Finance

Private Equity-backed IPOs Rise in Africa – PwC, AVCA

Published

6 years ago

September 26, 2018

Private Equity-backed IPOs Rise in Africa – PwC, AVCA

The African Private Equity and Venture Capital Association and PwC Nigeria have said private equity-backed Initial Public Offerings are among the largest IPOs in Africa.

They stated this in the ‘Africa Private Equity-backed Initial Public Offering’ report, which was released on Friday in Lagos.

The report provided a historic analysis of private equity-backed and non-private equity-backed IPOs between 2010 and 2017 on exchanges throughout Africa, as well as IPOs by African companies on international exchanges.

The Head of Research, AVCA, Enitan Obasanjo-Adeleye, said it had been noted long ago that the proportion of private equity exits through IPOs in Africa was lower relative to markets such as the United States and United Kingdom.

She said the capital markets played a fundamental role in the efficient allocation of capital, describing them as a critical exit route for private equity globally.

Obasanjo-Adeleye said the report provided data, which she said would be important for ongoing dialogue around measures that needed to be taken to narrow the IPO gap between Africa and other continents.

She said, “We are excited to have worked with PwC to highlight private equity-backed IPO activity on the African continent. Over the period from 2010 to 2017, African private equity-backed IPOs, as a percentage of total African IPOs, averaged just 16 per cent in terms of volume and 23 per cent in terms of value.

“In comparison, over the same period, private equity-backed IPOs in the US averaged 39 per cent in terms of volume and 44 per cent in terms of value, and in the UK, 36 per cent in terms of volume and 45 per cent in terms of value.

“During the period under review, there have been 30 African private equity-backed IPOs raising a total of $3bn. Consistent with overall IPO trends in Africa, the Johannesburg Stock Exchange led as an exit destination in terms of value of private equity-backed IPOs, with nearly $2bn raised.”

Obasanjo-Adeleye noted that an analysis of post-IPO performance showed that private equity-backed IPOs in sub-Saharan Africa showed a price return of 27 per cent higher than their offer price.

According to her, on an average, over a one-year time horizon post-IPO, this closely approximates the performance of their non-private equity backed IPO peers of 30 per cent.

She added that the performance of North African shares over the same time horizon in the period analysed differed, with post-IPO performance returning only zero per cent and eight per cent growth over offer price for private equity floats and non-private equity floats, respectively.

A Partner, PwC Capital Markets, Johannesburg, Andrew Del Boccio, said, “Private equity funds backed a combined 16 per cent of the IPOs in Africa between 2010 and 2017, with average one-year returns on sub-Saharan Africa transactions closely in line with non-private equity IPOs.

“This suggests an opportunity to further explore the capital markets as a plausible exit strategy for private equity investments in the region. Over the period, a relatively small number of private equity-backed IPOs contributed significantly to the value of proceeds raised.

“Among others, these include the 2010 $681m IPO of Life HealthCare Group on the JSE, which constituted 23 per cent of total private equity-backed IPO capital raised between 2010 and 2017, and the 2014 $348m IPO of Alexander Forbes, also on the JSE, constituting 12 per cent of total private equity-backed IPO capital raised.”

Del Boccio stated that the $819m dual listing of Vivo Energy on the JSE and London Stock Exchange, which took place in May 2018, raised more capital than any African private equity-backed IPO since 2010.

The Associate Director, Capital Markets, PwC Nigeria, Alice Tomdio, said the Vivo Energy IPO was clear evidence that the IPO market was open to companies with attractive equity stories and a proven track record of growth.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Banking Sector

Unity Bank, CashToken Rewards Promo Produces New Millionaire

Published

11 hours ago

October 8, 2024

Samed Olukoya

A Unity Bank customer, Mr. Amadi Chinmenem Gift Chike, has emerged as the latest winner of One Million Naira in the ongoing Cash Rewards Promo by Unity Bank Plc and CashToken Rewards Africa.

CashToken Rewards Africa is a Cash-Reward-as-a-Service company that rewards customers for their patronage and loyalty.

Mr. Amadi, a customer from Unity Bank’s Aba Road Branch, Port Harcourt, Rivers State, won the cash prize after completing qualifying transactions on Unity Bank’s digital banking channels including Unifi, *7799#, and on his Unity Bank-issued Verve card. Through these transactions, he received CashTokens, which entered him into the weekly national consumer draw, where he was selected as the lucky winner of the N1 million prize.

The grand prize winner, Mr. Amadi is the second customer to claim the N1 million grand prize in the rewards promo, which commenced in November 2023. Since the launch, Unity Bank customers have collectively won over N6 million in cash rewards.

Unity Bank and CashToken Rewards promo offers guaranteed instant cash rewards and life-changing opportunities for loyal customers who transact on any of the Bank’s electronic payment platforms, including the Unifi mobile banking application and the *7799# USSD platform. Every card transaction earns customers CashTokens, which qualify them for the weekly national consumer draw, with prizes ranging from N5,000 to N100 million.

Presenting the cheque to the winner in Port Harcourt, Unity Bank’s Regional Manager for Port Harcourt/Uyo Region, Mr. Etop Ikpe, congratulated the winner and reiterated the Bank’s commitment to building a sustainable loyalty platform for customer engagement and satisfaction.

He said, “We are happy to see another one of our loyal customers win a substantial cash prize through the Unity Bank and CashToken Rewards Promo. This initiative aligns with our mission to reward customer loyalty while providing a seamless and rewarding banking experience. As we continue to innovate and enhance our digital banking platforms, we are committed to creating more opportunities for our customers to benefit from their relationship with Unity Bank.”

In his reaction, an elated Mr. Amadi said, “This is a reward for my steadfastness. I have been banking with Unity Bank for a long time and I am really happy to win the cash prize. I commend the bank for the initiative and Unity Bank has always come through in keeping their promises both in terms of service delivery and meeting expectations of customers.”

