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Category: BUSINESS

When a get-up-and-go banker is at the saddle

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By Folorunsho Atta

Really, there are no failures in the world, but there are men and women who doesn’t know how to succeed. Success, in all ramifications is built or resilience, hard work and perseverance.
To Habeeb Yusuf, the dynamic and proactive MD/CEO of Nigeria most patronized microfinance bank, Nigeria Police Force Micro Finance Bank( NPF MFB), it’s dint of hard work and resilience that earned him the bank top job . Never relenting in hard work and improving on his leadership skills everytime, Habeeb’s colleagues at the bank will confirm to anyone who cares to listen that the banker with over 26 years of banking experience, would not rest on his oars until, unless the job is excellently done.
Appointed three months ago, the 1995 Banking and Finance graduate of the Kwara State Polytechnic in Ilorin, has demonstrated his ability and capability in this short period by hitting the ground running with his transformation agenda.


Not giving room to an atom of procrastination or indecision, Hebeeb was to respond swiftly over the Borno flood that ravaged the bank branch in the state. Rising to the occasion , he moved from Lagos with a few staff to address that issue.
As a good listener, his contemporaries disclosed that when it comes to banking principles, economics, adaptability, confidence in self, investment strategies and human relations, Habeeb thrives.
Now at the helm of affairs of African leading micro finance bank, his proactive measures have been reported to be his principles right from his days as the bank Head of Credit and operations, Branch manager, Head of administration and Regional Head before his elevation as the bank chief executive officer.


A team player who inspires others, the bank is expected, any moment, to attract more customers; increase the asset base and meet the international standards under the leadership of Habeeb Yusuf.
To Customers, Shareholders, Staff, Management Team and the Board of Directors, the actions of Habeeb in this past few months, underscores better days ahead.

The $200 billion club has only 3 members: Elon Musk, Jeff Bezos, and…

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Of the nearly 8 billion people in the world, only 2,781 are billionaires. Among them, only three people are part of the exclusive $200 billion club: Tesla CEO and the richest person in the world Elon Musk, Amazon founder Jeff Bezos, and the recent joiner Meta CEO Mark Zuckerberg.

According to Bloomberg billionaire’s index, Musk has a net worth of $270 billion, Bezos is worth $215 billion, and Zuckerberg stands at $202 billion, as of September 26. This puts the Facebook co-founder ahead of other major tech executives including Oracle co-founder Larry Ellison — who is also fighting for a spot in the club — and former Microsoft CEOs Bill Gates and Steve Ballmer.

Zuckerberg not only broke into the $200 billion club recently, but he has also been the biggest winner on the list having accumulated dozens of billions in wealth in 2024, Fortune reported. The 40-year-old’s wealth has ballooned by an incredible $71.8 billion this year, as per the Bloomberg Billionaires Index. The majority of his fortune is derived from a stake of about 13 percent in Meta Platforms which amounts to about 345.5 million shares, based on Meta’s April proxy statement quoted by Fortune.

The billionaire also famously takes $1 as his salary since he makes up for it in “other compensation” and his massive stake in Meta. He took home $24.4 million in “other compensation” this year, the publication reported.

When his wife Priscilla Chan gave birth to a baby girl in December 2015, the same day, he announced plans to give away 99 percent of his stock in Meta to advance philanthropic causes. Moreover, in September 2010, he donated $100 million of Facebook shares to the Newark, New Jersey, public school system. He has also donated 36 million shares to the Silicon Valley Community Foundation, Bloomberg reported. Zuckerberg and Chan are also spending $3 billion in an attempt to end, cure or manage all disease by the year 2100.

Access Holdings increases revenue to N2.2 trn, increases dividend pay-out by  50%

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Access Holdings Plc has announced its half-year audited financial results for the period ended 30 June 2024.

The results shows that the company has increased its revenue to N2.2trn in the first half of the year.

Access Holdings Plc is a leading multinational financial services group that offers commercial banking, lending, payment, insurance, and asset management services.

