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Nigeria: Full Year 2018 Banking – Logic, Outlook, and Gist

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Am I the only one who walked into the office this morning with an extra grin on their face and bounce in their step, knowing that it’s going to be a short week and a four day weekend? Well, just so you know, here’s my plan for the Easter: sleep, study, répéter.

Sorry to be a party-pooper, I just don’t have that energy. Before we run off for our Easter holidays – and now that we have FBNH’s result – here is a quick assessment of 2018 banking performance and what lies ahead, in my opinion.

In my last assessment, November 2018, I mentioned that banks were not willing to expand their exposure to risk assets anytime soon on the back of looming political risks and rising interest rates at the time. Fast forward five months, this position seems to have changed. The biggest banks genuinely intend to grow their retail book this year, and this makes sense.

Logic:

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Retail banking translates to more transaction volumes via digital channels (USSD, ATM, POS, Mobile Banking, etc). The bigger retail book means more Fee and Commission income, and of course better PBT.

For your sake, I attended routine earnings conference calls with some of the bank’s management and spoke to our banking analyst to get some key points: 

  • Most banks were aggressive with taking IFRS-9 induced write-offs in 2018
  • Growth in Internet banking has tapered industry-wide, however, there is no cause to worry here, as the slowdown is due to cannibalization by other digital channels which have recorded significant growth.
  • FBNH recorded a significant increase in their NPL, which could be attributed to a sharp decrease in their loan book (-15.86%). However, huge provisions were taken in the year and their long-standing NPL issue is gradually being resolved affirmed by lower loan loss provisions and cost of risk.
  • According to management of Access Bank, the merged entity is not expected to carry Diamond’s NPL burden, because Diamond is to make significant write-offs (of about N150bn) in FY2018 – Diamond is yet to release FY2018 results.
  • Retail, Oil & Gas, and General Commerce are the sectors banks are most interested in extending loans to this year.
  • Finally, guidance for loan growth, 10% – 15% on average, remains relatively weak this year when one considers inflation which is currently at 11.31%.
Read Also:  Coronation Research issues 2019 Economic Outlook for Nigeria: A Tale of Two Halves...

2018 Banking in a Nutshell

Nigeria: Full Year 2018 Banking - Logic, Outlook, and Gist - Brand Spur

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Source: Coronation Research, Company Filings, Bloomberg

Finally, I had Coronation Research’s banking analyst share his opinion on banking stocks in 2019. 

Outlook:

Nigeria: Full Year 2018 Banking - Logic, Outlook, and Gist - Brand Spur

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Another major impediment to industry loan growth is the Cash Reserve Ratio (CRR) set by the Central Bank (CBN). The apex bank maintained tight monetary policies all through last year with CRR at 22.5% of weighted average deposits (WAD).

Gist: 

When a bank’s WAD increases, the CBN debits their accounts for the increase, however when its WAD reduces,  the CBN does not reimburse their accounts. Banks are not happy about this, and those losing deposits are probably wailing. During their earnings call, management of the tier-1 bank, GTBank (deposit growth 10% YoY), disclosed that their effective CRR is as high as 30.5%. One can only imagine what some of the smaller banks are going through.

What’s happening this week?

  • March 2019 Consumer Price Index Report – 16 April 2019
  • Game of Thrones season 8 premieres today!!!

For the GOT lovers, S08E01 will be screening free at Harbour Point, VI Lagos, by 6 pm

 

Written by: Babatunde Makanjuola, Coronation Merchant Bank.com

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Nigeria: Full Year 2018 Banking - Logic, Outlook, and Gist - Brand Spur

Trend Micro Placed in 2021 Magic Quadrant for Endpoint Protection Platforms

Recognized for Completeness of Vision and Ability to Execute

 

HONG KONG SAR - Media OutReach - 13 May 2021 - Trend Micro Incorporated (TYO: 4704; TSE: 4704), a global cybersecurity leader, today announced that it has been positioned by Gartner as a Leader in the Magic Quadrant for Endpoint Protection Platform for its offering, Trend Micro Apex One. The evaluation was based on specific criteria that analyzed the company's overall completeness of vision and ability to execute.


Trend Micro is continually innovating and anticipating emerging threats. Our flagship Apex One endpoint protection platform features broad coverage against today's most critical threats. Our customers are protected using a range of techniques including virtual patching, which immediately protects against exploits until the vendor patch is applied.


