.
•
First Trustees Nigeria Limited which provides financial services solution involved in Custodial Services, Property Management Trust, and Equity Management Services.
•
FBN Capital Limited established to carry out Corporate Finance, Wealth Management and Capital Market functions of the bank.
•
FBN Registrar Nigeria Limited which offers share Registrar and Administration Services
•
First Pension Custodian Nigeria Limited which was established to carry out the business of Pension Fund Custody.
Associate
The bank has Kakawa Discount House as its only Associated Company.
The quarterly results of the bank have been very impressive. (see Table ll) The nine months result shows an increase of 27.68% and 26.67% in Gross Earnings and PAT respectively. This performance if continue in the last quarters will translate into better return on investment in terms of dividends and capital appreciation.3. Affiliate Companies
•
Banque Internationale du Benin
•
Value card
•
Afrexim Bank
•
Nigerian Interbank Settlement System
These subsidiaries and affiliates have turned the bank to a full fledged financial supermarket where all financial services are provided for its customers.
Board of directors
Names Designation
Mutallab, U. Abdul, CON Chairman, Ajeigbe, Jacob Moyo MD/CEO, Aboh, John Oche Director, Adesola, Harriet-Ann O Director, Afonja Ajibola A. Director, Babalola Aderemi W., Director, Ayoola O. Otudeko Director , Duba, Garba Director
Hassan-Odukale, Oyekanmi, Director, Ibrahim Muhammadu Director, Sanusi L.Sanusi Director, Mahmoud Abdullahi Director, Alex C. Otti, Director, Udo Udu-Aka, Director, Oladele O.Oyelola Director
Services
The main business of the bank is commercial banking services which includes: Savings Account, Current Account, Loans and Overdrafts and International banking services. Whilst the bank provides traditional banking services, its subsidiaries provides a wide range of products services as stated above. These services are delivered through its 394 branches strategically located all over the country.
Business analysis and financial summary
The bank has demonstrated a consistent growth pattern in all its balance sheet figures in the last five years.
The Total Assets grew by 111.5% from N290.5 billion in 2002 to N614.8 billion in 2006. The total deposit also grew by 154.19% from N176.6 billion in 2002 to N448.9 billion in 2006. The Loan Portfolio of the bank increased from N66.38 billion in 2002 to N177.30 billion in 2006.The shareholders' funds also increased in this magnitude by 222.34% from N19.3 billion in 2002 to N62.3 billion in 2006. The bank's performing loan was 99.71% and 95.63% in 2006 and 2005 respectively.(see table lV)
The Gross Earnings and PAT increased consistently from N46 billion and N6.1 billion in 2002 to N67.4 billion and N17.4 billion in 2006 representing 45.76% and 263.97% respectively.
The growth can be attributed to very good customer service delivery system complimented by high window network servers that make service delivery excellent.
The performance indices of the bank fluctuated during the period under review. (see Table lV) Profit margin shows consistence increase over the five year period. Return on Equity increased from 2002 to 2003 and fell in 2004 and 2005 before it increased in 2006. The Capital Adequacy of the bank measured by ratio of Shareholders' Fund to Total Assets and to Loan and Advances increased from 2002 to 2004, fell in 2005 and 2006. The liquidity position of the bank measured by Loans & Advances to Total Assets and Deposits is fair with five year average percentage of 34%.
The stock market analysis though impressive, fluctuated during the period under review. EPS which was N2.35 in 2002 increased to N4.33 in 2003, but fell in 2004 to N3.28 and went up again in 2005 to N3.44 and fell again in 2006 to N3.32. The P/E Ratio followed the same pattern with five year average value of 8.51. This value is good as investors that invested in the company may recoup their investment back in eight years.
The bank consistently paid dividend throughout the five year period. The alpha value of 0.73 is positive indicating that the bank over-performed the market in the last one year while the beta value of -0.35 is negative indicating very low risk.
The total return to investors in the last five years is highly encouraging. (see Table l) The ability of the bank to consistently give bonus in the last five years shows the stock is highly rewarding.
The bank projected
•
Consistent increase in Gross Earnings in the next four years (see table lll
•
Total Assets and contingents will grow by 21%, 50%, 27%,30% in 2007, 2008, 2009, and 2010 respectively
•
The quality of the bank's management will be sustained
•
Consistent payment of dividend as stipulated in table lll above
•
The bank will continue to enjoy the goodwill and confidence of its present and potential customers,
•
The Public Offer will be oversubscribed
Analyst comments
•
The positive alpha value of 0.73 shows higher performance compared to Market performance..
