TIG Post

Tag: profits

  • SIC’s 2023 dividend payments were funded by loans, not profits – Ex-shareholder

    SIC’s 2023 dividend payments were funded by loans, not profits – Ex-shareholder

    Former State Insurance Company (SIC) shareholder and chartered insurer, Larry Jiagge, has voiced his frustrations over SIC’s financial practices and the National Insurance Commission’s (NIC) response to regulatory infractions.

    Speaking on Joy FM’s Super Morning Show on Friday, February 7, Mr. Jiagge alleged that in 2023, SIC took loans to finance shareholder dividends, painting a misleading picture of financial health.

    “They went to borrow money to pay that dividend, I can tell you that for a fact, I was a shareholder then.”

    This statement brought attention to the company’s questionable financial practices, particularly its dependence on loans to distribute dividends.

    Mr. Jiagge revealed that stakeholders only gradually uncovered the full extent of these issues, noting that certain aspects were too sensitive for public discussion. However, his chief concern was the NIC’s failure to properly regulate the insurance industry.

    He criticized the commission for not enforcing its own policies, stating that despite repeatedly raising these concerns in writing, the NIC failed to take decisive action.

    The lawyer’s remarks followed reports that former SIC Insurance Company Limited Managing Director, Hollistar Duah-Yentumi, had refused to hand over to the newly appointed acting MD, James Agyenim-Boateng, and had taken legal action to challenge her dismissal.

    “There are things you can’t talk about on air. Some of these problems had the stamp of the National Insurance Commission,” Mr Jiagge said.

    He added, “They don’t enforce their own law, and I had pointed this out to them in writing all the time.”

    The lawyer also expressed his disappointment over SIC’s asset sales, recalling his efforts to raise objections as a shareholder.

    Mr Jiagge noted that he officially petitioned the NIC on the issue, but despite his persistent follow-ups, the Commission took a full year to reply.

    When their response finally came, it merely reinforced SIC’s position, claiming that the asset disposals had received shareholder approval.

    “They should abide by their own law, the law they created” he advised.

  • MTN’s profit climbs to GHS2.33bn in first half of 2024

    MTN’s profit climbs to GHS2.33bn in first half of 2024

    MTN Ghana has announced a profit of GH¢2.33 billion for the first half of 2024, reflecting a significant 36% increase compared to the same period last year.

    The company’s unaudited financial report reveals a 31.2% rise in service revenue year-on-year, driven by growth in data, Mobile Money, and digital services.

    This increase was bolstered by improved 4G connectivity and a 3.9% expansion in the subscriber base, bringing the total to 28.4 million, with 0.6 million new subscribers added in Q2.

    MTN Ghana invested GH¢2.8 billion in capital expenditures to enhance network quality, expand coverage, and upgrade IT systems.

    Voice revenue decreased by 3.1% year-on-year to GH¢1.7 billion due to customers choosing more affordable plans.

    However, there was a 13.7% increase in voice usage minutes, thanks to initiatives aimed at boosting customer engagement and reducing churn.

    The proportion of voice revenue in total service revenue dropped from 29.1% to 21.5% year-on-year, as focus shifted towards faster-growing segments.

    Data revenue saw a robust growth of 55.0% year-on-year, reaching GH¢4.0 billion.

    This was supported by a 15.9% increase in active data subscribers and a 7.2% rise in data usage per user, leading to a 24.2% increase in data traffic.

    The contribution of data revenue to total service revenue climbed from 41.5% to 49.0%.

    Mobile Money revenue surged by 44.8% year-on-year to GH¢1.9 billion, driven by a 16.2% increase in active users and strong growth in advanced services, cash-out services, and peer-to-peer transactions. Mobile Money’s share of total service revenue rose from 21.7% to 24.0%.

    Digital revenue grew by 59.4% year-on-year to GH¢101.4 million, primarily due to gains in video, gaming, and ring-back tones. The number of ayoba users increased by 14.8% to 2.9 million, while the MyMTN app expanded to 1.6 million users, with over 0.4 million using it daily.

