₦airaland Forum

chillykelly86:
Oga Agba, this wait go long oo. That's if it's not a "wild goose wait".

😆

chillykelly86:
Bro, believe whatever suits you. I no get strength for this back and forth.

chillykelly86:
The cushion you're referring to is in the banks books, not in CBN vault. What you're saying has no precedent, even in the banking sector. There have been banking sector consolidation and recapitalization in the past. The raised funds weren't deposited with the CBN. CBN hasn't indicated that the raised funds will be deposited with them. I will need all the experts in the world to explain the rational of such a decision and reconcile it with their stated purpose of preparing the banks to participate in big ticket transactions and for a $1 trillion economy.

Omooloriredade:
Please note that it is not necessary for a bank to issue all shares created from raised the authorised share capital. For example, the additional 31B odd shares created by Zenith will fetch the bank over N900B (if they sold them at N30 per share) far above the CBN requirement of N500B and without considering the current paid in capital of N200B +. The other banks will follow suit. This is not a GT or Zenith bank issue.

Kwibaba:
What if the money is used in risk free investments to make more gain?

Streetinvestor2:
I don't think u are right. It is capital base of 500 billion and not supposed to be idle fund to be kept just at cbn vault.

Streetinvestor2:
The os will move from 29 billion to 44 billion. And the money raised with the new os will not generate revenue and new eps why will the bank maintain the same PAT with injection of new fund into the business. Some of this analysis paralysis dey tiya me.As a business man, you look for more money with money. It is simple new os, new revenue,new PAT and new eps simple

oyaskii:
Dark S1-S3 (2017 - 2020).



Man can do what he wills but he cannot will what he wills." - Arthur Schopenhauer.

Seeing the S1-S3 of this back to back, has to be the most exhilarating, most exciting and yet the most exhausting ride i have been on in recent time, whilst seeing a piece of television.

This does a marvelous job of incorporating pieces of theoretical physics into it's storyline viz a viz, time travel, theory of relativity, bootstrap paradox and in the most simplest terms, the continuous running gag of "The Chicken and the egg, which comes first?". it takes great creative liberties to ensure some of the exaggerated part of the plot, stayed within the confines of plausible scientific theories, and doesn't distort the story telling in any way.

Excellent first and second season, but it almost fell of the wagon in the third season, and i can't lie, they almost lost me, with so many time jumps, and so many character intersecting loops, but it pays of big, as they were able to stick a plausible landing, in the end.

The writing is of the finest, is like the show runners actually travelled in time, gained all knowledge and were able to write this masterpiece as a result!, so good. Special praise for the casting as well, each past, present and future self of the same character were so similar facially that you'd, actually think, they all share the same DNA in real life, Top tier Casting!

A compelling blend of science fiction and mystery. An easy recommend if you like mind binding concepts, time travel, phycological thrillers, but I'd suggest you see all 3 seasons back to back, and if you ever get lost, there is an official website and tonnes of materials and articles, to help you find your way....

solid solid show ...an unprecedented all timer ✨ ⌛

8.5/10.

Zagee:
I think it's not all gloom and doom, but it depends on what metrics you're viewing it from.

In the voice of bulaba: "these are baby steps of pain"
"I wish there was any other way, but there's none"..

KarlTom:
GTCO AGM May 9, 2024

Closure of Register. April 29, 2024
Dividend payment. May 9, 2024

That the issued share capital of the Company be and is hereby increased from ₦14,715,589,612.00 to ₦22,215,589,612.00

https://doclib.ngxgroup.com/Financial_NewsDocs/40890_GUARANTY_TRUST_HOLDING_COMPANY_PLC-_NOTICES_OF_ANNUAL_GENERAL_MEETING_(AGM)_-__ANNUAL_GENERAL_MEETING_(AGM)_APRIL_2024.pdf

Zagee:
Good to see you're now a poet . Quite refreshing reading something less technical .

We all believe the call from CBN is to bolster the ranks and file of the banking sector even if were left with 2 banks in each category. Let everybody put their money where there mouth is. I would be waiting for the directors to take the lead anyway.

When you say "dilute current shareholders' fund", how?

BabsO2:
You are overstating Zenith retained earnings. Zenith is not double of UBA, but above by a small amount.
The correct Numbers are
Zenith N 1.18 Trillion
UBA N 0.92 Trillion
Access N 0.72 Trillion
First Bank N 0.68 Trillion *** Unaudited Full Year numbers
GT N 0.58 Trillion

emmanuelewumi:
Interim dividend of 50k

Final dividend of N2.70k


Total dividend of N3.20k

ojesymsym:
Is this signal for the present price or what is the suggested entry price based on this signal?

Zagee:
A dividend reinvestment plan has to be on the cards for directors of banks. Example 30bn can find its way back to Access from its proposed 60bn dividend, while they search for the remaining with their RI.

