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Sub-Saharan Africa Mergers and Acquisition Transactions Totalled US$39.6 Billion in the First Nine Months of 2022

An estimated US$327.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2022

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merger and acquisition

Refinitiv, a London Stock Exchange Group business, today released the investment banking analysis for the Sub-Saharan African for the third quarter of 2022. 

Investment Banking Fees

An estimated US$327.5 million worth of investment banking fees were generated in Sub Saharan Africa during the first nine months of 2022, 21% less than the same period in 2021 and the lowest first nine-month total in the region since 2013.  Fees totalled US$112.9 million during the third quarter of 2022, an increase of 46% from the previous quarter.

Advisory fees earned from completed M&A transactions in the region reached US120.8 million, a 64% increase from the first nine months of last year and a three-year high.  Equity capital markets underwriting fees declined 39% to US$30.8 million, the lowest first nine-month total since 2003, while debt capital markets fees declined 50% to US$59.3 million.  Syndicated lending fees declined 33% to US$116.6 million, the lowest first nine-month total since 2014.

Seventy-two percent of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2022, followed by Mauritius (10%) and Nigeria (5%). Citi earned the most investment banking fees in the region during the first nine months of 2022, a total of US$26.7 million or an 8% share of the total fee pool.

Mergers & Acquisitions

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$39.6 billion during the first nine months of 2022, 50% less than the value recorded during the same period in 2021.  Despite the decline in value, the number of deal announcements in the region increased 6% from last year to the highest first nine-month total since 2017.

Deals involving a Sub-Saharan African target totalled US$24.4 billion during the first nine months of 2022, down 61% from the same period last year but higher than the level recorded during each of the previous seven years.  Domestic deals declined 82% from last year’s record high value to US$9.3 billion, while inbound deals increased 47% to US$15.1 billion as the number of transactions increased 11% to an all-time high of 243. Sub-Saharan African outbound M&A totalled US$11.1 billion, down 1% from last year but the second highest first nine-month total since our records began in 1980.

The Energy & Power sector was most active, with deals targeting energy & power companies accounting for 39% of Sub-Saharan African target M&A during the first nine months of 2022, followed by Healthcare with 20%. South Africa was the most targeted nation, followed by Angola and Nigeria. Scotiabank topped the any Sub-Saharan African involvement announced M&A financial advisor league table during the first nine months of 2022.

Equity Capital Markets

Sub-Saharan African equity and equity-related issuance totalled US$993.2 million during the first nine months of 2022, the lowest first nine-month total since 2003.  Proceeds raised by companies in the region declined 15% compared to the first nine months of 2021, while the number of issues fell 18%.

All proceeds were raised by follow-on issuance with Pepkor Holdings, MTN Nigeria Communications and South African coal exporter ThungelaResources among those in the region raising new equity funds from follow-ons.  No convertible or initial public offerings were recorded in Sub-Saharan Africa during the first nine months of 2022.

Issuers in South Africa raised more in the equity capital markets than any other Sub-Saharan African nation during the first nine months of 2022, a total of US$716.1 million, while Nigerian issuers raised a combined US$277.1 million. Citi took first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2022 with a 37% market share.

Debt Capital Markets

Sub-Saharan African debt issuance totalled US$21.6 billion during the first nine months of 2022, down 43% from the value recorded during the same period in 2021.  The number of issues declined 40% from last year at this time. US$4.2 billion was raised during the third quarter of 2022, down 35% from the previous quarter and the lowest quarterly total in two years.

South Africa was the most active issuer nation during the first nine months of 2022, accounting for 47% of total bond proceeds, followed by Ivory Coast (27%) and Nigeria (10%). Government & agency issuers account for 62% of proceeds raised during the first nine months of 2022, while issuers in the technology sector account for 24%. Citi took the top spot in the Sub-Saharan African bond bookrunner ranking during the first nine months of 2022, with US$3.1 billion of related proceeds, or a 14% market share.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

UBA Announces Final Dividend of N2.30 per Share for FY 2023, Totaling N95.8 Billion

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UBA House Marina

UBA (United Bank for Africa) shareholders are set to receive dividends as the bank announces a final dividend of N2.30 per share for the fiscal year 2023.

This translated to a total payout of N95.8 billion, more than the N37.6 billion paid out in 2022.

Despite the robust increase in dividend payments, UBA’s dividend payout to profit after tax (PAT) ratio experienced a decline of 6.3 percentage points, dropping from 22.1% in 2022 to 15.8% in 2023.

Shareholders will receive the dividends based on their shareholdings as of the close of business on Friday, May 10, 2024. The payment is scheduled for May 24, 2024.

UBA urges shareholders who have not completed the e-dividend registration process to obtain the E-Dividend Mandate Form to ensure a smooth disbursement process.

The bank’s unclaimed dividends increased to N14.9 billion in 2023, an 18% increase from the previous year.

The bank reported a profit after tax of N607.7 billion, representing a 257% increase from the N170.3 billion recorded in 2022. This increase in profitability includes a net FX revaluation gain of N26.6 billion.

However, it’s worth noting that the Central Bank of Nigeria (CBN) directive prohibits banks from utilizing FX revaluation gains for dividends payment or operational expenses.

Shareholders are advised to complete the e-dividend registration process or contact the registrar, Africa Prudential Plc, for assistance regarding outstanding dividend warrants or share certificates.