•
The -0.35 Beta value shows that the risk is very low, lower than the market risk
•
The ability of the bank to meet the minimum capital base without pressure shows that the bank is sound.
•
The new offer will enable the bank to increase its financial strength which is expected to translate to better businesses and performance
•
The good quarterly results may translate to better total return to investors in the current year.
•
The modern technology, high branch network, well organised customized services are expected to improve the performance of the bank.
•
The future outlook of the bank looks brighter and there is possibility that the bank will meet the projections and even surpass them.
•
From experience, there are indications that investors will take up their Rights and also respond positively to the Public Offer.
•
If this impression comes to reality, the Offer will be successful.
•
There is possibility for post Offer Price appreciation.
Conclusion
In light of the analysis above :
•
We are of the opinion that the bank has good prospect. The possibility of full or oversubscription of the Offer is high
•
Full and Over subscription of the Offer will enable the bank to retain its position as the biggest bank in Nigeria.
•
The sound fundamentals, good capital appreciation and good return enjoyed by investors over the years may likely continue because more fund will be available to do business.
•
The going concern of the bank has not been threatened over the years, Investors will continue to enjoy security of their investment. Those investing on long term will also enjoy good share accumulation. Return on investment will improve since the bank is likely going to continue to make more income.
•
Going through the financial projections we are also of the opinion that the bank will be able to meet most of its projections which make the stock a good buy for Investment.
RECOMMENDATION
We therefore recommend that the Offer is a good buy for both long and short term Investors.
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The bank was converted to a publicly quoted company in 1970 and quoted on Nigerian Stock Exchange in 1979. The bank has grown consistently since inception to become the biggest bank in Nigeria with current Market Capitalisation of N=418.53 billion as at May 11, 2007.
The bank is wholly owned by Nigerian Citizens, and Associates. As at 31st March 2006, the bank has eight subsidiaries, one Associate and four affiliate companies. These are:
Subsidiaries
•
FBN Bank (UK) Limited established to meet the banking requirements of Nigerian business men and high-net-worth individuals in London.
•
FBN Insurance Brokers Limited which transacts all classes of Insurance brokerage businesses
•
FBN Mortgage Limited which is the Mortgage Finance outfit to improve the access to home ownership by majority of Nigerians
•
First Funds Limited established to manage FBN group Small and Medium Enterprises Equity Investment.
•
First Trustees Nigeria Limited which provides financial services solution involved in Custodial Services, Property Management Trust, and Equity Management Services.
•
FBN Capital Limited established to carry out Corporate Finance, Wealth Management and Capital Market functions of the bank.
•
FBN Registrar Nigeria Limited which offers share Registrar and Administration Services
•
First Pension Custodian Nigeria Limited which was established to carry out the business of Pension Fund Custody.
Associate
The bank has Kakawa Discount House as its only Associated Company.
The quarterly results of the bank have been very impressive. (see Table ll) The nine months result shows an increase of 27.68% and 26.67% in Gross Earnings and PAT respectively. This performance if continue in the last quarters will translate into better return on investment in terms of dividends and capital appreciation.3. Affiliate Companies
•
Banque Internationale du Benin
•
Value card
•
Afrexim Bank
•
Nigerian Interbank Settlement System
These subsidiaries and affiliates have turned the bank to a full fledged financial supermarket where all financial services are provided for its customers.
Board of directors
Names Designation
Mutallab, U. Abdul, CON Chairman, Ajeigbe, Jacob Moyo MD/CEO, Aboh, John Oche Director, Adesola, Harriet-Ann O Director, Afonja Ajibola A. Director, Babalola Aderemi W., Director, Ayoola O. Otudeko Director , Duba, Garba Director
Hassan-Odukale, Oyekanmi, Director, Ibrahim Muhammadu Director, Sanusi L.Sanusi Director, Mahmoud Abdullahi Director, Alex C. Otti, Director, Udo Udu-Aka, Director, Oladele O.Oyelola Director
Services
The main business of the bank is commercial banking services which includes: Savings Account, Current Account, Loans and Overdrafts and International banking services. Whilst the bank provides traditional banking services, its subsidiaries provides a wide range of products services as stated above. These services are delivered through its 394 branches strategically located all over the country.
Business analysis and financial summary
The bank has demonstrated a consistent growth pattern in all its balance sheet figures in the last five years.
