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SSA Investment Bank Fees Hit $555.6m 2019

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  • SSA Investment Bank Fees Hit $555.6m in 2019

2019 Investment Banking Fees in Sub-Saharan Africa reached an estimated US$555.6 million during 2019, up 3% from 2018 and an annual total exceeded only twice since Refinitiv records began in the year 2000.

Double digits were recorded across Merge and Acquisition transactions and syndicated lending fees. Advisory fees earned from completed M&A transactions generated US$205.8 million, up 55% from 2019 and eight-year high for Sub-Saharan Africa. Syndicated lending fees increased by 14% year-on-year to US$246.8 million, the highest annual total recorded in the region since 2000.

Equity capital markets underwriting fees declined 68% to US$28.9 million, the lowest level since 2002, while bond underwriting fees fell 26% year-on-year to US$74.2 million. Equity fees accounted for just 5% of the overall Sub-Saharan African investment banking fee pool during 2019, the lowest share on record, while syndicated lending fees accounted for a record high of 44%. M&A bond fees generated 37% and 13%, respectively.

“JP Morgan led the deals table in 2019. They earned the most investment banking fees for Sub-Saharan Africa during 2019 with a total of US$48.5 million, which is an 8.7% share of the total fee pool,” confirmed Franita Neuville, Investment and Advisory Performance Director for Middle East and Africa at Refinitiv

“Standard Bank Group followed closely with 8.6% share of the total fee pool”, continued Neuville.

Bolstered by Naspers’ US$35.9 billion spin-off of its international empire of internet assets, the value of announced M&A transactions with any Sub-Saharan African involvement reached a record high of US$79.6 billion in 2019, 142% more than the value recorded during 2018. Deals involving a Sub-Saharan African target increased 315 in value to US$26.1 billion, what is now a four-year high. An US$8.8 billion offer for Anadarko Petroleum’s African assets by French energy giant Total SA helped push inbound M&A, involving an acquiror from outside of the region, up 7% year-on-year to US$15.7 billion while intra-regional activity in Sub-Saharan Africa almost doubled to US$10.4 billion. Outbound M&A increased 145% to a three-year high of US$12.5 billion. Deals in the energy and power sector accounted for 40% of Sub-Saharan Africa target M&A activity during 2019.

“In terms of the most targeted nations in Sub-Saharan Africa during 2019, South Africa accounted for 81% of deals by value, followed by the Republic of Congo at 3.1% and Nigeria at 2.3%,” said Neuville.

“In terms of the financial advisor league table, Morgan Stanley topped the any Sub-Saharan African involvement announced M&A financial advisor league table during 2019 with 61% share of the market, followed by JP Morgan with 57%,” she added.

Sub-Saharan African equity and equity-related issuance totaled just US$1.6 billion during 2019, 66% less than the value recorded during 2018 and the lowest annual total in the region since 2005. Eighteen follow-up offerings totaled US$1.5 billion and accounted for 95% of the total equity capital market activity in the region by value, while three initial public offerings for the remaining 5%. Mozambique’s Hidroelectrica de Cahora Bassa, a hydropower generation company, supplied the largest initial public offering in the during 2019, raising US$53.7 million in July. ICON Properties raised US20.4 billion in January 2019, while Skyway Aviation Handling Co raised US$6.2 million when it listed in Nigeria in April 2019. Standard Bank Group topped the Sub-Saharan Africa ECM league table during 2019 with 42% share of the total market, followed by Investec with 19%.

Sub-Saharan African debt issuance totaled US$27.2 billion during 2019, down 19% from the value recorded during 2018 and a three-year low. South Africa and Ivory Coast were the most active issuer nations with US$7.1 billion and US$6.4 billion in bond proceeds, respectively. South Africa raised US$5.0 billion with its largest Eurobond sale to date in September last year. JP Morgan took the top spot in the Sub-Saharan African bond ranking during the 2019 with US$4.1 billion of related proceeds, or a 15% market share.

