'Afribank's IPO will Boost Stock Market'
By Uche Obike
Investors at the nation's stock market are eagerly waiting for the proposed N9.0 billion Offer for Subscription expected to hit the market any time from now.
With its current market at N6.83 per share at which the price stagnated due to the technical suspension placed on it by the Nigerian Stock Exchange (NSE) pending the conclusion of the bank's proposed Offer.
THISDAY checks revealed that at N6.83 per share, Afribank's is considered to be undervalued. It is expected that at conclusion of the Offer the share price at the secondary market will increase rapidly to an impressive high during the year.
Investors have adopted cautious transactions on Afribank's shares apparently due to its current low price. The current situation is that there many buyers without willing sellers of the bank's shares.
Investment analysts have expressed confidence in the proposed Offer, predicting that the Offer will be over-subscribed.
The Chairman of Afribank Nigeria Plc, Alhaji Aliyu K. Belgore recently said that the final resolution of the shares of Banque Internationale Pour L'Afrique Occidentale (BIAO) will boost the bank's position in the Nigerian banking industry,
The Chairman who made this disclosure at the bank's recent Annual General Meeting, explained that the eventual acquisition of the 33.94 per cent shares of the bank by the Federal Government would be a blessing to all stakeholders of the bank.
Belgore expressed confidence that with the new development, the bank would soon access the market for the purpose of raising funds that would aid the bank's effort at expanding market share and improved performance.
The fresh funds, he explained further, would enable the bank undertake projects that would bring superior returns to the investors.
He however explained that the Federal Government was the seller of the BIAO shares, and that the money that would be realised from the sale of the shares would not come to Afribank, in as much as the sale of the shares would also not affect the bank's operational performance.
The Chairman who expressed the board's satisfaction with the performance of the executive management, disclosed that members of the board have sympathy for the Management Buy Out Option.
According to him, the board and management of the bank have carried out extensive reorganisation and restructuring that would take the bank to higher grounds in the nearest future. The bank, he added, is now well positioned to get increased market share and fully optimise its goodwill and potentials and post superior returns to stakeholders .
Belgore said that the board is open to any honest and transparent means in the sale of the acquired shares. He advised that the "Bureau of Public Enterprises should consider solely the interest of Afribank as a viable, strong and profitable bank in the privatisation exercise".
Analysts believe that Afribank Nigeria is undoubtedly one of the four big banks in Nigeria today. In its over forty years of existence, the bank has grown to become a full conglomerate incorporating six highly specialised subsidiaries offering highly specialised financial services.
The bank is said to currently have presence in over 150 locations in all the states of the federation, offering normal and specialised banking services. Out of these, about 111 branches are already connected on-line, real-time, thus making Afribank one of the financial institutions in Nigeria with the highest number of business offices connected on-line, real-time.
To explores major financial markets, the bank Offers different kinds of products and services that appeal to a wide clientele base. Some of these products are Afribank Cash Express, Afribank Personal Retirement Plan, Oil Services Contractors, Advances Revolving Scheme, Afribank Home Plan, Afribank Apprenticeship Saving Scheme and Afribank Pilgrims Welfare Accounts.
With all that has been put in place and the current trend in the industry, one may have no choice than to believe that the bank is all set for market challenges.
The source confirmed that there is also the public sector focus team in the Bank, which is charged essentially to handle government related projects and collections.
The new business focus of the bank has enabled it to firmly entrench itself into the telecommunication, oil and gas, hospitality and tourism, solid minerals development, iron and steel and estate development markets where it has carved a niche for itself.
The bank in the last few months opened additional business offices in Lagos, Enugu, Port Harcourt, Kaduna, Bomo, Oyo, Ondo, Plateau, Ogun, Osun, Anambra Sokoto and Kano States in order to enable it make its services accessible to a wider spectrum of the banking public and capture the low, medium and high-networth customers.
Human and material resources were also deployed to enable the bank aggressively penetrate new markets, while innovative products are being developed to address the emerging needs of different markets. Few months ago, the bank beefed up its executive management with the appointment of two executive directors and a general manager while over 500 young graduates were recently employed as part of efforts targeted at re-tooling the manpower of the bank. The young graduates have been trained and deployed to various departments.
The bank has also developed a new corporate culture, which has customer satisfaction as its focus. It has equally upgraded its facilities with the intention of handling customers' requests and inquiries promptly. Its relationship management has been made more vibrant with the deliberate decentralisation policy and structures that make the highly professional staff of the bank relate closely with clients.
With the on-going proactive approach to market challenges, value-driven strategies, focused management, resources optimisation techniques' prudent risk management' Afribank Nigeria can only be set for greater heights in the years to come.
Incorporated as a Private Limited Liability Company, the bank commenced operations on January 4, 1960. it was converted to a Public Limited Liability Company on October 7, 1992. Its shares are currently quoted on the Nigerian Stock Exchange. The principal activities of the group have continued to be the provision of commercial banking, merchant banking, real estate and insurance broking services.
With the bank's current repositioning efforts, there is no doubt that those who are buying the shares of Afribank today, are certainly investing into the future.
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