The company said in a statement that its continued resilience, focus on delivering sustainable performance and commitment to creating long-term value for shareholders gave it the edge to succeed.

It added, “Access Holdings Plc demonstrated strong performance across all key balance sheet indicators and continues to maintain a well-structured, healthy, and diversified financial position. This is evident in the resilient half year results from the banking franchise operating in twenty-two markets across four continents and the non-banking subsidiaries including Access Pensions, Hydrogen Payments, and Access Insurance Brokers.”

Breaking down the half year 2024 performance, Access Holding said total assets and shareholders’ equity stood at ₦36.5 trillion and ₦2.8 trillion, respectively.

“This represents a year to date of growth of 37.1% and 29.8%, respectively. Customer deposits increased by 31.3%, from ₦15.3 trillion in December 2023 to ₦20.1 trillion by half year 2024. Gross loans and advances also saw an increase of 37.6%, growing from ₦8.9 trillion in December 2023 to ₦12.3 trillion by half year 2024, from organic loan growth and the impact of foreign currency-denominated loans.

“Access Holdings reported triple-digit growth across all profitability metrics, with gross revenue rising by 133.5% year-on-year, from ₦940 billion in half year 2023 to ₦2.2 trillion in half year 2024. This increase was supported by higher interest and non-interest earnings in the period. Interest income surpassed the ₦1 trillion mark, from the expansion of risk assets and effective pricing, leading to a 142% growth from ₦606.8 billion in half year 2023 to ₦1.47 trillion by half year 2024. Non-interest income also grew by 117%, rising from ₦333.4 billion in half year 2023 to ₦723.6 billion in half year 2024.

“Profit before tax increased by 108.2% year-on-year, from ₦167.6 billion in half year 2023 to ₦348.97 billion in half year 2024, while profit after tax rose by 107.7%, from ₦135.4 billion to ₦281.3 billion over the same period. This resulted in a 103% growth in earnings per share (EPS), which increased from ₦3.74 in half year 2023 to ₦7.58 in half year 2024.

“Cost-to-income ratio (CIR) remained relatively flat at 60.4% in half year 2024 despite double digit growth in inflation and devaluation in the same period. Cost to income was moderated as revenue outpaced operating expenses. The increase in operating expenses was primarily from ongoing IT upgrade and integration, double-digit growth in AMCON levy and NDIC premium which increased by 63.1% and 37%, respectively, and will normalise in the second half of the year, inflation-related cost-of-living adjustments, higher energy expenses, and the currency conversion impact of subsidiaries’ operating costs.

“To maximise value for our shareholders, Access Holdings Plc has declared an interim dividend of 45 kobo per share (half year 2023, 30 Kobo), representing a 50% increase in dividend payout,”’ the report added.

Speaking on its banking group, the Access Holdings said the challenging operating environment and tight monetary policy stance did not stop Access Banking Group from recording strong year-on-year growth across all performance metrics, with Interest and non-interest income contributing significantly to gross earnings.

For instance net interest income grew by 131% from N232.2 billion in half year 2023 to N536.7 billion in half year 2024.

Fees and commissions increased by 94% year on year from N119.8 billion to N232.5 billion from higher transaction volumes on our digital channels, credit related fees and card payments.

“The Banking Group subsidiaries contributed 55% to the Group’s Profit Before Tax (PBT), demonstrating the significant impact of their operations and growing importance in driving overall profitability. Year-on-year, their PBT performance grew by 218% from N63.3 billion to N201.7 billion.

“As part of our ongoing strategic expansion beyond Nigeria, we have successfully completed the full integration of the merged entities in Zambia and Tanzania operations. These developments not only enhance our presence in key markets but also create significant value by expanding our customer base, strengthening cross-border banking capabilities, and fostering increased operational efficiency across our subsidiaries.” the company added.

