By Omoh Gabriel, Business Editor
Oceanic Bank International PLC and other Nigerian Banks are currently studying the plan for the development of the Fourth mainland bridge which is on the drawing board for private sector financing. Disclosing this at Oceanic Bank investors’ forum on Friday in Lagos, the Managing Director/Chief Executive officer of the Bank Dr. Mrs Cecilia Ibru said that one of the reasons Nigerian Banks are going back to the capital market for more funds is to enable them finance big projects which hitherto they were unable to finance and foreign banks took undue advantage of such opportunities in the country.
The fourth mainland bridge is being planned to take traffic from Lekki to Ekpe, Ikorodu and Shagamu which would ease the traffic problem in Lagos. The fourth mainland bridge is probably the most ambitious plan as it will displace third mainland bridge as the longest bridge in Africa but this time it may be built with private capital.
Dr. Cecilia Ibru said that Oceanic Bank was going to the market to expand its shareholders funds that will give the bank the opportunity to lend much more to single but large projects which lower level of shareholders fund would not allow . She disclosed that when she saw the plan for the fourth mainland bridge and the attendant advantage to the economy it “blew my mind and we are preparing to be part of the development of the fourth mainland bridge”.
She said with adequate funding Nigerian Banks are prepared to lend long term for the development of the country and in particular they are gearing up to participate in the oil and gas sector of the economy. She further said that the banks are also preparing to fund the development of the Nigeria railways and the power sector. Banks she said are now in the mood to tap into the huge opportunities that are available in these sectors hence the desire of banks to raise more funds to position them to perform their intermediation role in the development of the economy.
Dr. Ibru stated that foreigners are looking at Nigeria and that Nigerians must take the bull by the horns to develop the country.
She also said that banks after the second round of consolidation will be in position to fund road projects and other infrastructure in the country. She dispel the feelings in some quarters that Nigerian Banks are over capitalise saying that shareholders fund enable banks to expand and that there is much fund in the Northern part of the country to mobilise. The only way to bring these funds to the formal sector is to take banking to the people by making banking services available to the populace.
Speaking on the offer at an investors forum held in Lagos, the bank chief described the response of the investors to the offer since inception as awesome, noting that investors patronage of the offer has beat the bank’s projection.
While acknowledging the positive response to the offer, she assured both the old and prospective investors of the bank of bumper returns on their investment in the bank. Capital market analysts have however projected that the bank’s share value would hit N35 before the end of its current financial year.
Speaking in the same vein at the forum, Chief Executive of Clearview Securities Limited, Rev. Olu Odejinmi, described the offer price of N16.50 per share as a give away, noting that the performance of the bank’s stock in the capital market has made it investors’ delight.
He said: “The offer price of N16.50 is a give away. It is a price of one for two. I have no doubt that investors would swoop on the shares. No doubt, the bank has a lot of goodwill. A good wine needs no bush. In the capital market, the Oceanic Bank’s stock is investors’ delight. It is one of the most traded stocks on the floor and one that is very liquid. This is an opportunity investors cannot afford to miss. I can assure you that you will be smiling to the bank two weeks after the closure of the offer.”
In the same vein, the Chief Executive of Future View Securities, Mrs. Elizabeth Ebi lauded the bank’s decision to sell the offer at a discounted amount of N16.50 kobo. Explaining the implications of the discount, she said once an investor buys into the bank, he automatically gains N3.03 kobo on each unit of shares bought.
She further said: “Oceanic Bank has done very well, the bank would certainly get to the top in the industry with the current zeal of its management, the fantastic and realistic future plans of the bank and the anticipated returns on investment that is indeed bumper.” She however recalled the surprise bonus issue of one for four given the shareholders at the bank’s last financial year.
“I enjoin people to buy massively into this bank through this offer. I strongly recommend it because I am sure it is an offer that will succeed and create enhance shareholders value greatly”
Chairman of Nestle Nigeria, Chief Olusegun Osunkeye also stressed the need for investors to massively invest in the Offer.
Osunkeye hinged his reasons on the bank’s consistent wealth creation for investors, adding that the bank has proven over the years to be investors’ friendly.
According to him, Oceanic Bank has showed through its various local and international awards, variety of products, enhanced services and track records of return on investment, that it was a one-stop financial supermarket.
“I like to be part of a success story and would expect all investors to follow suit. Over the years, Oceanic Bank has proven to be investors’ friendly. It has a rich history of wealth creation for investors. Just take a look at the year-end where they gave shareholders one for four and 42k per share. Is there any better example for investors’ friendly bank? Besides, look at the array of awards, commitment to corporate governance, track records of performance and all that investors need in an organization, better be on board to share in the ocean of prosperity now and the future,” he advised.
