As part of the strategy to harmonize its global brand and identity, FCMB Group Plc has announced a change of name in the pension management arm of its business. Formerly known as Legacy Pension Managers Limited, the leading financial services holding company’s fund managers firm will now be known as FCMB Pensions Limited. In a statement released in Abuja, the Federal Capital Territory, the Group said, following the acquisition of majority shareholding in the company by FCMB Group Plc and the approval of the Board of Directors at its meeting of October 17, 2018, the change of name will positively enhance the company’s marketing and distribution activities.
Reacting to Media inquiries, the Managing Director of FCMB Pensions Limited, (formerly Legacy Pension), Mr. Misbahu Yola, notifying shareholders said, “what has happened is expected and an important alignment of our marketing message. There has been a comprehensive integration of the pensions business into FCMB Group, which is known for its culture of excellence, resilience and customer focus. It is another way of welcoming it to a group that has endured and enjoyed stability and sustainable growth in the last 41years”. FCMB Group Plc is a leading financial services group with businesses in commercial and retail banking, investment banking and wealth management, across seven subsidiaries that was founded in 1977 and became a public listed company in 2005. FCMB increased its stake in its pensions business between 2017 and 2018 from 28.3% to 91.6% currently. The acquisition is expected to engender sustainable and diversified low-risk growth momentum. The pension firm will also leverage on FCMB’s extensive distribution network, alternate channels, digital innovation, investment research, and rapidly expanding customer base.
Chairman of the Board of FCMB Pensions Limited and the Group Chief Executive of FCMB Group Plc, Mr. Ladi Balogun said, “the change of the company’s name will entrench a single brand identity across our pensions and retail banking businesses. Having distinguished ourselves in consumer finance over the years and gaining greater market share in retail payments solutions and savings accounts, a comprehensive suite of asset and wealth management propositions is a natural addition to our growing base of 5 million customers. The brand harmonization will enable us create greater marketing synergies and, along with other initiatives, accelerate the growth of our pensions business”.
First City Monument Bank (FCMB) is set to substantially increase its support to agribusiness, its value chain and growth of the Nigerian economy after signing a Memorandum of Understanding with the World Savings and Retail Banking Institute (WSBI). The memorandum outlines a framework to deepen agency banking, financial inclusion and savings culture in the informal and agribusiness sectors. As part of the terms of the partnership, in addition to the stated areas of support, WSBI will provide technical oversight supervision on a regular basis to ensure the achievement of mutually agreed goals set by both institutions. According to the memorandum, the project involves FCMB rolling out an integrated savings account – named ‘Kampe Account’ – to offer financial services under phase one of its plan to 150,000 unbanked and under-banked farmers across five states through agricultural agents operating under the bank’s agency banking proposition. The first set of states to benefit in this first phase are Kaduna, Kano, Nasarawa, Ogun and Oyo. The plan is to reach 2 million farmers across the entire nation by year 2023.
In addition to the financial support to farmers, FCMB plans to deploy its state-of-the art technology and mobile banking solutions to drive the project mainly in the rural and sub-urban farm settlements where most farmers are based. The bank will also organize capacity-building programmes for farmers aimed at facilitating their understanding of the sector and promote innovative ideas that would make the sector attractive, ultimately facilitating job creation that would in turn, impact on productivity and income. Commenting on the grant from WSBI and the initiative, FCMB’s Managing Director and Chief Executive, Mr. Adam Nuru noted the development will revolutionize agribusiness – one of the various empowerment strategies adopted by the bank that is appreciated by stakeholders within and outside Nigeria.
According to him, ”partnering with WSBI and harnessing the business model we have developed to drive it, under our Kampe Account, is built on a sustainable approach which ensures farmers can gain better access to finance and other resources needed to help them build successful businesses.” Nigerian smallholder farmers have been at a disadvantage due to several factors including land fragmentation, inadequate farming equipment, broken value chains, poor access to finance and inadequate cash flow. Over the years, they have suffered from lack of essential services such as access to good markets to create low economies of scale, challenges in the promotion of agricultural productivity, hurdles in their bid to achieve increase in food security to improve rural livelihoods for engendering systematic growth out of poverty. FCMB and WSBI are optimistic that these challenges will be addressed.
Mr. Nuru added: “Farmers who benefit from this effort can and should make the best use of the opportunity. FCMB will continue to partner with WSBI to create opportunities that would ensure the realization of the personal and business needs of customers.” WSBI Managing Director Chris De Noose concluded: “The Kampe Savings Project is yet another example of the innovative ways rural communities can flourish through mobile savings and beyond. Expanding banking access and agricultural services through the provision of mobile services to the farming community, which increasingly includes more women, can help knock out any doubt about the payoff that farming can bring.”
First City Monument Bank (FCMB) Limited is a member of FCMB Group Plc, which is one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail banking and wealth management led group, FCMB expects to continue to distinguish itself through innovation and the delivery of exceptional services.
