The performance of the equity market in the global, emerging and frontier markets was largely negative in H1-2020, the bearish sentiment observed in the market was attributable to the coronavirus pandemic, with investors exiting their positions in riskier assets like equities in favour of safe havens (the US treasury).
This action changed the fortune of the SSA equity market under our watch as Foreign investors in SSA equity market took flight despite the fact that some SSA markets started on a good note with Nigeria’s equity market ranked among the best performers in the world early in the year.
Fastrack to H2- 2020, the narrative changed. The global market turned positive, fueled by the relaxation of lockdown across the world coupled with dovish monetary stances across the globe, giving room for economic activities to rebound.
Nevertheless, save for Nigeria, which witnessed a major correction and surged above it pre-COVID level, sentiment for the majority of the bourses in SSA remained broadly negative due to a relatively high yield environment, poor monetary policy stimulus and the weaker macroeconomic outlook.
While the Nigerian bourse was a clear outperformer (+30.3% YTD), driven by a heterodox monetary policy framework which crashed rates on TBills, followed by the S/African JSE, up 3.2%, Sentiment for Stocks in Mauritius (-26.2% YTD), Ghana (-19.4% YTD), the West Africa BRVM (-17.2% YTD) and Kenya (-12.1% YTD) remained broadly negative.
Looking ahead, we expect a broad-based rebound in 2021on the back of improvement in the overall macro environment.
Nigerian music superstar and Grammy-nominated artist, Wizkid is set to headline the Livespot X-Clusive concert slated for December 19 and 20, 2020. The Nigerian global star who is fresh off a hugely successful album release will bring his magic home again during Nigeria’s first-ever hybrid live concert holding in Lagos.
Wizkid has won over 20 awards in a career spanninga decade. Amassing fans across Africa, Europe, America, and across the world, he has scored over 800million streams on youtube, Apple Music, Spotify, and Deezer combined. Wizkid has been described as a rising star by Billboard, one of the world’s most authoritative music voices.
The singer and songwriter assured that music lovers and fans watching online and offline will be treated to his best-performance yet. The physical events will feature limited seating in line with COVID-19 restrictions. Tickets and access to the Livestream will, however, be made available via Livespot Nation.
“This year has been tough on everybody, but we all recorded some wins in one way or another,” the artist said. “I want my fans to experience the best live concert in recent memory, and I’m looking forward to making that a reality,” he continued.
With no other major concert to look forward to this December, fans have a lot to expect from Livespot X-Clusive. The concert will also feature other music superstars like Dare Art Alade aka Darey, Yemi Alade and Simi as co-headliners.
The event which will be the first-ever live hybrid concert in Nigeria will host a select few physically at Eko Hotel and the rest of the world will get a chance to stream the concert live on Livespot Nation.
According to Deola Art Alade, CEO, Livespot360, producers of Livespot X-Clusive,
“The event is going to be a fusion of incredible live performances; music, festival quality sound, impressive lighting, special acts, and immersive experiences, all rolled into one high-octane event which promises to deliver an unprecedented level of quality which Livespot360 is known for. We’re very excited and grateful for the opportunity to keep bringing Nigerians the very best of entertainment.”
Livespot360 is the brain behind some of Nigeria’s most iconic entertainment events in recent times, including Livespot X Festival with Cardi B, Love Like A Movie with Ciara and Kim Kardashian and BAFEST, to name a few.
This event marks the second event Livespot360’s entertainment division Livespot X will be producing and the first event Multi-platinum Afro-soul star Darey will be performing at in five years. Speaking ahead of the event, the Darey, had this to say,
“The ‘X’ in Livespot X-clusive like the X in Livespot X Festival is a dynamic variable that takes up different forms, shapes and expressions year on year. It is an evolving hybrid of unique experiences designed to meet and exceed the entertainment cravings of Nigerians and Africans. And for me this particular event is all the more special.
I get to perform songs from my newest EP Way Home and I also get to share the stage with queens like Yemi Alade and Simi and superstars like Wizkid and Patoranking. Livespot X-Clusive will definitely be an unforgettable experience.”
Livespot X-Clusive is a brainchild of Livespot360, a creative collective of the digital era, unified by a passion for developing disruptive ideas. Combining digital marketing, experiential marketing, advertising, education and entertainment for the Nigerian audience, the company’s mantra is to constantly set the bar in quality and performance.
