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FirstBank Offers Support To SMEs In Education Sector Through The Pandemic

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By Chinyere Nwokeoma, NAN

First Bank of Nigeria Limited has offered to give financial support to Small and Medium Enterprises (SMEs) in Education Sector to cushion the effects of the COVID -19 pandemic. Mr. Bankole Adediran, Head, Transaction Banking Products, FirstBank, made this known at the Bank’s SMEConnect webinar with theme: “Managing Your School through the Pandemic: Engagement and Retention Strategies”.

Adediran said that the Bank was ready to partner with SMEs in the education sector through the period of the novel coronavirus pandemic to sustain their businesses.

“FirstBank, as an institution, is very passionate about education, and will continue to support the sector,” he said.

He said that the Bank would continue to reinforce its leading role at enabling the growth of the educational sector in the country.

Adediran said that the Bank had an array of financial products that could be accessed by SMEs in the educational sector in the period of COVID -19.

He said SMEs in the sector could key into FirstEdu Loan targeted at private nursery, primary and secondary schools to assist the schools in achieving their desired growth in medium and long terms.

According to him, the product provides funding advancement of up to N20 million for schools with a minimum of 100 students with school fees collection domiciled at FirstBank.

Adediran said that, with the product, school owners/proprietors could stay ahead to make learning easy and conducive for students.

He said the Bank had launched various interventions and initiatives to support the sector to navigate through challenges occasioned by COVID -19.

He noted that FirstBank recently launched an e-learning initiative aimed at reaching out to one million students across the country to ensure they would be academically engaged while at home.

Adediran also said that the Bank supported 10 universities and three secondary schools across the country with major infrastructure projects.

He added that the Bank donated 20,000 e-learning devices to the Lagos State Government to promote online learning for students in the public schools.

Adediran urged schools must learn from the COVID -19 pandemic by embracing automation to plug leakages in the sector.

Mrs. Folasade Adefisayo, Commissioner for Education, Lagos State, who was a panelist at the webinar, commended the Bank for donating 20,000 devices with six months data, to the state for e-learning.

Adefisayo said the state reached out to many companies for support at the wake of the pandemic and that FirstBank came to its aid.

She disclosed that all the schools were not prepared for the situation, noting that most children in public schools did not have device and data for online learning.

“This pandemic has been a terrible thing, and one lesson from it is that we have not invested enough in solutions we can deplore at a time like this,” Adefisayo said.

She said that the pandemic had forced Nigerians to be more creative and innovative, adding that schooling would no longer be the same again.

Adefisayo called on teachers to change their teaching and learning strategies, saying that COVID -19 had changed learning.

Also, Dr. Yomi Otubela, President, National Association of Proprietors of Private Schools (NAPPS), said the association had responded greatly by interfacing between government and its agencies since the beginning of the pandemic.

Otubela said the Central Bank of Nigeria was working out modalities for palliatives for schools and teachers who had not been receiving salaries since the pandemic started.

He noted that there had been an increase in rape, kidnapping and robbery as a result of COVID -19.

Mr. Wale Abioye, Team Lead, Customer Practice in Management Consulting (KPMG), said the pandemic had impacted negatively on many sectors of the economy, especially education.

Abioye highlighted some of the negative impacts of the pandemic to include financial/economic, structural, social and policy challenges.

He said many SMEs in the educational sector could be out of business due to the pandemic, thereby increasing unemployment rate.

Mr. Babatunde Vaughan, Education Lead, Modern Classroom, Microsoft Nigeria, said the company had introduced a lot of products to make online learning easy and interesting.

“COVID -19 is a very unique period for everyone, change has come and we will continue to experience change.

“We must be more proactive than reactive,” Vaughan urged.

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Banking

FBNHOLDINGS GROUP WINS BIG AT THE 2020 GREAT PLACE TO WORK AWARDS

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FBNHoldings Group has won big at the 2020 Great Place To Work Award ceremony held last week Friday in Lagos. The Holdings Company along with its subsidiary companies; First Bank of Nigeria Ltd,  FBNQuest Merchant Bank and FBNQuest Capital won various awards at the prestigious event.

