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Capital Market
Friday, May 2, 2014
Q1: FCMB posts N5.6bn pre-tax profit, extends working hours JOHNSON OKANLAWON
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CMB Group has declared a profit before tax of N5.6bn for the first quarter ended March 31, 2014, up 15 per cent from N4.8bn recorded in the same period of 2013. A statement from the bank said the group reported earnings growth in the first quarter in spite of the challenging regulatory environment. According to the statement, net revenue rose 16 per cent to N22.3bn, due to growth in earning assets, improved funding cost and the growing contribution of retail banking activities, which compensated for the decline in unit commissions on turnover. The company deposits increased nine per cent yearon-year to N687.3bn, aided by JOHNSON OKANLAWON
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SDH Merchant Bank has assured of a significant improvement in its financial performance at the end of the current financial year. Chairman of the company, Mr. Osaro Isokpan, who disclosed this at the Annual General Meeting of the company in Lagos, also stated that the company was able to overcome the challenges posed by the downturn in the global economy which also affected the Nigerian economy in 2013. According to him, given the global economic trend, when most country’s economy nose-dived, Nigeria was not expected
22 per cent growth in current and savings accounts, while fixed deposits declined. Loans and advances also grew 50 per cent year-on-year to N493.7bn on retail business that witnessed a 90 per cent loan growth, from the same period in 2013, to N105.4bn in the review period. The retail and business banking segments combined, now accounts for 33 per cent of total risk assets. Specifically, FCMB Limited achieved a higher net interest margin of 8.8 per cent with a healthy loan to deposit ratio of 71.8 per cent as well as a more efficient cost-to-income ratio of 68.9 per cent, indicating steady improvement in profitability. Commenting on these results, the Managing Director of FCMB Group Plc, Mr. Peter Obaseki,said the group re-
ported positive developments in most of its key operating areas, saying that the bank’s operating income rose 16 per cent, from N19.3bn in 2013 to N22.3bn in 1Q14. He said the bank’s operating expenses was up 11 per cent, from N14.0bn in 2013 to N15.5bn in the review period, while pre-tax profits rose 15 per cent to N5.6bn. Obaseki added that FCMB Capital Markets Limited and CSL Stockbrokers reported pre-tax profits of N198m, 128 per cent higher than the figure recorded the same period of 2013. The Group Managing Director of FCMB Limited, Mr. Ladi Balogun explained that the commercial and retail banking arm of the group posted a profit before tax of N5.5bn, up 13 per cent from N4.8bn recorded in the first
quarter of 2013. He said, “On our statement of financial position, total deposits increased nine per cent, growing from N628.4bn in 2013 to N687.3bn, but fell four per cent from the December 2013, to N717.4bn due to expected reductions in wholesale deposits. “Net interest margin continued to climb to 8.8 per cent on the back of the robust retail loan growth, whilst return on average equity for the commercial and retail banking activities rose to 14.9 per cent. We expect margins, profitability and efficiency ratios to continue to improve in spite of the challenging regulatory environment.” Meanwhile, the bank’s opening times has been extended by an hour from today and selected branches will be open Saturdays.
FSDH Merchant Bank assures investors of better performance to be different. “As it affects us, it affects institutions’ performance all over the country. However, FSDH, given that it was our first year, our consolidation year, we have met expectations,” he noted. He maintained that the company, leveraging on its culture of excellence and conservatism, will strive to meet the expectation of shareholders in the area of incremental growth in capital, dividend returns, returns on capital and excellent corporate image. “So far, we have had a culture of excellence and I believe this will take the
company far. Coming year, we expect our performance to be much better; we expect to focus on the products that will drive our profitability,” he added. Also speaking, Mr. Femi Agbaje, a Non-Executive Director of the company, noted that despite the fact that the company recently got its merchant banking license, it was able to post an impressive financial performance. He said, “The company’s performance is good. We should not forget that they only recently just got the merchant banking license and this is their first au-
dited financials as a merchant bank. If you look at it and compare it with their peers in the industry, my view is that they have done well. “The foundation is very strong, and also the brand. Even as a discount house which has been in operation, one must credit them. When most of the other discount houses have collapsed, FSDH have grown from strength to strength and my belief is what you see in terms of performance is only the beginning of much better things to come.”
