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Banks, Others Pay N578.114bn Dividends to Shareholders

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  • Banks, Others Pay N578.114bn Dividends to Shareholders

A total of N578.114bn dividends has so far been declared for payment to shareholders by companies that have held their Annual General Meetings for the 2018 financial year.

According to the latest data obtained from the Nigerian Stock Exchange by our correspondent, Dangote Cement Plc paid the highest dividend of N16 per share, which translated to N272.640bn.

Guaranty Trust Bank Plc paid N80.84bn dividend, Zenith Bank Plc paid a total of N78.491bn dividend, Nestlé Nigeria Plc paid N30.517bn, Access Bank Plc paid N17.772bn and Stanbic IBTC Holdings Plc paid N15.361bn.

Nigerian Breweries Plc, Dangote Sugar Refinery Plc, Seplat Petroleum Development Company Plc, FBN Holdings, Cement Company of Northern Nigeria Plc, Total Nigeria Plc, Fidelity Bank Plc, 11 Plc and Okomu Oil Palm Plc paid N14.634bn, N13.212bn, N10.641, N9.333bn, N5.257bn, N4.753bn, N3.187bn, N2.975bn and N2.862bn, respectively.

FCMB Group Plc paid N2.773bn, Nascon Allied Industries Plc paid N2.650bn, Julius Berger Nigeria Plc paid N2.640bn, Custodian Investment Plc paid N2.059bn, CAP Plc paid N2.031bn, United Capital Plc paid N1.8bn, and Transnational Corporation of Nigeria Plc paid N1.219bn.

Wema Bank Plc, Transcorp Hotels Plc and Africa Prudential Plc paid N1.157bn, N1.140bn and N1bn, respectively.

Other companies paid dividends in nine digits, while one company― The Initiates Plc ― paid in six digits (N444,990).

Some shareholders have expressed their displeasure over the dividends paid by the companies.

The shareholders, who expected to have received higher dividends, complained at different Annual General Meetings in Lagos, describing the dividends paid as meagre.

A shareholder with Union Bank of Nigeria, Mrs Olubukola Adesanmi, said, “The dividend is too small; we are just trying to manage it. We believe companies can do better.

“We know there are some issues facing the companies; they keep complaining about taxes, fines and all those things. What they are giving us is ‘kobo-kobo’ but we are just trying to manage it; it is not commensurate with the investments we have.

“I have shares in other banks, like FCMB, Wema Bank, and insurance and fast-moving consumer goods companies; the story is all the same. I have over 500 shares in Union Bank.”

Another shareholder, Mr Kehinde Oniwinde, said he always tried to register his displeasure during AGMs.

He said some companies had not even paid dividends in a long time and nothing was done to them.

According to him, it is unfair that shareholders are not being well compensated or not compensated at all in some cases.

Oniwinde said, “Companies can do better; we always encourage the companies to try and do better. What do you expect when you invest money? You expect to make gain; you don’t expect any loss; but if the loss comes, there must be a reason for it and it should not be a regular thing.

“For some of us that have quite a number of shares in companies, I think a lot more can be done. Those that don’t pay dividends should be probed; there should be a consideration for people that invest money in the company.

“I have been buying shares since the ’70s and I have shares in 72 companies; some about N20m, some N12m, and others less than N10m. I expect these investments to yield tangible returns.”

The President, Advancement of the Rights of Nigerian Shareholders, Dr Faruk Umar, said although no shareholder had come to him personally to complain, he confirmed that many shareholders had complained about low dividends at different AGMs.

He stated that he was also not pleased with the dividends paid by some companies, citing the United Bank for Africa Plc and FBN Holdings.

Umar said, “I also complained that the dividend paid by UBA should have been N1 rather than 85 kobo. But the group managing director said that they would try to achieve it next year.

“At the AGM of FBN Holdings, I also complained about the dividend but they gave a good explanation that they would try to achieve one digit Non-Performing Loan ratio, which would enable them to pay N1 dividend.

“If you look at the profitability, it is very high. If not because of the NPL ratio, they would have paid close to N1. So, I commend them for the 26 kobo they paid, which they said was from their insurance and merchant bank subsidiaries.”

Umar added that he was sure that when the group achieved one-digit NPL, it would be able to pay a dividend from the banking subsidiary, which would increase the amount to be received.

He said he had received explanations from banks, which said dividends were regulated by the Central Bank of Nigeria.

Umar said his findings revealed that if the NPL ratio was one digit, banks would not be outlawed by the CBN to pay dividends.

He said, “If you also look at the first-quarter results, many companies have not recorded losses; they have improved marginally on their profits. I am hopeful that the dividend next year will be higher than the one paid in 2018.”

The Group Chairman, UBA, Mr Tony Elumelu, noted that the year 2018 was not rosy for many companies because of the difficult operating environment.

He said the economy witnessed a slow recovery but the bank tried its best to deliver good results and value for shareholders.

He assured shareholders that being a shareholder himself, he would ensure that the request for an upward review of dividends was considered while hoping for better economic and operating environment.

The President, Independent Shareholders Association of Nigeria, Mr Sunny Nwosu, said a lot of regulatory changes, such as the IFRS 9, coupled with the difficult operating environment, contributed to the poor performance of companies.