The Total Assets grew by 111.5% from N290.5 billion in 2002 to N614.8 billion in 2006. The total deposit also grew by 154.19% from N176.6 billion in 2002 to N448.9 billion in 2006. The Loan Portfolio of the bank increased from N66.38 billion in 2002 to N177.30 billion in 2006.The shareholders' funds also increased in this magnitude by 222.34% from N19.3 billion in 2002 to N62.3 billion in 2006. The bank's performing loan was 99.71% and 95.63% in 2006 and 2005 respectively.(see table lV)
The Gross Earnings and PAT increased consistently from N46 billion and N6.1 billion in 2002 to N67.4 billion and N17.4 billion in 2006 representing 45.76% and 263.97% respectively.
The growth can be attributed to very good customer service delivery system complimented by high window network servers that make service delivery excellent.
The performance indices of the bank fluctuated during the period under review. (see Table lV) Profit margin shows consistence increase over the five year period. Return on Equity increased from 2002 to 2003 and fell in 2004 and 2005 before it increased in 2006. The Capital Adequacy of the bank measured by ratio of Shareholders' Fund to Total Assets and to Loan and Advances increased from 2002 to 2004, fell in 2005 and 2006. The liquidity position of the bank measured by Loans & Advances to Total Assets and Deposits is fair with five year average percentage of 34%.
The stock market analysis though impressive, fluctuated during the period under review. EPS which was N2.35 in 2002 increased to N4.33 in 2003, but fell in 2004 to N3.28 and went up again in 2005 to N3.44 and fell again in 2006 to N3.32. The P/E Ratio followed the same pattern with five year average value of 8.51. This value is good as investors that invested in the company may recoup their investment back in eight years.
The bank consistently paid dividend throughout the five year period. The alpha value of 0.73 is positive indicating that the bank over-performed the market in the last one year while the beta value of -0.35 is negative indicating very low risk.
The total return to investors in the last five years is highly encouraging. (see Table l) The ability of the bank to consistently give bonus in the last five years shows the stock is highly rewarding.
The bank projected
•
Consistent increase in Gross Earnings in the next four years (see table lll
•
Total Assets and contingents will grow by 21%, 50%, 27%,30% in 2007, 2008, 2009, and 2010 respectively
•
The quality of the bank's management will be sustained
•
Consistent payment of dividend as stipulated in table lll above
•
The bank will continue to enjoy the goodwill and confidence of its present and potential customers,
•
The Public Offer will be oversubscribed
Analyst comments
•
The positive alpha value of 0.73 shows higher performance compared to Market performance..
•
The -0.35 Beta value shows that the risk is very low, lower than the market risk
•
The ability of the bank to meet the minimum capital base without pressure shows that the bank is sound.
•
The new offer will enable the bank to increase its financial strength which is expected to translate to better businesses and performance
•
The good quarterly results may translate to better total return to investors in the current year.
•
The modern technology, high branch network, well organised customized services are expected to improve the performance of the bank.
•
The future outlook of the bank looks brighter and there is possibility that the bank will meet the projections and even surpass them.
•
From experience, there are indications that investors will take up their Rights and also respond positively to the Public Offer.
•
If this impression comes to reality, the Offer will be successful.
•
There is possibility for post Offer Price appreciation.
Conclusion
In light of the analysis above :
•
We are of the opinion that the bank has good prospect. The possibility of full or oversubscription of the Offer is high
•
Full and Over subscription of the Offer will enable the bank to retain its position as the biggest bank in Nigeria.
•
The sound fundamentals, good capital appreciation and good return enjoyed by investors over the years may likely continue because more fund will be available to do business.
•
The going concern of the bank has not been threatened over the years, Investors will continue to enjoy security of their investment. Those investing on long term will also enjoy good share accumulation. Return on investment will improve since the bank is likely going to continue to make more income.
•
Going through the financial projections we are also of the opinion that the bank will be able to meet most of its projections which make the stock a good buy for Investment.
RECOMMENDATION
We therefore recommend that the Offer is a good buy for both long and short term Investors.
To interact with stock experts/analyst and share your own ideas, quickly join to become member of nairakobo forum and started posting today. Registration is free.
nairakobo forum is an Investor's friend.
Once again, you are welcome to nairakobo forum..
see you there....
GTBank impresses investors with capital gain, steady growth in dividend
For dividend and capital gain –driven investors, GTBank has met their investment objectives. GODFREY OBIOMA says with its international strategic partnership and current quarterly results, there are strong indications of better returns in the coming year.