Tickets to Livespot X-Clusive can be purchased online at Livespotnation.com.
The COVID-19 outbreak brought a huge hit for the world’s largest sports brands, with thousands of their shops closed amid coronavirus lockdown in the first half of the year. Although third-quarter sales showed signs of recovery, the year-to-date revenue losses still count in billions of euros.
According to data presented by Safe Betting Sites, Adidas Group, as one of the largest and most recognizable sportswear and sporting goods manufacturers in the world, lost €3.5bn in YTD revenue amid the COVID-19 crisis, the severest loss among the top three sports brands.
Q3 Net Sales Dropped by 7% YoY to €5.9B
As Europe’s largest sportswear manufacturer and the second-largest globally, Adidas has witnessed impressive growth in sales and income over the last two decades. In 2000, the Group`s net sales amounted to €4.6bn, revealed the company’s 2019 annual report.
In the next ten years, this figure almost doubled to €8.7bn and continued rising. Statistics show the company’s net sales surged to €21.5bn in 2019, nearly a 150% jump in a decade.
Last year, the Adidas Group reported a gross profit of around €12.3bn, twice as much from €6bn in 2010.
Source: Adidas Q1, Q2, and Q3 2020 ResultsSource: Interbrand Best Global Brands 2020
However, the COVID-19 crisis caused a huge financial hit to the German sports brand. In the first quarter of 2020, Adidas generated €4.75bn in revenue, a €1.13bn plunge year-over-year. Although Adidas’ e-commerce sales jumped 35% in this period, it wasn’t enough to balance widespread closures of brick-and-mortar stores.
The downsizing trend continued in the second quarter of the year, with the revenue falling to €3.58bn, a €1.93bn drop in a year. From April to June, almost all Adidas stores except those in the Asia-Pacific region were closed. In Latin America and emerging markets, sales decreased by more than 60%, while Europe and North America witnessed a 40% drop. Statistics show that the company’s revenue plummeted by €3.06bn in the first half of the year.
The third-quarter earnings report revealed strong recovery, as more than 90% of Adidas retail stores were operational, most of which had been closed for several weeks during the second quarter. Net sales rose to €5.9bn between July and September, still 7% less than the same period a year ago.
Although the Group reported a €3.5bn revenue loss in the nine months of 2020, the Best Global Brands 2020 data show Adidas brand value still increased this year and hit over $12bn, up from $11.9bn in 2019. Five years ago, the Adidas brand was valued at $6.8bn.
Adidas Market Cap Plunged by €2.3B in 2020
Besides huge revenue loss, the world’s second-largest sportswear manufacturer also witnessed a substantial market cap drop amid the COVID-19 crisis.
In December 2019, the combined value of Adidas shares amounted to €56.8bn, revealed the Yahoo Finance data. After the stock market crash in March, this figure slumped by 29% to €40.3bn.
However, Adidas stock price bounced back in the second quarter of 2020, with the market cap rising to €45.5bn between April in June. Statistics show the company’s market capitalization continued rising in the last six months and hit €54.4 last week. Still €2.3bn less compared to December 2019 figures.
New York – Traffic volume declines for US airports and toll roads improved in 3Q20 from unprecedented levels in 2Q20, but the magnitude of declines remains severe, Fitch Ratings says.
Fitch’s US Airports & Toll Roads Traffic Monitor comparison tool analyzes traffic at all major airports and toll roads, as well as a few regional airports, and finds that average airport and toll road traffic was down 71% and 25%, respectively, in 3Q20 relative to 3Q19. This is better than the respective y-o-y declines of 89% and 45% seen in 2Q20, which appears to be the trough.
Traffic recovery varied across airports in 3Q20, although overall airport traffic remained severely depressed, with all but one airport losing over 50% of passenger volume compared with 3Q19. One-third of airports in the traffic-monitor tool performed worse than Fitch expectations of a 75% decline in 3Q20 enplanements.
These are primarily international gateways and airports in leading business markets, which suffered from international travel restrictions and reduced business travel, in particular San Francisco, Boston, Washington DC and New York. Hawaii was the slowest to recover in the 3Q20 traffic monitor, with enplanements down 93% y-o-y in 2Q20, recovering only slightly to a y-o-y deficit of 89% in 3Q20.