“We wait in anticipation to see what the Investment Banking activity will look like in 2020. With South Africa’s Exchange Traded Funds turning 20 this year, we certainly hope it will be a year of prosperity for the whole market,” Neuville concluded.

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

Unity Bank Grows Profit by 34 Percent But Net Trading Income Dips 443% in H1 2021

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Unity bank - Investors King

Unity Bank Plc, a community-oriented commercial bank, extended its positive momentum in the first half (H1) of 2021 as gross income grew by 3 percent to N23.609 billion, up from N22.863 billion filed in the first half of 2020.

The bank disclosed in its unaudited financial statement released on Friday.

Net interest income rose to N9.868 billion in the period under review, representing an increase of 9 percent from N9.059 billion filed in the corresponding period of 2020. Unity Bank increased net fee and commission income by 21 to N3.073 billion, up from N2.545 billion achieved in H1 2020.

However, net trading income dipped by 443 percent from N30.342 million recorded in H1 2020 to -N104.108 million. Other operating income also decreased by 27 percent to N366.067 million when compared to N500.721 million filed in H1 2020.

The bank’s net operating income expanded by 18 percent to N13.923 billion in H1 2021 from N11.824 billion in H1 2020. Profit before tax increased to N1.502 billion in the period under review, an increase of 34 percent from N1.120 billion filed in H1 2020.

Profit after tax rose to N1.382 billion in H1 2021, an increase of 34 percent from N1.031 billion recorded in H1 2020.

Speaking on the performance, the Managing Director/CEO of Unity Bank Plc, Mrs. Tomi Somefun, said “the bank is beginning to reflect greater consistency, steady outlook and resilience that places it on a performance pedestal ahead of the volatilities in the operating environment occasioned partly by the prevailing global pandemic and other market shocks that have far-reaching implications in the local and foreign economies.

“The double digits growth recorded in both earnings and profits, she further added, was the result of a portfolio plan which the Bank set out in the beginning of the year to diversify its portfolio whilst incrementally pursuing asset creation in petrochemical downstream, consumer, healthcare and general commerce with agribusiness providing the bulwark for identified business and brand benefits.”

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Loans

FCMB Empowers Agribusiness, Healthcare and Others With AFDB’s $50 Million Credit

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Mrs Yemisi Edun - Investors King

Women empowered businesses and local enterprises involved in agribusiness, manufacturing, health care, and renewable energy will have access to long term funding from First City Monument Bank (FCMB), courtesy of a $50m credit facility from the African Development Bank (AfDB). 

The $50m credit line will narrow the lending gap to underserved segments and complement FCMB’s lending efforts and operations in the Nigerian market. AfDB will disburse the funds to FCMB before the end of this year.

Mrs Yemisi Edun, Managing Director, FCMB, thanked the African Development Bank for having confidence in the Bank, saying the credit line would help it increase lending to high impact sectors of the Nigerian economy.

She said, “The $50m credit line will increase access to finance for women empowered businesses and enterprises involved in agribusiness, manufacturing, renewable energy and healthcare, enabling them to build back better post-COVID.

“We are delighted that a minimum of 30 per cent of the funds will go specifically to women empowered businesses, which would, in turn, contribute to stimulating gender equality and empowerment. Remarkably, it aligns with FCMB’s transformative agenda of boosting household economic resilience by improving women’s access to credit and work opportunities.”

In addition to the $50m, the AfDB will provide a technical assistance grant of $200,000 to FCMB through its Affirmative Finance Action for Women in Africa (AFAWA). The Women Entrepreneurship Finance Initiative, an international partnership supporting women entrepreneurs in developing countries, supports AFAWA. The assistance grant complements the loan and will further strengthen training, monitoring and reporting by the Bank.

In a statement, AfDB’s Director of Financial Sector Development, Mr Stefan Nalletamby, said, “We are pleased to support FCMB’s strategy to become a dominant player in addressing the funding needs of women-empowered and local enterprises. This project will extend valuable resources to critical but underserved segments during the ongoing COVID-19 pandemic, with its adverse macroeconomic impact”.

