Two Nigerian lenders, Fidelity Bank plc and Wema Bank plc, have concluded plans to join their counterparts at the Over-The-Counter (OTC) platform of FMDQ plc in search for liquidity on issued/ tradable instruments, BusinessDay can authoritatively disclose.
While Wema will today quote its N8.15billion Commercial Paper (CP) on the platform of FMDQ OTC plc, Fidelity will on Friday, embark on its N30billion bond on the same platform which has become a reliable opportunity for many issuers to raise the profile of their issues and access a deep pool of funds.
Fidelity Bank plc had raised N30billion through an unsecured bond at 16.48 percent to fund increased lending to small businesses and retail clients. The Bond prospectus showed that the fixed-rate bond due 2022 was fully underwritten. The bond has been admitted to trade on the Nigerian Stock Exchange (NSE).
Fidelity Bank’s unaudited results for the half-year (H1) period ended June 30, 2015 shows gross earnings increased by 13.6 percent to N71.9billion, from N63.3billion in H1 2014. Also, Net Fee Income (NII) increased by 25.9percent to N15.2billion from N12.1billion in H1 2014; and operating income increased by 14.1percent to N42billion, from N36.8billion in H1 2014. H1’15 profit before tax (PBT) stood higher at N9.7billion.
Prior to this new listing and quotation, other instruments listed on FMDQ OTC Securities Exchange platform are FCMB Financing SPV plc N26billion bond; the N30.5billion UBA Bond; N15.54billion Stanbic IBTC Bond, N4.8trillion FGN Bonds, and the quotation of N2.8trillion Nigerian Treasury Bills (NTBs).
With today’s quoting of an N8.15billion Commercial Paper, Wema Bank plc joins Stanbic IBTC plc and Skye Bank plc which had taken advantage of the Central Bank of Nigeria (CBN) and FMDQ reintroduction of the Commercial Paper (CPs) window to increase their ability to do more transactions.
Wema Bank plc half-year (H1) 2015 results show profit before tax (PBT) decline to N1.173billion from N3.093billion in H1’14. The bank’s profit after income tax expense also declined to N997.209million from N2.372billion in H1’2014.
FMDQ had quoted Stanbic IBTC Bank N100billion Multi-Currency Commercial Paper Issuance Programme on its platform.Out of the N100billon programme, a total of N44.5billion in three tranches, have been issued and sold down to investors.
In the first-quarter of this year, Skye Bank plc signed an agreement with FMDQ OTC plc and issued N100 billion in Commercial Paper. The first tranche of the transaction was N20 billion which close on March 27, 2015.
Commercial Paper is a money-market security, issued (sold) by large corporations to obtain funds to meet short-term debt obligations (for example, payroll), and is backed only by an issuing bank or corporation’s promise to pay the face amount on the maturity date specified on the note.
FMDQ is creating more depth in the Nigerian debt market and the OTC Securities Exchange strives to achieve market transparency as it deploys technology initiatives for seamless processes on its platform.
Turnover in the FMDQ OTC markets increased 57.63percent year-on-year (YoY) to N87.80trillion as at August 14, 2015 with an average daily turnover of N570.12billion. In the fixed income market, the average debt outstanding clocked N12.08trillion in August, with 51percent short-term instruments and 49 percent long term instruments.
FGN bonds constituted 84percent of total outstanding Bonds with Agency, Subnational, Corporate and Supranational bonds accounting for the balance in terms of product contribution.
T.bills maintained dominance, accounting for 33.14percent. This was followed by FX with 27.28percent and Repos/Buy-Backs with 22.28percent.
Unsecured Placements/Takings accounted for 10.14percent, whilst FGN bonds and other bonds recorded 6.53 percent and 0.05percent, respectively. On an individual product basis, year-to-date (ydt) transactions in the FX market rose 5.10percent to $122.54billion over same period in 2014.
Iheanyi Nwachukwu
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