FBN Holdings Plc received a Platinum Certification as a Great Workplace further attesting to the quality of its people practices. It also received the award for the Best Workplace for Millennials; this has become evident with a high percentage of its workforce in this age category and the targeted HR initiatives to drive engagement and retention. FBNHoldings also topped the following two categories and received the awards as the Best in Leadership Practice and Best Workplace for Women. Overall, FBNHoldings was ranked as the 2nd Best  Workplace.

In the other categories, First Bank of Nigeria Limited received a gold certification as a Great Workplace and also won the Best Workplace in Learning and Development, affirming its peak performance in this space. The Bank was ranked as the 5th Best Workplace in the Large Corporates Category.

FBNQuest also had a glorious evening at the event, based on research feedback and metric score from the Great Place To Work team. In the other Categories- (Medium-sized Corporates), FBNQuest Merchant Bank and FBNQuest Trustees were adjudged as the 4th and 5th best workplace ranking respectively. They also received Gold Certification as a Great Workplace, while FBNQuest Capital received a Silver Certification.

Speaking on the awards received by the Group, UK Eke, MFR, the Group Managing Director of FBN Holdings Plc said ‘this is a reflection of the commitment and efforts of the FBN Holdings Group management in providing and building quality life for all our employees’ adding further ‘the awards also demonstrates our recognition of the critical importance of all our employees as we seek to remain the ‘hub for the best industry talent’ towards the delivery of our overall strategic objectives.

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Banking

ZENITH BANK SHOWS RESILIENCE AS PROFIT BEFORE TAX RISES BY 1% IN Q3 2020

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Zenith Bank Plc has announced its unaudited results for the third quarter ended 30 September 2020 with with a Profit Before Tax (PBT) of N177 billion, representing a 1% growth over the ₦176 billion posted in the same period in the previous year. This performance demonstrates the Group’s resilience against the backdrop of a challenging macro-economic environment brought about by the Coronavirus (COVID-19) pandemic.

According to the unaudited account which was presented to the Nigerian Stock Exchange (NSE), gross earnings were up 4% year-on-year (y-o-y) to ₦509 billion, driven by non-interest income which increased to ₦173 billion from ₦157 billion recorded at the end of Q3 2019, reflecting the Group’s increasingly diversified business model. Profit After Tax (PAT) grew by 6% to N159 billion from N150 billion in the corresponding period last year. The growth was driven by non-interest income which grew by 11% to ₦173 billion from ₦157 billion recorded at the end of Q3 2019, reflecting the Group’s increasingly diversified business model.

The result also demonstrates the Group’s ability to deliver optimal pricing for its interest-bearing assets and liabilities in a declining yield environment, as net interest income grew by 5% Year-on-Year (y-o-y) to ₦225 billion despite the drop in total interest income from ₦322 billion to ₦319 billion. Interest expense and cost of funds were down 13% and 27% to close at ₦94 billion and 2.2% respectively, reflecting the Group’s robust treasury and liquidity management.

Total deposits closed at ₦5.2 trillion at the end of Q3 2020 up from ₦4.3 trillion in December 2019, dominated by low-cost deposits. Retail deposits grew impressively by 58% to ₦1.7 trillion at the end of Q3 2020 up from ₦1.1 trillion as at December 2019, underpinned by the continuous expansion and improvement of the Group’s digital platforms.

In terms of asset quality, the Group’s Non-Performing Loan (NPL) ratio improved to 4.80% (FYE 2019: 4.95%), despite growing loans and advances by 17 % from ₦2.5 trillion as at December 2019 to ₦2.9 trillion at the end of Q3 2020, affirming the Group’s prudent credit risk management. The liquidity and capital adequacy ratios (CAR), at 67.4% (Bank: 52.5%) and 21.5% respectively at the end of Q3 2020, remain above regulatory thresholds of 30.0% and 15.0%.

