₦airaland Forum

Mpeace:
I doubt if this affects all banks. It appears to be limited to banks with capital adequacy issues/ enjoying some form of interventions from CBN. But I no too sure oh.

I dont think you're out of line..
.

leo1234:
50M is still massive.

Most people here are still trading with less than 10M.

Una get money for here o . , ,

fashionnisir:
Ebi like say that discusssion of holding back dividend as per aqcuiring of FBHN done spread reach general banking sector

The chief Monkey Hunter will use this as excuse not to pay interim dividend.

On the other hand; Zenith,UBA, Access,GTB must definitely pay interim dividend.

GeneralDae:
GT, Zenith, and UBA are very strong banks fundamentally. I doubt they have these issues.

Sunrisepebble:
Zenith, not sure. It could be the reason why they didn’t pay out a lot for FY24

Zenith had the highest loan losses but it forcasted them and made provisions.

https://nairametrics.com/2025/06/02/bad-loans-nigerian-listed-banks-incur-n3-77-trillion-in-loan-losses-since-2023-see-top-losers/

Sunrisepebble:
What I’m hearing is that GT for sure are clear.

Theirs seems moderate, about 14% not up to the CBN threshold of 20%

EDUECO:
Zenith and Access Banks can never be in this category because they have met the latest capital adequacy requirement for international and national banking in Nigeria.

This might give those two a lifeline. I guess this is why some banks have not made the move yet for their 2nd tranche of capitalisation..
We are already in Q2.
deadline is February!!

EDUECO:
Not for banks like UBA, Zenith,Access and GTBank.

Each of the four banks listed above has a shareholder's funds exceeding 2.4 Trillion Naira!

UBA, Zenith Bank and Access Bank all have shareholder's funds that is doubled their market capitalization. The shareholder's funds of each of these 3 banks is close to 4 Trillion Naira.

True. But some may default in that Single Obligor Limit to a particular lender.. I think this is where the CBN hammer is.
Don't lend so much as 20% of SHF to a single person"
It looks more like winch hunting to me if the banks can cover the risk..

leo1234:
Thanks 👍


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leo1234:
Thanks 👍


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Thanks 👍 .

Bigdeal01:
I like the fact that nobody is mentioning Caverton and MTN, Neimeth etc. They are just slowly inching up. No noise. No debate. No emotions.
Looks like we attach too much emotion to certain stocks. Oando, Ellah Lakes this and that. If you are buying, buy. If are selling, sell. Market will always do its thing.

The funny part is that both Oando and Ella lakes are both companies with huge negative shareholder's funds.

This was GT’s only forbearance
https://nairametrics.com/2024/09/14/gtco-to-write-off-aiteo-loan-and-switch-to-aggressive-recovery-plan/

chimex38:
This might give those two a lifeline. I guess this is why some banks have not made the move yet for their 2nd tranche of capitalisation..
We are already in Q2.
deadline is February!!


True. But some may default in that Single Obligor Limit to a particular lender.. I think this is where the CBN hammer is.
Don't lend so much as 20% of SHF to a single person"
It looks more like winch hunting to me if the banks can cover the risk..

Yes,it will definitely give Zenith and Access a great advantage.

Sunrisepebble:
This was GT’s only forbearance
https://nairametrics.com/2024/09/14/gtco-to-write-off-aiteo-loan-and-switch-to-aggressive-recovery-plan/

OK..noted .

CBN Just dey like shalaye too much.. nothing much go do these top banks long term..
na to buy their dips if ee happen.

chimex38:
CBN Just dey like shalaye too much.. nothing much go do these top banks long term..
na to buy their dips if ee happen.

I tell you. If prices come down to my dream entries, I will load more.

GeneralDae:
Because most of this surplus is from crude oil and associated gases. We do not receive all the oil we export rather at least 50% are repatriated immediately. All of it still shows in the surplus but it means nada.

In this era of easy access to information, It took me just a minute to ask Gemini AI a few questions, and it extracted this information. I hope you take the time to read it carefully and understand why your 50% sharing idea doesn't work.

