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Credit to Private Sector Grows to N24 Trillion

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Banking sector credit to the private sector grew by 6.4 per cent to N24.163.4 trillion at the end of February 2019, compared with the increase of 1.9 per cent and 0.9 per cent at end of December 2018 and the corresponding period of 2018, respectively.

The CBN revealed this in its economic report for the first quarter of 2019 posted on its website.

The development was attributed to the 5.9 per cent increase in claims on the core private sector.

Also, aggregate credit to the domestic economy (net), rose by 10.7 per cent to N30.518 trillion at the end of February 2019, compared with the growth of 6.3 per cent and 4.5 per cent at the end of December 2018 and the corresponding period of 2018, respectively.

The development reflected the respective increase of 30.6 per cent and 6.4 per cent in net claims on the federal government and claims on the private sector.

Net claims on the federal government rose by 30.6 per cent to N6.354 trillion at the end of February 2019, compared with the growth of 33.7 per cent and 26.3 per cent at end-December 2018 and the corresponding period of 2018, respectively.

According to the report, the development reflected the increase in holdings of government securities by the CBN. But foreign assets (net) of the banking system fell by 7.5 per cent to N17. 023 trillion at the end of February 2019. It, however, contrasted with the growth of 18.5 per cent recorded at end-December 2018. Relative to the level at the end of the corresponding period of 2018, foreign assets (net) declined by 3.2 per cent. The development was attributed to the 8.8 per cent fall in foreign asset holdings of the CBN.

Other assets (net) of the banking system fell by 1.0 per cent at end-February 2019 to negative N12.743 trillion, in contrast to the growth of 1.3 per cent and 2.4 per cent at end-December 2018 and the corresponding period of 2018, respectively.

The decline in other assets (net) of the banking system, in the review period, was attributed to the fall in the unclassified assets of the CBN.

On the other hand, currency-in-circulation (CIC) at the end of February 2019, fell by 3.8 per cent to N2.241trillion, but was in contrast to the growth of 20.9 per cent at the end of December 2018.

The development relative to the preceding quarter reflected, mainly, the 3.8 per cent and 6.6 per cent decline in its currency outside banks and demand deposit components, respectively.

The report also showed that total deposits at the CBN amounted to N14.155 trillion at the end of February 2019, indicating a 9.9 per cent decline below the level at end-December 2018.

The fall was attributed to 16.5 per cent and 14.8 per cent decline in the deposits of the private sector and the federal government, respectively.

Of the total deposits at the CBN, the shares of the federal government, banks and private sector deposits were 46.8 per cent, 34.8 per cent and 18.4 per cent, respectively.

Reserve money rose marginally by 0.4 per cent to N7.167 trillion at the end of February 2019, compared with the increase of 4.9 per cent at the end of December 2018. The development reflected the rise in total bank reserves.

“The money market was generally stable in the first quarter of 2019 despite mixed liquidity trends in the domestic money market.

“Although fiscal injections and maturing CBN bills boosted liquidity, withdrawals arising from CBN interventions in the market through Open Market Operations (OMO), moderated liquidity considerably. “Consequently, major money market rates, on average, trended below the levels at the end of the preceding quarter, reflecting ample liquidity in the system,” it stated.

Total value of money market assets outstanding in the first quarter of 2019 stood at N11.892 trillion, showing a decline of 2.5 per cent, in contrast to the 4.3 per cent increase recorded at the end of the fourth quarter of 2018. The development was attributed to the 4.1 per cent, 3.1 per cent and 25 per cent decline in the FGN Bonds, NTBs and Bankers’ Acceptances, respectively, during the review quarter.

In the month under review, interest rates moved in tandem with the level of banking system liquidity during the review period. Consequently, banks’ deposit rates were mixed, while lending rates trended downwards in the first quarter of 2019.

Auditing

Bidvest Bank trading profit rises 3.5% to R6.7bn

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The Commercial bank in the Republic of South Africa trading, distribution and services group Bidvest said recently its trading profit for the year ended June 30 rose 3.5 percent to R6.7 billion despite flat revenue.