On the positive side, domestic hubbing operations drove airport traffic at Dallas-Fort Worth and Charlotte, both American Airline hubs, and Chicago Midway, a Southwest hub. In addition, some domestic, leisure-focused O&D markets such as Las Vegas, Lee County, FL and Boise, ID saw stronger recoveries.
Toll road performance has been significantly more resilient than airports to pandemic-related disruptions, with average traffic recovering to a 25% decline in 3Q20 relative to 3Q19, from an average 45% yoy decline in 2Q20. Traffic performance in 3Q20 was generally better than Fitch’s expectations of a 30% 3Q20 traffic decline for most toll road systems, including turnpikes, expressways, managed lanes and standalone systems.
Truck traffic fared better than passenger vehicle traffic during the coronavirus shutdowns, as goods transportation was less affected than moving people. This was reflected in Fitch’s commercial vehicle traffic forecast of a 15% decline in 3Q20, compared with a 30% decline for passenger vehicles. Turnpikes outperformed the toll road sector as a whole in 3Q20 because of their mix of commercial and passenger traffic.
Certain Fitch-rated bridge systems continue to see severely depressed traffic volume, including Buffalo’s Peace Bridge and the McAllen International Bridge System, both of which have material exposure to international traffic. Strong liquidity and DSCR metrics have allowed these systems to maintain a Stable Outlook.
The decline in commuter traffic may take longer to rebound as certain workers are slower to return to offices given a greater shift to remote work arrangements. On the other hand, commuters have opted for personal vehicles over public transit in the absence of a widely available vaccine.
The majority of Fitch-rated toll roads have a Stable Rating Outlook due to their relative resilience during the pandemic. However, the Negative Rating Outlooks on most Fitch-rated airports reflect the effect of the pandemic and patchwork travel restrictions on operating and financial performance, as well as uncertainty around the time and magnitude of recovery.
The growth in online shopping has led to the acceleration of alternative shopping habits like social commerce. Growing at a 31.4% compound annual growth rate (CAGR) between 2020 and 2027, the global social commerce market is estimated to grow to $604.5 billion by 2027.
A good number of eCommerce companies are either already selling or planning to sell via social media. According to the research data analyzed and published by Stock Apps, 15% of these companies worldwide are already selling on social media while 25% are planning to start.
On the other hand, China’s social commerce market is estimated to grow at a 30.5% CAGR over the period of the analysis. According to eMarketer, the country is estimated to have 357.2 million social buyers by the end of 2020. That would be equivalent to 30.6% of the total population.
In 2021, the figure will rise to 392.2 million, 420 million in 2022 and 446.8 million by 2023. At the end of the forecast period, China is set to account for 37.9% of social buyers worldwide. Based on data from Statista, the number of social commerce users could be even higher as its 2020 estimate is 713 million.
eMarketer projects that retail social commerce sales will reach $242.41 billion in China in 2020. The sector is expected to account for 11.6% of total retail eCommerce sales in the country this year. By 2023, the figure is estimated to almost double to $474.81 billion.
US Social Commerce to Generate $23 Billion in 2020
China has been far ahead of the US in social commerce. In 2019, eMarketer reported $186.04 billion as the sector’s total sales. That was close to ten times the US total of $19.42 billion.
Tencent’s WeChat has been at the forefront of the trend, particularly since 2017 when it launched Mini Programs. Since that time, major online retailers create Mini Programs to make direct sales within the app.
According to its 2019 annual report, Tencent announced that it generated over $115 billion in total transaction volume from its Mini Programs.
In the US, the sector is projected to be worth $26.9 billion in 2020 according to Research and Markets. The eMarketer projection is slightly less optimistic, projecting sales worth $23.26 billion by the end of 2020. It estimates that the figure will rise to $31.35 billion in 2021, $38.22 billion in 2022 and by 2023, it will reach $45.63 billion.
Statista projects that by 2024, the figure could be as high as $84.2 billion, accounting for 7.8% of retail eCommerce sales in the US.
Douyin Creators to Generate $11.8 Billion in 2021
In view of the success of the trend in China, top-ranking US companies like Walmart and Facebook seem to be taking cues.
In August 2020, Walmart announced its intention to buy a 7.5% stake in TikTok. According to its CEO, the move is based on the fact that it sees a huge business opportunity in social media.
A look at how Douyin, the Chinese version of TikTok, embraced social commerce provides handy insights. In 2018, Douyin partnered with Alibaba introducing a shopping feature on the app and has refined its offering to include product search features and native storefronts.