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Finance

President Tinubu Launches National Single Window Project

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Bola Tinubu

President Bola Tinubu inaugurated the National Single Window Project to streamline trade processes and combat bureaucratic bottlenecks.

The initiative promises to unlock significant economic benefits and bolster Nigeria’s position as a global trade leader.

Addressing stakeholders at the Council Chamber of the State House in Abuja, President Tinubu outlined the transformative potential of the Single Window Project.

He explained that Nigeria stands to gain approximately $2.7 billion annually by implementing the initiative, while also saving an estimated $4 billion lost to inefficiencies and corruption plaguing the trade sector.

The National Single Window Project, codenamed a digital trade compliance initiative, will serve as a cross-government website facilitating trade by providing a unified portal for Nigerian and international trade actors.

This centralized platform will offer access to a full range of resources and standardized services from various Nigerian agencies, promising to expedite cargo movement and optimize inter-African trade.

President Tinubu’s directive to dismantle obstacles hindering trade efficiency reflects a commitment to fostering a transparent, secure, and business-friendly environment.

He underscored the urgency of eliminating red tape, bureaucracy, delays, and corruption at Nigerian ports, asserting that the economy cannot afford to sustain such losses.

The President’s call to emulate success stories from countries like Singapore, Korea, Kenya, and Saudi Arabia highlights the transformative potential of the Single Window system.

By joining the ranks of nations that have significantly improved trade efficiency through similar initiatives, Nigeria aims to unlock new avenues for economic growth and prosperity.

Tinubu stated that the National Single Window Project transcends Nigeria’s borders, presenting opportunities for regional integration and inter-African trade optimization. By linking Nigeria’s system with those of other African nations, the initiative seeks to expedite cargo movement and enhance trade facilitation across the continent.

Managing Director of the Nigerian Ports Authority, Bello Koko, provided insights into the practical implications of the Single Window initiative.

He affirmed that imports would be cleared at all seaports within 24 hours, a significant improvement compared to neighboring countries where clearance often takes up to 72 hours.

Koko outlined how the initiative would streamline paperwork, enhance information sharing among government agencies, and foster greater efficiency in trade transactions.

With representatives from key government agencies and bodies forming the project secretariat, the National Single Window Project reflects a collaborative effort to drive comprehensive reform in Nigeria’s trade sector.

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Banking Sector

Fidelity Bank Grows Profit by 131.5% in FY 2023

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Mrs. Nneka Onyeali-Ikpe, MDCEO of Fidelity Bank Plc

Leading financial institution, Fidelity Bank Plc, has released its 2023 full year Audited Financial Statements, reporting a 131.5% growth in Profit Before Tax to N 124,26 billion.

According to the results, which was issued to the Nigerian Exchange (NGX) today, the bank grew Gross Earnings by 64.9% YoY to N555.83 billion, driven by 81.6% growth in Net interest income which increased from N152.7billion to N277.37 billion. This led to a Profit After Tax of N99.45 billion representing a 112.9% annual growth.

Commenting on the Bank’s commendable performance, Dr. Nneka Onyeali-Ikpe,OON, MD/CEO of Fidelity Bank Plc said, “We closed the financial year with strong double-digit growth across key income and balance-sheet lines. Our performance in 2023 is an attestation of our capacity to deliver superior returns to shareholders despite the difficulties in our operating environment. Profit before tax grew by 131.5% to N124.3bn from N53.7bn in 2022FY, leading to an increase in Return on Average Equity (RoAE) of 26.5% from 15.6% in 2022FY.”

A review of the financial performance showed that the bank grew Net interest income by 81.6% to N277.4bn driven by a 55.5% increase in interest income, thus reflecting a steady rise in asset yield throughout the year. The average funding cost dropped by 20bps to 4.4% due to increased low-cost funds that grew from 83.6% in 2022FY to 97.4% in 2023. The combination of higher asset yield and lower funding cost led to an increase in Net Interest Margin (NIM) of 8.1% from 6.3% in 2022FY.

Similarly, Total Customer Deposits crossed the N4tn mark as deposits grew by 55.6% from N2.6tn in 2022FY. The increase was driven by 81.1% growth in low-cost funds.

Despite the challenging operating environment, the bank reaffirmed its devotion to helping individuals grow, inspiring businesses to thrive and empowering economies to prosper by increasing Net Loans & Advances to N3.1tn from N2.1tn in 2022FY.

Despite the growth in its loan portfolio, Regulatory Ratios were maintained well above the required thresholds, with liquidity ratio at 45.3% from 39.6% in 2022FY and capital adequacy ratio (CAR) at 16.2% compared to the minimum requirement of 15.0%.

“We recognize the changing dynamics in the Nigerian banking space and the need to monitor and proactively manage evolving risks. The proposed final dividend of 60 kobo per share reflects our commitment to strong value creation and returns to our shareholders,” explained Onyeali-Ikpe.

Fidelity Bank has consistently paid dividend since 2006. With the proposed final dividend of 60 kobo per share, Fidelity Bank would be paying investors a total dividend of 85 kobo per share for the reporting period, a 70.0% increase compared to the 50 kobo per share paid to its shareholders in the previous year.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged customer commercial bank with over 8.3 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

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