Headline earnings per share were up 9.8 percent to 1,352.1 cents and the company said exceptional cost and capital discipline as well as improved margins were highlights against a volatile trading backdrop.

The CEO Bidvest Bank Lindsay Ralphs said, “There has been a strong focus on our clients, on solutions, innovation, wholesaling the right product at the appropriate price point as well as bolt-on acquisitions in the services and office & print divisions, which has culminated in acceptable growth.”

The group declared a final cash dividend of 318 cents per share, bringing the total dividend for the year to 600 cents, up 7.9 percent from last year.

Strong profitability gains were achieved at Adcock Ingram while Comair recognised the successful claim awarded against South African Airways, which increased Bidvest’s share of profits from these associated companies.

Bidvest said its diverse portfolio of businesses and extensive reach allowed it to weather challenging times.

“Our basic-need services and everyday essential product ranges enable us to support and add value to all our stakeholders. Innovation to disrupt ourselves, and the industries in which we operate, remains a core focus alongside disciplined asset management and cost control,” Ralphs added.

 

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Guinness Nigeria Declares N5.5bn Profit, N3.3bn Dividend

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A leading beverage alcohol firm in Nigeria Guinness Nigeria, recently announced a profit after tax (PAT) of N5.483 billion for the year ended June 30, 2019, compared with N6.718 billion. The profit was actualized from a revenue of N131.498 billion as against N142.975 billion in 2018.

Net financing income fell from N3.443 billion to N1.862 billion, while profit before tax (PBT) was N7.103 billion, down from N9.943 billion in 2018. The board of directors has recommended a dividend of N3.329 billion.

Commenting on the result, the Managing Director, Guinness Nigeria Plc, Mr. Baker Magunda, stated that the company would continue to work on all operating indices while expecting that the micro and macroeconomic parameters improve.

Magunda mentioned that: “Revenue for the year declined 8% compared to same period last year on the backdrop of an extremely challenging macroeconomic and competitive environment. The cost of the increase in excise duty at a time of stagnant consumer disposable income had to be absorbed by industry players. Despite the tough competitive landscape, we continue to see good growth performance from Guinness, Spirits and the malt drinks.”

According to him, a combination of factors, inflation plus prior year royalties and accruals not approved by NOTAP, led to a 17 per cent decline in gross profit for the organisation.

Magunda explained that “Marketing spend reduction by 16 per cent and distribution costs initiatives partly mitigated the gross profit decline, thus leading to a fall in operating profit by N4.4 billion. Profit before tax decreased by N2.8 billion as a 46 per cent reduction in net finance costs further helped to cushion the decline in operating profit,”

Also speaking on the performance, Chairman of the company, Mr. Babatunde Savage, said: “As a board, we are confident that our strategy is sound, and that we are making the right investments in the company to ensure our long-term competitiveness. The Board will continue to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”

The company noted that despite the challenges, it continues to fulfill its commitment to stakeholders particularly as it drives its renewable energy and water recovery project for sustainable environment.

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Zenith Bank grows profit to N111.7bn, in H1’19

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Nigeria’s leading financial service Zenith Bank Plc has announced profit before tax (PBT) of N111.7billion and proposed interim dividend of 30 kobo per share for the half-year ended June 2019 (H1’19).

This was disclosed by the bank in its audited financial results for H1’19 released recently which showed improved performance in key financial indicators.

In a statement announcing the results, the bank said: “Gross earnings grew by three percent from ¦ 322.2 billion to ¦ 331.6 billion driven by a significant growth of 24 percent (YoY) in non-interest income from ¦ 88.6 billion in H1 2018 to ¦ 109.7 billion in H1 2019.”

It further said: “In particular, fees from electronic products increased by ¦ 17 billion (168 percent) from ¦ 10 billion in H1 2018 to ¦ 27 billion in H1 2019, demonstrating significant progress in our retail banking initiatives.”

“This top-line growth filtered through to the bottom-line as Profit Before Tax (PBT) increased to¦ 111.7 billion reflecting a four percent growth over ¦ 107.4 billion reported in H1 2018 with earnings per share (EPS) increasing by nine percent to ¦ 2.83 in H1 2019 from ¦ 2.60 compared to the prior period.” It added.

 

 

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