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TRANSCRIPT
Listing on the Nigerian Stock Exchange
& Facts behind the Listing
November 4th, 2014
I. The Opportunity
II. Overview of Omoluabi Savings & Loans Plc.
- The Bank
- History and Business of the Company
- Key Highlights
- Board & Management Team
- Ownership Structure
- Business Prospects and Going Concern Status
- Overview of Regulation
III. Financial Performance
IV. Thank You
table of contents
I. The Opportunity
The Opportunity – Omoluabi NGN 1.65 Billion NSE IPO
Issuer
Listing
Transaction Structure
The Offer
Market Capitalization at
Initial Public Offer
Price-Pre offer:
Events
Omoluabi Savings and Loans Plc.
Nigerian Stock Exchange (“NSE”)
Initial Public Offer (“IPO”)
3,000,000,000 Ordinary Shares of N0.55 each.
Market Capitalization at
Initial Public Offer
Price-Post offer:
N1,100,000,000
N2,750,000,000
Syndicate
Issuing House: MorganCapital Securities Limited
Underwriters: MorganCapital Securities Limited/UniCapital Plc.
Designated Advisers: MorganCapital Securities Limited
Admission and commencement of unconditional trading on
the NSE: November 4th, 2014.
II. Overview of Omoluabi Savings & Loans
Plc.
THE BANK
The cardinal objective of establishing Omoluabi Savings and Loans Plc. (“OMOLUABI” OR “the bank”) is to avail the people of Osun State in particular and Nigeria in general the opportunity to acquire their own homes. Our target clientele include individuals, corporate bodies, educational institutions, government parastatals and agencies, co-operative societies, non-governmental organisations, etc. operating within and outside Osun State. We are also totally committed to the provision of high quality banking and financial operations to our numerous customers.
HISTORY AND BUSINESS OF THE BANK
The Bank is a Primary Mortgage
Institution conceptualized and put in
place by the Government of Osun State,
Nigeria.
The Bank was incorporated on the 9th
of March 1993 as Osun Building
Society Ltd (Mortgage Bankers).
The Bank was issued with a licence to
carry on Mortgage Banking Business in
April, 1993.
The Bank changed its name to
Livingspring Savings & Loans Limited
on 30th June, 1998, and to Omoluabi
Savings & Loans Limited on 17th April
2013.
The Company converted to a Public
Liability Company (PLC) on 8th May,
2013 in line with its vision to broaden
its shareholder-base and to get Listed
on the Nigerian Stock Exchange.
KEY HIGHLIGHTS
Strong Economic Indicator
Renaissance Capital, a leading emerging markets investment bank in Africa, has revealed
that Osun, Ekiti, Lagos and Oyo States are the leading economies in Nigeria. Being a State
Mortgage Institution, the Bank will definitely benefit to a large extent as a result of the
rapid transformation going on in the State.
The economy of the Osun State grew from N110 billion Gross Domestic Product (GDP)
recorded in 2010 to over N800 billion 2013. This has created a lot of demand for
Mortgages, as disposable income of the citizens’ increases so demand also increases. The
influx of people into Osun is creating a brand new economy that needs to be serviced.
Favorable Industry Fundamentals
Housing Shortfall in Nigeria is estimated at between 12 – 16 million. In Osun State there
is a shortfall of over three hundred thousand housing units. Commercial real-estate is
also in high demand as a result of increased economic activities in the State.
Mortgage Finance requirement for the country is conservatively put at between 15 – 20
trillion naira.
Only about 5% of the 13.7 Million housing units in Nigeria currently financed with a
mortgage.
The rental market for real estate is very huge; an average household in Nigeria spends
about 40% of their disposable income on rents; this so because well over 70% of
Nigerians still lives in rented apartment mainly because of inaccessibility to Mortgage
Finance.
Housing stock in Nigeria is estimated at 10.7million, out of which only about 5% is in
formal mortgage. These numbers are lower in Osun State, there is a lot of opportunities
for Mortgage Institutions like Omoluabi.
Home ownership in Nigeria put at 10% compared to 72% US, 78% UK, 60% China, 54%
Korea, 92% Singapore.
BOARD OF DIRECTORS
Dr. Wale Bolorunduro is a seasoned banker who had made his impact felt
in both the banking and energy sector in Nigeria. He attended Obafemi
Awolowo University where he bagged a first class degree in Metallurgical
and Materials Engineering in 1990. He had then the best faculty grade.
He proceeded to University of British Columbia in Canada in 2009 where
he bagged his Master of Science degree in Business Management and a
Doctorate Degree in 2002. He later proceeded to Leeds Business School
in United Kingdom in the year 2009 where he has a Master of Science
degree in Corporate Governance.
