VFD Group To Acquire Commercial Banking License

…To Raise Capital By N13.5bn This Month

VFD Group Plc, a leading proprietary investment company in Lagos will this month conclude the ongoing capital raise as engagement with regulatory authorities has been concluded.

The raise of N13.5bn is expected to be concluded by this month and would cover the immediate equity capital raise which includes a N4.1bn rights issue, a private placement of N4.9bn and a potential bond issuance of about N4.5bn.

The injection of additional capital into the business would primarily support the commercial banking licence acquisition as well as expansion activities and other investment opportunities.

Further strategic plans would include creating an investment fund. The focus of the investment vehicles includes real estate, arts and collections, public listed entities, venture capital investments and public assets acquisition.

The group is also exploring investment opportunities within the oil and gas and energy sectors. Engagements are ongoing with prospective partners in the marginal oil field bid round.

The Group has also released reports from its investors call for Q1 2021. Over the past couple of years, VFD Group Plc’s performance has provided the foundation for its emergence as the leading investment company in Nigeria with an interest in key sectors of the Nigerian economy.

The Group has continued to establish a value ecosystem for enhanced efficiency and compelling offerings to over a hundred million Nigerians.

The year 2020 was indeed a challenging year for the global economy with the onset of a pandemic that questioned every known business principle.

But despite these challenges, the Group was able to weather this and posted impressive results.

For instance, year on year, gross earnings grew by 102 per cent while interest income grew significantly due to an increase in the income on loans and advances.

The impact of growth in gross earnings and interest income increased the group’s profit before tax (PBT). This was only made possible through the dedication of the hardworking staff and the support from shareholders and other key business stakeholders.

Another key contributor to the PBT was the slow growth rate of operating expenses which grew year on year by 16 per cent which is a testament to the group’s continuous drive towards operational efficiency.

In the first quarter of this year 2021, the balance sheet is largely driven by the impact of part refund of N20bn from the firm’s deposit of N25bn with the CBN for the banking license. This effectively reduced the liability position with the corresponding impact in total assets which declined by 31 per cent when compared to December 2020.

For total equity, this grew by almost seven per cent mainly from retained earnings as the Group started the year with strong performance indicators.

Interest earnings grew by 16 per cent from year-end 2020 led by an N11bn growth in placement. This is reflected in the earnings mix as interest income grew by 357 per cent with key contributions coming from the lending business.

Over the next coming months, significant growth is expected in risk assets as they restructure the lending business within the group while revamp of other areas is also done for the 2021 strategy.

Also highlighted particularly, was the strategy review of Q1 2021 and focus and plans on Q2. Even with the current socio-economic atmosphere in the country, VFD still aims to deliver on its promise to be the foremost investment company and a global player.

In the first quarter, despite the Covid-19 crisis and its effect on the economic activities in the country, the group completed its investment in a leading digital, savings and investment platform in Nigeria. This partnership gives the group access to clientele, market and product knowledge that the investment platform has.

VFD also acquired a 50 per cent stake in a remittance and electronic money transfer processing company. The group believes the importance of remittance to Nigeria and its citizens even as the number of Nigerians in the diaspora continues to increase daily.

In addition, VFD’s real estate subsidiary, Dynasty Real Estate identified a prime opportunity to tap into a relatively new segment of the real estate market – ‘’PropTech’’ by acquiring a 2.5% stake in Spleet Africa.

The investment shows DRE’s unique understanding of the real estate market is not only making traditional Real Estate investments but also expanding its scope to ProPtech which is argued to be the future of real estate.

In February 2021, VFD also entered into a partnership agreement with a microfinance company in Ghana. Under this partnership, the group would be providing support for the development of the company’s IT infrastructure and assist in the deployment of digital banking solutions to the customers in Ghana.

Also in March 2021, VFD Group rolled out the updated VBank App. With this project, VFD is designing an IT infrastructure and building scale that will allow them to connect all their offerings to a single platform and ecosystem while giving the required leverage to scale exponentially.

Also, the VFD group completed a $2.5m series A investment in a smartphone company. The company has an open platform created for smartphone funding and offers mobile network operators integration and locking technology, proprietary credit scoring algorithms, and many more.

This investment further establishes the VFD brand as a mobile-friendly organization that embraces change and technology.

It promises a foothold in the Nigerian smartphone and mobile network operators industry as well as opening up more opportunities for partnerships regarding phone financing in the future.

This continuous expansion of the VFD ecosystem brings about a need to continue to optimise operations, solidify the capital base and ensure they are continuously creating value for the shareholders.