Pfizer planning to raise AstraZeneca bid above $106bn
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fizer Incorporation is preparing to sweeten its bid for AstraZeneca Plc to more than 63 billion pounds ($106bn) in an attempt to lure the United Kingdom’s second-biggest drug maker to the negotiating table, people with knowledge of the matter said. The offer may value AstraZeneca at more than 50 pounds a share and include a larger cash component, and could come as early as next week, said the people, who asked not to be identified discussing confidential information. The London-
based company rejected a cash-and-stock proposal of 46.61 pounds a share. Pfizer will report its earnings on May 5. The new bid and its timing aren’t final and may change, two of the people said. After speaking with some AstraZeneca shareholders, Pfizer sees an offer in the low 50 pound-pershare range gaining their support for the companies to hold talks, two people said. Pfizer’s Chief Executive Officer Ian Read is on a charm offensive in the UK this week and would prefer
to negotiate a friendly deal. Buying AstraZeneca would give Pfizer a lower tax rate and a portfolio of experimental cancer drugs. AstraZeneca’s US traded shares rose 2.6 per cent to $81.11. The company ended London trading at 4,815 pence a share, or the equivalent of about $81, giving it a market value of 60.8 billion pounds. Pfizer rose 0.7 per cent to $31.50. The companies have several large investors in common, including BlackRock Inc., Wellington Management Company and Vanguard Group Incorporation
Pfizer’s top-20 shareholders collectively own 27.6 per cent of AstraZeneca, Bloomberg data showed. “Until we see something officially, there is no comment we can provide,” said Esra Erkal-Paler, an AstraZeneca spokeswoman. Pfizer spokeswoman Joan Campion declined to comment. Pfizer’s earlier offer, made in January, valued AstraZeneca at 58.8 billion pounds. The proposed deal would be the largest ever in the drug industry and the biggest of a UK company, data compiled by Bloomberg showed.
45
Source: NSE
Source: FMDA
Market indicators All-Share Index 39,011.90 points Market capitalisation 13.02 trillion
Stock Updates GAINERS COMPANY
OPENING
CLOSING
CHANGE
% CHANGE
COSTAIN
1.20
1.26
0.06
5.00
REDSTAREX
4.26
4.47
0.21
4.93
FBNH
12.59
13.21
0.62
4.92
NEIMETH
1.09
1.14
0.05
4.59
WAPIC
0.70
0.72
0.02
2.86
SKYEBANK
3.51
3.60
0.09
2.56
FIDELITYBK
1.95
2.00
0.05
2.56
PRESCO
42.00
43.00
1.00
2.38
ETI
13.30
13.60
0.30
2.26
CORNERST
0.50
0.51
0.01
2.00
CHANGE
% CHANGE
LOSERS COMPANY
OPENING
CLOSING
MANSARD
2.43
2.31
-0.12
-4.94
IPWA
0.61
0.58
-0.03
-4.92
SEPLAT
627.00
597.01
-29.99
-4.78
TOTAL
167.90
161.20
-6.70
-3.99
FIRSTALUM
0.52
0.50
-0.02
-3.85
OASISINS
0.53
0.51
-0.02
-3.77
INTENEGINS
0.57
0.55
-0.02
-3.51
IKEJAHOTEL
0.58
0.56
-0.02
-3.45
UBCAP
2.37
2.29
-0.08
-3.38
ABCTRANS
0.90
0.87
-0.03
-3.33
Primary Market Auction TENOR
AMOUNT (N’mn)
RATE (%)
DATE
91-Day
22,057.31
11.50
07-Nov-13
182-Day
30,000.00
11.59
07-Nov-13
182-Day
47,786.39
13.05
07-Nov-13
Open Market Operations TENOR
AMOUNT (N’mn)
RATE (%)
DATE
178-Day
86,709.13
12.35
07-Nov-13
175-Day
95,368.69
12.35
07-Nov-13
-
-
-
-
Wholesale Dutch Auction System AMOUNT OFFERED
MARKET DEMAND
AMOUNT SOLD
DATE
$350m
N/A
$343m
04-Nov-13
$400m
N/A
$399m
30-Oct-13