The World Savings and Retail Banking Institute (WSBI), founded in 1924, represents the interests of 6,000 savings and retail banks globally, with total assets of $15 trillion and serves approximately 1.3 billion customers in nearly 80 countries (as of 2016). The Institute focuses on international regulatory issues that affect the savings and retail banking industry. It supports the achievement of sustainable, inclusive, balanced growth and job creation, in industrialized and less developed countries.
Lagos: April 27, 2018: FCMB Group Plc is on a stronger pedestal and will continue to provide superior performance that would add significant value to stakeholders in a sustainable manner in spite of the challenging macroeconomic and regulatory environments. The financial institution added that its subsidiaries are well positioned to deliver more cutting-edge solutions that would provide the best customer experience in their respective target markets.
The assurance was given at the 5th Annual General Meeting (AGM) of FCMB Group Plc, a holding company comprising eight entities, namely First City Monument Bank Limited, FCMB Capital Markets, CSL Stockbrokers Limited, CSL Trustees Limited, Legacy Pension Managers Limited, FCMB (UK) Limited, First City Asset Management Limited and Credit Direct Limited, held on Friday, April 27, 2018 in Lagos.
Going by its audited accounts for the year ended December 31, 2017, FCMB Group Plc recorded a gross revenue of N169.9 billion and a profit before tax (PBT) of N11.5billion, while profit after tax (PAT) was N9.4billion. In addition, deposits grew to N689.9billion as at the end of December 2017, an increase of 5%, from N657.6billion in the previous year. The Group’s capital adequacy ratio also improved to 16.9% from 16.7%, just as asset base increased to N1.19trillion, compared to N1.17trillion at the end of 2016. Non-interest income as at the end of 2017 was N32billion, while loans and advances stood at N649.8billion.
Presenting the Chairman’s report, Mr. Oladipupo Jadesimi said:
‘’We will continue to shore up the capital of the bank through profit retention in preparation for the growth opportunities that we expect as the economy recovers’’.
The new Chairman of the Board of FCMB Group Plc expressed gratitude to shareholders for their continuous support, adding that:
‘’Although we met with a number of challenges as a Group in 2017, I am pleased to say that we were able to surmount them, thanks to the commitment of all the personnel of our Group companies’’.
Also speaking at the AGM, the Group Chief Executive of FCMB Group Plc, Mr. Ladi Balogun, said:
‘’In spite of the reduction in headline numbers, Group performance is an improvement over the previous year after adjusting for the significant FX (foreign exchange) revaluation income enjoyed in 2016. The key drivers of the Group’s performance include increase in income from our non-banking activities, lower impairment charges from the bank and its subsidiaries, and improved operating efficiencies through more pervasive use of technology’’.
Mr. Balogun assured that FCMB Group Plc’s successful acquisition of majority (88.2%) stake in Legacy Pension Managers Limited will go a long way to help achieve further diversification of service offerings and consequent earnings within the FCMB Group. He said:
“ We see significant growth opportunities in the Pension management industry in Nigeria as it is yet to achieve maturity and will support and facilitate strategic organic and inorganic growth initiatives that will position Legacy in the top-tier of its industry over the next few years’’.
Concerning the performance of the flagship of the holding institution, First City Monument Bank Limited, the Commercial and Retail Banking member of FCMB Group Plc, the Group Chief Executive told the meeting it:
‘’showed signs of improvement with growth in income levels (after adjusting for exceptional FX revaluation income in 2016), reduction in impairment charges and substantial growth in our UK business and consumer finance business (CDL), after a difficult 2016. Commercial and Retail Banking remains our largest group, contributing 76.2% of profits and 98.5% of total assets’’.
He, in addition stated that the Investment Banking arm:
‘’Exhibited improved performance, from a loss position in 2016 of N84.0million after tax to a profit position of N430.3million after tax in 2017, largely driven by CSL Stockbrokers Limited. Our stockbroking business remains a top-3 player in its sector and participated as the sell-side broker on the largest ever trade on the Nigeria Stock Exchange in December 2017. CSLS Stockbrokers Limited and FCMB Capital Markets Limited jointly accounted for 4.1% of profits’’.
FCMB Capital Markets Limited, the investment banking subsidiary of FCMB Group Plc, has again demonstrated its advisory and capital raising capability by acting as financial adviser and Lead Issuing House on the successful fundraising and listing of LAPO Microfinance Bank Limited’s N3.15 billion bond on the FMDQ OTC platform. The bond, the first ever by a microfinance bank to raise money in Nigeria’s debt capital market, was priced at 17.75% and has a tenor of 5 years. The Issue was rated A- by Agusto& Co and BBB+ by GCR, which are investment grade ratings.