Here's a breakdown of how oil revenue is typically shared in Nigeria:

1. Types of Agreements:
* Joint Ventures (JVs): Historically, these have been the dominant mode of operation. In JVs, the Nigerian National Petroleum Company Limited (NNPCL) (formerly NNPC) holds a majority equity stake (often around 55% or 60%) in the venture with International Oil Companies (IOCs). In this arrangement, both parties contribute to the costs of exploration, development, and production in proportion to their equity share, and then they share the profits accordingly. However, the government's consistent failure to meet its "cash call" obligations (its share of the funding) has led to challenges.
* Production Sharing Contracts (PSCs): These are common in offshore and deepwater operations. In PSCs, the IOC (the contractor) typically bears the initial exploration and development costs and risks. Once oil is discovered and produced, the revenue is shared in a specific order:
* Cost Oil: A portion of the crude oil produced is allocated to the IOC to recover its capital and operating expenditures.
* Royalty: The Nigerian government receives a royalty on the crude oil produced. This is a direct payment for the extraction of the natural resource. The rates for royalties have been adjusted over time, particularly with the Deep Offshore and Inland Basin Production Sharing Contracts Act amendments. For instance, in deep offshore areas, it's now often 10%.
* Tax Oil: A portion is also set aside for the Petroleum Profits Tax (PPT) which is a tax on the profits of the oil companies.
* Profit Oil: The remaining oil after cost recovery, royalties, and tax oil is "profit oil," which is then split between the government (NNPCL) and the IOC in agreed-upon proportions. These proportions can be influenced by factors like oil prices and production rates.


2. What the Percentages Refer To:
When someone mentions percentages, they could be referring to:
* Equity Share in JVs: If they are talking about Joint Ventures, Nigeria's NNPCL typically holds a majority stake (e.g., 60% or 55%), meaning they are entitled to that percentage of the crude oil and are also responsible for a proportional share of the costs.
* Profit Oil Split in PSCs: In PSCs, the 60/40 or similar split would likely refer to the "profit oil" remaining after costs, royalties, and taxes have been accounted for. The exact split for profit oil can vary based on the specific contract and other clauses (like "R-factor" which relates to the ratio of cumulative revenues to cumulative costs).
* Overall Government Take: This encompasses all the ways the government derives revenue from oil, including royalties, petroleum profits tax, NNPCL's share of profit oil (in PSCs) or equity crude (in JVs), and other bonuses.


3. The 40%/60% Scenario:
It's plausible that in some specific Production Sharing Contracts, after cost recovery, royalties, and other deductions, the remaining "profit oil" is split with 60% going to Nigeria and 40% going to the IOC. However, it's crucial to understand that this 60% for Nigeria is not of the total revenue generated by the oil company from sales, but rather a share of the profit oil after various deductions.
Important Considerations:
* Petroleum Industry Act (PIA): The recent Petroleum Industry Act (PIA) aims to reform Nigeria's oil and gas sector, including its fiscal framework. It introduces new royalty rates, taxes, and contractual terms designed to increase government revenue and attract investment. This means the specific percentages and terms of revenue sharing are subject to the provisions of the PIA for new and renegotiated contracts.
* Cost Recovery: A significant point of contention has often been the high costs declared by IOCs, which directly impact the "profit oil" available for sharing. Inflated costs can reduce the government's share of profits.
* Royalties and Taxes: The Nigerian government also earns substantial revenue through royalties and various taxes on oil company profits, which are independent of the direct profit split in some agreements.

In summary, while a 60% to Nigeria and 40% to IOCs split might apply to the "profit oil" in some agreements, it's not a direct split of the total revenue generated by the companies. The actual percentage of revenue that comes to Nigeria is derived from a combination of equity stakes, royalties, taxes, and profit-sharing arrangements, which are complex and subject to specific contract terms and the evolving legal framework.

EDUECO:
The chief Monkey Hunter will use this as excuse not to pay interim dividend.

On the other hand; Zenith,UBA, Access,GTB must definitely pay interim dividend.

The second paragraph is for sure
especially zenith

RodgersAkpafu:
The second paragraph is for sure
especially zenith

Zenith Bank is their leader !

The current shareholder's funds is 4.4 Trillion Naira.

At the rate of N5 per share,this shareholder's funds can pay dividend for the next 20 years even if Zenith Bank never declare any profit.

ositadima1:
In this era of easy access to information, It took me just a minute to ask Gemini AI a few questions, and it extracted this information. I hope you take the time to read it carefully and understand why your 50% sharing idea doesn't work.

Here's a breakdown of how oil revenue is typically shared in Nigeria:

1. Types of Agreements:
* Joint Ventures (JVs): Historically, these have been the dominant mode of operation. In JVs, the Nigerian National Petroleum Company Limited (NNPCL) (formerly NNPC) holds a majority equity stake (often around 55% or 60%) in the venture with International Oil Companies (IOCs). In this arrangement, both parties contribute to the costs of exploration, development, and production in proportion to their equity share, and then they share the profits accordingly. However, the government's consistent failure to meet its "cash call" obligations (its share of the funding) has led to challenges.
* Production Sharing Contracts (PSCs): These are common in offshore and deepwater operations. In PSCs, the IOC (the contractor) typically bears the initial exploration and development costs and risks. Once oil is discovered and produced, the revenue is shared in a specific order:
* Cost Oil: A portion of the crude oil produced is allocated to the IOC to recover its capital and operating expenditures.
* Royalty: The Nigerian government receives a royalty on the crude oil produced. This is a direct payment for the extraction of the natural resource. The rates for royalties have been adjusted over time, particularly with the Deep Offshore and Inland Basin Production Sharing Contracts Act amendments. For instance, in deep offshore areas, it's now often 10%.
* Tax Oil: A portion is also set aside for the Petroleum Profits Tax (PPT) which is a tax on the profits of the oil companies.
* Profit Oil: The remaining oil after cost recovery, royalties, and tax oil is "profit oil," which is then split between the government (NNPCL) and the IOC in agreed-upon proportions. These proportions can be influenced by factors like oil prices and production rates.


2. What the Percentages Refer To:
When someone mentions percentages, they could be referring to:
* Equity Share in JVs: If they are talking about Joint Ventures, Nigeria's NNPCL typically holds a majority stake (e.g., 60% or 55%), meaning they are entitled to that percentage of the crude oil and are also responsible for a proportional share of the costs.
* Profit Oil Split in PSCs: In PSCs, the 60/40 or similar split would likely refer to the "profit oil" remaining after costs, royalties, and taxes have been accounted for. The exact split for profit oil can vary based on the specific contract and other clauses (like "R-factor" which relates to the ratio of cumulative revenues to cumulative costs).
* Overall Government Take: This encompasses all the ways the government derives revenue from oil, including royalties, petroleum profits tax, NNPCL's share of profit oil (in PSCs) or equity crude (in JVs), and other bonuses.


3. The 40%/60% Scenario:
It's plausible that in some specific Production Sharing Contracts, after cost recovery, royalties, and other deductions, the remaining "profit oil" is split with 60% going to Nigeria and 40% going to the IOC. However, it's crucial to understand that this 60% for Nigeria is not of the total revenue generated by the oil company from sales, but rather a share of the profit oil after various deductions.
Important Considerations:
* Petroleum Industry Act (PIA): The recent Petroleum Industry Act (PIA) aims to reform Nigeria's oil and gas sector, including its fiscal framework. It introduces new royalty rates, taxes, and contractual terms designed to increase government revenue and attract investment. This means the specific percentages and terms of revenue sharing are subject to the provisions of the PIA for new and renegotiated contracts.
* Cost Recovery: A significant point of contention has often been the high costs declared by IOCs, which directly impact the "profit oil" available for sharing. Inflated costs can reduce the government's share of profits.
* Royalties and Taxes: The Nigerian government also earns substantial revenue through royalties and various taxes on oil company profits, which are independent of the direct profit split in some agreements.

In summary, while a 60% to Nigeria and 40% to IOCs split might apply to the "profit oil" in some agreements, it's not a direct split of the total revenue generated by the companies. The actual percentage of revenue that comes to Nigeria is derived from a combination of equity stakes, royalties, taxes, and profit-sharing arrangements, which are complex and subject to specific contract terms and the evolving legal framework.

I really don’t get what your point is. I gave a rough estimate of 50% across both onshore and offshore operations. You can see from your article that there’s nothing fixed and it varies. So when I say we gain only about 50% of the exports, how does your article about our JV agreements disprove this?

You should also know that only in 2025 did both NNPC and indigenous companies increase their share.

But let’s assume we get a remittance of 60% currently in total, how does that give us a surplus that can help the foreign exchange considering that we only had a 5.17 trillion naira trade surplus with the total included?

Total exports ( including about 40% repatriated): approx 20 trillion naira

Crude oil exports : approx 12.5 trillion naira

Trade balance : approx 5 trillion naira

The trade surplus amount question is:
Is it inclusive of the sale of crude from the JV(100%) or just the NNPC portion(55-60%)?

I tend to incline towards sales of crude in the JV.

Also by trade surplus, it kind of indicates revenue difference; difference between Export and Import in its entirety. Thus, this makes it inclusive of any royalty, PPT, Cost oil, etc for the Crude Oil section of the trade surplus.
So GeneralDae might not be out of place if he says about 50% will be repatriated by the IOCs in those ventures unless the trades export and import value reported were exclusive of the IOCs share and other foreign joint partnership in other sectors from the onset.


Though indigenous firms are now taken over the Onshore part, hence probably about 35%- 45% repatriation by the IOCs.

EDUECO:
Zenith Bank is their leader !

The current shareholder's funds is 4.4 Trillion Naira.

At the rate of N5 per share,this shareholder's funds can pay dividend for the next 20 years even if Zenith Bank never declare any profit.

i like how you think....