As of August 2020, Douyin had 600 million daily active users and was the country’s most popular platform for shoppable videos. At the time, the app had more than 22 million creators, who made over $6.15 billion over the trailing 12-month period.
In 2021, Douyin announced that it would invest traffic resources worth $1.5 billion so as to generate $11.8 billion in income for creators. The competition is, however, rather stiff as its main rival, Kuaishou, announced a total of 500 million eCommerce orders in August 2020. Daily active users on this app numbered around 300 million at the time.
Moreover, Facebook introduced a live shopping experience similar to Taobao Live on Facebook Shop. This is a dedicated section for eCommerce within the app, allowing businesses to go live and feature their products.
It is worth noting that during the pandemic, Taobao Live saw impressive growth. In February 2020, the number of streaming events on the platform increased by a whopping 110% according to Caixin. During the first quarter of 2020, the platform posted a sales increase of 88% year-over-year (YoY).
From September 2019 to September 2020, Taobao Live GMV surpassed $53.2 billion according to China Internet Watch.
The International Day of Persons with Disability (IDPWD) is recognised globally on December 3, to celebrate people living with disabilities. This year, with the IDPWD theme, ‘Not all Disabilities are Visible,’MTN Nigeria partnered with the Ministry of Humanitarian Affairs, Disaster Management and Social Development of Nigeria to commemorate the day at an event in Abuja, Nigeria.
This year’s theme places emphasis on spreading awareness, and understanding disabilities that are not immediately apparent. These include mental illness, chronic pain or fatigue, sight or hearing impairments, diabetes, brain injuries, neurological disorders, learning differences and cognitive dysfunctions, among others.
Speaking at the event, Hajiya Sadiya Umar Farouq, Honourable Minister of Humanitarian Affairs, Disaster Management and Social Development, said,
“In recent years, disability issues have taken top spots as evident in the Sustainable Development Goals (SDG)s. In committing to the realization off the 2020 agenda for sustainable development, the Federal Government of Nigeria remains committed to including and protecting persons with disabilities to guarantee that no one is left behind.” The Minister also thanked MTN for supporting this year’s event.
Also commenting, the Chairman, MTN Foundation, Prince Julius Adelusi-Adeluyi, OFR, mni, reiterated MTN’s commitment to ensuring that these incredible set of people live full lives despite their disabilities.
He said, “People living with disabilities are a part of our society — an important part, and we must all commit to recognising and caring for them. I am both honoured and humbled to say that the MTN Foundation continues to work hard to ensure that persons living with disabilities are empowered through our corporate social investment initiatives. We believe that a consistent and concerted approach makes all the difference.”
At the event, the MTN Foundation also donated relief and mobility items, including guide canes, crutches and elbow pads to persons with disabilities through the Ministry of Humanitarian Affairs, Disaster Management and Social Development.
Since its inception, the MTN Foundation has directly affected the lives of over 20,000 persons living with disabilities through the MTN Disability Support Project. Also, over 1,080 under-graduate scholarships have been awarded to students in public tertiary institutions under the MTNF Scholarship Scheme for Blind Students.
Gear Up for the 2020 Drive-In Autoshow at This year Autofest
From luxury to rugged, 2020 Autofest continue to become more electrifying, efficient, enhanced and the most anticipated motorsports event in Nigeria.
Though we have all had a turbulent 2020, we remain thankful for making it this far and to end the year on a positive note, BetKing, Fearless Energy Drink, Ace of Spades, Grandcru Beat99.9fm, Work&Play, Coscharis Motors, JB Autos and the BMW club have put together Autofest2020 – A Drive-in Autoshow & Concert!!!
There will be lots of Music performance, car and bike stunts, food, drinks, virtual reality games and an exciting array of the largest Christmas fireworks display.
Mavin Artists Ladipoe and Crayon, DJ Jimmy Jatt, DJ Tee, DJ Jennyswitch, DJ Kraizee amongst others are this year music headliners.
The event highlight “10 Cars 1 King” powered by BetKing is offering 1M (One Million Naira) in Cash Prizes for the King of Drift & Drag championship.
This year’s Autofest 2020 will feature races, bikes & car parade and a display of an array of exotic automobile ranging from Mercedes, Lexus, Audis BMWs, Ferraris, Lamborghinis, Maseratis, Kawasakis, Ducatis and many more fascinating automobiles.