Zenith Bank Plc has continued to demonstrate resilience and industry leadership. In recognition of its track record of excellent performance, Zenith Bank was voted as the Best Commercial Bank in Nigeria 2019 by the World Finance and the Best Digital Bank in Nigeria 2019 by Agusto and Co. The Bank was also recognised as Bank of the Year and Best in Retail Banking at the 2019 BusinessDay Banks and Other Financial Institutions (BOFI) Awards. More recently, the Bank emerged as the Most Valuable Banking Brand in Nigeria, for the third consecutive year, in the Banker Magazine “Top 500 Banking Brands 2020”, Number One Bank in Nigeria by Tier-1 Capital in the “2020 Top 1000 World Banks” Ranking published by The Banker Magazine, Best Bank in Nigeria 2020 in the Global Finance World’s Best Banks Awards 2020, and Bank of the Decade (People’s Choice) at the ThisDay Awards 2020.

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GTBANK SUSTAINS GROWTH MOMENTUM

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With profit after tax of N142 billion, total assets of N4.6 trillion and shareholders’ funds of N755.5 billion for the nine months ended September 30, 2020, Guaranty Trust Bank Plc has recorded an impressive performance,

Shareholders of Guaranty Trust Bank (GTBank) Plc heaved a big sigh of relief last week after the bank announced its nine months results ended September 31, 2020. The bank reported a performance that was commendable considering the operating environment that prevailed in the review period.

The economy has suffered from the COVID-19 induced lockdown and companies operating are expected to feel the negative impact. Hence, there were apprehension over what the financial results of listed companies, including banks, would look like at the end of third quarter (Q3).

However, GTBank reported a resilient results, showing growth in most performance metrics. The bank recorded a net income of N188 billion, up from N173 billion in the corresponding period of 2019. Net fee income stood at N33 billion, compared with N47 billion in 2019. Loan impairment charges soared by 267 per cent from N2.762 billion to N10.145 billion in 2020.

GTBank ended the nine months with a profit before tax (PBT) of N167.352 billion as against N170.652 billion in 2019, and profit after tax of N142.283 billion compared with N146.989 billion in 2019.

Loan and deposit book grew by 4.5 per cent and 25.1 per cent from N1.502trillion and N2.640 trillion recorded as at December2019 to N1.569 trillion and N3.303trillioninSeptember 2020 respectively.

GTBank’s balance sheet remained well structured, diversified and resilient with total assets and shareholders’funds printing at N4.574 trillion and N755.5 billion respectively.

Full impact capital adequacy ratio (CAR) remained very strong, closing at 23.9 per cent. Similarly, asset quality was sustained as non-performing loan(NPL) ratio and cost of risk (COR)closed at 6.5 per cent and 0.6 per cent in September 2020 from 6.5 per cent and 0.3 per cent in December 2019 respectively.

In all, GTBank Plc continues boast of the best performing indicators in terms of all financial ratios including: post-tax return on equity (ROAE) of 26.3 per cent, post-tax return on assets (ROAA) of 4.6 per cent, and cost to income ratio of 40.2 per cent.

Commenting on the performance, the Managing Director/CEO of GTBank Plc, Mr. Segun Agbaje, said: “Our third quarter (Q3) result is a reflection of how we have appropriately positioned our balance sheet to cope with current economic realities and the challenging business environment.

It is also testament to the enduring loyalty of our customers, the hard work and dedication of our staff and the unwavering support we continue to enjoy from all our stakeholders in our drive to deliver best-in-class financial services and superior and sustainable returns.”

According to him, as an organisation, “we will continue to build on our commitment to enriching lives by leveraging our digital-first customer-centric strategy to improve customer experience and maintain a high standard in service delivery, and going beyond banking to create and drive innovative financial solutions that add value to our customers in all aspects of their lives.”

Assessing the results, analysts at FBNQuest Research said GTBank’s 9M PBT of N167bn implies that the bank will have to deliver Q4 PBT of N68 billion to meet its full year guidance of N235 billion.

“While this is not impossible, we believe that it would be a stretch given the prevailing macroeconomic and low yield environment. Management was unwilling to revise its guidance on its Q2 2020 conference call. As such, it appears the bank’s current run-rate is more in line with our N229 billion full year PBT forecast.

Further down the profit and loss (P&L), PAT missed by 12 per cent, largely because of a negative result of -N4.4 billion in other comprehensive income (OCI). Despite this, the bank’s PAT still implies a healthy annualised ROAE of 28.9 per cent, ahead of its full year ROAE guidance of over 25 per cent. We expect a neutral reaction from the market following the limited surprises on the results,” they said.