    The company plans further upgrades and new features for the app in the latter half of the year.

    MTN Ghana’s CEO, Stephen Blewett, stated, “MTN Ghana delivered strong results in the first half of 2024, despite the difficult macroeconomic conditions. This reflects the resilience of the business and our ability to provide essential connectivity solutions to our customers. We have also been able to increase financial inclusion, supporting the further development of the country”.

    Looking forward, MTN Ghana will continue to invest in platform development, network improvements, and service enhancements in line with its Ambition 2025 strategy.

    The company aims to enhance efficiency, maintain liquidity, and strengthen its balance sheet amid ongoing economic and political uncertainties, with a medium-term revenue growth outlook in the high twenties percentage range.

  • GAB Research confirms strong recovery of banking sector in 2023

    GAB Research confirms strong recovery of banking sector in 2023

    During the first quarter (Q1) of 2023, the release of prudential financial data by several universal banks in the country affirmed the impressive and resilient performance of the industry. This was notable despite challenges in the last quarter (Q4) of the previous year, mainly due to the government’s debt restructuring program, particularly the domestic debt exchange program (DDEP).

    Comparing Q1 2023 to Q4 2022, the industry’s balance sheet displayed remarkable growth. This growth was underpinned by sustained increases in deposits and capital levels, leading to robust expansion in total assets.

    The income statement of the industry demonstrated considerable strength in the reviewed period. Profit after tax (PAT) experienced a significant surge, attributed to substantial revenue growth relative to operating expenses. Private sector credit received a boost, resulting in a 7.31% increase from around GHȼ47.07 billion in 2022 to GHȼ50.51 billion in Q1 2023.

    Key indicators highlighted the industry’s strength and resilience within the broader financial system. These indicators encompassed asset quality, capital adequacy ratio (CAR), return on equity (ROE), liquidity, non-performing loans (NPLs), and market risk sensitivity.

    The capital adequacy ratio exceeded 21.96% in Q1 2023, surpassing the Bank of Ghana’s regulatory requirement of 16.60% as of December 2022. This substantial ratio indicated robust capitalization and enhanced financial resilience, ensuring that banks could maintain regulatory capital requirements even during credit risk concentration shocks.

    The industry’s overall financial stability was reflected in the quality of its assets, highlighting effective risk mitigation measures for both capital and loan formation. The average return on equity for Q1 2023 indicated efficient profit generation from shareholder investments.

    Liquidity coverage ratio (LCR) remained above 92.98% during the review period, reflecting ample high-quality liquid assets to address short-term cash outflows. This indicated banks’ preparedness to counter potential market-wide shocks and liquidity disruptions.

    Profitability indicators, including profit-before-tax (PBT), profit-after-tax (PAT), return on assets (ROA), return on equity (ROE), earning assets, and net interest income, showed substantial improvements in Q1 2023 compared to the end of 2022.

    The industry’s resilience, exemplified by high ROE and other factors, is projected to continue in the current financial year and beyond, making it an attractive investment for the financial sector and broader Ghanaian economy.

    Ghanaian banks have taken proactive steps to strengthen risk management and internal controls, positioning themselves to handle potential solvency challenges. Their collaboration with the Bank of Ghana and other stakeholders ensures continued industry stability.

    In conclusion, Ghanaian banks are prepared to engage with individuals, households, and businesses as the economy recovers. Their resilience, supported by improved operational performance, capitalization, and government policies, positions them to withstand shocks and contribute to economic growth through responsible lending.

    The sustained growth in deposits and capital levels suggests potential for financial deepening and credit expansion. The industry projects a positive outlook, supported by ongoing reforms and strategies to provide sound financial services and facilitate economic growth. The impressive performance of the first quarter of 2023 highlights the robustness of banks within the industry.

