Sunday 17 March 2019
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EquityMarket Access Bank’s dividends depressed by mergers as equities shed N292bn ...as UBA set to pay N22bn dividends to shareholders
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Stories by TELIAT SULE ccess Bank Plc, which is in the last stage of finalising its merger with Diamond Bank Plc, has proposed to pay shareholders N0.25 per share for the year ended December 31, 2018, and this may turn out to be the least dividend per share among the nation’s tier 1 banks payable in the 2019 dividend season. The five tier 1 banks are Guaranty Trust Bank (GTB), United Bank for Africa (UBA), Zenith Bank, First Bank of Nigeria Limited and Access Bank Plc. Only First Bank of Nigeria Limited is yet to announce its audited financial statement through FBN Holdings Plc but analysts are optimistic it will outperform its earnings forecasts. Zenith Bank had earlier proposed to pay shareholders N2.50 per share which amounted to N78.5 billion just as GTB proposed to pay N2.45 per share which translated to N72.1 billion. Last Friday, the United Bank for Africa (UBA) proposed to pay N0.65 per share and that amounted to N22.2 billion. Meanwhile, at N0.25 per share as final dividend, Access Bank will be paying shareholders N7.23 billion as dividend, which turns out to be the least among the four tier 1 banks that have made their corporate actions known to the investing public, thus bringing the total dividend paid in 2018 to N0.50, having paid N0.25 per share at half as interim dividend. The reduction in Access Bank’s corporate actions may not be unconnected with its merger with Diamond Bank. The bank announced last Friday it had received the final approval from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) to consummate its merger with Diamond Bank. “Access Bank Plc is pleased to announce that the Bank has received the final approval of both the Central Bank of Nigeria and the Securities and Exchange Commission to the proposed Scheme of Merger (‘the Scheme’) between the Bank and Diamond Bank Plc. The Scheme is
subject to judicial sanction of the Federal High Court. We will provide further update to the market upon receipt of the court sanction of the Scheme”, the statement read. With the latest corporate actions coming from both Access Bank and UBA, the total proposed dividends for the 2019 dividend season have risen to N529.6 billion. From the proposed dividends, banks, including Stanbic IBTC, will be paying shareholders on due dates N195.4 billion, and this amounted to 37 percent of the total proposed dividends year to date. “Acquisition may have played a role
in the amount of dividend Access Bank is proposing to investors. An Acquisition requires huge amount of cash expenses alongside the fact that the bank also proposed cash payment for the shares bought from Diamond Bank’s shareholders. Hence, the bank will need to work towards having good liquidity standing in order to fund the merger and post-merger requirements’, said Chinonye Nnewuihe , senior analyst with Meristem Securities. In spite of more listed firms announcing handsome rewards for shareholders, the nation’s equity
market remained unresponsive as the All Share Index (ASI) last week retreated into the negative territory. ASI closed at 31,142.72 points last week Friday, March 15, 2019 which translated to -0.92 percent returns year to date when compared with 31, 430.50 points on the last trading day of 2018. The market capitalisation closed at N11.6 trillion last week Friday compared with N11.91 trillion on the last on March 8 2019 translating to a loss of N291.5 billion in a week. Analysts have attributed different factors as responsible for the neutral posture of investors to mouth-water-
ing corporate actions from listed firms. “Whilst the political risk overhang has largely abated, I think investors are looking forward to announcement on CBN leadership and policy direction. The market is clearly undervalued, particularly the large –cap banks trading at historic low valuations. Hopefully, as the fog clears, both local investors and foreign portfolio investors will return to equities. “More so, expectation of further moderation in yields on fixed income securities reinforces the positive outlook for equities, as fund managers should allocate more money to equities, a development which should trigger deserved upward re-rating of value stocks on the Nigerian Stock Exchange(NSE)”, said Abiola Rasak, head, investor’s relation, the United Bank for Africa. For the financial year ended December 31, 2018, Access Bank made N528.7 billion as revenue compared with N459.1 billion made in similar period in 2017. Net interest income after impairment charges stood at N158.9 billion in 2018 well above N129 billion made in comparable period in 2017. Profit before tax for the current period was N103.2 billion as against N78.2 billion in the previous period. Profit for the year was N95 billion in contrast to N60 billion in the previous period. Furthermore, the United Bank for Africa (UBA) realised N205.6 billion as net interest income for the period ended December 31, 2018 compared with N207.6 billion in 2017. Profit before tax stood at N106.8 billion, representing 2.44 percent increase over N104.2 billion made in similar period in 2017. UBA made N78.6 billion as profit for the period, a marginal increase over N77.5 billion made in comparable period in 2017. The bank expended N1.05 billion on different CSR projects in the course of the year. Notable among such projects were the financial inclusion and public enlightenment project which gulped N400 million; Akwa Ibom State Government Security Project, N177.3 million; Ambrose Ali University , Edo State, N93.7 million and Taraba State Government Security Project, N84 million.
NSE, GRI to host sustainability reporting workshop
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he Nigerian Stock Exchange in partnership with the Global Reporting Initiative (GRI), is set to host a halfday workshop on sustainability reporting where the NSE Sustainability Disclosure Guidelines will be unveiled. The event is scheduled to hold on Tuesday, March 19, 2019, at the Exchange House in Lagos. This workshop will bring together C-level executives, Corporate Social Responsibility and Sustainability experts, non-governmental organizations and other stakeholders for an interactive session to share insights on the imperative of good sustainable practices and
reporting. The conversation at this workshop will seek to address the implementation of sustainability reporting, key metrics in the new GRI reporting standards, reporting process and enhancement of corporate transparency and ultimately performance on environmental, social and governance (ESG) issues. Speakers at the event include Bola Adeeko, Head, Shared Services Division, NSE; Bekeme MasadeOlowola, GRI Board Member and Executive Director, CSR in Action; Olumide Orojimi, Head, Corporate Communication, NSE; Godstime Iwenekhai, Head, Listing Regulation Department, NSE. The panel discus-
sion will feature Temitope Oguntokun, Country Lead, Sustainability and Stakeholder Management, International Breweries Plc; Ken Egbas, Founder/CEO at TruContact CSR Nigeria; Omobolanle Victor-Laniyan, Head, Sustainability, Access Bank Plc on sustainability and Emilia Asim-Ita, Practice Director, AML. Commenting on the planned workshop, Olumide Orojimi, Head, Corporate Communications, NSE, stated that, “A wide range of investors and other stakeholders are increasingly demanding more disclosure of information and data from issuers on how they are addressing sustainability issues, including ESG
factors and other non-financial risks and opportunities. As a sustainable Exchange, we are committed to helping organizations within our ecosystem implement reporting structure in line with global practices and their business peculiarities. This event will spotlight corporate social responsibilities beyond just practices and reveal how companies can create value through sustainability and reporting”. GRI Head of Capital Markets Engagement, Eszter Vitorino, added, “Ensuring the sustainability of development in Nigeria can only be achieved through the proactive contribution of all members of the
investment chain. We, therefore, give a warm congratulations to the NSE for walking the talk and driving corporate sustainability disclosure, which is the pivotal building block of responsible investment decisions”. Recall that The NSE recently secured approval of its Sustainability Disclosure Guidelines from the Securities Exchange Commission (SEC). The Guidelines set out recommendations for good practice in thirteen thematic areas under four core principles in ESG reporting. With the implementation of Guidelines, investors can look forward to a consistent approach to ESG reporting from Issuers listed on The NSE.