LAPO is a leading Microfinance Bank in Nigeria which commenced operations in 2010. Its banking activities are targeted at micro, small and medium enterprises, particularly women and micro enterprise owners who it provides loans to build their businesses. FCMB Capital Markets acted as the Lead Issuing House on the transaction. As a financial adviser, FCMB Capital Markets was responsible for, amongst others, developing a robust transaction structure that ensures flexibility for the issuer and comfort for the investors, and assisting to obtain regulatory approvals. FCMB Capital Markets is one of the few financial institutions in the country to consistently demonstrate the ability to structure transactions of this nature, having successfully executed similar complex deals previously.
LAPO Microfinance Bank stated that the proceeds will be used to deepen its business in the country, strengthen its capital base, expand its branchless banking solutions and enter new market segments, including the launch of its agency banking model and the deployment of e-business solutions, among others. Speaking during the bond listing ceremony on Tuesday, March 27, 2018 in Lagos, the Executive Director of FCMB Capital Markets Limited, Mr. Tolu Osinibi, said, ‘’we are excited and grateful at having been given the opportunity by LAPO Microfinance Bank to have played a leading role on this landmark transaction, where FCMB Capital Markets acted as financial adviser and the Lead Issuing House on the first ever bond issuance by a microfinance Institution in Nigeria’s capital markets. The success of this transaction speaks to the institutional strength of LAPO and an affirmation of this strength by institutional investors that have trusted LAPO with the funds they manage. Following from the success of its capital markets debut, we at FCMB Capital Markets expect to see LAPO become a repeat issuer, and we also anticipate that this landmark transaction will open up the capital markets to other microfinance institutions that meet the criteria”.
Also speaking, the CEO of LAPO Microfinance Bank, Dr. Godwin Ehigiamusoe, said, ‘’the gap between the demand by micro, small and medium businesses and the little supply is still huge. LAPO Microfinance Bank was only able to deliver loans valued at N135.7 billion in 2017. The capital market remains one of the most viable and affordable options for medium and long term financing for on-lending. We have therefore made a very sound decision. With excellent corporate governance, experienced management, committed staff and extensive footprints across Nigeria, LAPO Microfinance Bank is poised to deliver its core mandate of enhancing financial inclusion. We will continue to enable the under-banked and economically active poor to become active participants in the national economy.’’ FCMB Capital Markets Limited has been involved in several landmark transactions in Nigeria over the past three decades. The firm provides comprehensive advisory services, combining innovative advice and proven execution skills to domestic and multinational clients. Its services include but are not limited to financial advisory, debt and equity capital raising including initial public offerings, mergers and acquisitions, project and structured finance. It has acted as an adviser and arranger of choice to Nigeria’s leading companies and public institutions.
Also, the decision to list the bond on FMDQ is based on the fact that, as a debt-focused securities exchange, FMDQ has shown strong commitment to facilitate growth and development in the financial market through its platform for the registration, listing, quotation and valuation of bonds. The leadership of the exchange continues to run an efficient, transparent and well-regulated market, which attracts and retains both domestic and foreign investors.
Nigerian media industry by empowering its practitioners with the requisite tools and knowledge that promotes the values of professionalism and ethics in the discharge of their duties. This, according to the Bank, is as a result of the critical role the media plays in national development. FCMB gave the assurance at an interactive and capacity building forum it organized for media executives and correspondents based in Abuja and the Northern Region on February 9, 2018. The forum had a foremost financial and media expert who is also the Chief Executive Officer of RTC Advisory Services Limited and lecturer at the Lagos Business School, Mr. Opeyemi Agbaje, as guest speaker.
In his address at the event, the Group Head, Corporate Affairs of FCMB, Mr. Diran Olojo, explained that it is part of the Bank’s initiatives to further promote excellence, build capacity of media practitioners, spur ideas, deepen relationships and appreciate their contributions over the years to the success of the Bank since its establishment 34 years ago. According to him, ‘’at FCMB we recognize the strategic importance and role of the media not just in promoting our business, but in the areas of agenda setting, providing solutions and dissemination of quality and balanced communication that drives national unity and development in a sustainable manner. As an institution anchored on the culture of excellence and professionalism, we will continue to champion and execute initiatives that would assist the Nigerian media industry and journalists perform optimally as the fourth estate of the realm and key influencers. We therefore urge our media practitioners to reinvent themselves and expand the frontiers of their knowledge by adopting innovative skills that would help them meet the dynamics of the profession while upholding due diligence and ethics that conform with global best practices’’.
Mr. Olojo told the gathering that as an inclusive lender, FCMB will continue to offer and deliver cutting edge solutions that provide the best customer experience. He added that the Bank is resilient and focused on sustaining the momentum of its position as a top financial institution by supporting initiatives that would enhance the growth and achievement of the personal and business aspirations of its customers as well as the overall prosperity of Nigeria. In his paper titled, ‘’The Nigerian Economy and Financial Sector in 2018’’, the guest speaker at the media parley, Mr. Agbaje, observed that having overcome the recession in some critical areas, things were looking up for the nation’s economy going by the positive signals shown by several macroeconomic indicators, such as stable exchange rates, growing foreign reserves and inflation. The former Senior Banker however noted that, “there are a couple of areas of the economy – the non-oil economic sectors that require more passionate attention. They include the manufacturing, employment and the domestic food sectors. In addition, there are also a few fuel subsidy concerns. A lot of cleaning up is going on in the financial sector while portfolios and profitability are improving. From a number of indications, the economy should record incremental improvements in 2018, over 2017. However, the recovery is mainly powered by the oil sector. It is also imperative for our economic system to be skewed towards an investment-led growth strategy to facilitate sustainable development across all sectors’’.