Chief Executive Officer, Oando Plc, Wale Tinubu, who gave a testimony of how the bank helped Oando to grow its business, was optimistic that Nigerians would rally round the bank to ensure the Offer records monumental success.
The bank, since last Monday has been in the market offering a total of 3.4 billion units of its shares at a discounted rate of N16.50. The offer, expected to increase the bank’s shareholders’ funds by N55.4 billion to over N100 billion, is being undertaken to give investors opportunity in the Oceanic Bank treasure. The offer proceeds would also be used to increase its capital base, invest heavily on information technology, be used as working capital and also increase its branch network locally and offshore.
Widely acclaimed as “the investors’ delight”, going by its high rate of returns since its first public offer which has recorded a 375 per cent total yield, the bank has also projected a profit of N18.9 billion in 2007, N24.9 billion in 2008 and N28.6 billion in 2009. The bank also projected a dividend of 56 kobo in 2007, 58 kobo in 2008 and 67 kobo in 2009.
Oceanic Bank recorded the highest return on average equity among the top seven banks in the country and also recorded the second highest return on average assets among the top seven banks in the country. The bank’s efficiency level is evident in its low cost to income ratio, which was the second lowest cost ratio among the top seven banks in the country.
Effectively, the bank’s gross earning have been growing annually at a 55 per cent rate, while its profit before tax has been growing at an annual rate of 39 per cent to N11.6 billion in 2006.
Its dividend policy has been one of the most attractive in the industry in the past five years. The quantum of its annual dividend payout has grown by an impressive 1477 percent since 2001, which implies that investors in Oceanic Bank have the prospect of seeing their investment yielding three times the value of their initial investment annually.
Banks recapitalisation 09/03/07
Helios, CDC, OPIC and Top US based Investment Funds invest N10bn in FCMB
By Omoh Gabriel, Business Editor
A club of leading international institutional investors led by Helios Investment Partners last Thursday crossed a block trade in the shares of First City Monument Bank Plc (FCMB) acquiring 1,5billion shares, representing 15.81 per cent of the bank’s shareholdings.
The deal which is a return of confidence in the Nigeria economy and financial sector by foreign institutional investor was highly welcome by operators in the capital market. Operators long view of the return of institutional investors and foreign banks into the Nigeria financial service sector is that of ground breaking for the CBN vision 2020 of Nigeria becoming the financial hub of Africa. The Nigerian Stock Exchange in conveying its approval for these investments stated in a letter signed by Binos D. Yaroe, General Manager and Head of Quotations/Listing Department that “The Director-General/CEO and the entire management team of The Exchange congratulate FCMB for successfully attracting internationally renowned institutional investors into making significant equity investments in the bank and looks forward to a speedy closeout of the transaction”.
Helios Investment Partners is a UK based equity fund with about $300 million under its management and access to an even larger co-investment pool from its limited partners. The fund’s investments in FCMB include contributions from other prominent investors such as CDC, an investment arm of the British Government; and several of the world’s leading investment funds, based in the United States believed to be Soros Private Equity Funds (Soros is one of the largest and foremost fund managers in the world) as well as the Overseas Private Investment Corporation (OPIC), an agency of the United States Government.
In addition to the capital provided by the Helios funds, a group of US funds (several top-tier hedge funds), that are limited partners in the Helios fund, also made additional direct investments into FCMB through a co-investment vehicle. All investors are taking a long term position and have committed to selling restrictions for several years and will consequently be represented on the Board of FCMB.
This remarkable flow of funds into FCMB by these reputable professional investors is clear demonstration by the global investment community of a high level of confidence in FCMB’s unfolding growth story and strategy.
This would be the first investment for most of these funds in the Nigerian equity markets. It is also a resounding endorsement of the Professor Chukwuma Soludo led banking reforms initiative and an endorsement of the Nigerian economic success story.
With these developments FCMB is further strengthened to expand and deepen its role and offering in the African continent, providing the bank with a formidable group of financial partners for it’s future growth initiative. Corporate governance and shareholding structure will be greatly enhanced and this transaction may indeed lead to surplus demand for FCMB shares.
It is expected that the bank will build its relationship with this exceptional group of investors to channel further portfolio investments into the Nigerian economy. FCMB is also expecting to make some further investment announcements before the end of its financial year in April 2007.
With this investment the bank shareholders funds is now in the region of N40billion, placing the bank in a competitive advantage.
