Let me address it here – yes, since the day MTN Nigeria sneezed that it would go “financial” after the Central Bank of Nigeria had postulated its upgraded financial inclusion strategy, most Nigerian banks have been losing market caps. While there are many factors that could have resulted to this precipitation, my conclusion is that markets are pricing a redesign in the financial sector. And most players believe MTN Nigeria MoMo product, on maturity, will trigger dislocations in the sector.

Our largest bank by market cap, GTBank, had fallen from N1.3 trillion to now N741 billion even in a time it has been declaring massive profits and growing revenues. Simply,  there is no reason why that should happen. But it is happening due to market perceptions. Look at those numbers; it is only in Nigeria that a bank will deliver such, and yet nothing great happens on its stock (see the figure). Tell me, if massive profits do not deliver the glory of market cap bumps, what will?

The Bank’s balance sheet remained resilient with Total assets and Shareholders’ Funds closing at N3.519trillion and N636.8Billion respectively. Full Impact Capital Adequacy Ratio (CAR) remained very strong, closing at 23.6%. In terms of Assets quality, NPL ratio and Cost of Risk (COR) improved to 5.6% and 0.2% in September 2019 from 7.3% and 0.3% in December 2018 respectively. Complementing the improvement noted in NPLs and COR, we maintained adequate Loan Loss coverage of 95.2% for Lifetime Credit Impaired Loans (NPLs). On the backdrop of this result, Post-Tax Return on Equity (ROAE) closed at 32.3% while Post-Tax Return on Assets (ROAA) stood at 5.8%.

Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr. Segun Agbaje, said; “The Bank’s 3^rd quarter result reflects the strength of our franchise and the quality of our business strategy to deliver sustainable long-term value for our shareholders. Going into the final quarter of the year, we will continue to differentiate ourselves by maintaining a high standard in service delivery and leveraging our resources, expertise and network to enrich the lives of our customers. That’s why, from November 10 – 11, 2019, we are organizing the GTBank Fashion Weekend, the biggest consumer-focused event in Africa’s fashion industry, to give indigenous small businesses the platform and access to new markets and customers that they need to grow.”

Perception of markets – and you can blame MTN partly for that. Of course, this trajectory is not just on GTBank; other local banks are experiencing the same challenges. 

Yesterday, Innoson Vehicle Manufacturing (IVM) signed a partnership deal with Shell Nigeria Gas Ltd, according to a statement signed by the company’s Head of Corporate Communications, Cornel Osigwe.

The partnership means that Shell will henceforth use Innoson Vehicles for official and operational purposes. The development has given a boost to the drive to patronize local contents. Innoson has been looking for such partnershipS to expand its market base and has assured of its readiness to meet the supply demand.

In a brief address, the Founder and Chairman of Innoson Group, Mr. Innocent Chukwuma, said IVM, being the first wholly indigenous and leading vehicle manufacturing company in Nigeria, has established themselves as leaders in major markets across Nigeria and West Africa, due to its high safety standards, dynamic and exhilarating performance, ruggedness, durability, absolute reliability and affordable prices.

“Today in Africa, we are witnessing a revolution in car manufacturing led by Innoson, to produce the best vehicles that meet international and Standard Organization of Nigeria’s standards,” he said.

The Shell Nigeria Gas MD, ED Ubong, said that Shell has over the years been passionately showing a patronage example to others when it comes to local content. He said that the efforts of Shell in promoting locally made goods and services has not gone unnoticed: Recalling that this year, Shell won the International Oil Company with the most impactful Local Content Initiatives in the upstream category at the 2019 edition of the Nigerian Oil and Gas Opportunity Fair (NOGOF) held in the Bayelsa State capital, Yenogoa, in April.

Ubong promised that Shell will do more than patronize Innoson, that it will help the company to get better by pointing out areas of improvement.

The contract purchase agreement by the two companies has been commended as precedential encouragement to other corporate organizations in Nigeria, to patronize local contents.

Chevron is Selling Its Oil Fields in Nigeria

Chevron is seeking to sell many of its oil fields in Nigeria as the company is trying to focus on its U.S. shale output, banking and industry, Reuters reports.

Nigerian oil field has witnessed reduction in activities by oil giants like ExxonMobil and Royal Dutch Shell, who have decided to cut their presence in Nigeria to the barest minimum.

Chevron is the third largest oil producer in Nigeria. However, it is believed that the turn of events in the oil industry, especially in the Niger Delta region has pushed the California-based company to look for buyers for quite a number of its on the onshore and shallow offshore fields.

In 2018, Chevron Nigeria was producing 194, 000 barrels of crude oil per day, 233 million cubic feet of natural gas per day and 6, 000 barrels of liquefied petroleum gas (LPG) per day.

Currently, Chevron’s subsidiary in Nigeria operates and holds 40% stake in 8 blocks in the onshore and near-onshore regions of the Niger Delta under the partnership of the Nigeria’s National Petroleum Corporation (NNPC).

The report said that discussions are being held directly with potential buyers and Chevron is not planning to launch a tender process for the assets at this stage.

However, the recent development has but stirred concern for Nigeria. The security challenges in the Niger Delta region was fingered as the major reason behind the decision of Chevron, Shell and ExxonMobil to sell a number of their oil fields, but experts are suggesting that there could be more.

The dwindling future of oil based energy is a reality that the oil giants cannot deny. Therefore most of the oil companies are trying to reduce the cost of production especially in risk-filled places like the Niger Delta.

Data based economy is growing with threatening speed that oil companies have to brace up for the impact. And that means, cutting cost and saving up for whatever alternative there may have to stay in business.

It is believed that the development is a sign that Nigeria needs to diversify its economy and find practical alternative to her oil based economy.