Speaking on the operating performance of the non-banking subsidiaries, Access Holdings said the performance demonstrated a consistent growth trajectory.

It added, “Access Pensions has achieved a remarkable 162.1% increase in Assets Under Management (AUM), rising from ₦1.1 trillion in December 2023 to ₦2.9 trillion in the first half of 2024. This growth is driven by organic expansion in RSA accounts, new mandates, and synergies from the merger with ARM Pensions. As a result, Access Pensions has positioned itself as one of the top two largest pension fund administrators (PFAs) in Nigeria, with over 2.8 million RSA accounts. Furthermore, the operating income for the pension business saw a substantial increase of 190%, climbing from ₦5.6 billion in H1 2023 to ₦16.2 billion in H1 2024.

“Hydrogen Payments achieved a remarkable 1,871% growth in top-line revenue compared to H1 2023, reflecting its exceptional performance and contribution to the profitability of the holding company. The total payment volume (TPV) processed surged by 306%, reaching N13.8 trillion in H1 2024, up from N3.4 trillion in H1 2023. Notably, 90% of these transactions were processed through the Hydrogen switching platform, underscoring its reliability and dependability, particularly for small businesses across Nigeria. The platform’s ability to handle large transaction volumes with minimal downtime has significantly improved operational efficiency, contributing to a stronger profit outlook for the group.

“Access Insurance Brokers posted significant growth with an 83% increase in gross premiums written and a 60% rise in commission income in the first year of operations. Specifically, gross written premiums surged from N2.3 billion to N5.9 billion by half year 2024.”

The company added that it is confident in its ability to surpass the growth momentum achieved in the first half of the year as operations continue in the second half.

It said, “Our strategic priorities will remain focused on scaling non-banking segments, expanding our digital footprint, and solidifying our presence in high-growth African and international markets. These are geared towards accelerating revenue diversification and ensuring long-term sustainable value creation for our shareholders.

“Furthermore, we are fast-tracking the completion of our technology infrastructure integration and upgrades, which will significantly enhance operational efficiency across the group. This technology transformation will strengthen our digital capabilities, allowing us to deliver superior services to our customers, drive operational synergies, and optimise cost.

“Our strategic focus on non-banking segments, digital expansion, and geographic diversification will continue to create lasting value for shareholders, positioning the group to capitalise on emerging opportunities and sustain growth in the long term.”

On future plan, the company said, “We recently concluded our rights issue of N351 billion, and we are awaiting the Central Bank of Nigeria (CBN) capital verification and the Securities and Exchange Commission (SEC) approval for the allotment of rights. We will keep our investors and shareholders informed as we proceed with the exercise.”

Fidelity Bank Affirms Commitment to Data Protection and Strong Corporate Governance

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Our attention has been drawn to a news story titled, “NDPC Fines Fidelity Bank for Data Breach”. While the matter is a subject of an ongoing engagement with the regulator, we wish to assure the public that we have conducted ourselves to the highest ethical standards by ensuring full compliance with extant laws on data protection. Below is a breakdown of our dealings with the NDPC since we received their letter informing us about an alleged data breach:On April 30th, 2023, we received a notice of investigation from the Nigerian Data Protection Agency (NDPA), now the Nigerian Data Protection Commission (NDPC).

The investigation was in respect of a complaint from [name has been withheld to protect the identity of the complainant] who claimed that [name withheld] details were used to open an account in the bank without [name withheld] consent.Based on this notice, we conducted an internal investigation into the circumstances around the claim and discovered as follows:An account opening request was received online in the name of [name withheld], and an email was sent to the email address attached to the request informing them about this.In compliance with our Data Protection policy, accounts created online without full documentation are not allowed to be operational and are closed after 30 days if the outstanding documents are not provided to authenticate the identity of the person seeking to open the account.

