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African Development Bank Hosts Consultations With Governments to Promote its Blueprint to Equip Africa’s Workforce With in-Demand Skills

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African Development Bank - Investors King

The African Development Bank hosted virtual consultations with African government ministers, representatives of the African Union, government officials, and academics to gather views on the implementation of the Bank’s Skills for Employability and Productivity in Africa Action Plan for 2022-2025.

The first session on 12 April focused on countries in East and Southern Africa. The second, on April 13, targeted countries in Central, North, and West Africa. The Bank is seeking regional member countries’ endorsement of the Action Plan and inputs on how the plan can support investment in higher education, in science and technology, as well as in technical and vocational education and training – also known as TVET.

“It’s another milestone in the Bank’s partnership with our regional member countries to forge partnership in equipping Africa’s labor force with in-demand skills … African youth have the potential to become the world’s largest resource for productive and innovative labor, if they are equipped with quality and relevant skills,” said Beth Dunford, Bank Vice President for Agriculture, Human and Social Development.

The Action Plan comes at a critical juncture, when Africa is ramping up efforts to enhance scientific and technological capabilities for a more productive and innovative society. Malawi’s Minister of Education, Agnes Nyalonje, said the Action Plan was in line with her country’s aspirations in education and skills development. “We will benefit every inch of the way in the investments and focus that the Bank wants to bring to higher education and TVET,” she said.

The Skills for Employability and Productivity in Africa Action Plan is anchored in the Bank’s Jobs for Youth in Africa Strategy (2016–2025), which seeks to create 25 million jobs and equip 50 million youth with relevant skills. Public financing of TVET and higher education across the continent has not kept pace with demand. Infrastructure gaps, like shortages of classrooms, libraries, and laboratories, are negatively impacting access, quality, and equity in the sector.

Pascal Gatabazi, the chief technical advisor in Rwanda’s ministry of education, said: “The government of Rwanda has put human capital development on the top of its [development] agenda, with technical and vocational education as a top priority. The government has been putting significant investment in TVET, and that’s why…we have a dedicated ministry in charge of IT and TVET,” he said.

Martha Phiri, the Bank’s Director for Human Capital, Youth and Skills Development, said the Bank will leverage partnerships to boost investment in education infrastructure. This will result in substantial increases in the number of African graduates studying science, technology, engineering and mathematics, or pursuing technical and vocational education and training. “Our Action Plan places special emphasis on digital skills, online learning and entrepreneurship,” said Phiri.

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Banking Sector

Zenith Bank Achieves Historic Milestones in 2023 With Stellar Triple-Digit Topline And Bottom-Line Growth

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Zenith Bank - Investors King

Zenith Bank Plc has announced its audited results for the year ended December 31, 2023, achieving a remarkable triple-digit growth of 125% in gross earnings from NGN945.6 billion reported in 2022 to NGN2.132 trillion in 2023.

According to the audited financial results for the 2023 financial year presented to the Nigerian Exchange (NGX), this impressive triple-digit growth in gross earnings resulted in a Year-on-Year (YoY) increase of 180% in Profit Before Tax (PBT) from NGN284.7 billion in 2022 to NGN796 billion in 2023.

Profit After Tax (PAT) also recorded triple-digit growth of 202% from NGN223.9 billion to NGN676.9 billion in the period ended December 31, 2023.

The increase in gross earnings is primarily due to growth in interest and non-interest income. Interest income increased by 112% from NGN540 billion in 2022 to NGN1.1 trillion in 2023. Non-interest income grew by 141% from NGN381 billion to NGN918.9 billion in the same period.

The increase in interest income is attributed to the growth in the size of risk assets and their effective repricing, alongside the rise in the yield of other interest-bearing instruments over the year. Growth in non-interest income was driven by significant trading gains and an increase in gains from the revaluation of foreign currencies.

The cost of funds grew from 1.9% in 2022 to 3.0% in 2023 due to the high interest rate environment while interest expense increased by 135% from NGN173.5 billion in 2022 to NGN408.5 billion in 2023. Notwithstanding the 32% growth in operating expenses in 2023, the Group’s cost-to-income ratio improved significantly from 54.4% in 2022 to 36.1% in 2023 due to improved top-line performance.

