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Finance

Russian Bank Targets Nigeria, Others in Expansion Drive

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Russian bank, Promsvyazbank
  • Russian Bank Targets Nigeria, Others in Expansion Drive

Promsvyazbank, one of Russia’s largest privately-held banks, is looking to Nigeria and other Africa countries to expand its business, one of its senior executives told Reuters.

Alexander Meshcheryakov, the bank’s Head of Transaction, Documentary and International Businesses said in an interview in Moscow that the move was due to sluggish loan demand at home.

“There is growing interest in Africa among (Russian) clients.

“Many clients come to us with this topic and ask to help them with financing projects in Africa.

“To cater to its clients’ needs, Promsvyazbank is now studying business opportunities in Nigeria, Kenya, Rwanda, Tanzania, Uganda, Zambia and other countries, Meshcheryakov said.

He said Africa’s economies were predicted to grow faster than the global economy over the next decade as they try to attract foreign investors with tax breaks and guarantees.

“Africa is basically one of the fastest growing regions and could be the only economic region that has not yet unlocked its potential … From a growth point of view, it’s likely to be the most promising one on the world map.

“In the future, we expect that the ‘Made in Russia’ tag would be regarded as decent and worth the money,’’ Meshcheryakov said, declining to elaborate on the details of the projects the bank is involved in.

According to him, Promsvyazbank has already signed an agreement with the African Export-Import Bank (Afreximbank), and it is setting up contacts with certain governments.

He said that for now, Promsvyazbank would focus on financing projects in Africa, but may eventually consider opening a branch there.

With its Africa expansion plans, Promsvyazbank will join other Russian banks already operating in the region, such as VTB, Gazprombank and Renaissance Capital.

Promsvyazbank is Russia’s 10th largest bank by assets.

Russia’s second biggest bank VTB opened its subsidiary Bank VTB-Africa in Angola in 2006, focusing mostly on corporate and investment banking but also featuring a small retail division for its clients’ employees.

Gazprombank Africa, a branch of Russia’s third largest lender Gazprombank, has been based in South Africa since 2014. Investment bank RenCap has offices in Kenya, Nigeria and South Africa.

The economies of the African countries targeted by Promsvyazbank will grow by 4-7 per cent a year by 2019, according to World Bank estimates.

This is in contrast to Russia’s economy, which, emerging from two years of contraction is forecast to expand by less than 2 per cent in 2017.

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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