In compliance with our data protection laws, the account was not allowed to be operational as the passport photograph and BVN were not provided.The account was immediately placed on “Post No Debit” status as the applicant was expected to complete the account opening process by providing the outstanding documents for verification within 30 days. This was not done, and the account was eventually closed.On May 2nd 2023, we responded to the NDPC that the bank did not violate any law because there was no data breach and that the account opening process was not completed. On our part, we carried out due diligence by immediately blocking the account and subsequently closing the account when we did not receive the outstanding documents.At no point in the process was the account ever operational. On July 7th, 2023, we were invited for a Pre-Action meeting with NDPC. During the meeting, we restated our position as earlier communicated to them in our letter dated May 2nd. However, despite our explanation and evidence provided to support our claim, the agency informed us that they had reached a conclusion to impose a penalty on the bank.

On 5th December of 2023, we got a letter from NDPC demanding we pay a ‘remedial fee’ of N250 million within 21 days.We immediately commenced another round of engagements with the Commission as we were convinced, we had not breached any extant law or regulation. While discussions were still ongoing with the NDPC, we received another letter on the 20th of August demanding that we now pay N555.8m naira.As a responsible financial organization with a history of strong corporate governance standards, we remain committed to the due process of the law, and we wish to assure all our customers of our unwavering commitment to upholding the highest level of ethical standards in all our dealings with customer data. Our commitment to strong corporate governance has earned us local and international recognition, including the prestigious CG+ award. This is the highest rank under the Corporate Governance Rating System (CGRS) of the Nigerian Exchange Group (NGX), which evaluates listed companies against established best practices and standards.

As a Bank, we remain in discussions with the NDPC over an amicable resolution to this matter.

Signed.

Dr Meksley Nwagboh

Divisional Head, Brand & Communications

Fidelity Bank Plc.

1,500 Osun Residents Benefit from Fidelity Food Bank Outreach

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Over 1,500 residents made up of women, children, widows, and the elderly have benefited from the one-day feeding program organized by Fidelity Bank in Osun State.The food bank project was held at St. Benedict Catholic Church, Osogbo, Osun State under the bank’s Corporate Social Responsibility (CSR) Initiative created to reach out to vulnerable persons and reduce the effect of hunger in the society.Speaking at the distribution event, the Divisional Head, Brand and Communication, Fidelity Bank Plc, Dr. Meksley Nwagboh, described the Food Bank Initiative as the bank’s contribution towards helping the less privileged in the society.

Highlighting the bank’s commitment to supporting the underserved communities in its outreach efforts in the Osogbo and environs, he noted that, “Food security is a pressing challenge, and as a socially responsible organization, we are committed to tackling this issue. We collaborate with various non-governmental organisations (NGOs) to identify communities in dire need and provide much-needed food support.According to Nwagboh, “There is always a significant turnout of people during our Food Bank outreaches.

This program holds every month, and the distribution of the food packs takes place simultaneously across all regions of the country. Today, we brought over 1,500 packs of food items to be distributed to the people and plan to continue to do more in communities across the country to help those in need.”Applauding the initiative by Fidelity Bank, Reverend Father Michael Domingo of St. Benedict Catholic Church, Osogbo stated that, “It is surprising and commendable that a bank in Nigeria is giving back to the community. We are aware that banks are known for taking, but Fidelity Bank is giving back to the people.“The Fidelity Food Bank initiative is worthy of emulation which is why the Catholic Church has a working relationship with the Bank.

We recognize its uniqueness and appreciate how it helps the community.”On his part. Reverend Father Joseph Komolafe, the host priest, encouraged affluent individuals to follow Fidelity Bank’s example in combating hunger adding that, “You don’t have to wait until you have plenty before you give out. Share what you have, no matter how little, for the progress and development of society,” he stated.The Fidelity Food Bank Initiative continues to make a significant impact, providing vital support to those in need and reinforcing the bank’s commitment to social responsibility.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged commercial bank with over 8.3 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