Chief (Mrs.) O.A. Olotu attended University of Ife now Obafemi Awolowo
University between 1971 – 1976 where she bagged her first degree in
Estate Surveying and Management and a Master’s Degree in Business
Administration in 1995 from the same University. She is a fellow of the
Nigerian Institute of Estate Surveyors and Valuers (A.N.I.S.V). She is also
an Associate of Rating and Valuers Association of the United Kingdom.
She currently the Managing Director of Olaitan Olotu & Co. a firm of
Estate Valuers and Developers in Ibadan.
Mr. A.A. Kolawole is a graduate of Accountancy from the
University of Maiduguri in Borno State between 1982
and 1986. He is a Fellow of Certified National
Accountants of Nigeria and a member of the Chartered
Institute of Taxation of Nigeria. He joined the Civil Service
as an Accountant Grade II in 1987 and rose through the
ranks to the position of Accountant General of the State
of Osun. He has attended many workshops and seminars
in financial management and public finance. He is
married with children.
Mr. Aina attended University of Ibadan between 1984
and 1987 where he bagged a Bachelor of Science Degree
in Geography with the Second Class Upper Division. He
also obtained a Masters Degree in Geography from the
same institution in 1990. Mr. Samuel Ayanleye Aina
worked briefly as a lecturer of Rufus Giwa Polytechnic,
Owo before joining the Civil Service of the Old Oyo State
in 1989. He rose through the ranks to the position of
Permanent Secretary, Ministry of Finance and Economic
Development. Mr. Aina is a seasoned administrator who
is married with children.
Chief (Mrs.) Olaitan A. Olotu (Member)
Dr. Wale Bolorunduro - Chairman of the Board
Mr. Samuel A. Aina (Member)
(Member)
Mr. Alaba A. Kolawole (Member)
(Member)
(Member)
Mr. A.A. Adepeju attended the Polytechnic Ibadan between 1975 and
1977 where he obtained an Ordinary National Diploma in Accountancy.
He became a Chartered Accountant in 1982 and he became a Fellow of
the Institute of Chartered Accountants of Nigeria in 1994. Mr. Adetunji
Adepeju is also professional Member of Nigerian Institute of
Management. He worked in the defunct Co-operative Bank Plc. and was
once the Chief Executive of Co-op Building Society. He is currently the
Managing Consultant of Projektlink Konsult Limited in Ibadan. He is
married with children.
Mr. Adetunji A. Adepeju (Director)
KEY MANAGEMENT TEAM
He is a holder of a Bachelor of Science (BSc. Hons, 1984) in
Business Administration from the University of Lagos. He has in
addition a Masters of Business Administration (MBA) degree from
the University of Ilorin. He came on board as a Manager
(Marketing) at the commencement of operations in 1999 where
he coordinated all marketing activities of the company.
He obtained in 1978 a Bachelor of Science (BSc. Hons.) degree in
Botany from the University of Ibadan. He also holds a University
of Lagos Bachelor of Science (Bsc. Hons 1986) degree in
Accounting. He has already completed the course work for the
award of Masters of Business Administration (MBA) at the
Obafemi Awolowo University, Ile-Ife. He qualified in 1998 as an
Associate of the Institute of Chartered Accountants of Nigeria
(ICAN).
Mr. Babafemi Alao (Managing Director/CEO)
Mr. Josiah Ogunlumade (Chief Financial Officer)
She is a holder of B.Ed (BUSMgt) 1993 and PGD in Public
Administration also in 1993 from the University of Port Harcourt.
She also has a Masters Degree in Public Administration and
Business Administration from OAU, Ife in 2012. She was
employed as a Senior Banking Officer in 1999. She is a pioneer
staff and has risen to the managerial cadre.
He holds a Higher National Diploma (HND 1996) in Banking and
Finance from Osun State College of Technology Esa Oke. Mr
Fasakin also has a Master’s degree in Business Administration
from the Ekiti State University in year 2005.
Mrs. Esther Idowu (Head, Banking Operations)
Mr. Adelani Fasakin (Head, Internal Audit)
OWNERSHIP STRUCTURE
Top Five (5) Shareholders
Shareholder Nos. of Ordinary Shares Ownership %
MorganCapital Securities 1,950,000,000 39.00% Local Government Areas 1,090,133,708 21.80% UniCapital Plc. 1,050,000,000 21.00% State Government of Osun 909,706,292 18.18% Others 160,000 0.01% Total 5,000,000,000 100%
39%
21%
21%
18%1%
MorganCapital
Local Government Areas
Unicapital Plc
State Government of Osun
Others
OWNERSHIP STRUCTURE
BUSINESS PROSPECTS AND GOING CONCERN STATUS
The mortgage industry is expected to experience a major boost in activity as a result
of the ongoing reforms of the Federal Government in mortgage delivery services and
monetization of major personnel costs. The Company is expected to witness a
turnaround in its activities in the light of the prevailing positive environment of its
catchment area of the Osun State.