But a quick question though.....

Did you come about this calculation by using the post rights issue/public offer ordinary shares number?

Or the ordinary shares number of the past

RodgersAkpafu:
i like how you think....

But a quick question though.....

Did you come about this calculation by using the post rights issue/public offer ordinary shares number?

Or the ordinary shares number of the past

Post rights outstanding shares of about 41 billion units.

GeneralDae:
I really don’t get what your point is. I gave a rough estimate of 50% across both onshore and offshore operations. You can see from your article that there’s nothing fixed and it varies. So when I say we gain only about 50% of the exports, how does your article about our JV agreements disprove this?

You should also know that only in 2025 did both NNPC and indigenous companies increase their share.

But let’s assume we get a remittance of 60% currently in total, how does that give us a surplus that can help the foreign exchange considering that we only had a 5.17 trillion naira trade surplus with the total included?

Total exports ( including about 40% repatriated): approx 20 trillion naira

Crude oil exports : approx 12.5 trillion naira

Trade balance : approx 5 trillion naira

My point is clear: what is shared is the profit after costs, taxes, royalties, and other deductions. And clearly, the profit is not shared on a 50:50 basis contrary to what you claimed. Not even close.

ositadima1:
My point is clear: what is shared is the profit after costs, taxes, royalties, and other deductions. And clearly, the profit is not shared on a 50:50 basis contrary to what you claimed. Not even close.

So what is it from your article? How much crude oil profit is our share from our JV partnership and production sharing contracts with the IOC’s both offshore and onshore? You have not countered what I wrote. But we can just kill it here.

GeneralDae:
So what is it from your article? You have not countered what I wrote. But we can just kill it here.

Are you joking?

In your initial post, you said that 50% of the revenue from crude sales is repatriated by the IOCs, and therefore the trade surplus isn't accurate. Are you now denying that?

I'm telling you that you're not correct—Nigeria takes the lion’s share of the profit after collecting huge taxes, royalties, and other deductions. Technically, the IOCs may not even get up to 30%. So, most of the revenue stays in Nigeria, unless we factor in the cost of equipment, pipelines, looted funds, etc.

EDUECO:
The chief Monkey Hunter will use this as excuse not to pay interim dividend.

On the other hand; Zenith,UBA, Access,GTB must definitely pay interim dividend.

You got me laughing.
Was there any news or hint of interim dividend from the Chief Monkey Hunter?

Agbalowomeri:
Una get money for here o . , ,

Na baba God we dey pray make our own land.
We get faith say e go happen at baba God time.

Pennystockwarri:
Hi everyone. For those who have questions on Ellah Lakes, please join this Twitter space on Sunday June 15 by 5pm Nigerian time.

The company’s management will be present to answer questions



https://x.com/i/spaces/1ypJdZODmqpKW

Big day tomorrow.................................

An update on Ellah lake operations with pictures and a video.

https://x.com/bivins1/status/1933967814295249405?t=Dut5nOU4VDMHEJEZLzkoHQ&s=19

Streetinvestor2:
Na baba God we dey pray make our own land.
We get faith say e go happen at baba God time.

Street, you don pass that prayer level....
You dey the level of Thanksgiving.

GeneralDae:
I swear. Some underestimate the benefits of this refinery because they expect it to bring prices down or improve the exchange rate.
I have been saying it that Dangote refinery may not massively boost the exchange rate because of low margins in the refining industry (whether he imports crude or buys in naira from Nigeria) but the chain effect on the economy (especially the petrochemicals), the jobs and energy security it provides and would provide at full capacity is priceless.

Exactly why we were shouting when the regulatory authorities were causing unnecessary trouble and corruptly supporting importers bringing in poor quality and cheap products!

https://www.thisdaylive.com/2025/06/15/regulatory-forbearance-cbn-directs-first-bank-others-to-suspend-dividend-payments-bonuses/

If First Bank is there then I don’t know who will be exempted.

moneymanager:
https://www.thisdaylive.com/2025/06/15/regulatory-forbearance-cbn-directs-first-bank-others-to-suspend-dividend-payments-bonuses/

If First Bank is there then I don’t know who will be exempted.

I was expecting First Bank to be there actually.

Access Bank with another acquisition. This time in Gambia. I think Access Bank is positioning for something big in Africa.

https://standard.gm/access-bank-takes-over-standard-chartered-bank/

I always take what Thisday says about FBN with caution. Clearly the CBN circular did not mention any bank specifically.

moneymanager:
https://www.thisdaylive.com/2025/06/15/regulatory-forbearance-cbn-directs-first-bank-others-to-suspend-dividend-payments-bonuses/

If First Bank is there then I don’t know who will be exempted.