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Wema Bank Continues to Sustain Growth

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  • Wema Bank Continues to Sustain Growth

There is no doubt that the Nigerian banking sector has been facing some challenges due to weakness in the country’s macroeconomic indices.

From a decline in the quality of assets in the industry, to rising non-performing loans (NPLs) ratio, decline in core liquid assets, among others, some banks have been struggling to weather the storm.

Fitch Ratings recently noted that the banking industry will remain challenging considering low oil prices, continued disruptions in oil production and constraints regarding the forex liquidity. As such, the industry could witness a rise in non-performing loan (NPL) ratios, though Fitch expects banks to remain profitable in 2016.

However, the rating agency affirmed Wema Bank’s Long-term National Rating of Wema Bank at BBB-. This, the agency said was reflective of the bank’s stable outlook and continued viability, in spite of the challenging macro-economic environment. The Long-term IDR of Wema Bank also remained Stable at B-, as the rating was driven by the bank’s VR. It stated that it does not expect any material change in the bank’s intrinsic creditworthiness.

Wema Bank’s strengths, which underpin its long and short-term ratings, include the bank’s strong risk management culture, low NPL exposure and good liquidity levels.

Managing Director of Wema Bank, Mr. Segun Oloketuyi, stated that the rating was an affirmation of the bank’s continued transformation, risk culture and positioning, as one of the major players within Nigeria’s retail banking landscape. He said the bank’s affirmed rating further reinforced its resolve to remain a smarter and efficient bank, driven by innovation and technology.

The Journey So Far

The bank celebrated its 71st anniversary in May this year. Established on May 2, 1945 as Agbonmagbe Bank, the financial institution has undergone rapid transformation. Widely reputed as the longest surviving and most resilient indigenous Nigerian bank, Wema Bank Plc has over the years, diligently offered a fully-fledged range of value-adding banking and financial advisory services to the Nigerian public.

Incorporated in 1945 as a Private Limited Liability Company (under the old name of Agbomagbe Bank Limited) and commencing banking operations in Nigeria the same year, Wema Bank 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 it over the years to provide the Nigerian public with diverse financial and business advisory services.

Wema Bank after staying for seven years as a regional bank decided to upgrade to a national bank and has rising from a negative position, to a profitable financial institution, despite the challenges in the industry.

In its 2016 half year financials, Wema bank reported an 11 per cent rise in profit and a 15 per cent rise in turnover. The bank delivered an Interest income of N20.2 billion, a 15 per cent increase from N17.5 billion in the first half of 2015, while its fee and commission income also jumped by 42.3 per cent, from N2.2 billion in the first half of 2015 to N3.1 billion in the first half of 2016. The bank also recorded a 13.7 per cent growth in total assets, from N344.64 billion in the first half of 2015 to N391 billion in the first half of 2016. Furthermore, its operating expenses grew marginally by 2.7 per cent.

“Six years ago, we took a decision to refocus the bank’s operations on its areas of strength and build a sustainable institution. We took advantage of the new licensing regime and applied for a regional authorisation with a pledge to expand in the near future, once the turnaround project was completed.

“The bank’s transformation was implemented in three phases -first to stabilise the bank, second to prepare the building blocks for growth and third to go for growth. We are now within the third phase of the transformation project,” Oloketuyi explained.

He added: “The 2016 financial year has been characterised by deceleration on a number of economic indicators coupled with increasing energy costs, intensified by rising inflation, all within a tough operating environment.

“In spite of these challenges, Wema Bank has been able to deliver a modest improvement in the first half of the year. We commence the second half of the year with a sense of cautious optimism; well aware that the economic fundamentals point to an economy heading for further slowdown, yet hopeful that additional fiscal initiatives will be implemented to stimulate growth.”

Capital Raising

The bank receyelp raised N50 billion tier-2 capital, by issuing a bond. The first tranche was N20 billion and the second tranche was N30 billion.
“In recapitalising an institution, what you need to watch out is your optimum capital. Sometimes, if you make it all tier-1, it may not just be the optimal that you need. So, sometimes you also need to have some dose of tier-2.

“In 2009 when we took over, we had a distressed institution and all indices pointed to that direction. As at December 2009, the audited financial statement showed a negative capital of N45 million and the bank was totally on its knees. The share of market we had then was less 0.6 per cent. Equipment and processes and the platforms we were running were obsolete and the core banking application we had which is the platform we use to serve our customers, was old to the level that it couldn’t be supported by those who supported them.

“The non-performing loan ratio was 89 per cent and the performance of the bank was poor. So, we came in and said we need to have a containment strategy to stop the bleeding and stabilise the bank. So, between 2010 and 2014, was largely to give life back to the bank.