Expected to grace the Autofest event that has evolved to become one of the most anticipated Auto shows in Nigeria are racers, car enthusiasts, Speedsters, Petrolheads, etc.
The event, which is put together by BMW Club Nigeria, promises to be full of thrills.
According to the organizers, the 2020 edition of AutoFest promises to be more thrilling, adrenaline pumping and all shades of beautiful.
The 2020 edition of AutoFest will hold on Saturday at TBS (Tafawa Balewa Square) Lagos. Commencement time is 2 pm.
Date: Sat, 19th Dec 2020
Time: 2pm
Venue: TBS
Ticket giveaways will be announced on @bmwckubnigeria IG page.
Grab your VIP or regular parking Slot tickets from autofest.com.ng
Each ticket admits 4 people per car.
No mask no entry.
Social distancing measures in place
For more, enquires/waivers and early-bird discounts call: 08123135763
Governor Ishaku made the call on Thursday in Jalingo when he flagged off the Health Insurance Scheme.
Governor Ishaku delivering his speech during the Flag off ceremony. | www.brandspurng.com
He told his audience at the event that his passion for the Health Insurance Scheme was fuelled by his visit last year to Rwanda. What he saw there, he said, was an excellent health insurance scheme which required the people to pay only a token in order to enjoy a wide range of healthcare facilities.
He expressed satisfaction that his passion for the scheme and determination to have it replicated in Taraba State has eventually materised.
The Governor directed the management of the agency to initiate steps to ensure that the poor and the vulnerable are guaranteed access to the services of the Agency.
“We must ensure that the poor are not denied access to medical treatment under this scheme”, he said.
He also announced the plan of his administration to ensure that every ward in the state has a standard health clinic. This, according to him, is to take healthcare down to the doorsteps of the ordinary people in the state.
It was also an occasion for the Governor to recount some of his notable achievements in the health sector.
He said the administration has renovated three General Hospitals in the state, one of which has already been commissioned. The renovated hospitals have greatly enhanced access and qualify of medical services available to the people of the state.
He also used the occasion to remind the people that Covid-19 was still very much around and urged them to continue to observe the protocols for preventing its spread.
He said Taraba State was lucky to be among the states with the lowest cases of the infection and called for vigilance among the people.
Speaking earlier, Innocent Vakkai, Commissioner for Health, said the establishment of the Contributory Health Insurance Agency has come as one of the numerous visionary programmes embarked upon by the Darius Ishaku administration.
He expressed happiness that despite the delay in mid-wifing the agency due to the Covid-19 pandemic, the scheme had eventually materialised and urged the people to take advantage of the scheme to maintain good health.
Despite the negative impact of the COVID-19 pandemic and other headwinds that characterized the year 2020, the performance of Nigeria’s 5-biggest lenders – First Bank, UBA, Zenith, Guaranty and Access (a.k.a. FUZGA), on average is set to surpass that of 2019 given their average performance thus far in 2020.
Analysis of the recent 9-months earnings results of these lenders shows that the FUZGA combination grew their 9-months Gross Earnings for 2020 by 6.91% to N2.370 trillion, compared to N2.217 trillion reported in 9M’19, while Post-Tax Profit of the FUZGA combination grew by 3.95% to N535.385 billion compared to N515.025 billion in 9M’19.
On the other hand, the Total Deposits collected by the five lenders in 9M’2020 rose by 21.31% when compared to the corresponding period of 2019 to settle at N25.869 trillion, while Total Assets of the combination rose by 19.68% to N34.774 trillion from N29.056 trillion as at the end of December 2019.
This performance confirmed that the Nigerian banking sector successfully weathered the storm of COVID-19 pandemic; a further justification of why the sector kept growing even when the broader economy had slid into a recession.
However, by disaggregating the combined performance of the five major lenders, we notice that, though all the five lenders recorded growth in Gross Earnings in the 9-months of 2020, only Access, First Bank, and Zenith were able to cascade the Earnings growth to improved Pre-and-Post-Tax Profit due to varying factors.
Source: NSE, GTI Research
Snapshot of Access Bank Performance in 9M’20
Access bank Gross Earnings in 9-months 2020 grew by 14.21% over the corresponding period of 2019 to N650.397 billion. This represents the highest 9-months Gross Earnings by any Nigerian bank in 2020 and was mainly driven by a 145% increase in Non-interest income to N184.712 billion.