Mr. Agbaje, a one-time Chairman of Convention on Business Integrity, also urged the media to brace up to the challenges of the profession by playing more active roles in not just reporting activities, but serving as a compass to society. He added that it is the responsibility of media practitioners to ensure diligence, ethics, fairness and professionalism in the discharge of their duties in order to promote peace, understanding and progress. Over the years, FCMB has organised series of initiatives to empower and build the capacity of the media industry. For instance, the Bank in 2016 hosted financial journalists to a parley under the theme ‘’Raising the Bar’’, which had the Chief Executive of Corporate Shepherds Limited, Mr. Idorenyen Enang, as guest speaker. In 2015, it organised a similar capacity building programme for journalists in the new media. Among the guest speakers was an international journalist, Mr. Inigo Gilimore, who spoke on the topic, ‘’Stimulating Responsible New Media Journalism: A Pathway to International Recognition’’.
In addition, FCMB in 2014 brought together media executives to a training programme on, “Sustainable Banking in Nigeria: The Role of the Media”. The session had theManaging Director of UK-based Sustainable Finance Advisory Limited, Carey Bohjanen, as guest speaker. First City Monument Bank (FCMB) is a member of FCMB Group Plc, which is one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments.
First City Monument Bank (FCMB) is set to motivate about 100 customers among its youth segment with cash rewards, other exciting prizes and engagements to commemorate this year’s Valentine’s celebration. In its annual campaign tagged, “Banking on Love”, the lender said many young and even some older people view the February 14th Valentine Day celebration as solely defined by the day’s activities with their chosen partners and loved ones.
Today, First City Monument Bank (FCMB) Limited thinks differently. The Bank, speaking through its Head of Corporate Affairs, Mr. Diran Olojo, enjoined the youth to see love as a virtue that is all encompassing. FCMB said love is more about care, giving, commitment, passion, trust and responsibility for the comfort, protection, security and happiness of the next person with an open mind and genuiness of purpose. He stated that the position further goes to define some of the activities engaged in by the Bank which pays close attention to many segments of the Nigerian society. According to Mr. Olojo, “at FCMB, it is not all about business at all times. There is a strong propelling philosophy which also drives us to be concerned about the best way to positively affect our immediate environment. How best to reach and impact the less-privileged. We always think about the best strategies to adopt to help the needy people in our society. We care about the orphans, the widows, the aged people, our youths and the internally displaced persons (IDPs) who have been affected by insurgency, man-made and other natural disasters. We believe one of the positive outcomes of sound corporate governance, is impacting positively on lives and communities in Nigeria. Indeed, as businesses act responsively and boost their performance indices, they should also devote a part of their income to giving back to the society by engaging in various life-changing activities. At FCMB, we have been guided’’. This year’s Banking on Love campaign will include cash awards and some giveaways to many youth customers during and after Valentine celebration, a global event that climaxes on February 14th. N10,000 each is being given to 25 young people every week, throughout February, the month of Love. To be eligible to win, customers are required to carry out transactions with their cards that add-up to at least N5,000 in a week. Winners will be announced weekly.
The Flexx account is FCMB’s youth-centric banking product targeted at young people who are actively seeking platforms that allow them express their uniqueness, while building skills for financial success. This is summarized in the description of Flexx as, “An app, a card, an account”, which gives account holders the freedom to bank on the go, using the Flexx Mobile App. FCMB’s Executive Director, Retail Banking, Mr. Olu Akanmu while responding to an inquiry said, “Flexx is more than an account. It is a lifestyle platform that offers the customer experience centred around Fun, Future and Banking. FCMB serves this platform through digital channels that fit into the lifestyle of the Flexx target market which include the Mobile App, a Microsite and an Online Account Opening platform, all of which enable a potential Flexx customer open an account with FCMB without having to visit a branch″.
