FirstInland Bank: Paving way for fresh offers

Lanre Oyetade, Group Business Editor

Okey Nwosu, MD, FirstInland Bank

THE Nigerian economy has been performing very strongly in the wake of recent economic policies initiated by the Federal Government. This development has seen the non-oil sector recording very tremendous growth amidst other macro-economic indices.

For instance in 2006, the Central Bank of Nigeria (CBN) reported a Gross Domestic Product (GDP) of N18.2 trillion and projected about N19 trillion in 2007.

In the same vein, the apex bank has projected external reserves of about $50 billion for 2007 while prices of crude of oil, the country’s major foreign exchange, is rising in the international oil market.

Besides this, Nigeria has maintained a BB- sovereign rating by Fitch and Standard and Poor, two leading international rating agencies. This level of rating means that Nigeria is a country with reasonable stability that an investor can invest in.

Moreover, Goldman Sachs, a leading international investment bank, has said in a recent report that Nigeria would be one of the 20 biggest economies in the world by 2020 if its on-going economic reforms were maintained.

Against this background, the CBN has initiated Financial System Strategy 2020 (FSS) aimed at positioning the economy as the hub of the African continent as part of the strategy to position Nigeria as one of the biggest economies in the world by 2020.

Consequently, this positive economic outlook has increased the confidence and interest of local and international investors in the Nigerian economy.

Imperative of fresh capital
In a bid to position themselves for the emerging economic opportunities, some of the discerning banks among the 25 banks that emerged from the recent consolidation in the banking industry have begun to shore up their tier one capital in order to remain locally and globally competitive.

It is against this background that First Inland Bank Plc joined the rank of banks raising fresh capital from the capital market to expand and modernise its operations as well as boost its working capital requirement with an offer that is noted to be the first in the New Year, 2008.

Olorogun O’tega Emerhor, Vice-Chairman of the bank said recently in Lagos that the bank would offer for subscription five billion ordinary shares of 50 kobo each at N9.50 per share, rights issue of 968.8 million ordinary shares of 50 each at N8.50 per share and four billion irredeemable non-cumulative preference shares of 50 kobo each at N9.50 per share.

The current share price of the bank on the Nigerian Stock Exchange (NSE) is N13.30. This means that it is giving a discount of 28.6 per cent on the Public Offer and 36.09 per cent on the Rights Issue.

Purpose of offer
The purpose of the Offer, according to the bank, is to finance the expansion of branch network, upgrade of information technology infrastructure, recapitalisation and development of subsidiaries and to enhance working capital.

Emerhor said the Offer is opened to both local and foreign investors, remarking that offshore investors can participate in the offer through foreign currency denominated subscription in line with Section 17 of the Nigerian Investment Promotion Commission Act and in compliance with the Nigerian Stock Exchange (NSE) and Securities and Exchange Commission (SEC) Rules and Regulations, which has been approved by the Ministry of Finance, Central Bank of Nigeria and SEC.

The Vice- Chairman noted that payment by the offshore investors would be through bank transfers or cheque issuance as cash payments in any currency is not allowed for investment in securities, adding that the rate will be the ruling autonomous rate at the point of subscription.

Emerhor said First Inland Bank would arrange the necessary capital importation certificate for valid subscribers at the conclusion of the offer.

The lead issuing house is First Inland Capital Limited while the joint issuing houses include BGL Securities Limited, FutureView Financial Services Limited are Greenwich Trust Limited.

Others are Integrated Trust & Investment Limited, Oceanic Bank International Plc, Skye Bank Plc and Sterling Capital Markets Limited.

Financial performance
For the financial year ending April 30, 2007, First Inland Bank reported gross earnings of N27.5 billion and profit after tax of N2.6 billion compared with gross earnings of N2.98 billion and a loss after tax of N10.3 billion in 2006.

Coming on the heels of this performance, the directors of the bank have forecast that in the absence of unforeseen contingencies, the bank’s gross earnings would increase to N50.015 billion for the financial year ending April 30, 2008 while profit after tax would be N8.9 billion. The Board of the bank has proposed a dividend of 31 kobo for the 2009 trading period.

Strategic positioning
First Inland Bank has set a vision of being “first and distinctive in all aspects of its operations”. To facilitate this vision, it has set out a five-year strategic plan of expanding its operations in Nigeria and abroad in a bid to actualise the vision.

The bank plans to pursue projects that will enhance its reach to potential customers in various geographical locations across the globe by investing in various channels including branch expansion projects and information technology infrastructure.

It will also enhance its working capital to enable it consummate big-ticket transactions in some identified profitable sectors of its target markets.

In order to realise this objective, First Inland Bank plans to enhance its capacity in human resources, risk management and information and communication technology.

Technology and products
One of the major strengths of First Inland Bank is technology and technology-related products.

Information technology
Information technology remains the platform of First Inland Bank’s service delivery. The bank’s strategy involves the continued use of technology to reshape banking service delivery in Nigeria in order to ensure convenience, efficiency, cost reduction, value added and innovation. The bank continues to exploit and master new technologies to package and deliver innovative products and services. First Inland continues to take pride as a technology and service driven bank as we strife to increase and enhance the service delivery channel using technology.