The bank’s Non-interest income increased on the back of a 31.37% increase in Fee & Commission income to N87.883 billion and a 2,431% increase in Trading gains to N84.192 billion.
Source: NSE, GTI Research
However, Interest income and Other operating income of the lender fell by 7.34% and 1.41% to N375.283 billion and N32.79 billion in 9M’20 respectively compared to N405.024 billion and N32.26 billion in 9M’19.
We suspect that the reduction in the bank’s Interest income may not be unconnected to the recent accommodative interest rate regime of the CBN, necessitated by the need to revive the economy from the negative impact of the COVID-19 pandemic through the reduction in the cost of capital, especially to real sector players.
Nevertheless, the bank’s Post-tax profit printed at N102.300 billion, representing
an increase of 15.67% compared to the corresponding period of 2019.
In terms of balance sheet performance, the bank’s Total Assets grew by 10.9% to N7.924 trillion compared to N7.143 trillion in 9M’19, driven mainly by the 14.3% increase in loan provision to N3.502 trillion, in compliance with the new CBN loan-to-deposit rate policy of 65% minimum.
Based on the 9M’20 earnings performance of the lender, our Q4 earnings projection for the bank, and the macroeconomic outlook for the bank’s biggest market, Nigeria, we review up our target price for Access bank stock on the Nigerian Stock Exchange (NSE) to N11.15, from N8.60 earlier set at the beginning of Q2’20, occasioned by the then projected impact of COVID-19 on the Nigerian economy.
Snapshot of Guaranty Trust Bank Performance in 9M’20
Guaranty Trust Bank grew its Gross Earnings in 9M’20 by 3.25% to N341.742 billion from N330.967 billion in the corresponding period of 2019. This was jointly driven by a 1.80% increase in Interest Income to N341.742 billion, a 2.34% increase in Non-interest Income to N59.495 billion, and a 3.46% increase in Other Operating Income to N45.34 billion compared to the corresponding period of 2019.
Source: NSE, GTI Research
The 2.34% growth in Non-Interest Income was mainly driven by the 96.90% increase in Trading gains (to N18.98billion) and a 2,725% increase in Net-impairment reversal on financial instruments (to N3.11 million), despite the 22.69% dip in Fee & Commission Income which settled at N37.400 billion.
However, as a result of the joint increases in cost heads such as Personnel expense (up by 5.20% to N28.72bn), Other operating expenses (up by 9.93% to N60.07bn), and Depreciation and Amortization provision (up by 39% to N21.57bn), the bank’s Pre-tax and `Post-tax profit weakened by 1.93% and 3.20% respectively to print at N167.35 billion and N142.28 billion, compared to N170.65 billion and N148.99 billion in 9-months of 2019.
In terms of balance sheet performance, the bank’s Total Assets rose faster by 22% to N4.57 trillion, while Total Liabilities increased by 12% to N3.82 trillion. The strong increase in the value of its Total Assets was mainly buoyed by improved loan provision (up by 5% to N1.57 trillion) in line with the CBN loan-to-deposit ratio policy of 65%, and the huge restricted deposits and assets with CBN (as Cash Reserve Ratio) to the tune of N1.17 trillion.
Given the performance of the group in its 9-months earnings result, our earnings projection for the bank for the next three quarters (Q4’20 – Q2’21), and the expectation of a gradual recovery of the Nigerian economy from recession in three to four quarters to come, we review our target price for Guaranty stock to N36.15 from N34.40 earlier set post Q2’20 earnings results.
Snapshot of First Bank Plc. Performance in 9M’20
First Bank Nigeria Holdings Plc, Nigeria’s oldest commercial bank with over 126 years of operational history grew both its Gross Earnings and Post-tax profit in Q3’20 by 5.46% and 15.05% to N432.20 billion and N54.35 billion respectively compared to Q3’19 figures of N409.81 billion and N47.25 billion.
Source: NSE, GTI Research
The growth in the bank’s Gross Earnings was mainly driven by the 52.22% increase in the aggregate Non-interest income component of its earnings to N132.41 billion, while the Interest income component of its earnings and Other income component fell by 6.84% and 36.32% to N297.71 billion and 2.08 billion respectively compared to 9M’19.
