Mutual Benefit Assurance Plc plans to shore up its authorised capital from the present level of N10 billion to N20billion ordinary shares of 50 kobo each.
The company announced this at its 21st annual general meeting held in Lagos recently.
Chairman of the company, Dr. Akin Ogunbiyi, who disclosed this to the shareholders at the meeting, said it is part of the company’s positive response to the regulator’s Risk Base Supervision initiative.
Ogunbiyi informed: â€œIn response to RBS regime, Mutual Benefits Assurance Plc is set to recapitalise. As a first step to recapitalisation, the company’s authorised share capital was increased from 10,000,000,000 ordinary shares of 50 kobo each to 20,000,000,000 ordinary shares of 50 kobo each to accommodate the proposed issue of shares, which is planned for the third and fourth quarters of 2017″.
Announcing the company’s scorecard during the period, Ogunbiyi said that given the very challenging economic environment during the year, the recorded 17per cent decrease in Gross Premium Written (GPW) of the company was not unexpected.
He however said the decrease in gross written of the company did not cascade to the underwriting profit.
“Underwriting profit increased by 16 percent from N3.6 billion in 2015 to N4.2billion in 2016, this is because your management employed better strategies of risk profiling of businesses within its portfolio thereby reducing its reinsurance costs”, the Mutual Benefit Assurance boss stated.
According to him, the Mutual Benefit Assurance group reported a loss before tax of N1.1billion in the year from N1.2 billion profit reported in 2015.
He explained that the major contributing factor to this was the depreciation in the value of naira against major currencies.
“This resulted in a foreign exchange loss of N1.9billion on the foreign currency denominated borrowings held by your Company.
As a result of the diminution in the value of the naira, coupled with the difficult business operating environment in 2016, your Company was unable to achieve the desired returns for dividend declaration,” he explained.
He however assured the shareholders of management and board commitment to the growth and success of the company.
The Mutual Benefit Group, during the year under review, grew its total assets by 12percent from N46billion in 2015 to N51billion in 2016, while shareholders’ funds decreased by 8 percent as a result of the impact of the foreign exchange loss.
On the future outlook of the company, Ogunbiyi, said that from 2017, the board and management of the company has set the wheels in motion for its repositioning as part of their goal to lead the industry in growth, profitability, innovation, operational efficiencies, and dividend returns with the implementation of a new five-year strategic roadmap tagged;â€™ Project One Reloaded Starting from 2017.
He said: â€œTo achieve the goals of the project, we will focus on the following key priorities: Deepen market penetration/customer acquisition by aggressively growing our customer base across all segments; embed customer and service delivery excellence by establishing our company as the most customer focused in the industry; transform people and culture by creating the right environment to attract, develop and retain knowledgeable and motivated staff; and drive operational effectiveness by leveraging on disruptive technology and embedding analytics.
“These strategic initiatives require huge capital outlay which will be sourced from our internally generated funds as well as from additional equity capital we will be raising very soon,” he stressed.