In a bid to define love beyond the euphoria of the moment, FCMB said the Bank is aware of the challenges faced by people and the society. It was for this reason that it consciously chose to bring hope and smiles to the people and communities. The Bank extended its hand of benevolence to internally displaced women in Maiduguri, Bornu State by providing training and financial support to 100 of them to start any small-scale businesses of their choice. The financial institution also organised skill acquisition and other capacity building programmes for the beneficiaries. FCMB’s intervention in economic empowerment is seen in its partnership with Wecyclers, an award winning company involved in recycling, on a waste-to-wealth franchise scheme. Through this collaboration, the Bank is helping to tackle the challenge of waste management by deploying an innovative recycling project aimed at job and wealth creation, while promoting health and sanitation. To further deepen the project, FCMB has put in place a monthly reward scheme for top recyclers. The first batch of winners emerged in May, 2017 and have been presented with their prizes. FCMB’s economic empowerment CSR activities have also impacted on youths. The Bank has instituted a capacity building programme for youths, tagged “Empowered for the Future”. The initiative focuses on peer-to-peer economic empowerment, sexual and reproductive health promotion for in- and out-of-school adolescents. It commenced with 50 youths who were trained on various aspects of human development. The beneficiaries are expected to reach out to 750 peers over a one-year period, with focus on financial literacy, skill acquisition, sexual and reproductive health, while undergoing vocational training, job shadowing and knowledge building programmes. Another of FCMB’s expression of real love is its Priceless Gift of Sight programme. The Bank has been sponsoring this project since 2009 in partnership with the Tulsi Chanrai Foundation (TCF), a Nigerian-Indian Non-Governmental Organisation (NGO). The programme involves eye screening tests, full ophthalmic medical examination, eye surgeries, provision of free medication, eye glasses and counselling for those suffering from cataract, an eye defect that could lead to blindness if not promptly treated. Over 100,000 people across Nigeria have so far benefited from it since the Bank took up the sponsorship 9 years ago. In 2017, FCMB also sponsored 500 eye surgeries in Kebbi, Cross Rivers and Imo states, while more than a thousand people underwent the screening for cataract during the programme. The 2018 programme nationwide is currently being planned. The Bank has previously carried out the programme in Katsina, Adamawa and Ogun states. To FCMB, this is love in action and not just words.
FCAM’s Legacy Short Maturity (NGN) Fund Holds AGM … Fund Returns 12.99% in Fund Year-ended 30 June, 2017
Unitholders of Legacy Short Maturity (NGN) Fund, a mutual fund managed by First City Asset Management Limited (FCAM), converged in Lagos on January 8, 2018 for the Annual General Meeting (AGM) of the Fund. FCAM is the wealth and investment management arm of FCMB Group Plc, one of Nigeria’s leading financial institutions. At the meeting, the unitholders approved the financial statements of the Fund for the year ended June 30, 2017, while also applauding it for generating returns of 12.99% despite the challenging operating environment. They also unanimously endorsed the payment of a dividend of 11kobo per unit as well as the name change of the Fund from Legacy Short Maturity (NGN) Fund to Legacy Debt Fund, among other resolutions passed at the meeting.
In the audited results for the year ended June 30, 2017, Legacy Short Maturity (NGN) Fund recorded a profit after tax of N100.487million, as against N50.343 million realised in the previous Fund Year. In addition, total revenue generated by the Fund rose from N63.422 million, to N119.005 million.
Speaking on the performance of the Legacy Short Maturity (NGN) Fund at the AGM, the Chief Executive Officer of First City Asset Management Limited, FCAM), Mr. James Ilori, stated that although the return of 12.99% was lower than the 16.82% return of the Fund’s benchmark, the Fund carried significantly lower interest rate risk relative to its benchmark. Also, the Fund’s risk-rating was upgraded by Agusto & Co. Fund performance is expected to improve significantly in the new Fund year.
The Legacy Short Maturity (NGN) Fund seeks to preserve capital and generate consistent income for unit holders. The Fund pursues its investment objectives by investing in high quality, Naira-denominated Money Market Instruments and short maturity bonds rated by a Securities & Exchange Commission (SEC) registered credit rating agency. Trading and Settlement is done on a best execution basis. In addition, the Fund is highly liquid and well diversified. Proceeds to investors, at the point of exiting the Fund, are tax free the Legacy Short Maturity (NGN) Fund rating was, in December 2017, upgraded by two notches, from BBB+(f) to A(f), by Agusto & Co, the foremost pan-African rating agency. The higher rating of A(f) indicates that Legacy Short Maturity (NGN) Fund has a low to moderate exposure to downside risk (impairment to the net asset value) in the medium term. According to Agusto & Co, the new rating was on account of the Fund’s good quality assets, adequate liquidity management strategies, conservative approach to credit risk & enhanced risk management, and zero currency risk exposure.
In addition, the rating agency stated that interest rate risk in the Fund was moderate in the short term, and that the Fund has a high quality portfolio management team with over 18 years’ experience across various financial fields. FCAM, a subsidiary of FCMB Group Plc, provides services that cut-across collective investment schemes such as mutual funds, which are predominantly for retail investors, as well as specialised discretionary portfolio management, for ultra-high and high networth individuals and institutional investors. The company has consistently focused on delivering superior wealth and investment management services, aimed at meeting investors’ desire for safety of investments and good returns. In October 2017, Legacy Short Maturity (NGN) Fund was nominated for “Best Fixed Income Fund” and Legacy Equity Fund won the award of ‘’Best Managed Fund in Equity’’, at the BusinessDay Banking Awards. FCAM’s market counterparties include CSL Stockbrokers Limited and First City Monument Bank Limited.