Specifically, the gains in Non-interest income came from the 15.18% increase in Fee & Commission income to N87.59 billion, 452.11% increase in Net-gain on sale investment securities to N41.18 billion, and a 4.61% increase in Net-gain on financial instruments at FVTPL to N3.63 billion compared to Q3’19.
Despite the 7.18% increase in Personnel expenses to N74.17 billion and a 26.69% increase in provision for Depreciation & Amortization to N18.56 billion, the bank’s Pre-tax profit grew by 16.24% over the corresponding period of 2019 to N63.31 billion, supported by the 3.62% reduction in Other operating expenses to N117.03 billion. As such, Post-tax profit settled at N54.35 billion, representing a 15.05% growth over that of Q3’19.
In terms of balance sheet performance, the bank’s Total Assets increased by 17% to N7.24 trillion, aided mainly by the 10% increase in its loan book to N2.87 trillion. This we suspect was driven by the CBN loan-to-deposit rate policy of 65% and the 18% increase in total deposit received compared to 9M’19.
Although we noticed that the disposal of one of the group’s subsidiaries business, FBN Insurance, added N19.90 billion and 35kobo to its Earnings and EPS for 9M’20, we believe the group is on track to meet our FY 2020 Earnings, Post-tax profit, and EPS forecast of N510.81 billion, N70.25 billion and N1.96, by the end of the 2020 financial year.
Hence, we revise upward our target price for FBNH stock to N8.26 from N7.40 earlier set in Q2’20.
Snapshot of UBA Plc. Performance in 9M’20
United Bank Plc group in its 9M’20 earnings result grew its Gross Earnings by 5.94% to N453.67 billion when compared to the corresponding period of 2019, but reported a the decline of -5.51% in Post-tax profit which settled at N77.13 billion compared to N81.63 billion in Q3’19.
Source: NSE, GTI Research
The growth of the bank’s Gross Earnings was jointly driven by a 6.46% increase in Interest Income to N317.14 billion, and a 6.94% increase in Non-Interest Income to N130.73 billion, despite the 28.14% dip in Other Operating Income to N5.79 billion from N8.07 billion in 9M’19.
Nevertheless, the group’s Pre and Post-tax profit dipped by 8% and 5.51% to N90.37 billion and N77.13 billion respectively, largely as a result of the sharp increases in some key cost items. Notably, the bank’s Fee and Commission expense rose by 23.8% to N23.77 billion, Personnel expenses rose by 20.67% to N66.62 billion, Depreciation and Amortization provision rose by 23.82% to N14.37 billion, and Other operating expense increased by 17.78% N111.67 billion compared to the corresponding period of 2019.
In terms of balance sheet performance, the bank’s Total Assets increased by 26% to print at N7.06 trillion, driven largely by the 13% increase in Gross Loans to N2.45 trillion and a 51% increase in Cash balances with the CBN due to the high Cash Reserve Requirement of 27%.
On the liability side, the bank’s Total Liability rose sharply by 28% to N6.40 trillion, driven largely by the 37% increase in Total Deposit to N5.60 trillion compared to 9M’19. Hence, as a result of the double-fold increase in Total deposit compared to loans’ provision, the bank’s loan-to-deposit rate weakened to 43.7% from 52.9% in the corresponding period of 2019 to trail CBN’s regulatory loan-to-deposit benchmark of 65%.
Although the bank’s current 9M profit trailed that of 9M’19, we up our target price for the bank’s stock to N9.50 from N8.20 earlier set at the time of the release of its 6-months earnings result, owing to the sustained improvement in macro economic activities postCOVID-19 lockdown in Nigeria (the bank’s biggest market), and the expected reduction in Fee & Commission expenses in Q4’20 and in the near term, due to the recent CBN policy which lowered interest rate on Savings deposit to 10% of MPR (from 30%), effective from September 1, 2020.
Snapshot of Zenith Bank Plc. Performance in in 9M’20
Zenith Bank Plc., one of Nigeria’s prime lenders grew its Gross Earnings and Post-tax profit in 9-months 2020 by 2.84% and 5.70% to N492.31 billion and N159.32 billion respectively compared to the corresponding period of 2019.
Source: NSE, GTI Research
The growth in the bank’s Gross earnings relative to 9M’19 was mainly impacted by the 5.85% increase in Non-interest income to N148.94 billion, and a 52.92% increase in Other operating income to N24.55 billion despite a 0.97% reduction in Interest income to N318.82 billion compared to N321.94 billion realized in the corresponding period of 2019.