Read the full Magic Quadrant for Endpoint Protection Platform report at: https://resources.trendmicro.com/Gartner-Magic-Quadrant-Endpoints.html

"The endpoint has become a key battleground as determined threat actors try to take advantage of the pandemic to target distributed workforces and vulnerable remote access infrastructure. But throughout this difficult period, we've been there for our customers," said Wendy Moore, vice president of product marketing for Trend Micro. "I'm delighted to see us recognized again for doing what we do best: Protecting global organizations through innovative, cloud-first and platform-based security. We will continue to focus on offering simple, robust and industry-leading protection through our cybersecurity platform."

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At the heart of the company's cybersecurity platform is Trend Micro Vision One, which delivers visibility and XDR using telemetry from Apex One in addition to email, servers, cloud workloads and networks for faster detections and investigations.

Magic Quadrant reports are a culmination of rigorous, fact-based research in specific markets, providing a wide-angle view of the relative positions of the providers in markets where growth is high and provider differentiation is distinct. Providers are positioned into four quadrants: Leaders, Challengers, Visionaries and Niche Players. The research enables you to get the most from market analysis in alignment with your unique business and technology needs.

* Gartner disclaimer: Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


About Trend Micro

Trend Micro, a global cybersecurity leader, helps make the world safe for exchanging digital information. Fueled by decades of security expertise, global threat research, and continuous innovation, Trend Micro's cybersecurity platform protects hundreds of thousands of organizations and millions of individuals across clouds, networks, devices, and endpoints. As a leader in cloud and enterprise cybersecurity, the platform delivers a powerful range of advanced threat defense techniques optimized for environments like AWS, Microsoft, and Google, and central visibility for better, faster detection and response. With 7,000 employees across 65 countries, Trend Micro enables organizations to simplify and secure their connected world. www.trendmicro.com.hk


#TrendMicro


Nigeria: Full Year 2018 Banking - Logic, Outlook, and Gist - Brand Spur
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Latest News

Trend Micro Placed in 2021 Magic Quadrant for Endpoint Protection Platforms

Recognized for Completeness of Vision and Ability to Execute

 

HONG KONG SAR - Media OutReach - 13 May 2021 - Trend Micro Incorporated (TYO: 4704; TSE: 4704), a global cybersecurity leader, today announced that it has been positioned by Gartner as a Leader in the Magic Quadrant for Endpoint Protection Platform for its offering, Trend Micro Apex One. The evaluation was based on specific criteria that analyzed the company's overall completeness of vision and ability to execute.


Trend Micro is continually innovating and anticipating emerging threats. Our flagship Apex One endpoint protection platform features broad coverage against today's most critical threats. Our customers are protected using a range of techniques including virtual patching, which immediately protects against exploits until the vendor patch is applied.


Read the full Magic Quadrant for Endpoint Protection Platform report at: https://resources.trendmicro.com/Gartner-Magic-Quadrant-Endpoints.html

"The endpoint has become a key battleground as determined threat actors try to take advantage of the pandemic to target distributed workforces and vulnerable remote access infrastructure. But throughout this difficult period, we've been there for our customers," said Wendy Moore, vice president of product marketing for Trend Micro. "I'm delighted to see us recognized again for doing what we do best: Protecting global organizations through innovative, cloud-first and platform-based security. We will continue to focus on offering simple, robust and industry-leading protection through our cybersecurity platform."

At the heart of the company's cybersecurity platform is Trend Micro Vision One, which delivers visibility and XDR using telemetry from Apex One in addition to email, servers, cloud workloads and networks for faster detections and investigations.

Magic Quadrant reports are a culmination of rigorous, fact-based research in specific markets, providing a wide-angle view of the relative positions of the providers in markets where growth is high and provider differentiation is distinct. Providers are positioned into four quadrants: Leaders, Challengers, Visionaries and Niche Players. The research enables you to get the most from market analysis in alignment with your unique business and technology needs.

* Gartner disclaimer: Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.


About Trend Micro

Trend Micro, a global cybersecurity leader, helps make the world safe for exchanging digital information. Fueled by decades of security expertise, global threat research, and continuous innovation, Trend Micro's cybersecurity platform protects hundreds of thousands of organizations and millions of individuals across clouds, networks, devices, and endpoints. As a leader in cloud and enterprise cybersecurity, the platform delivers a powerful range of advanced threat defense techniques optimized for environments like AWS, Microsoft, and Google, and central visibility for better, faster detection and response. With 7,000 employees across 65 countries, Trend Micro enables organizations to simplify and secure their connected world. www.trendmicro.com.hk


#TrendMicro


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