Consistently rising final dividend payment has been the hallmark of GT Bank, a trend that has endeaved it to investors.
The bank paid final dividends of N0.75 per share in 2003; N0.60 in 2004; N0.62 in 2005; N0.70 in 2006 and N0.95 per share in the 2007 financial year. These were paid from earnings per share of N1.28 per share in 2003; N1.35 in 2004; N1.10 in 2005; N1.45 in 2006 and N1.63 in 2007.
This partly explains the substantial capital appreciation. As at October 3, 2006, the share price of the bank grew by 56.03 percent in one year. In 6 months, it was 19.88 percent stronger and 51.92 percent higher in one month.
March 1, 200, GT Bank gained 7.62 percent in 8 months; 51.07 percent in 2 months ; 27.5 percent in 1 month and 5.75 percent in I week.
By April 24, 2007, investors reaped 10.7 percent capital gain in one month. The bank’s quarterly result for the period ended December 31, 2006 shows turnover of N40.5 billion, up from N26.35 billion in the corresponding quarter in 2005.Profit after tax was up from N2.34 billion to N3.42 billion.
To further boost earnings and deliver more superior returns to investors, the bank entered into strategic partnership with Morgan Stanley investment management, a leading investment bank in the United States. The partnership would also enable it take part in the management of the nation’s external reserves.
GT Bank also earned further international confidence with a $40-million credit line from the African Development Bank. This brings to $400million, the total funding from international finance institutions.
GT Banks international stature was further bolstered by the Netherlands Development Finance Company (FMO) acquisition of 15 percent equity interest in Guaranty Trust Bank Ghana Limited.
Recently, the bank’s $350-million Eurobond, the first of its kind in West Africa, was oversubscribed.
It is on account of this local and international pedigree that the bank has received (AA-) risk rating from Fitch, an international rating agency and BB- risk rating from Standard and Poor’s.
Back home, it received the first runners-up award in KPMG’s customer services excellence award in recognition of its excellent customer services delivery.
The superior service delivery was achieved through the creation of some financial products. These include cash plus, a debit card connected to customers accounts that give them access to all the electronic channels. Through this product, customers can pay for goods and serviced and withdraw cash from over 3,000 interswitch powered Automated Teller Machines (ATMs).
Also among its financial product is Guaranty Bank Master, a global and e-payment brands issued in partnership with MasterCard international.
To interact with stock experts/analyst and share your own ideas, quickly join to become member of nairakobo forum and started posting today. Registration is free.
nairakobo forum is an Investor's friend.
Once again, you are welcome to nairakobo forum..
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Consistently rising final dividend payment has been the hallmark of GT Bank, a trend that has endeaved it to investors.
The bank paid final dividends of N0.75 per share in 2003; N0.60 in 2004; N0.62 in 2005; N0.70 in 2006 and N0.95 per share in the 2007 financial year. These were paid from earnings per share of N1.28 per share in 2003; N1.35 in 2004; N1.10 in 2005; N1.45 in 2006 and N1.63 in 2007.
This partly explains the substantial capital appreciation. As at October 3, 2006, the share price of the bank grew by 56.03 percent in one year. In 6 months, it was 19.88 percent stronger and 51.92 percent higher in one month.
March 1, 200, GT Bank gained 7.62 percent in 8 months; 51.07 percent in 2 months ; 27.5 percent in 1 month and 5.75 percent in I week.
By April 24, 2007, investors reaped 10.7 percent capital gain in one month. The bank’s quarterly result for the period ended December 31, 2006 shows turnover of N40.5 billion, up from N26.35 billion in the corresponding quarter in 2005.Profit after tax was up from N2.34 billion to N3.42 billion.
To further boost earnings and deliver more superior returns to investors, the bank entered into strategic partnership with Morgan Stanley investment management, a leading investment bank in the United States. The partnership would also enable it take part in the management of the nation’s external reserves.
GT Bank also earned further international confidence with a $40-million credit line from the African Development Bank. This brings to $400million, the total funding from international finance institutions.
GT Banks international stature was further bolstered by the Netherlands Development Finance Company (FMO) acquisition of 15 percent equity interest in Guaranty Trust Bank Ghana Limited.
Recently, the bank’s $350-million Eurobond, the first of its kind in West Africa, was oversubscribed.
It is on account of this local and international pedigree that the bank has received (AA-) risk rating from Fitch, an international rating agency and BB- risk rating from Standard and Poor’s.
Back home, it received the first runners-up award in KPMG’s customer services excellence award in recognition of its excellent customer services delivery.