“A distressed bank needs to be turned around to a performing bank. Of course, you need capital for any business, more so for banking which is a regulated business. So, the first major assignment we did was to recapitalise the bank. Today we have been able to completely turn around the bank,” Oloketuyi explained.

Promoting Financial Inclusion

In its bid to promote financial include, Wema Bank in collaboration with Etisalat Nigeria recently collaborated to introduce the ‘WemaEasySavers,’ a tier-1 savings account, targeted at youths. The USSD based account is a seamless process where existing Etisalat customers can open instant account by dailing *945*10# and can be used instantly for transactions of up to N30,000 daily. However, it can be upgraded any time to other account types that give higher transaction limits.

Speaking at the launch, Oloketuyi said the initiative marked the beginning of greater things to come and greater services in Wema bank as the bank forges ahead with its growth strategy. He also said the bank has been stabilised and on the path of growth, and has invested a lot on technology which positioned it to receive this strategic partnership with Etisalat.

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.

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Dangote Cement Boosts Sub-Saharan Africa’s Economic Development

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Dangote Cement - Investors King

Operating in 10 African countries, Dangote Cement has significantly boost Sub-Saharan Africa Economic Development and play major roles in attracting Investors and job creation.

Sub-Saharan Africa is populated by more than half a billion people, and rapid urbanisation is creating challenges in the areas of housing, roads, railways, power supply, dams and water pipelines – aspects of infrastructure that are critical to the well-being of the population.

This situation indicates that cement and concrete will play a major role in construction technology in Africa, an aspect that makes the continent an attractive destination for investors.

The Dangote Group has taken cognizance and advantage of the cement demand in Africa by investing in 10 sub-Saharan counties like Nigeria, Senegal, South Africa, Cameroon, Ethiopia, Tanzania, Zambia, Ghana, Congo, and Sierra Leone.

Remarkably, the Dangote Cement plant has successfully operated in Senegal in the last five years, producing 32.5 and 42.5-grades, thereby offering the domestic market higher-quality cement at competitive prices.

The company’s 1.5Mta factory located in Pout, about 60km from Dakar, was commissioned at the end of December 2014 to take advantage of the geographical strategic location, strong demand and abundant limestone deposits.

Country Manager, Dangote Cement, Senegal, Luk Haelterman, said: “before our entry, the domestic market was almost entirely made up of 32.5-grade cement. Our plant produces 42.5-grade cement, thereby offering the market higher-quality cement at a competitive price, which the construction industry urgently needs.”

Dangote Cement Senegal’s integrated plant is modern, fuel-efficient that uses the latest technology to produce high-quality cement. This enables the company to compete very effectively in a Sub-Saharan cement industry that is fragmented and characterised by smaller-scale operators with older technologies.

Haelterman described Dangote Cement’s investment in Senegal as one of the biggest foreign direct investments by an African company, which is an indication of its strong belief in the future growth of its economy.

He said the market has potential for growth for both local consumption and export, despite being saturated by other cement brands, saying, “apart from capturing the local market in Senegal, we also now export cement to neighbouring countries of Mali, The Gambia and Guinea-Bissau.”

Haelterman attributed the company’s outstanding performance in Senegal to stringent quality assurance processes, which were deployed to ensure that customers get high-quality products that meet all the required technical standards.

According to him, Dangote’s introduction of the 42.5-degree brand of cement to the major market in Senegal upon entry has enabled the company to gain the desired market share in the country.

Luk also disclosed that Dangote Cement Senegal has developed a culture of supporting local employees and prioritising local hiring, which allows local country employees have the necessary knowledge, experience, and support to take up key roles within the company.

He said the policy aims to gradually reduce the number of expatriates employed by the business by enhancing the skills and capacity of Senegalese employees to take up leadership positions.

“We have ensured that our image has been aligned with two key principles from day one: maintaining high quality, and taking a local approach in everything that we do,” he said.

Human resources manager, Dangote Cement, Senegal, Waly Diouf, said the company takes training and development of employees as a priority. “Today, Dangote Senegal has about 800 employees. We make sure that we invest heavily in the training and development of employees. We have a programme, which enables us to boost the skills of local staff at all levels. Dangote Cement Senegal is one of the best plants in Africa. This consistent training of indigenous manpower has made our plant one of the best in Africa ” he disclosed.

Chief finance officer, Dangote Cement, Senegal, Ousmane Mbaye, said the company has contributed significantly to the development of Senegal’s economy, saying, “Dangote Senegal started operation in Senegal in 2015, and between 2015 and 2019, the company has contributed heavily into the Senegalese government treasury, thereby assisting in economic development.”

Head of mines, Dangote Cement, Senegal, Leyti Ndiaye added that “our job is to supply raw materials to the plant and make sure that blending of the limestone is done correctly. We operate under very strict environmental regulations. As a company, we have a sustainable environment management plan so as to reduce environmental degradation during operation as well as restoration of degraded lands after final mine closure.”

