FSDH Merchant Bank Assures Investors of Optimum Returns

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MARKET NEWS

By Nosa Alekhuogie

FSDH Merchant Bank Limited has assured its teeming shareholders that it will continue to do what is necessary to ensure that they are rewarded with optimum returns in the years ahead.

Chairman of the company, Mr. Osaro Isokpan, who stated this at the company’s annual general meeting (AGM) held in Lagos recently, stressed that the company is optimistic that the nation’s economy will soon turn the corner, a situation he stated, will reflect on companies operating in the country.

Isokpan, commended shareholders and stakeholders for their support and the confidence reposed in the company’s management and board.

He said: “With the expected improvement in the operating environment in the year 2017 and the strategies that we have put in place to take advantage of the emerging opportunities in the economy, we are confident that we will continue to maximise shareholders’ value by constantly re-inventing and realigning our operations and services to exceed the expectations of our various stakeholders.”

Speaking further, he revealed that, “as at December 31, 2016, the FSDH Group recorded a total asset size of N141.3 billion while the group’s shareholders’ funds stood at N27.87 billion. While this represents a small reduction (7.84 per cent) from the N30.24 billion recorded as group shareholders’ funds as at December 31, 2015, our capital adequacy ratio remains strong at 22.76 per cent against the minimum of 10 per cent prescribed by the CBN for Merchant Banks.

“The Group achieved a profit before tax (PBT) of N3.87 billion for the financial year ended December 31 2016. This represents a decrease of 18.01 per cent when compared with the profit of N4.72 billion for the year ended December 31, 2015. Profit after tax (PAT) for the group decreased by 20.05 per cent to N3.27 billion from N4.09 billion for the previous year. Earnings per share (EPS) for the group were put at 109 kobo, which was 32 kobo lower than the 141 kobo that was earned in the previous financial year.”

The reduction in profitability, according to him, is a reflection of the challenging state of the economy in the year under review.

He added: “During the period under review, all our subsidiaries posted profits. FSDH Asset Management (FSDH-AM) contributed a Profit after Tax of N319.54 million while Pensions Alliance Limited (PAL) and FSDH Securities (FSDH-SEC) contributed N988.39 million and N47.36 million respectively to the Profit after Tax of the group.

Speaking on the performance of the company, one of the directors, Mrs. Muhibat Abbas, representing UNICO CPFA Limited, commended the company’s performance noting that, “the performance was good considering the situation in the country currently although not as good as the previous year but it was commendable.”

Speaking on why dividend was not paid for the year under review, she explained that it was strategic because the company had other investment plans.

“We would rather channel the money to meet the strategic plan than give it to shareholders and ask for it again. We can expect that dividend would be paid in the nearest future when we have effected the plan and the situation in the country improves. For now we prefer to invest and grow the company so that we can have better returns in subsequent years.

“A time like this is the time to buy shares of good companies with good fundamentals .Over the years, FSDH investment has paid off, we have gotten our money back many times so we are confident in the management and strategic course of the company.” she added.