AfDB added that the project also advances its ten-year strategy and is consistent with three of its high-five strategic priorities. These are industrialise Africa, Feed Africa, and improve the quality of life for the people of Africa. This also aligns with the Nigeria Country Strategy Paper 2020-2024.

Recently, FCMB secured a $10 million facility from Oikocredit, a major global social impact investor and co-operative institution based in The Netherlands, to upscale its impressive financial support to SMEs and the agribusiness sectors in Nigeria.

FCMB is a member of FCMB Group Plc, Nigeria’s leading and most diversified financial holding company with subsidiaries that are market leaders in their respective segments. The Bank has built a strong base in various sectors of the nation’s economy by consistently offering cutting-edge solutions to its customers across segments.

Having successfully transformed into a retail banking and wealth management-led group, FCMB expects to continue to distinguish itself through innovation and the delivery of exceptional services.

To find out more about FCMB, please visit www.fcmb.com.

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Banking Sector

Fidelity Bank Doles Out N39 Million to 15 Lucky Customers

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Fidelity Bank Promo - Investors King

In yet another show of its commitment to reward loyal customers for maintaining a savings habit, leading financial institution, Fidelity Bank PLC has presented cash gifts worth N39million to lucky customers at the closing ceremony of the Fidelity Bank’s Get Alert in Millions (GAIM) Promo.

Held at Fidelity Bank’s head office in Lagos on Thursday, 29 July 2021, the well-attended event was conducted in the presence of relevant regulatory bodies including the National Lottery Regulatory Commission (NLRC), Lagos State Lotteries Board (LSLB), and Federal Competition and Consumer Protection Commission (FCCPC).

Speaking at the event, the Managing Director/Chief Executive Officer of Fidelity Bank, Mrs. Nneka Onyeali-Ikpe, ably represented by the bank’s Executive Director -Lagos and SouthWest, Dr. Ken Opara, reiterated the bank’s devotion to supporting initiatives that enrich the lives of its loyal customers even in times of economic uncertainties. She said “Encouraging savings and financially empowering our loyal customers have been a long-standing heritage at Fidelity Bank. We are elated at yet another opportunity to dole out up to N39Million to 15 Nigerians even in this time of economic uncertainty”. She further stressed the bank’s intentional drive towards enhancing CBN’s financial inclusion goal. “As a bank, we continuously position ourselves as key drivers for financial inclusion. Beyond encouraging savings, we believe that our GAIM campaign is a suitable initiative to attract the unbanked to the banking side of life”, Nneka added.

At the event, the duo of Mr. Sunday Okechukwu and Mr. Justine Nwaozor, who won the star prize of N10 million each were credited with their winnings. 13 other winners were credited with N3 million, N2 million, and N1 million accordingly; while 18 lucky customers walked home with consolation prizes including TV sets, refrigerators and generators.

Expressing his delight, a star prize winner, Mr. Sunday Okechukwu said, “I am grateful for this reward and most especially, the initiative. It’s common knowledge that having a healthy savings culture is good for one’s financial wellbeing, however, staying true to savings is sometimes difficult given the times we are in. However, with initiatives like this, savings become easier as we stand a chance to win big. I am glad to have won big, so big enough to turn my life and business around. Truly, Fidelity Bank keeps their word”.

Launched in 2019, Fidelity Bank’s GAIM Season 4 promo is a savings initiative of the bank specifically aimed at promoting a savings culture among Nigerians. Through this campaign, a total of N120 million has been seeded to several Fidelity Bank customers.

As a bank, we are pleased with the outcome of this initiative so far. Having wound up the fourth season of this campaign, it is exciting to see the number of people whose fortunes have changed. Although GAIM Season 4 is over, we will continue to drive initiatives that will, directly and indirectly impact the lives of our customers and Nigerians at large”, disclosed the Head of Savings and Sales, Fidelity Bank Plc, Mr. Ukpai Ibe.

Over the years, the leading tier two Bank has continued to intensify its efforts and innovate ways towards ensuring customer and stakeholder satisfaction. Through this promo, Fidelity Bank has promoted financial inclusion through digital channels and enriched the lives of its customers.

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