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FG to Borrow N105bn via Local Bonds

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The Federal Government is planning to borrow N105bn ($345m) in local currency — denominated bonds at an auction on October 12, the Debt Management Office has said.

The DMO said on Tuesday that it would raise N35bn each from debt maturing in 2021, 2026 and 2036, using the Dutch auction system.

All the bonds are re-openings of previously issued debt.

The Federal Government had last week announced plans to raise between N250bn and N340bn in local currency-denominated bonds in the fourth quarter of this year.

The government has estimated that it will borrow around N900bn from the local debt market this year to fund a budget deficit projected at N2.2tn, which has been aggravated by an economic slump as low oil prices slashed government revenues and weakened the naira.

The FG is also planning a $1bn Eurobond issue.

The Central Bank of Nigeria is also planning to borrow N129.67bn ($403.01m) in short-dated Treasury bills at an auction on Wednesday (today).

The CBN said it would raise N28bn in three-month paper, N33.49bn in six-month bills and N68.18bn in one-year bills.

According to a public notice by the lender, payment for the purchases will be made on Thursday.

The Federal Government issues Treasury bills to raise cash to fund the budget deficit, manage banking system liquidity and curb rising inflation.

According to the traders, banks have been resorting to the central bank’s standing lending facility to cover their positions.

The naira closed at 476 against the dollar on Tuesday, marginally down from 475 recorded on Monday.

The naira had fallen to an all-time low of 490 against the dollar at the parallel market early on Friday before recovering to 475 amid the lingering dollar shortage.

At the official market, the naira spot rate closed at 420.31 against the greenback, FMDQ data showed.

The CBN had borrowed N140.88bn ($448m) via short-dated Treasury bills at an auction last Wednesday, attracting lower yields across the board, except on the three-month debt that was flat.

The CBN said it was planning to borrow N1.77bn via Treasury bills in the last three months of the year.

In its fourth quarter Treasury bill issue programme, the apex bank said it would raise about N815.37bn, comprising 91 days, 182 days and 364 days’ debt instruments.

In addition to the above, the central bank is also planning to raise about N952.05bn as rollover in the three categories of the instruments.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.

His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.

The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.

FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.

For more information about FCMB Group Plc, please visit www.fcmbgroup.com.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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Central Bank Extends One-Year Moratorium by 12 Months

The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.

The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.

In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.

The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.

“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

“Following the expiration of the above timelines, the CBN hereby approves as follows:

“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.

“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”

It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.

To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.

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Finance

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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