Retail banking
Its retail banking products and services are aimed at promoting lower risk retail lending products, in particular car loans, credit cards, and other consumer finance related products. We target the low class customer segment, which is currently under-banked and is set to grow rapidly during the next few years as the econ-omy continues to expand. Our products are distinct in five major functional aspects: access, type, pricing, service and marketing. The bank has various products targeted at customer’s stage of life; young adult, marriage and household formation, childbearing and education, household saving, retirement saving and actual retirement for best results. Its operations are seamlessly integrated so that customers experience the same level of efficient service, whether online, offline, ATM and mobile phone or in our branches.

Private banking
First Inland private banking services are professional, innovative and flexible in responding to individual needs, utilizing an extensive range of investment, fiduciary and banking products. First Inland Private banking pursues an integrated business model to cater for the needs of high net –worth clients, families and selected institutions. It also provides a comprehensive offering of financial solutions including estate planning and advising on foundations and philanthropic activities.

Corporate banking
FirstInland Bank has competence and expertise in the delivery of customised and unique solutions tailored to address our corporate customers’ distinctive needs. It has enhanced its customers’ business, leveraging on industry links and thorough understanding of its operating environment. Its dedicated professionals have unique insights based on skill, experience and knowledge of the industries in which its clients operate.

Investment banking
Its experienced professionals have the strength and industry experience to meet the needs of all categories of customers. Its investment banking division has a strong heritage in wholesome banking, coupled with strategic alliances with local and offshore financial institutions.

Structure finance
The bank has developed a wide range of appropriate financial solutions to meet our customers’ sophisticated requirements in structured financing, in collaboration with multilateral financial institutions such as Afrexim, IFC, FMO and US-EXIM. We are able to structure products that provide unique solutions to our clients’ need. The bank has been involved in transactions in telecommunications, oil and gas, power production and infrastructural development.

Its structured finance team focuses on the design of debt, equity, and hybrid financing techniques, in order to meet financing goals that cannot be solved by conventional corporate finance or bank credit products.

First Inland Bank is the result of the merger in December 2005, of four Nigerian banks, namely First Atlantic Bank Plc, Inland Bank (Nigeria) Plc, IMB International Bank Plc and NUB International Bank Limited.

It commenced operations in January 2006 with an authorised share capital of N10 billion divided into 20 billion ordinary shares of 50 kobo each and a combined issued and paid up capital of N4.5 billion dividend 9.7 billion ordinary shares of 50 each.

Oceanic Bank raises limit on ATM withdrawals to N100,000

Odidison Omankhanlen, Lagos

Keeping with its strategies to continually delight its teeming customers with value adding services, Oceanic Bank has raised the limit on withdrawals from its automated teller machines (ATMs) from N60, 000 to N100, 000. Increase in the limit to N100, 000 is informed by Oceanic Bank’s drive to ensure that customers have easy access to their funds without coming into the banking hall. The implication of the limit on withdrawals is that customers, holding the bank’s ATM card can now visit the nearest ATM of the bank or any bank’s ATM that is on the InterSwitch consortium and conduct necessary banking transactions.

Many of the bank’s customers have lauded this move by the bank which is expected to significantly reduce customers’ visits to banking halls as the ATMs allow access to funds all through. In the past years, Oceanic Bank ATM has become a source of succor to countless users of ATM cards on the InterSwitch consortium. Customers have come out loudly to speak of the reliability of the bank’s ATM services. Obtaining the ATM card is free while only an insignificant charge is applied for cash withdrawals, which can be up to five times in a single day. Consequently, ATM cardholders need not go into the banking hall for simple cash withdrawals, thus saving invaluable time.

This convenience and ease of banking is also available to corporate organisations and merchants. Employers of labour can pay salaries of their employees through the ATM. Corporate organisations and merchants can also save themselves the risk associated with cash handling by routing payments for their goods and services through the Oceanic Bank ATM. It also helps corporate organisations and merchants to keep an eye on their cash inflow. Already, several reputable companies and service providers have been availing themselves of this service from Oceanic Bank. These include Cadbury Nigeria Plc, Aerocontractors, Nigerian Investment Promotion Council, and MegaPlaza, the up- scale department store in Victoria Island, Lagos, to mention a few. Other potential partner institutions are currently discussing with Oceanic Bank on how they could join the bank’s ATM network and enjoy all its benefits.

For these and current corporate and individual users of the Oceanic Bank ATM, there is the comfort of knowing that the service comes with ironclad security. Once an ATM cardholder keeps his or her account details and PIN (personal identification number) secret, he or she is virtually assured of the privacy and security of his transaction. This is even more so as the ATMs are installed in secure locations, while their operations are protected by several layers of embedded security to frustrate vandals. Chief Executive of the bank, Dr. (Mrs.) Cecilia Ibru, recently assured that the bank would do everything possible to assist the government in creating a cashless society. She said the bank has invested heavily on ATMs with a view to having ATMs in all its branches and other locations across the country.

Described as a financial supermarket because of its many subsidiaries that are contributing positively to its bottomline, the bank’s has increased its branches from 12 branches as at September 31st, 2000 to 320 Business Offices as at 30 September 2007. The bank currently ranks amongst the top four banks in the industry in terms of Branch Network. In the 2006/2007 financial year alone, it added a total of 135 Business offices to its branch network.

With its strategic branch expansion all over the states in Nigeria and provision of one stop financial services to all its customers, Oceanic Bank possesses relevant qualities towards accelerating momentum in attaining a leadership position in Africa and creating shareholders values at all times.