  • A 148% increase in profit recorded by FCMB B Group Plc

    A 148% increase in profit recorded by FCMB B Group Plc

    FCMB Group Plc has released its unaudited six-month results, revealing a strong positive financial performance across key indicators.

    During the period from January to June this year, the company experienced remarkable growth, reporting a 148% increase in profit before tax, which amounted to N38.2 billion.

    This significant surge is in contrast to the N15.4 billion recorded during the corresponding period in 2022.

    The diverse segments of the group demonstrated robust earnings growth during this period, with Banking Group showing an impressive 185.5% increase, Consumer Finance achieving 10.3% growth, Investment Management seeing a 53.3% rise, and Investment Banking experiencing a substantial 54.3% surge.

    Furthermore, FCMB Group’s gross revenue for June 2023 witnessed remarkable growth, reaching N238.2 billion, which represents an 88.7% increase when compared to the N126.2 billion generated during the same period in the previous year.

    This remarkable growth was largely driven by a 51.9% increase in interest income and a staggering 216.9% increase in non-interest income, showcasing the company’s strong performance and ability to capitalize on various opportunities in the financial market.

    Commenting on the half-year financial results, the Group Chief Executive of FCMB Group Plc, Mr Ladi Balogun, said: “We continue to leverage our unique Group structure to build a technology-driven ecosystem that fosters inclusive and sustainable growth in the communities we serve.

    “This strategy enables us to deliver robust performance despite the challenging domestic and global environment.

    “Barring unforeseen circumstances, this trend will be sustained and accompanied by improving efficiencies arising from greater scale and ongoing digitization.”

  • Amazon makes $3.2 billion while it undergoes multiple rounds of layoffs

    Amazon makes $3.2 billion while it undergoes multiple rounds of layoffs

    Amazon is back in the black to start the year.

    The world’s largest online retailer on Thursday April 27 2023 announced a profit of $3.2 billion for the first quarter, a significant improvement from the period’s $3.8 billion loss and much over analysts’ expectations.

    The swing to a profit comes as Amazon (AMZN) has ramped up its cost-cutting measures in recent months. The company has announced two rounds of layoffs, canceled products and nixed physical store expansions.

    It also comes as key areas of Amazon’s business continue to grow despite lingering recession fears possibly weighing on corporate and consumer spending.

    The company’s revenue increased 9% during the quarter from the prior year. Amazon expects second-quarter net sales to grow between 5% and 10% from the same period the year before, or be between $127 billion and $133 billion.

    “The results indicate that ongoing cost-cutting measures are having a positive impact on Amazon’s business prospects,” said Jesse Cohen, senior analyst at Investing.com. “Amazon’s strong guidance for Q2 revenue is another indicator that the company may be starting to come out of the woods.”

  • Shell reports record high profits in over a century

    Shell reports record high profits in over a century

    After energy prices soared last year as a result of Russia’s invasion of Ukraine, oil and gas giant Shell has announced record annual profits.

    In its 115-year history, the company’s 2022 adjusted earnings of $39.9 billion (£32.2 billion) were the highest ever.

    Following Russia’s invasion of Ukraine, oil and gas prices increased, which resulted in energy companies making record profits.

    Given that households are struggling with inflation, the profits have increased pressure on businesses to pay windfall taxes.

    Last year, the UK government introduced a windfall tax – called the Energy Profits Levy – on the profits of firms to help fund its scheme to lower gas and electricity bills.

    Oil and gas prices had begun to rise after the end of Covid lockdowns but rose sharply after Russia’s invasion of Ukraine, resulting in bumper profits for energy companies.

    The price of Brent crude oil climbed above $120 a barrel in March 2022, but has fallen back since. Oil prices are now below the level seen before the invasion of Ukraine.

    Gas prices remain elevated but have been capped for consumers by the government.

    Shell chief executive Wael Sawan said the firm’s results “demonstrate the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world”.

    “We believe that Shell is well positioned to be the trusted partner through the energy transition.“