Download Tag: Nigeria

Capital and leverage is favourably considered and a ratings positive, with GCR’s calculated leverage ratio at a stable and strong 20% at 1QFY22. We expect this metric to remain within a similar range going forward based on historical trends, and as management continues its conservative approach to capital and FUM growth. Funding and liquidity position is assessed at an intermediate level. SAMTL’s funding base comprises largely investment products targeted at high net-worth individuals, with maturities ranging between 30days – over 365 days, and can be rolled over at maturity.

Cash flow and leverage is positively viewed given the low gearing level. While the Company issued about N3.5bn short term private notes in two tranches during FY21, under its N10bn debt issuance programme, to support business expansion, it demonstrated sound ability to repay its debt with net debt to EBITDA margin closing FY21 at 0.12x. As at end-May 2022, one of the series have been fully repaid, with more private notes (about N2.2bn) issued during the current year.

FCMB AM, formerly First City Asset Management Limited, was incorporated on 25 July 1997 and commenced operations in January 2020, with principal business activities of providing fund management, administration, and investment advisory services. The name change on 4 October 2019, was largely attributed to management’s strategic drive to align with the Group’s strong brand franchise. FCMB AM is a sub subsidiary of the Group, through CSL stockbrokers Limited, which owned 100% stake in the asset manager. However, the asset manager remains a non-core entity within the Group, contributing a modest 0.1% and 0.7% to total assets and gross earnings respectively at FY21.

LAPO Microfinance Bank Limited traces its roots to the 1980s when it was established as a pro-poor non-governmental organisation. The entity transitioned to a microfinance bank in 2010 operating a state microfinance banking license, and subsequently upgraded to a national microfinance banking license in 2012, enabling its expansion across the different sub-regions of the Nigerian market. The bank is privately owned, with two majority shareholders – Godwin Ehigiamusoe (founder and previous chief executive officer) and Lift Above Poverty Organisation, with 40% and 56.9% ownership stakes respectively at FY21. Our assessment of the bank is on a stand-alone basis, as LAPO Mfb has no operating subsidiaries and is not part of a group.