Banking
Bank of Ireland to repay state 1.8 billion euros
…Bank of Ireland to sell new shares, debt in landmark deal
…Bank to avoid 450 mln euro step up charge of as a result
…Placing of up to 9.99 pct of existing stock via “cashbox”
…Proof Irish banking system is recovering-finance minister
DUBLIN – Bank of Ireland (BoI) has set out plans to raise 580 million euros ($788 million) through a share sale as part of a milestone deal to repay 1.8 billion euros to the state, handing the government a timely financial boost.
The bank’s plan to redeem preference shares issued when the 15 percent state-owned lender was rescued in 2009 will cut its reliance on the government less than two weeks before Ireland is set to become the first euro zone country to exit an EU/IMF bailout.
The announcement comes after Reuters cited a source familiar with the deal as saying Bank of Ireland would raise between 500 and 600 million euros of new equity as early as this week and would repay the rest through issuing debt.
The deal also follows a steady stream of more positive economic news in Ireland, including the fastest fall in unemployment in four years, that convinced Dublin to make a clean break from its bailout programme.
BoI, the only Irish lender to escape nationalisation, had faced a March 2014 deadline to pay back the state before a clause under its 4.8 billion euro bailout increased the cost of buying the shares back by 25 percent, or 450 million euros.
The equity placing will redeem 537 million of the shares with the results to be announced later on Wednesday. The remainder will be repaid through the issuing of debt secured on the preference shares, the bank said.
A banker involved in the deal said BoI had enough orders to meet its placing target by 0915 GMT.
The redemption will also remove dividend restrictions imposed by the European Commission on state aid grounds.
“A successful refinancing of the government preference shares represents a significant step for BoI back to normalised operating conditions, giving the bank and its shareholders more control over the group’s strategy,” said Ciaran Callaghan, an analyst at Merrion Stockbrokers.
The bank said the new shares would equate to a maximum of 9.99 percent of its existing stock, breaking with stock market norms of a company not issuing new shares worth more than 5 percent of its stock market value without a special resolution from shareholders.
Companies are able to issue stock worth up to 10 percent of their equity if they use a financial structure known as a “cash box”, where the new equity is channeled through a specially created company. Bank of Ireland would then buy the cash box.
BANKING SYSTEM RECOVERING
The bank added it had advised the Irish central bank that it is does not intend to recognise the preference shares as common equity Tier 1 (CET1) capital after July 2016, indicating it is confident it can make enough of a profit to retire the instrument by then.
Shares in the bank, up almost three-fold over the past 12 months, were 0.9 percent lower at 0.27 euros at 0840 GMT.
BoI’s announcement comes after the bank’s capital adequacy ratios suffered a sharper than expected drop after the Irish central bank said on Monday it needed to make extra loan-loss provisions after an industry-wide review.
BoI, recovering faster than rivals hampered by larger loan losses and weaker margins, said it was not required to raise additional capital after the review and was in talks with the central bank about its estimates.
The review, one of the final conditions of Ireland’s 85 billion euro bailout, took place ahead of euro zone-wide stress tests next year, Irish lenders’ first health check since 2011.
Bank of Ireland escaped falling into full state control after the last stress tests, when a group of North American investors led by Wilbur Ross and Prem Watsa bought a 35 percent stake just months after Ireland signed up to its bailout.
The state sold a 1 billion euro contingent convertible bond or coco it held with the bank earlier this year and will be left with a residual equity stake of around 14 percent if, as expected, it chooses not to take part in the placement.
Irish Finance Minister Michael Noonan said the deal would generate a profit for the taxpayer on the shares, with the exact return depending on the outcome of the book-building exercises for both transactions.
“As we exit our EU/IMF programme on December 15, this transaction will build further confidence in Ireland’s recovery and will strengthen Ireland’s return to normal market funding,” Noonan said in a statement.
“The Irish banking system is recovering, international investors are returning and this has positive implications across the banking system.”
Bank of Ireland mandated Credit Suisse, Davy, Deutsche Bank and UBS as placing agents, with Bank of America Merrill Lynch joining as joint lead managers and underwriters for the debt sale to private investors.
– REUTERS
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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