I think post FUGAZ-dividend bear might be put on hold for this year oo. Let them come and drive this index to the sky

emmanuelewumi:
Transcorp to pay dividend of 10k per share from EPS of 40k

onegentleguy:
Not sure anyone has asserted that there'll be a reduction in capitalization.
A reduction in share capital component would've been from the share premium A/c if a bonus issue were allowed as a mode of increasing their issued share capital.

onegentleguy:
Honestly, your concerns are valid!
But look at it this way; If the component of RE (retained earnings) is included, the proportion of equity financing needed to boost the banks share capital to appreciable levels in line with current economic realities will be insufficient.

Some class of share capital particularly RE, could imply the incorporation of certain fragments of "risky asset" that can sometimes be unsustainable. (ref: that from the recent spate of Fx revaluation gains)
RE can be an indirect beneficiary of these sought of gains.
While this takes nothing away from the RE position of shareholders (that's sacrosanct), it would in this instance, be better not to incorporate it.

Again, by excluding these components, the CBN can seek to find the right balance on the "dislocation" between Naira asset pricing and the present economic reality. DBMs are key to finding that balance!
These key points underscores the need for banks to raise enough funds. ...they really need to and like I once said, it's actually long overdue.

To give this a bit of context; compare the Fx-N differential/PPP between the last time we had a banking sector recapitalization in 2006 (during the Soludo era) and now.
...a brief;
2006: Minimum cap requirement was N25B @ N130+/$... which is approx $193M.
2024: Proposed minimum cap requirement of N500B @ N1,300+/$ (a 9x multiple from 2006)... will be less $380M.
So the actual raise in capital base will essentially be by a multiple of 2x (380/193) when infact our currency has depreciated by over 9x (i.e 1--130/1,300) within the same timeframe.

Notice how I had only used N500B, the min cap requirement for DBMs with international spread (mainly the stronger banks) for this example. Now imagine if we zoom in on the smaller banks.
This should put to bed the debate in some quarters on whether the proposed minimum capital is too big. But for anything, I think it's even a bit too small. Now imagine if the CBN allows for the incorporation of other components aside paid-up capital and share premium.
That would reduce the difference between what is required and what they have and imply less capital raise, when in reality, the banks actually need more... otherwise, the economy "might have to pay for it" sooner or later.

There's a reason no Nigerian bank is among the top 10 largest banks in the African continent. So much for the self acclaimed "African giant"!
As at 2023, the 10th on the list, South Africa's Investec Bank has a capital base of near $30B. Not sure if all the quoted banks in Nigeria can match that!
Top on the list is also South Africa's Standard Bank (group) with a capital base of $172.9B. (South Africa dominates the list with no fewer t
than 5 in the top 10)
Part of the reason for the unworthy cap base of Nigeria banks can be attributed to the many years of underpricing of banking equities. But then again, we know it's broadly a deliberate "set-up" so certain cooperate criminals in the financial services industry and their cronies can continue to thrive.
Now banking coys are surging in price. Perhaps the wide gap between RV & MV will close on their journey to real price discovery but whether that will be sustained or if it's just another flash in the pan occasioned by the planned recap exercise would be a different kettle of fish.

On a side note, I align with those who also see the recap policy as a strategic move by the CBN to continually tighten system liquidity (justified by the recent high rates in the FI market) and reduce Naira volatility by closing the gap btw capital flight and Fx inflow.
Perhaps the Naira could strengthen a bit more from current level and hopefully find a balance around it... which should help with the long awaited clarity in exchange rate and spur confidence towards Naira assets.

Overall, I think the policy spells good for the economy and by extension, the market.
Aside banking coys, some select asset names will do well!

CAVEAT: The entirety of this post is merely the view of the writer. ...no part of t should be inferred as an investment advice/guide.
Due diligence still applies as always.

It is well

onegentleguy:
Update...

Following my post above, someone brought to my attention a section of the CBN recent circular that reads in part;
"For existing banks, the capital requirement specified above shall be paid-in capital (paid-up + share premium only). Bonus issues, other reserves and additional tier 1 capital shall not be allowed or recognized for the purpose of meeting the new minimum capital requirements"

I honestly didn't notice that part.
So my assertion of the possibility of a bonus issue as a mode of increasing paid-up capital will not hold.

It's likely gonna be RI and/or PP all the way.

Cc: @ Chipa

It is well

emmanuelewumi:
That of March 2035 is an error. It is not N20, the correct price is about N73.

Try to buy it at N20 next week to see if it will fly

emmaodet:
Thanks very much Mr Osita.
If I get it right, yield to maturity only works if I decided to be reinvesting my coupon rate but if I decided to be taking my interest every year, yield to maturity will not work rather bond yield is what am getting, right? Since am not compounding my interest into reinvestment

emmanuelewumi:
That should be an error

How can the market price be N20 and the coupon is 12.5%. That will give a yield of about 60%.

Based on what I have below the current price is about N72. 20k

emmaodet:
Okay. Thanks

maishai:
So many things are wrong with Nigeria......The road that truck sits on is never meant to handle more than 30ton load at a spot, what is a truck of over 63ton doing on it.... .. ......


We need to shift our focus to upholding systemic actions instead of focusing on individuals

Agbalowomeri:
Lol how do you think people make money in financial markets? There is no vacuum. As someone is making big money, another is losing big money. If you don't come to terms with this, then .....