Speaking only on the third quarter(Q3) result, FBNQuest said Q3 PBT grew five per cent to N57.6 billion on the back of six per cent increase in pre-provision profit and two per cent reduction in operations expenses(opex). Pre-provision profit growth was driven by 10 per cent increase in funding income, thanks to a sharp reduction in interest expense.

In bid to sustain its impressive performance and deliver returns to shareholders, the bank is proposing to diversify into payment service banking (PSB), asset management business and pension administration among others. This the bank hopes to achieve through the adoption of a holding company (HoldCo) structure.

The Central Bank of Nigeria (CBN) has given the bank an approval-in-principle to commence the transform into HoldCo structure. According to the bank, reorganisation is expected to be implemented by means of a scheme of arrangement with its shareholders pursuant to the Companies and Allied Matters Act.

Agbaje explained that the competitive landscape as it were for the non-core banking businesses didn’t warrant the bank retaining the subsidiaries and pushing it into adopting the HoldCo model.

He said: “We got our universal banking license in 2001. But you will remember that when the financial crisis happened, universal banking license was cancelled and the CBN decided that you either stay as a bank, or you went into a holding company structure.

“At the time, because the competitive landscape was very different from what it is today, we decided that we were going to focus on our banking business, and it was the right decision for us then. Because we went from number seven in profit to number one, some years, we have been number two, but basically, we have been number one most of the years.”

The MD/CEO said while it was the right decision to take at that time, he added that the competitive landscape today has necessitated diversifying the banking earnings, hence, the decision to go the HoldCo way.

“When you look at what is happening to banking, or you look at what I’ve been describing to you, and the people who are basically looking to take banking income, it is time to diversify our earnings. The only way you can legally diversify your earnings in Nigeria today is going into a holding company structure, because as a pure bank, you cannot do more than banking,” he said.

According to Agbaje, the bank proposes to diversify into payment service banking (PSB), asset management business and pension fund administration (PFA). He explained that this diversification would not distract its core banking business.

It envisages to go greenfield with the PSB while seeking to acquire an asset management company and a PFA. Nevertheless, if acquiring these companies are expensive, the bank has the option of going Greenfield with them. And for now, is not looking the way of insurance business, even though it is not foreclosing the idea of operating the business in the future.

Agbaje stressed that poised to take advantage of opportunities inherent in the HoldCo arrangement, GTBank has therefore looked at some sectors that “create great synergies for it to create great opportunities.”

“We looked at some sectors, which we think today create great synergies for us and create great opportunities. The first one is payments. We love the payment landscape, you can see what is happening with FinTechs, we think we should compete with the FinTechs, we think we should grow the business, and that it is definitely a business for the future.

And so it’s a place we would like to play to diversify the earnings base of the bank. We like asset management. The reason we like asset management is that it complements our business, we’ve grown a very good retail business today. Sometimes when people want a higher yield, then we lose that money to other institutions.

But, we will create our own asset management company so that when the retail money looking for yield leaves us, it goes to someone that is in our ecosystem, and we consolidated profit and loss. A system where you can do payments, you can do asset management, once you come into your bank ecosystem is what we are beginning to build,” he said.

Talking on the PFA, Agbaje said the PFA business is continuing to grow. Hence the need to focus on it and benefit from it.

“And essentially what we are trying to do is do as much as we can for the customer base that we have. And we think that this is a good place to start and that this will diversify our earnings base and create value. The go to market plan for this is very simple.

I have started to tell you about the first one, which is the diversifying to what we think of complementary businesses and services, payments, asset management, and PFA for today, there might be other businesses, the people like the one I always hear about is insurance.

But I think that if we are going to be dominant in the businesses that we have picked, it is better we focus and we stop with those. And then maybe one day down the road if we’re very successful with everything else, we can look at insurance.

We are also going to face our core banking business we are never going to let that drop because GTBank Nigeria continues to be the mother ship for us, and apart from our corporate business which is very strong, which will continue to hold, we will make sure that we continue to deepen our retail and SME business,” he said.

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