Return on Average Equity (ROAE) increased by 118% from 16.8% in 2022 to 36.6% in 2023, underpinned by improved gross earnings, as the Group sought to deliver better shareholder returns. Return on Average Assets (ROAA) also grew by 95% from 2.1% to 4.1% in the same period.

The Group has continued to deepen its market leadership in key corporate and retail deposit segments as customer deposits increased by 69% from NGN9.0 trillion to NGN15.2 trillion in 2023.

Its retail drive continues to yield dividends as retail deposits now constitute 46% of total deposits (compared to 44% in 2022) and grew by 77% from NGN3.97 trillion in 2022 to NGN7.04 trillion in 2023, also reinforcing increased customer confidence in the Zenith brand.

Total assets increased by 66% from NGN12.3 trillion in 2022 to NGN20.4 trillion in 2023, largely due to growth in total deposits and the revaluation of foreign currency deposits.

Gross loans grew by 71% from NGN4.1 trillion in 2022 to NGN7.1 trillion in 2023 due to the revaluation of foreign currency loans and the growth in local currency risk assets.

As a result of the disciplined and diligent approach to risk assets creation and management, the loan growth did not significantly impact the Non-Performing Loans (NPL) ratio, which increased marginally from 4.3% to 4.4% despite the heightened risk environment and challenging operating environment, an attestation to the Group’s resilience despite headwinds and a challenging macroeconomic environment.

Also, the prudential ratios remain within regulatory thresholds, with the Capital Adequacy Ratio (CAR) and liquidity ratio at 21.7% and 71.0%, respectively, at the close of 2023.

As a demonstration of its commitment to shareholders, the bank has announced a proposed final dividend payout of NGN3.50 per share, bringing the total dividend to NGN4.00 per share.

In 2024, the Group will complete the transition to a holding company structure, which is anticipated to position it advantageously for exploring emerging opportunities in the Fintech space while bolstering its digital and retail banking initiatives.

Furthermore, the Group is undertaking urgent necessary actions to meet the new minimum NGN500 billion equity capital requirement to maintain its international authorisation within the timeframe stipulated by the Central Bank of Nigeria (CBN).

This will strengthen its presence in key markets to continue positioning for sustainable growth and value addition for stakeholders.

Zenith Bank’s track record of excellent performance has continued to earn the brand numerous awards, including being recognised as Best Bank in Nigeria, for the fourth time in five years, from 2020 to 2022 and in 2024, in the Global Finance World’s Best Banks Awards; the Best Bank for Digital Solutions in Nigeria in the Euromoney Awards 2023, being listed in the World Finance Top 100 Global Companies in 2023; being recognised as the Number One Bank in Nigeria by Tier-1 Capital, for the 14th consecutive year, in the 2023 Top 1000 World Banks Ranking published by The Banker Magazine; Best Commercial Bank, Nigeria, for three consecutive years from 2021 to 2023, in the World Finance Banking Awards; Best Corporate Governance Bank, Nigeria in the World Finance Corporate Governance Awards 2022 and 2023; Bank of the Year (Nigeria) in The Banker’s Bank of the Year Awards 2020 and 2022; Best in Corporate Governance’ Financial Services’ Africa, for four successive years from 2020 to 2023, by the Ethical Boardroom; Most Sustainable Bank, Nigeria in the International Banker 2023 Banking Awards; Best Commercial Bank, Nigeria and Best Innovation in Retail Banking, Nigeria in the International Banker 2022 Banking Awards.

Also, the bank emerged as the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021; Bank of the Year 2023 and Retail Bank of the Year for three consecutive years from 2020 to 2022, at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards. Similarly, Zenith Bank was named Bank of the Decade (People’s Choice) at the ThisDay Awards 2020, Bank of the Year 2021 by Champion Newspaper, Bank of the Year 2022 by New Telegraph Newspaper, and Most Responsible Organisation in Africa 2021 by SERAS Awards.