First City Monument Bank (FCMB) has tasked youths in Nigeria to key into the financial system by adopting savings culture and other financial management techniques that would help secure their future. The Bank made the clarion call at an outreach programme it organised for thousands of students in thirty secondary schools spread across the six geo-political zones in Nigeria to commemorate this year’s World Savings Day on October 31, 2017 The highly exciting and educative mentoring sessions, which are in line with FCMB’s Corporate Social Responsibility (CSR) and sustainability philosophy, were anchored by top executives of the Bank at the thirty schools. This is the second consecutive year the lender is carrying out this exercise in partnership with the Bankers’ Committee of the Central Bank of Nigeria (CBN), under the theme, ‘’Learn, Earn, Save’’. Last year, FCMB executed a similar programme in twelve schools nationwide.
The World Savings Day is aimed at teachingand reinforcing the key fundamentals of financial literacy, savings culture as well as entrepreneurial skills in theyouth. This is part of the Bank’s strategic contributions towards securing the future of young Nigerians by encouraging theadoption of savings and other financial management techniques at an early age to enhance their general well-being. Speaking during the mentoring session for students of Holy Child Girls College, Calabar in Cross River State, FCMB’s Manager, Calabar Road branch, Mr. Charles Emefiele, said that imbibing financial principles at an early age will go a long way to help students and young ones manage their resources effectively, appreciate how money works and how it can be channeled to productive ventures now and in the future. ‘’When you regularly put aside a portion of the money you are given or earn in a safe place that pays interest, this is what is known as savings. Saving money from early age guarantees financial independence, prudent management, planning and overall success of individuals and society’’, he explained. Mr. Emefiele further told the students that, ‘’the money saved should be placed in a financial institution for safekeeping and to earn interest on your money. This reduces the risk of spending, theft and gives your money the chance to grow’’.
Also mentoring the students of Government Science School in Lafia, Nasarawa State, the Manager, Lafia branch of FCMB, Mr. Ibrahim Ogah, pointed out that,‘’by being financially literate, students and indeed youths will be able to build capacity for future business endeavours, thereby securing their future and guaranteeing freedom from poverty’’. He advised the students to pass the message to their friends, parents and other family members. Commenting on the significance of FCMB’s involvement in the annual World Savings Day, the Group Head, Corporate Affairs of the Bank, Mr. Diran Olojo, said that it is an extension of its commitment to drive and deepen prudent and effective management of resources among the populace, especially youths. ‘’We want our young ones, who are the hope and future drivers of Nigeria, to understand and appreciate the importance of prudent management of resources and other initiatives that have the capacity to positively impact lives and by extension, the society. This is to ensure their financial security and independence in future’’, he added. Mr. Olojo assured that FCMB will sustain its support to the promotion of financial literacy and inclusion because, ‘’this is one of the most effective ways to build and empower a new community of Nigerians and a robust country through the very important initiative’’.
Over the years, FCMB has been actively involved in the efforts towards enhancing financial literacy and inclusion among various segments of the population by organising mentoring and capacity building programmes. The Bank has also raised the bar in this direction by donating various items to schools to boost teaching and learning. For instance, in 2016, the FCMB adopted Government Girls Secondary School, Akure in Ondo state and donated a power generating set to the school as part of the Financial Literacy Day. In 2015, the Bank organised a mentoring session for students of Girls College, Dala in Kano state. It used the opportunity of the programme to renovate and equip the school hall as part of measures to provide a conducive environment for the students. First City Monument Bank (FCMB) Limited is a member of FCMB Group Plc, which is one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail and commercial banking-led group, FCMB expects to continue to distinguish itself by delivering exceptional services, while enhancing the growth and achievement of the personal and business aspirations of its customers.
The number of awards in the kitty of FCMB Group Plc has received another boost. This is because, two of its subsidiaries, First City Monument Bank (FCMB) and First City Asset Management Limited (FCAM), have emerged as the, ‘’Most Improved Retail Bank in Nigeria’’ and ‘’Best Managed Fund in Equity’’, respectively, at this year’s BusinessDay Banking Awards held on October 14, 2017 in Lagos. In 2015, FCMB won the “Most Customer Friendly Bank” award at the BusinessDay Banking Awards. The latest development is a confirmation of the giant strides being recorded by FCMB Group and its subsidiaries in the Nigerian financial services industry. It is also a testimony that the various initiatives being driven by the subsidiaries in the areas of service, products offering, operations and value addition to enhance customer experience are yielding the desired results and appreciated. While First City Monument Bank (FCMB) is the retail, commercial and corporate banking arm of the Group, First City Asset Management Limited (FCAM) is the investment management services arm of CSL Stockbrokers Limited, another subsidiary of the Group.
