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FSDH declares N3.8b profit, proposes 978m dividend
October 27, 2009

FIRST Securities Discount House Limited has posted N3.8 billion profit after tax in its 2008 operations, as against N2.4 billion recorded in the previous year. The company's shareholders' fund also increased from N9.5 billion in 2007 to N12.9 billion in the period under review.

Based on this, the company's board is proposing 978.2 million dividends, culminating to 35 kobo dividend per share to every shareholder of the company.

First Securities Discount House (FSDH) Managing Director, Mr. Rilwan Bello-Osagie at the company's pre-yearly general meeting briefing in Lagos, yesterday, explained that the percentage increase in profit after tax is 64 per cent while shareholders' fund grew by 35 per cent.

He explained that the improved performance was occasioned by the company's ability to fine-tune the company's strategies, streamline cost of operations and beef up a strong risk management system.

He noted that the Nigerian capital market is currently bedeviled with the problem of non-performing loan, which is hitting hard on the stock market.

Also the astronomical growth of 40 per cent experienced in the Nigerian capital market in the last five year prior to the stock price meltdown in 2008 is abnormal compared to the realities on ground

The FSDH boss said that in the light of the current Central Bank of Nigeria (CBN) reforms in the financial sector and coupled with low investors' confidence in the equities market in recent times, it will take a while before the global and national equities market bounce back.

Bello-Osagie who called on investors to engage in the diversification of investment portfolios to recoup their loss noted that despite the challenging financial climate, the company recorded an increase of 64 per cent in its profit after tax in the year.

According to him, the outlook for the industry in the immediate future will still be dominated by the problems of non-performing credits noting that despite the clean-up exercise by the CBN, the negative effect on the industry is likely to linger.

"Banks will continue to look for every opportunity to sell off their positions in the stock market, in an attempt to write-back some of the provision. Therefore recovery in the capital market may still take some time.

"On the wider economy, the bitter lessons of the current problem coupled with the unfriendly business climate is likely to restrict the flow of credit in the economy as financial services providers become more risk averse,"' he added.

To consolidate on the performance, the managing director said the company has embarked on product development and risk management review in order to make these supportive systems more robust.

On the plans of the company in the near future, the FSDH said it would seek way to expand available options for its client.

The Guardian Newspaper, Tuesday October 27, 2009.

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