Chief executive officer, National Sector Mining Company, Ousmane Cisse commended Dangote Cement for investing massively in the Senegalese economy. “I am very proud to have Dangote Cement in Senegal. Dangote has been able to satisfy the Senegalese cement market since its inception in 2015. When Dangote arrived here, there were two players in the market. Dangote brought quantity and quality products through the introduction of 45.2R. Dangote has helped cement consumers in Senegal to access quality cement products.

“The company is also satisfying markets in the surrounding countries. When you visit Dangote, you will discover that most of the employees are Senegalese. The company has employed Senegalese and ensure adequate capacity building for everybody,” he stated.

The best practices adopted by the Dangote Cement Senegal Plant over the past five years have boosted its production process and quality of its products, with a corresponding positive impact on the economy of the country, Sub-Saharan Africa and the continent as a whole. This is a plus for development.

Dangote Cement has a production capacity of 48.6 million tonnes per year across 10 countries in Sub-Saharan Africa. The Group has integrated factories in seven countries, clinker grinding plant in Cameroon, and import and distribution facilities for bulk cement in Ghana and Sierra Leone. Together, these operations make the Group the largest cement producer in Sub-Saharan Africa.

Based in Nigeria, the Group operates in many of Sub-Saharan Africa’s key cement markets, helping the continent become self-sufficient in this basic commodity. In 2020, it started shipping clinker to West and Central Africa from Nigeria. Its regional strategy stated that it look for markets that have ample limestone, thriving economies, growing populations, and a pressing need for housing and infrastructure.

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Arla Food To Set Up Dairy Farm In Nigeria, Train 1,000 Dairy Farmers

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Arla Foods- Investors King

Arla Foods, makers of Dano Milk, has announced that it will build a state-of-the-art commercial dairy farm in Northern Nigeria where it plans to train and support up to 1,000 local dairy farmers as part of its long-term commitment to developing the Nigerian dairy sector.

The 200-hectare farm, scheduled to open in 2022, will have housing for 400 dairy cows, modern milking parlours and technology, grasslands and living facilities for 25 employees.

The firm said the farm is expected to produce over 10 tonnes of milk per day to supply locally produced dairy products to Nigerian consumers.

Managing Director, Arla Foods, Peder Pedersen said “there was a great need for nutritious food and dairy products to satisfy the growing demand from Nigeria’s fast-growing population.”

“This requires a complementary approach where imported food is crucial to ensuring food security while also supporting the government’s long-term agricultural transformation plan to build a sustainable dairy sector in Nigeria,” Pedersen said.

In 2019 Arla scaled up its commitment to developing a sustainable dairy sector in Nigeria with a new public-private partnership with the Kaduna State government.

It is the first of its size and offers 1,000 nomadic dairy farmers permanent farmlands. Arla is the commercial partner that will purchase, collect, process and bring the local milk to market.

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Appointments

The Board of Chemical and Allied Products Plc (CAP Plc) Appoints Vitus Ezinwa as a Non-Executive Director

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Chemical & Allied Products (CAP) Plc - Investors King

The Board of Chemical and Allied Products Plc (CAP Plc) has appointed Dr. Vitus Ezinwa as a Non-Executive Director of the company effective from Thursday June 17, 2021, subject to the approval of the Company’s shareholders at the next Annual General Meeting.

The company announced in a statement signed by Ayomipo Wey, Company Secretary/General Counsel, CAP Plc.

Dr. Ezinwa is a seasoned business manager and human resource professional with experience in leading multinational corporations.

He is currently the Chief Operating Officer (COO) of UAC of Nigeria Plc (“UACN”) and previously, the Group Director of HR at UACN.

Prior to Joining UACN, Dr. Ezinwa worked as Group Human Resources Director for Promasidor Africa; Human Resources Director, CocaCola Nigeria & Equatorial Africa with responsibility for 10 countries and Human Resources Director for British American Tobacco, West & Central Africa covering Ghana, Benin, Niger & Togo.

Dr. Ezinwa was, until recently, the Group Human Resource Director for Tropical General Investments (TGI) Group.

He is a member of the Advisory Board of Afterschool Graduate Development Centre, member of the Institute of Directors and a Fellow of the Chartered Institute of Personnel and Development (CIPD) UK.

He is a co-founder and Director of HR Network Africa and was until 2014, a member of the Lagos Business School’s Advisory Board. He holds a Bachelor’s degree in Sociology/Anthropology from the University of Nigeria, Nsukka, MBA in Management from Lagos Business School, a Master’s in applied business research and a Doctorate in Business Administration, both from Swiss Business School, Zurich, Switzerland.

In addition to holding an executive director role on the Board of UACN, Dr. Ezinwa is a non-executive director of Grand Cereals Limited.

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