Posted by By SEUN ADESIDA on
BankPHB has secured the shareholders approval to undertake its much awaited Initial Public Offer (IPO).
BankPHB has secured the shareholders approval to undertake its much awaited Initial Public Offer (IPO).
The approval which was given by the shareholders at the bank's sixth Annual General Meeting (AGM), allows the board to raise as much as N200 billion in fresh capital from members of the public.
Already, Bank PHB has filed an application at the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) seeking regulatory approval to issue five billion ordinary shares, which at N17 per share will see it raise a minimum fresh capital of N85 billion from members of the public.
This is the first time Bank PBH will be offering members of the investing public an opportunity to buy directly into it as a public limited liability company. The bank had only previously, in 2004, undertaken a private placement at N1.95 which was substantially oversubscribed.
Contrary to expectation of the board and management of BankPHB to raise a minimum fresh capital of N85 billion through Initial Public Offer from the capital market, the bank's shareholders unanimously asked the bank to go for N200 billion and assured the management that they would do everything possible to ensure that the offer is oversubscribed once it opens.
Chief Sunny Nwosu, national president of Independent Shareholders Association of Nigeria, representing the shareholders said, 'the N85 billion our bank is looking for is too small to make it compete favourably with others in the same market and it is in this view that, we the shareholders asked that the amount to be raise to N200 billion." A position overwhelmingly supported by all the shareholders, who spoke to support the motion.
While responding, Mr. Francis Atuche, the bank's managing director said: 'The strategy of the bank will determine the quantum of capital required to execute the strategy, the shareholders have today given the ceiling as to how much money we can raise, it is the responsibility of the management and board to determine the most efficient capital structure that will run the business of the bank.
At least, what we have now is an agreement by the owners of the bank that the bank should raise additional N200 billion. It can be diluted by raising additional N200 billion fresh capital.
'Based on the performance of the bank, all I can say is that we are the architect of brands. And we will give this offer our best short both from the shareholders and up to the directors."
He emphasized that the bank is founded on best practices, ensuring that in BankPHB we are building an institution, which God's willing, 100 years down the line, the institution will be stronger than we are going to leave it."
Atuche said the objective is to imbibe in the bank best practices that will make it an enduring institution. The outcome, he declared is not whether profit is high or above average but concomitantly the dividend is also high, so we are not in a rat race, we are in a long distance hull.
Shareholders at the AGM also ratified Bank PHB's acquisition of GTI Insurance and PHB Asset Management Limited ( a partnership with Fortis Investment of Europe) as well as the liberty to establish more subsidiaries in future. They also approved the board's desire for a formal change of name of the bank from PlatinumHabib Bank Plc to Bank PHB Plc.
Shareholders also approved some rewards for themselves as they ratified the board's recommendation of a 70 kobo per share cash dividend and a bonus issue of one share for four making it a very rewarding year for shareholders who have seen their holdings in the bank gain 231 per cent this year alone.
Already Bank PHB has listed the 1.61 billion bonus ordinary shares last week on the floor of the NSE making investors N41 billion richer on the bank's current listed price of N25.51. This frees the shares for shareholders of the bank to trade in. Bank PHB was one of the few banks that paid cash dividend last year having immediately written off its goodwill from bits merger.
Since the bank's annual general meeting in December 2006 shareholders of the bank have seen the value of their investment rise by more than 300 per cent to date. For shareholders who came on board during the bank's private placement in 2004, they have seen more than a 400 per cent increase on the value of their investment.
The 2007 financial report just released by Bank PHB shows the bank strong on earnings and profit growing at more than three times the Nigerian banking industry average growth rate. While the banking industry is growing earnings at an average rate of 12.41 per cent in the last five years, latest financial report card from Bank PHB shows that its average growth rate of 44.45 per cent in the last five years is more then three times higher.
Bank PHB announced earnings of N36 billion in June 2007 representing 172 per cent increase over the bank's N13 billion earnings made in June 2006.
Also the bank announced a profit before tax of N10.28 billion in 2007 representing an increase of 197 per cent over the similar profit of N3.25 billion within the same the same period in 2006. This indicates a cumulative average growth rate of 119.13 per cent for Bank PHB in the last five years about eight times higher than the average banking industry average growth rate in profits of 14.16 per cent. This indicates that Bank PHB is gaining efficiencies in its operations at a faster rate than the banking industry.
The bank's 2007 report card also showed a steep growth in total assets and contingents which at N480 billion represents a steep increase of 155 per cent over N188 billion in 2006. With the 2007 growth rate recorded in total assets and contingents, the bank has averaged a growth of 103 per cent in the last five years about four times higher than the average growth rate of 27 per cent recorded in the same period by the banking industry.
Bank PHB also closed the financial year with capital base of N36 billion representing 28 per cent increase on the N28 billion in June 2006 and an average cumulative growth rate of 144 per cent in the last five years, about four time higher than the industry average growth rate of 41 per cent within the same period.