Although the bank recorded considerable increases in cost items such as the 5% increase in Personnel expenses to N59.92 billion, 12.23% increase in Other operating expenses to N115.24 billion, and a 25.67% increase in provision for Depreciation and Amortization to N18.73 billion, its Pre-tax profit settled at N177.28 trillion, and this represents an increase of 0.62% when compared to 9M’19.
However, due to a lower effective tax rate provision of 10% in 9M’20 compared to 14% in the corresponding period of 2019, the bank’s Post-tax profit settled at N159.31 billion, representing a growth of 5.70% over N150.72 billion reported in the corresponding period of 2019.
In terms of balance sheet performance, the bank’s Total Assets increased by 26% to print at N7.97 trillion (now the biggest among its peers), owing mainly to the 18% increase in loan provision to N2.71 trillion and a 92% increase in Cash balances with the CBN as a result of the increase in CRR to 27.5% (from 22.5% last year) and deductions for failing to meet the loan-to-deposit ratio of 65% in the last two quarters.
Based on the 9-months performance of the bank which has remained strong despite COVID-19 and other headwinds, the gradual improvement in economic activities in Nigeria (the bank’s biggest market), and the expected reduction in Fee & Commission income for Q4’20 and the near term due to the recent CBN reduction of interest rate on Savings deposit to 10% of MPR, we upgrade our target price for Zenith stock to N26.35 from N24.30.
GOtv Nigeria is making the festivities extra special for its customers with a line-up of the most entertaining local shows and nail-biting offers on its Jolli package this season.
Here are five unmissable TV shows – and series – to get you in the festive mood:
Turn Up Friday:
Don’t miss the second season of the biggest clubbing experience ‘Turn Up Friday’ proudly sponsored by Pepsi and Infinix. The show which will air on the special AM Holiday channel 29 and Africa Magic Family will feature non-stop DJ mixes of hit songs and host, hype man extraordinaire, the energy gad, Do2dtun.
Stay tuned to an unforgettable party experience from the safety and comfort of your home. Showing on Fridays from 9:30 pm on Africa Family and AM Holiday channel 29.
Owambe Saturday:
COVID-19 took away the excitement of Owambe but this festive season, we get to relive the amazing moments with the second season of the live band music show, ‘Owambe Saturday’ sponsored by Goldberg.
The show will feature top Nigerian biggest musical bands who will bring a whole unique experience and hosted by popular comedian, Tee-A. Get your dancing shoes ready for a remarkable Owambe experience from 8:30 pm on Africa Magic Family and AM Holiday channel 29.
Jollof With Me:
If you love the good quality cooking show, then this is for you. ‘Jollof With Me’ is a new cooking and lifestyle show that features popular media personality, Nancy Isime hosting celebrity friends over for a meal and some fun, light-hearted conversations.
The show allows the viewers to learn new things about the guest through the conversations as well as a cocktail game that will see Isime make a cocktail that best describes the guest and have her guest score her on her mixology skills. You can catch ‘Jollof With Me’ on Sundays at 7 pm on AM Holiday channel 29 and at 8:30 pm on Africa Magic Family.
Ojukwu S3:
This is a story of a great kingdom Umuojukwu, where strength and male children are considered a symbol of wealth and power. The men of Umuojukwu go to great lengths to win the respect of the people and the love of the maidens. Ojukwu season 3 premieres, 1st of December at 6:30 pm on ROK 2.
Cheaters:
This is a weekly reality television series that sees young couples get caught up in a spider web of love, lies & extramarital affairs, catch ‘Cheaters’ on Fridays at 8 pm on ROK GH.
Enjoy all of these and more when you subscribe to GOtv Jolli. With GOtv Jolli package you get wide access to exciting contents- movies, kiddies’ content, local drama, documentaries, news and series at N2,460. You can make use of the MyGOtv app from the comfort of your homes to upgrade or reconnect.
Also, customers can get a GOtv decoder and antennae with one month on Jolli package at N8,400 in the special festive GOtv Jolli offer.
For more information on GOtv’s content offering, follow GOtv on Twitter, Instagram and Facebook. Visit www.gotvafrica.com or download MyGOtv app which is available to iOS and Android users to upgrade, reconnect or select the Auto-Renewal option to stay connected to quality entertainment without interruptions and for other self-service options.
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