The BusinessDay Banking Awards, organized annually by BusinessDay (Nigeria’s premier financial newspaper), identify, acknowledge and commend those who have contributed tremendously to the nation’s banking sector and the growth of the nation’s economy in each financial year. The Awards Committee employed qualitative and quantitative criteria in the process of identifying and selecting winners. The parameters used for the conferment of the awards on FCMB and FCAM include loan growth, loan/deposit ratio, capacity adequacy ratio, analysis of distribution of loans across sectors, return on average assets, performances across business segments, timely release of financial results and presence of investor/analyst’s presentation on corporate website. According to the organizers, FCMB was adjudged as the, ‘’Most Improved Retail Bank in Nigeria’’ as a result of its remarkable transformation from an investment bank to become a leader in the retail banking segment in less than 10 years. For instance, the Bank has increased the number of its branches nationwide to over 200, while its alternate channels provide prompt, secure and convenient banking services, among other benefits to millions of customers on the conferment of the award as ‘’Best Managed Fund in Equity’’ on FCAM, the committee said that the company’s flagship product, Legacy Equity Fund, had witnessed consistent growth in unit price and net asset value to become the best performing, predominantly equity-based mutual fund in Nigeria.
Speaking on the award, the Executive Director, Retail Banking of FCMB, Mr. Olu Akanmu, said, “we are proud to have come tops as the Most Improved Retail Bank in Nigeria at the 2017 edition of BusinessDay Banking Awards. This goes a long way to confirm our unequaled commitment in offering exceptional quality service to our teeming customers and the Nigerian public. Our retail banking capability enables us to offer excellent and value-added services to millions of Nigerians directly and indirectly, whilst also supporting their personal and business aspirations. We dedicate this award to our customers who have made FCMB what it is today’’.
Mr. Akanmu assured that, ‘’we will continue to expand our reach and upscale the simple, helpful and reliable banking services we are known for at all our touch points, which are driven by excellent technology and inclusive lending practices’’. On his part, the Chief Executive Officer of FCAM, Mr. James Ilori, said that, ‘’we dedicate this award to investors in Legacy Equity Fund, and thank them for believing in our ability to generate superior return for unit holders, safely. Legacy Equity Fund is a well-diversified portfolio of high quality stocks, with relatively lower volatility. The Fund seeks to achieve capital growth and generate stable income over the long-term, and is a good hedge against inflation’’.
He added that, “at FCAM, our team of skilful and internationally experienced investment professionals understand that products should always be matched with the investment objectives of investors. Our products, including Legacy Short Maturity (NGN) Fund, are designed with the investor in mind. We will continue to act in the best interest of our clients’’. FCMB has transformed itself over the last 10 years from Nigeria’s leading investment bank to a leading retail bank with a valuable franchise in this space. It has raised the bar in products and service offerings which resonates with the needs and lifestyles of the various socio-economic and demographic segments in Nigeria. The Bank acquires an average of 55,000 new customers and disburses 20,000 new loans monthly.
First City Asset Management Limited (FCAM), as an investment management company, provides services that cut-across collective investment schemes such as mutual funds and investment plans, which are predominantly for retail investors, as well as specialised discretionary portfolio management, for high networth individuals and institutional investors, within and outside Nigeria. FCAM has consistently focused on delivering superior wealth and investment management services, aimed at meeting investors’ desire for safety of investment and good return.
Real estate is one of the world’s oldest investment activities. Humans have always required shelter, from the days of living in caves to the modern day real estate era of duplexes and sky scrapers. Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. It has proven quite a profitable investment outlet for many investors, particularly over the medium to long term. However, contrary to the popular ‘safe as houses’ phrase, there are risks. It is important to note that real estate is an asset class with limited liquidity relative to other investment asset classes. Real estate is also capital intensive and highly cash flow dependent. If these three risk areas are not well managed, it is possible for an investor to fall into negative cash flow, and if this persists, the investor may be forced to sell the property at a loss or even go into insolvency. This is probably one of the primary causes of investment failure.
Investors profit from real estate in at least four different ways. Real estate appreciation occurs when the property becomes more valuable than when it was purchased due to a change in the real estate market, greater demand for the property, the land around the property becoming scarcer or busier or upgrades are put into your real estate investment to make it more attractive to potential buyers or leasing parties. Cash flow income arises from the rental streams that emanate from property such as an apartment building, office blocks, rental houses, etc. Real estate-related income is that generated by ‘specialists’ in the real estate industry such as real estate brokers, who make money through commissions from buying and selling property, or real estate management companies, who get to keep a percentage of rents in exchange for running the day-to-day operations of a property. Ancillary real estate income refers to that arising from mini-businesses within a bigger real estate investment that allows the investor to make money from a semi-captive collection of customers. A good example of this is vending machines within an office development.