Also commenting on the development, Simi Adeoye, Chief Business Development Officer for CashToken Rewards Africa, added: “We are proud to partner with Unity Bank in bringing life-changing opportunities to their customers through our Cash-Reward-as-a-Service model. We aim to make every transaction meaningful by turning regular banking activities into chances for customers to win significant rewards. We congratulate Mr. Amadi on his win, and we look forward to creating more millionaires as the promo continues. Mr. Amadi just like other beneficiaries can easily cash out his win by dialling *6700#, following the prompt and transferring his wins directly to his Unity Bank account.”

Banking Sector

Zenith Bank Enhances E-Channel Services for Customers

Published

4 days ago

October 4, 2024

Samed Olukoya

Zenith Bank, one of Nigeria’s leading financial institutions, has restored improved services across its electronic transaction channels, ensuring customers have seamless access to banking services.

In a statement released on Thursday via its X handle, the bank confirmed that customers can now conveniently conduct transactions across various platforms following a recent upgrade. These enhancements follow temporary glitches caused by routine IT maintenance aimed at optimizing service delivery.

Zenith Bank reiterated its commitment to providing improved services and highlighted the various channels available for customer transactions, including:

– Zenith Bank Debit, Credit, and Prepaid Cards
– Automated Teller Machines (ATMs)
– Point of Sale (POS) Terminals
– Zenith Bank Mobile App
– Internet Banking Platform
– Zenith Agents nationwide for agent banking

Customers are also encouraged to visit any of the bank’s branches across the country for in-person transactions.

Zenith Bank reassured further improvements in service delivery following the IT infrastructure upgrade. Customers with bulk payments and salary requests are encouraged to present payment mandates at any Zenith Bank branch nationwide for expedited processing.

Zenith Bank remains dedicated to enhancing customer experience and ensuring reliable banking services across all platforms.

Banking Sector

Nigerian Banks Face Soaring Wage Bills Amid Rising Inflation

Published

5 days ago

October 4, 2024

Ugwoke Ogbodo

Many Nigerian commercial banks have been spending more on hiring staff, fresh data has revealed.

Following worsening inflation in the country, some banks have to pay more for their newly hired workers, thus doubling the banks’ wages and salaries in just over a year and putting pressure on their operating costs.

The data showed that wages and salaries incurred by 10 banking groups in the first half of 2024 (H1 2024) stood at N615.8 billion, representing a 96 percent growth from the N314.4 billion incurred in H1 2023.

The banking groups are Access Holdings, UBA, FBN Holdings (First Bank), GTCO (GT Bank), Zenith Bank, Stanbic IBTC Holdings (Stanbic), Wema Bank, FCMB Group, Sterling Holding Company (Sterling), and Jaiz Bank.

It showed that Access Holdings incurred the highest wage bill among the banks, with N151.5 billion, up by 145 percent from the N61.9 billion reported in H1 2023 while First Bank’s personnel expenses for H1 2024 hit N134.2 billion, marking a 110 percent year-on-year increase from the N63.9 billion personnel expenses incurred in H1 2023.

For UBA, its wage bill grew by 92 percent year-on-year to N126.6 billion during the six months, up from N65.9 billion as of H1 2023. Also, Zenith Bank’s wage bill soared by 64 percent year-on-year to N63.5 billion, from N38.6 billion in H1 2023. Stanbic incurred wage expenses of N40.6 billion during the six-month period, up from N28.2 billion in H1 2023.

GT Bank’s wage bill almost doubled, increasing by 98 percent year-on-year to N39.3 billion, up from N19.9 billion in H1 2023. FCMB Group’s wage bill grew by 74 percent to N26.6 billion in H1 2024, up from N15.2 billion reported in the corresponding period of 2023.

In the same vein, Wema Bank’s wage also went up by 77 percent to N15.6 billion, from N8.8 billion in H1 2023. Sterling Bank’s wage bill also jumped by 41 percent year-on-year to N12.5 billion, from N8.9 billion as of H1 2023.

Jaiz Bank’s wage bill went up by 78 percent to N5.5 billion, from N3.1 billion in H1 2023.

The data showed that for some of these banks, the increase in employees also contributed to their rising wage bills, though, marginally.

For example, Zenith Bank increased its employee count by 511 to 8,146 between H1 2023 and H1 2024. UBA’s employee count between H1 2023 and H1 2024 increased marginally by 3 percent or 338, from 9,751 to 10,089.

While some companies downsize their staff strength, due to the harsh economy in the nation, the few available workers have been overloaded with work.

With inflationary pressures hitting hard on individuals and businesses, companies have been forced to substantially increase the wages for the few available staff.

For banks, apart from their staff wages, they have also had to incur increased outsourcing costs. Outsourcing costs relate to expenses incurred when a bank hires third-party contract staff.

GT Bank’s outsourcing costs increased by 69 percent year-on-year to N14.5 billion during the half-year, in contrast with N8.6 billion in H1 2023. First Bank’s outsourcing costs jumped by almost 300 percent year-on-year during the half-year to N16.4 billion, from N4.3 billion in H1 2023. Wema Bank also saw a dramatic increase in its outsourcing costs, posting N8.85 billion for the category in H1 2024, representing a 272 percent year-on-year growth from N2.38 billion as of H1 2023.

The jump in labour costs for banks has positioned some of them as the top-paying employers in the country. For instance, in H1 2024, Stanbic IBTC Holdings posted a wage per employee of N2.11 million per month. Zenith Bank had a wage per employee of about N650,000 per month, a stark comparison with UBA’s N2.09 million per month. However, UBA’s foreign operations employ about 4,150 staff members.