The Osun State administration is committed and desirous of partnering with the
private sector in the provision of affordable housing for its growing population.
OMOLUABI has strategically positioned itself to maximize this opportunity and has
diversified its product mix to meet its customer needs.
With the above favorable environment, and in the absence of unforeseen
circumstances, the Board of Directors are confident that OMOLUABI’s going concern
status is assured.
OVERVIEW OF REGULATION
The financial requirements which may be varied as the CBN
considers necessary are as follows:
Minimum capital:
i) National PMB - N5, 000,000,000.00
ii) State PMB - N2, 500,000,000.00.
Real Estate Construction Finance to Total Assets: A maximum of
twenty five [25%] of real estate construction finance to total
assets.
Mortgage Assets to Total Assets Ratio: A minimum of fifty
percent [50%] of mortgage assets to total assets.
CENTRAL BANK OF NIGERIA REVISED GUIDELINES FOR PRIMARY
MORTGAGE BANKS IN NIGERIA
KEY HIGHLIGHTS
Maximum Equity Investment Holding Ratio:
No Mortgage Bank shall invest more than ten
percent [10%] of its shareholders' funds
unimpaired by losses in the equity of any
venture or undertaking without the prior
approval of the Bank.
Minimum Mortgage Assets in Residential
Mortgages: No mortgage bank shall invest
less than 75% of its mortgage assets in
residential mortgages.
Non-performing loans to total loans ratio: No
PMB shall permit the non-performing loans in
its portfolio to exceed 30% of total loans and
advances. Once this ceiling is breached, the
PMB must suspend granting new loans and
advances until it has made such recoveries as
would keep this ratio within the permissible
range.
III. Financial Performance.
1336.11261.5
1338.3
1519.1
1931.3
3103.2 3080.5
0
500
1000
1500
2000
2500
3000
3500
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Total Asset
170.6125.5
147.2
303.1
709.9
310.8344.2
0
100
200
300
400
500
600
700
800
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Deposits
1045.1 1015.7 1030.4 1034.1 1018.7
2599.4 2569.9
0
500
1000
1500
2000
2500
3000
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Net Asset
74.1
138.4
81.2
94.9
71.3
83.6
99.3
0
20
40
60
80
100
120
140
160
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Net Income
27.1
-29.4
18.1
2.1 3.5
-9.5
41.8
-40
-30
-20
-10
0
10
20
30
40
50
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Profit After Tax
912.8 870.8 837.1970.1
1265.5
2128.1
1746.2
0
500
1000
1500
2000
2500
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Cash & Cash Equivalent
83.1106.6
148.4 154.2
215.9
424.6
716.2
0
100
200
300
400
500
600
700
800
2009(March)
2010(March)
2011(March)
2012(March)
2012(Dec)
2013(Dec)
2014(June)
Loans & Advances
CONCLUSION
● Clear Market Opportunity in one of the fastest growing sectors in Nigeria: With a fast-growing
economy and a rapidly urbanizing population, the Nigerian mortgage market has become a frontier for
investments in Africa. Housing shortfall in Nigeria is estimated between 12 – 16 million units (CBN
2013). This provides a veritable business opportunity for mortgage firms like Omoluabi Savings and
Loans Plc. to tap into.
● Huge Mortgage Finance Requirement in the Country: Nigeria’s Mortgage Finance requirement is
conservatively put at between 15 – 20 trillion naira, the market is absolutely huge and largely
untapped. Omoluabi Savings and Loans Plc. will be able to tap into a ready-made market with
unlimited opportunities. Home ownership in Nigeria is put at 10% compared to 72% US, 78% UK, 60%
China 54% Korea, 92% Singapore, therefore the room for growth in Mortgage financing is unlimited.
● License: The total number of mortgage institutions in the country currently stands at 40, consisting of
7 in the national license category, and 33 in the state license category, out of over 80 mortgage
institutions that sought licenses from Central Bank of Nigeria (“CBN”) as a result of the re-capitalization
directive. OMOLUABI is one of the 33 mortgage banks that scaled the recapitalization deadline of Dec
31st, 2013.
● Competition: OMOLUABI currently has a State Mortgage License which means it is registered do
business in Osun State. OMOLUABI is the only Mortgage Bank licensed to operate in Osun State, which
gives OMOLUABI a competitive advantage in the mortgage space in Osun State. OMOLUABI will in the
near future obtain a national license when it increases its share capital to N5b. The Bank can therefore
tap into opportunities in the South-West and across Nigeria.
Thank You