There are different categories of real estate investment. Residential real estate investments are houses, town houses, apartment buildings, housing estates and vacation homes where an investor can expect rental income as well as exposure capital appreciation. Commercial real estate investments consist mostly of office buildings. This is quite an interesting area for investors as rental income from this type of investment is typically governed by long leases and offers a steady income. However, commercial real estate is often highly capital intensive. Industrial real estate consists of warehouses, petrol stations, factory-office multi-use property, factory–warehouse multi-use property, heavy manufacturing buildings, industrial parks, light manufacturing buildings and research and development parks. Retail real estate investments consist of shopping malls, strip malls and other retail storefronts. These are becoming ever more popular in Nigeria as the middle class expands and they offer investors attractive investment yields. Real Estate Investment Trusts, or REITs, trade like stocks and own a portfolio of underlying real estate or real estate mortgages. They work like a mutual fund, whereby the issuer of the REIT is a professional real estate investment company. They pool funds together from different investors and issue units in exchange. The funds are then used to create a property portfolio, which could consist of both residential and commercial property. A REIT must pay out 90% of its profits to investors to remain a trust.
As with any other investment decision, there are always key things to consider and look out for. They may make the difference between making and losing money. It is not an exhaustive list, but some of the key things are listed below:
(a) Location: This remains one of the foremost success factors in siting a real estate development. Certain locations have a better ability to ensure that real estate developments continue to attract patronage all through the business cycle and result in a greater ability to generate returns from the investment made. The location of a property investment is, of course, highly dependent upon the end use to which the property investment is to be deployed. The investment profile of a property located in a well-established location will be quite different from the same property in a run-down area.
(b) Infrastructural Development: Knowledge of new projects coming up in a neighbourhood such as access roads, a shopping mall or a rail line can significantly improve the value of the property. New roads and rail lines mean improved access to a certain area, thereby making the area more attractive to prospective tenants and investors. It can, however, also reduce the value of the property if, for instance, the new rail line runs close to the house, with the noise from the trains constituting a nuisance. The same applies to shopping malls or airports as they will bring with them new jobs and naturally employees looking for accommodation. Imagine the increase in value to an area previously without power supply and a contract is awarded to install and connect power lines to that area.
(c) Inflation Outlook: Inflation affects the value of money and investments. For an investment to give real returns it has to be above inflation. So a property returning 5% per annum in an economy where inflation is 10% cannot be said to be really profitable.
(d) Interest Rates: Most real estate investments are financed with debt. This occurs especially when leveraging occurs. In leveraging you pay for a property by contributing an amount as capital and funding the rest by a mortgage loan. In the event that interest rates rise, it means that your cost of funding will rise, thereby reducing your profit margin. It also makes it harder to sell the property as the potential buyer has to consider the elevated interest rate that he has to pay, thereby making the purchase less attractive. It might lead to the potential buyer asking for a discount to cover elevated interest rates.
(e) Population Growth: Growth in population means an increased need for housing. Not just for housing but also for service providers for the growing population. These service providers (bank branches, new stores etc.…) would have to acquire or rent property to operate from. So, population growth is an important factor in real estate investment. Also, migration to a particular area by the population would be another factor. In Lagos, Nigeria, the growing middle class seems to prefer living in the Lekki area, which has led to an increase in house prices and rent and also to the proliferation of shopping malls and supermarkets.
(f) Projected Economic Growth/Wellbeing: A growing economy with a growing middle and upper class means more demand for everything, from clothing to food and to property. A growing economy also means more investible income, with people looking to buy their first house or for other real estate investments. To put it in perspective, an economy in recession means job losses or cost cutting by firms. This means fewer people with investible income to acquire real estate. It also means that people who have lost their jobs will start to default on their mortgage or rent payments. This will eventually lead to forced sales of property, bearing in mind that forced sales are normally at a discount. The final outcome will be decline in real estate value.
(g) Government Policies: Policy shifts may affect the real estate market. It could be in terms of increased or reduced taxes or an effect of capital gains on property investments. The recent change in capital gains tax by the Chinese authorities led to a scramble by investors to sell off their property holdings to avoid paying the 20% capital gains tax. Other policies such as increase in lending rate for second or third home buyers also can affect the market.
Nigeria is a country of over 160 million people with a housing deficit of over 16 million housing units. Ordinarily, this would constitute a huge opportunity for investors as demand clearly outstrips supply. However, we have not seen this gap being met due to the high cost of real estate in Nigeria and the inability of the masses needing property to afford it. Urban migration has led to demand for housing units in cities such as Ibadan, Port Harcourt, Warri, Enugu, Benin, Lagos and Abuja, with the housing deficit still unmet. Factors such as the high cost of land, elevated interest and mortgage rates, and poor infrastructure continue to adversely impact upon the availability of affordable, quality housing stock within the country.
For portfolio investors, analysis has repeatedly shown that real estate enhances diversification and acts as an inflation hedge. A low correlation to both stock and bond returns suggests that real estate investments have the potential to lower overall portfolio risk while the ability to increase rental rates in times of high inflation affords the opportunity to maintain the real value of a portfolio. Real estate should therefore be a constituent of most investors’ portfolios. Whilst this may be difficult for the average investor to achieve on account of a relatively high investment outlay, professional investment managers are well positioned to package that exposure to investors through mutual funds and real estate investment trusts.