Foreigners accused of defrauding Ecobank lose bid to quash arrest, extradition

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A Federal High Court, sitting in Lagos on Monday has dismissed the applications filed by two Indian nationals, Prem Garg, Devashish Garg and a Briton, Marcus Wade, to quash a bench warrant issued for their arrest and extradition, issued against them on alleged of $42,485,900 million USD fraud, for lacking in meritThe two Indians, the Briton who is the Chairman of Wilben Trade Limited, Dubai, and their companies; Agrico Agbe Limited, Wilben Trade Limited, Dubai, are being charged before the court by the office of the Attorney-General of the Federation (AGF) for allegedly defrauding Ecobank Plc of the sum of $ 42,485,900 million USD, with the pretence of using the of money to purchase and import into India parboiled rice into Nigeria.

Counts one and four against the defendants in the charge marked FHC/L/562C/2022, dated October 7, 2022, reads, “that you, Prem Garg, Devashish Garg both of Indian nationality, Agrico Agbe Limited (a company registered in Nigeria), Wilben Trade Limited, Dubai (a company registered in the United Arab Emirates, Dubai), Marcus Wade (Chairman of Wilben Trade Ltd, Dubai) of British nationality, sometime in the month of May and September, 2015 at Ecobank Plc, Lagos within the Jurisdiction of this Honourable Court conspired between yourselves to commit an offence thereby committed an offence punishable under Section 422 of the Criminal Code Act, Cap C38 Laws of the Federation of Nigeria, 2004.“That you, Prem Garg, Devashish Garg both of Indian nationality, Agrico Agbe Limited (a company registered in Nigeria), Wilben Trade Limited, Dubai (a company registered in the United Arab Emirates, Dubai), Marcus Wade (Chairman of Wilben Trade Ltd, Dubai) of British nationality, sometime in the month of May and September, 2015 at Eco Bank Plc. Lagos within the Jurisdiction of this Honourable Court conspired between yourselves to commit an offence to wit: Cheating in that you caused Ecobank Plc to deliver monies to the tune of $42, 485, 900. 00 (forty-Two Million, Four Hundred and Eight Five Thousand, Nine Hundred US Dollars) which was intended by contract for the purchase and import into Nigeria India Parboiled rice but never utilized the sum of money for the contract and thereby committed an offence punishable under Section 421 of the Criminal Code Act, Cap, C38 Laws of the Federation of Nigeria, 2004.”

GTBank in trouble as hackers seize website, search for customers’ details

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Cybercriminals appeared to have compromised the domain address of Nigeria’s banking giant GTBank.FTN gathered that gtbank.com was no longer accessible on Wednesday night.The incident came a day after the domain name was renewed for another five years from August 13, 2024, through March 21, 2029, according to multiple online platforms that analyse domain information.

No collective of hackers has claimed responsibility for the vandalism, which appeared to have started on August 14. A spokesman for GTBank did not immediately return a request seeking comments.Already, the attackers appeared to have created another HTTP layer of the website in an apparent ploy to steal customers’ data through phishing.A cybersecurity expert with experience in the Nigerian banking industry said it was possible that the bank’s login details were compromised, as against the domain address itself being stolen for a resale at a more lucrative deal online.

GTBank’s customers have already started expressing their frustration about the incident, with many commenting on social media platform X that they couldn’t open the website to conduct transactions. Some of the bank’s representatives on X urged customers to be patient and send their requests to a designated channel.

The bank’s mobile infrastructure did not appear to have been affected, as Android and iOS-based applications were still in operation as of the time of this report.

UBA Partners NBA Young Lawyers Forum, to Foster Professional Growth of 50,000 Practitioners

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Africa’s Global Bank, United Bank for Africa (UBA) Plc, has announced a strategic partnership with the Young Lawyers Forum (YLF) of the Nigerian Bar Association (NBA) with the aim to propel the professional development of over 50,000 young legal practitioners across Nigeria, by way of academic sponsorships as well as trainings, with reputable agencies in a bid to enhance their legal careers.