The superior service delivery was achieved through the creation of some financial products. These include cash plus, a debit card connected to customers accounts that give them access to all the electronic channels. Through this product, customers can pay for goods and serviced and withdraw cash from over 3,000 interswitch powered Automated Teller Machines (ATMs).
Also among its financial product is Guaranty Bank Master, a global and e-payment brands issued in partnership with MasterCard international.
To interact with stock experts/analyst and share your own ideas, quickly join to become member of nairakobo forum and started posting today. Registration is free.
nairakobo forum is an Investor's friend.
Once again, you are welcome to nairakobo forum..
see you there....
Stockbroker on why foreign companies won’t list in Nigeria
Foreign investors would only come to Nigeria to buy shares of quoted Nigerians companies but a foreign company would not come here to list at least for now, according to Godwin Obaseki, a stokebroker.
Abdul Imoyo
Obaseki was reacting to the continued growth in the liquidity of the secondary market of the Nigerian stock Exchange (NSE) with strong presence of foreign investors.
The chief executive, Afrinvest West Africa Limited, says the attributes of the current market growth are democracy, Federal Government’s reform programmes, and investor demand for global best practices.
According to him, foreign investors are really looking into the Nigerian market even as the local companies are putting their shares abroad for those investors who cannot get here.
"I do not see an European company coming in soon to take advantage of the vibrancy and liquidity in Nigerian capital market (Lagos) to list their companies. There is no attraction, because there is more money in Europe than coming to list in Lagos," Obaseki said.
"But we should be looking at more companies in the sub regions, that is, rest of West Africa coming in soon to take advantage of the vibrancy and liquidity in Lagos to list their companies."
He added: With Euro-bond, foreign investors are beginning to look into Nigerian securities, and "they don’t want to sit in Europe and USA to buy, they have been to China and Hong Kong. Suddenly, we are beginning to see them move in because of the strength of our market."
According to him, Nigeria can either find West African companies with operations here who need capital for their own market or countries that do not have a vibrant capital market like Nigeria to list their companies.
It would be recalled that M-net super sports of South Africa, which listed on the NSE a few years back, had since withdrawn from the NSE.
However, Obaseki has canvassed the development of market infrastructure such that investors who are buying new issues would get value for their money.
Specifically, he was of the view that investors in the primary market such as those buying initial public offerings (IPOs) should be issued share certificates electronically, such that after allotment of shares they could trade their holdings immediately.
To interact with stock experts/analyst and share your own ideas, quickly join to become member of nairakobo forum and started posting today. Registration is free.
nairakobo forum is an Investor's friend.
Once again, you are welcome to nairakobo forum..
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Abdul Imoyo
Obaseki was reacting to the continued growth in the liquidity of the secondary market of the Nigerian stock Exchange (NSE) with strong presence of foreign investors.
The chief executive, Afrinvest West Africa Limited, says the attributes of the current market growth are democracy, Federal Government’s reform programmes, and investor demand for global best practices.
According to him, foreign investors are really looking into the Nigerian market even as the local companies are putting their shares abroad for those investors who cannot get here.
"I do not see an European company coming in soon to take advantage of the vibrancy and liquidity in Nigerian capital market (Lagos) to list their companies. There is no attraction, because there is more money in Europe than coming to list in Lagos," Obaseki said.
"But we should be looking at more companies in the sub regions, that is, rest of West Africa coming in soon to take advantage of the vibrancy and liquidity in Lagos to list their companies."
He added: With Euro-bond, foreign investors are beginning to look into Nigerian securities, and "they don’t want to sit in Europe and USA to buy, they have been to China and Hong Kong. Suddenly, we are beginning to see them move in because of the strength of our market."
According to him, Nigeria can either find West African companies with operations here who need capital for their own market or countries that do not have a vibrant capital market like Nigeria to list their companies.
It would be recalled that M-net super sports of South Africa, which listed on the NSE a few years back, had since withdrawn from the NSE.
However, Obaseki has canvassed the development of market infrastructure such that investors who are buying new issues would get value for their money.
Specifically, he was of the view that investors in the primary market such as those buying initial public offerings (IPOs) should be issued share certificates electronically, such that after allotment of shares they could trade their holdings immediately.
To interact with stock experts/analyst and share your own ideas, quickly join to become member of nairakobo forum and started posting today. Registration is free.
nairakobo forum is an Investor's friend.
Once again, you are welcome to nairakobo forum..
see you there....
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