He said although the dividends paid were below some shareholders’ expectations, companies that paid dividends should be lauded for even the little paid, adding that some companies had not even paid dividends in years.

The President, Constance Shareholders Association of Nigeria, Mr Shehu Mikali, said he did not believe the dividends were small.

He stated that the dividends were quite reasonable, taking into consideration the business environment that such companies operated in during the year.

Mikali said, “Most of the companies have been able to pay; so, we have to give kudos to them because it is not easy to do business in an area where there are insecurity and infrastructural challenges.

“The dividends are better than nothing, and this time is better because some of the companies that have not paid in a while paid dividends this year.”

He stated that rather than complain, shareholders ought to give advice to such companies on how they feel the company could better perform and urge the government to make the economic environment more palatable and conducive for companies.

He added that the government should also work on constituting the board of directors of the Securities and Exchange Commission to enable the apex regulatory authority of the capital market to perform better.

“If it is a government that knows what it is doing, these are areas it ought to have done something about. When all that needs to be put in place with respect to regulation had been done and the regulators are doing their best to investors’ interest, we will have better accountability from such companies and better returns,” Mikali noted.

He described the Nigerian economy as a viable place to do business, saying the government could do more to make it better.

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

CBN to Extend Credit Risk Management System to OFIs

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In an effort to curb growing bad debt, the Central Bank of Nigeria has said it will extend its Credit Risk Management System to Other Financial Institutions (OFIs) operating in Nigeria to protect them from bad debtors.

According to the apex bank, this is important following the successful implementation of the credit risk system in other lending institutions operating in Nigeria.

The bank disclosed this in a circular titled ‘Credit Risk Management System: Commencement of enrolment of all Development Finance Institutions, Microfinance Banks, Primary Mortgage Banks and Finance Companies’ and signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, on Monday.

In part, the circular read, “As part of efforts to promote a safe and sound financial system in Nigeria, the CBN introduced the CRMS to improve credit risk management in commercial, merchant and non-interest banks as well as to prevent predatory borrowers from undermining the banking system.

“With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrolment of Other Financial Institutions on the CTMS platform.

“Accordingly, all DFIs, MfBs, PMBs and FCs are required to report all credit facilities (principal and interest) to the CRMs and to update same on monthly basis.

“OFIs shall note the Bank Verification Numbers and Tax Identification Numbers are the only basis for regulatory renditions”.

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Banking Sector

BoI Grows Assets by 78.8% to N1.86 Trillion

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The Bank of Industry Group concluded the 2020 financial year with a 78.8 per cent growth of assets from N1.04tn to N1.86tn between 2019 and 2020.

A statement by the bank on Monday said the increase was driven to a large extent by the successful debt syndication of €1bn and $1bn that were concluded in March and December 2020 respectively.

BoI stated that the group’s financial statement demonstrated resilience and strength, noting that the period had significant challenges in the operating environment on account of the impact of COVID-19 pandemic on the economy.

“It also indicates synergy with the various interventions developed by the Federal Government, the Central Bank as well as other strategic partners towards ameliorating the impact of the pandemic on Nigerian enterprises,” the statement said.

The group’s total equity increased by 14.8 per cent from N293.08bn in the previous year to N336.48bn in 2020.

It added that as a reflection of the adverse impact of the challenging operating environment on growth of new facilities, loans and advances grew marginally in 2020 by 1.3 per cent to N749.84bn from the 2019 position.

The bank explained that this was largely due to the economic slowdown in the year as well as the various interventions and support initiated by the bank for its customers.

“The bank reviewed and restructured all its managed projects under the CBN intervention programme with interest rate reduction from nine to five per cent per annum for a period of one year and moratorium extension of three months (with a possible extension up to 12 months),” it said.

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Banking Sector

TAJBank Deploys NQR Solution To Ease Customer Transactions

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TAJBank, Nigeria’s non-interest bank, has announced the deployment of the NQR Payment solution, an indigenous Quick Response Code (QRC) by the Nigeria Interbank Settlement Scheme (NIBSS), for merchants and customers as the newest addition to its innovative e-business channels.

The NQR Payment solution is a secure QR-code-based payments and collections platform developed for merchants and customers to receive and make payments for goods and services in a quick, easy, contactless and secure manner.

A statement signed by the Founder/Chief Operating Officer of the bank, Mr. Hamid Joda, indicated that the ingenious solution would further drive TAJBank’s culture of innovation and create a seamless payment experience for its rapidly growing individual and corporate customers in their banking transactions.

“We are excited to have this payment channel introduced into the nation’s financial system as an addition to other innovative solutions we have deployed over the past few months.

This is a proof that, as we have said in our communications signature line, TAJBank’s interest is always in our customers”, Joda enthused.

In his remarks, the non-interest lender’s Chief Marketing Officer/Co-Founder, Mr. Sherif Idi, also maintained that the deployment of the NQR payment solution would revolutionize the e-payment experience and open new frontiers for small, medium and large scale businesses who are major stakeholders of the bank.

Since it commenced operations in the non-interest banking segment of the financial services industry, TAJBank is noted for its impeccable track record of growth and innovation, rendering exceptional quality services to customers.

The lender’s NQR solution is open to all customers of the bank, both merchants and individuals, across all its branches and digital channels globally.

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