The partnership was announced on Friday, July 24, at the bank’s headquarters, UBA House, in Marina, Lagos. This collaboration aligns with UBA’s longstanding commitment to youth empowerment and Nigeria’s socio-economic advancement.

Under this initiative, UBA will provide comprehensive support to the NBA-YLF, a subsidiary of the Nigerian Bar Association that represents lawyers with less than 7 years of post-call experience. The bank’s involvement is expected to enhance these emerging legal professionals’ career trajectories significantly.

Speaking on the partnership, Group Head, Marketing and Corporate Communications, Alero Ladipo emphasized the bank’s dedication to nurturing young talent and in the process strengthening the legal framework that ensures justice is effective in the country. “The partnership with NBA-YLF aligns strategically with UBA’s commitment to youth development and community engagement while reinforcing the bank’s dedication to fostering professional growth”.

“At UBA, we recognize that empowering the youth is crucial to Nigeria’s future growth and advancement”, Ladipo said. “By investing in the professional growth of young lawyers, we’re not just supporting individuals; we’re strengthening the very fabric of our legal system and, by extension, our nation’s development,” she added.

Also speaking, UBA’s Brand Project Manager, Lemachi Chris Asoluka, expressed enthusiasm about the partnership and how such empowerment is invaluable in the present legal landscape.

“This collaboration with UBA marks a significant milestone as it provides unparalleled opportunities for young lawyers to gain the skills and connections necessary to thrive in today’s competitive legal landscape.” Chris -Asoluka said.

United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group-wide and serving over 45 million customers globally. Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.

Windfall tax could push Nigerian banks to breaking point, warns new report

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A recent report from U.S.-based Emerging & Frontier Capital (EFC) has issued a stark warning that the introduction of a windfall tax during the Central Bank of Nigeria’s (CBN) mandated recapitalization could severely strain the country’s banking sector.The report cautions that this move could “break the camel’s back” for banks already burdened by high regulatory costs.The report highlights the significant financial pressures facing Nigeria’s banking industry, which is currently grappling with expenses tied to the Cash Reserve Ratio (CRR), the Asset Management Corporation of Nigeria (AMCON) levy, and deposit insurance premiums.According to EFC, the top six banks in Nigeria incurred regulatory costs amounting to $1.8 billion in 2023 alone, and a staggering $7.6 billion over the past five years (2018-2023).In the report titled “More Pain for Longer,” EFC underscores the potential negative impact of the proposed windfall tax on the banking sector.While acknowledging the government’s need for revenue, the report questions the rationale behind taxing banks, especially when dividend payout ratios have been declining despite rising profits.The aggregate payout ratio of the top six banks has dropped from 38% in 2018 to just 16% in 2023, even as their profitability has increased.The report also argues that the proposed tax directly conflicts with the CBN’s current efforts to recapitalize the banking industry.Since the Global Financial Crisis (GFC), bank shareholders have experienced significant losses, with bank valuations plummeting to just one-tenth of their previous levels.EFC questions the logic of imposing a tax on banks at a time when shareholders are being asked to inject more capital into institutions that, in some cases, do not require additional funding.