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Banking Sector

UBA Reports 256.89% Rise in Profit After Tax, Hits N607.69bn in 2023

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UBA House Marina

United Bank for Africa Plc (UBA) has reported a 256.89% increase in profit after tax to N607.69 billion in the full year ended December 31, 2023 from N170.27 billion achieved in the previous year.

This outstanding performance underscores UBA’s resilience and strategic positioning in navigating the challenging economic landscape while capitalizing on emerging opportunities.

The audited financial results filed with the Nigerian Exchange Limited also revealed improvement across various financial metrics.

UBA’s gross earnings rose by 143% to N2.08 trillion compared to N853.2 billion recorded in 2022.

Similarly, the bank’s profit before tax surged by 277% to N758 billion, a significant leap from N201 billion in the prior year.

One of the most remarkable achievements for UBA was the doubling of its total assets, which crossed the N10 trillion mark to close at N20.65 trillion in December 2023. This exponential growth represents a 90.22% increase from N10.86 trillion in 2022.

UBA’s shareholders also witnessed a significant uptick in their funds, with the group’s shareholders’ funds increasing by 120.2% year-on-year to N2.0 trillion.

The group’s cost-to-income ratio dropped from 59.2% in 2022 to 37.2%, reflecting improved cost management and operational efficiency.

Also, UBA significantly bolstered its loan portfolios by 61.3% to N5.5 trillion, while deposits witnessed a substantial increase of 90.31% to N14.9 trillion, compared to N7.8 trillion recorded in 2022.

In line with its commitment to value creation and rewarding shareholders, UBA’s Chairman, Tony Elumelu, fulfilled the promise made at the last annual general meeting by proposing a final dividend of N2.30 kobo for every ordinary share of 50 kobo for the fiscal year 2023.

The proposed dividend, to be paid from retained earnings totaling N919.872 billion as of December 2023, underscores the bank’s commitment to delivering sustainable returns to its shareholders.

Commenting on the financial performance, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, stated, “I am very pleased with the unprecedented results achieved by our group in 2023.”

“The group’s shareholder’s funds crossed N2 trillion from N922 billion in 2022. The group is well positioned for further business expansion in FY2024 having closed FY2023 with a capital adequacy ratio of 32.6 percent.”

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Banking Sector

FBN Holdings to Seek Shareholders’ Approval for N300bn Capital Raise

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FBN Holdings

FBN Holdings, one of Nigeria’s leading financial holding companies, has announced its intention to seek shareholders’ approval for a N300 billion capital raise.

The decision comes amidst efforts to bolster the company’s financial strength and support its growth objectives in the dynamic banking landscape.

In a notice of its extraordinary general meeting (EGM) filed with the Nigerian Exchange Limited on Monday, FBN Holdings revealed its plans to convene a virtual meeting by the end of the month to deliberate on the proposed capital raise.

Shareholders will consider and vote on the special business item, granting the company authorization to undertake a capital raise of up to N300 billion.

“The capital raise transaction shall be by the issuance of shares via a public offering, private placement, rights issue in the Nigerian or international capital markets, at price(s) to be determined by way of a book building process or any other valuation method or combination of methods,” stated the notice.

The decision to pursue such a significant capital raise aligns with the evolving dynamics of the banking sector.

The Central Bank of Nigeria recently revised upward the capital requirements for commercial, merchant, and non-interest banks, as well as promoters of new banks, in response to domestic and global economic challenges.

According to the apex bank’s directive, commercial banks with international authorization are mandated to increase their capital base to N500 billion, while national banks must achieve a capital floor of N200 billion.

Regional banks, on the other hand, are expected to maintain a capital base of N50 billion. Non-interest banks have also been directed to raise their capital to N20 billion and N10 billion for national and regional authorizations, respectively.

FBN Holdings’ move to seek additional capital follows earlier initiatives in this regard. In October, the company sought approval from the Nigerian Exchange Group to raise N139 billion through a rights issue, signaling its proactive approach to fortifying its financial position and supporting future expansion endeavors.

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