HENATES

There are certainly still some clouds in the sky over SKYE Bank PLC even though business is going fairly well. According to the figures to September released a few days ago, Skye bank has recorded good growth in income but expenses increase is at a higher rate. Of particular interest was the 42.7% increase in interest expense to N43248m from N30373m while generating 25.7% rise in interest income to N99500 from N79507m. If not, 68.8% increase in investment and other operating income to N29739m had helped gross earnings to grow by 33.1% to N129238m from 97126m. Added to the interest expense increase, 37.8% growth in total operations expenses to N64614m, ended up delivering only 21.5% increase in profit within the nine months even as loan loss provision dropped by 14.9%. Skye banks profit before tax by September came to N14,978m as against N12333m by the same time in 2014. SO: * To close 2015 with higher profit margin than the one recorded in 2014, Skye Bank may have to find...

Eleven quoted companies may soon be delisted from the Nigerian Stock Exchange while another eleven are under watch for deficiencies in free float requirements. According to the X- Compliance report issued by the Exchange on October 26, most of the companies to be delisted requested for voluntary delisting. These include Tourist Company of Nigeria ( with the process already begun); Afrik pharmaceuticals, Union Dixon, Amino International, African Paints, Rokana Industries, Navitus Energy, Nigerian German Chemicals, Golden Guinea and FTN Cocoa Those under watch include Aluminium Manufacturing, Mti PLC, UNIC, Adswitch, G Cappa, Goldlinj Insurance, UTC Nigeria, IPWA, West African Glass, Mtech and Allied Breweries. According to the report, another 11  companies were on default in the submission of financials and reports including schedule one defaulters Multi trex  Integrated Foods and Roads Nigeria. However seven companies got kudos for submitting 2014 financials ahead if schedule. ...

NOVEMBER 17: * Seplat Petroleum Development PLC to pay $0.04 ( about N7.96) per share dividend. NOVEMBER 19: *  Nigerian Breweries PLC to pay N1.20 per share dividend * The Nigerian Society of Engineers to annual general meeting at Akure, Ondo state. DECEMBER 7: * Nestle PLC to pay N10 per share dividend. DECEMBER 14: * Total Nigeria PLC  to pay N2 per share dividend.

It appears Nigeria has come back full circle to the era of seeing investors and businesses as fat cows that should be milked to the last drop even when they are not well fed. First, it was MTN Nigeria that was fined about one trillion Naira reportedly for failing to comply fully with official directives on sim registration. Next we heard of First Bank being penalized by the Central Bank of Nigeria for not transferring MDA accounts to schedule as demanded by the presidency. Now it is the turn of UBA PLC to be fined N2.9bn for failing to remit N58.1bn MDA funds to the CBN by October 15, 2015. The fine was 5% of the fund in question. This is certainly becoming worrisome. One, punitive measures do not have the same impact with corrective measures especially when first offenders are involved. For example, claiming 5% for fund not remitted within days is certainly punitive because there is no way such money could  have earned even one per cent per day. On the other hand, if th...

Union Bank PLC is perhaps close to the winning formula that will pave the way back to big time but it is not quite According to the figures for the nine months ended September, the magic formula may not surface this year unless Union Bank keeps down growth in interest expense and revives fees and commission while continue to watch operations costs and personnel expense like a hawk. By September, Union Banks gross earnings had grown by only 6.4% to N84719m in spite of 182.9% rise in net trading income to N3597m; 43.8% increase in other operating income to N6307m from N4386m and 19.3% increase in interest income to N66636m from N55858m. This was because net fees and commission dropped by 5.59% to N6918m; cash recovered decreased by 67%; and gain from sale of subsidiaries plummeted by 115.3% into N511m loss from N3318m gain previously. Amidst this drag down of earnings growth. Interest expense jumped by 50.2% from N17733m to N26634m; thus depriving Union Bank the full benefits of ...

When Nestle PLC released its figures recently accompanying explanatory notes pointed to higher operational costs and the Naira devaluation as its major challenges within the period. Fortunately, the company not only caged them but as a matter, did not really put its finger on it's real challenge: High finance costs. According to the figures Nestle closed September 2015 with 5.19% rise in revenue to N107986m from N102655.4m. Now, because of cost saving and higher efficiency, cost of sale rose by only 2.77% to approximately N59975m thus leading to 8.35% increase in gross profit. Then total expenses came to about N23334m up 5.1% on September 2014's N22201.8m again leading to 11.6 % increase in profit recorded from its operations. Of course, this should have landed the company in real profit before tax growth above growth in income but it didn't. Instead, the reported figure came to 20814m up only 3.25% on N20158m previously. Why? Simple. This was because net financ...

Diamonds shine especially when they have cut and made dirt free but it looks like Diamond Bank this year is banking on controlling the controllable alone in order to shine. No way say the figures for the nine months to September released this week; other diets have to removed too. According to the figures, Diamond Bank had very firm control over growth in most cost units but could not prop up income with the same firm grip. For example interest expense increased by only 0.06% within the nine months to N37487.4m from N37465.2m; personnel cost rose by 5.41% to N26438.6m and other operating expenses ended at N42684.1m closed only 2.29% up. In these times these were the kind of expense growth rates easy to accommodate. Right? Wrong. In the case of Diamond bank, income flow could match them. Well interest income did increase by 2.22% to N122595m but 32.7% rise in loan loss provision and 55.1% increase in fees and commission expense left no room profit increase. This was partly b...