The report, dated August 5, 2024, highlights concerns raised during a recent Monetary Policy Committee (MPC) briefing by CBN Governor Olayemi Cardoso.Cardoso had expressed worry about the direction of both monetary and fiscal policies following the submission of an amendment to the 2023 Finance Bill, which proposes a 70% windfall tax on Nigerian banks’ realized profits from foreign exchange (FX) transactions between June 2023 and December 2025.EFC emphasizes that the proposed windfall tax would essentially redirect profits from FX transactions—expected to remain high due to exchange rate volatility—away from shareholders and into government coffers.This scenario is contributing to the declining share prices of banks, which are now trading below their public offer prices, with domestic investors increasingly turning to high-yield, non-taxable Federal Government of Nigeria (FGN) bonds.The report further stresses the importance of contextualizing FX gains, noting that while the top six Nigerian banks collectively recorded $3.1 billion in FX trading and revaluation gains in 2023, the majority of these gains—estimated at $2.9 billion—were unrealized, non-cash gains.Additionally, these figures do not account for the high costs associated with raising USD funding.EFC also questions why the Federal Government appears to overlook the substantial regulatory costs associated with banking in Nigeria, which totaled an estimated $1.8 billion for the top six banks in 2023 alone.The report paints a grim picture of the current state of Nigeria’s banking sector, pointing out that in June 2008, the collective market capitalization of the top six banks was $36.8 billion, with trailing year profits of $786 million.Today, their collective market capitalization has plummeted to $3.1 billion, even as their trailing year profits have risen to $4.3 billion. Despite this, shareholders are still being mandated to fund these banks, with declining dividend payouts exacerbating their financial pain.The EFC report concludes by questioning the long-term benefits of these policies for Nigeria, particularly as the majority of bank shareholders are Nigerian, with over 90% of ownership.The report warns that poor policy decisions are eroding the net worth of domestic investors, ultimately raising concerns about the broader implications for Nigeria’s economic future.

Rating: GCR Affirms Dangote Industries Limited AA+(NG)/ A1+(NG)

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—strong earnings prospects from the new refinery

GCR Ratings (GCR) has affirmed the national scale long-term and short-term issuer ratings of AA+(NG) and A1+(NG) respectively accorded to Dangote Industries Limited (DIL). GCR in its recent report also affirmed the national scale long-term issue rating of AA+(NG) accorded to each of Dangote Industries Funding Plc’s Series 1 NGN10.5Bn Tranche A and NGN177.1Bn Tranche B Bonds and Series 2 NGN112.4Bn Senior Unsecured Bond. The outlook on the ratings has been revised to Evolving from Stable previously.

According to GCR, “the ratings were affirmed on the prospects of significant growth in earnings following the commencement of operations at the new petrochemical refinery and robust earnings expectation from the other businesses.”In the report, the rating agency decried the impact of naira devaluation on DIL performance stating that, “the ratings are constrained by the adverse impact of the currency devaluation on the profitability and financial position of the group, given its significant foreign debt exposure.”GCR in recognition of the potential of the Dangote Group added, “the group’s business profile is bolstered by the commencement of refining operations in February 2024 (with the production of diesel, Naphtha, heavy fuel oil, and aviation fuel), which now complements the already well-diversified group businesses. Accordingly, we expect the group’s business fundamentals to become increasingly tilted towards oil refining, given its size as the largest refinery in Africa and Europe. We also expect strong export sales potential given the recent debut exports of refined oil to Europe.

The non-oil businesses continue to demonstrate strong earnings generating capacity and market leaderships in their respective sectors, underpinned by the above-peer production capacities and favourable demographics.”“We have maintained a positive peer comparison consideration for DIL underpinned by the importance of the refinery to the Nigerian economy. However, we have lowered the extent of support applicable under this rating component because we expect the support factors to translate to substantive enhancements to the group’s business and financial profiles over the outlook period. In 2022, DIL raised a cumulative NGN300Bn in Series 1 (Tranches A and B) and Series 2 Senior Unsecured Bonds issued by its sponsored special purpose vehicle, Dangote Industries Funding Plc.

Being senior unsecured debt sponsored by DIL, the Series 1 Tranches A and B Bonds and the Series 2 Bond rank pari passu with all other senior unsecured creditors of the group.Therefore, the Bonds bear the same national scale long-term rating as that accorded to DIL and any change in DIL’s long-term corporate rating would impact the Bonds ratings. We have reviewed the draft trustees’ bond performance report dated 24 May 2024 and note that the coupons have been paid as and when due and there were no breaches to any covenants and pledges in the trust deeds. However, the group remains highly exposed to volatile energy cost dynamics and is reliant on importation of gypsum for cement, raw sugar input, and crude oil for the refinery” GCR stated.