Shelter Afrique. Invests 22bn on housing in Nigeria

A pan-African finance company, Shelter Afrique, has spent over N22.51bn on housing initiatives in Nigeria, the Minister of Power, Works and Housing, Mr. BabatundeFashola has said.

In a statement made available to our correspondent, the minister said that between 2005 and 2010, Shelter Afrique in Nigeria had financed 23 initiatives with a total sum of N10.435bn ($52,175,000) and another N12.08bn ($60,400,000) over the last three years on 10 interventions.

“Of these initiatives, 15 represented lending for construction of housing projects, out of which the largest was for $7m for 376 houses of different types; and 251 service plots, followed by 287 mixed housing units for a cooperative society; 55 housing units and 100 service plots and the least was for 16 maisonettes. This is the intervention on the supply side of housing to provide houses,” he said.

He added that the remaining eight interventions were for mortgage financing to building societies, credit line for individual mortgages and related financing, on the demand side of housing, to provide finance.

Fashola said that out of the 10 interventions in the last three years, seven were for housing construction, including 287 units, 90 units, 15 floor commercial complex, 59 housing units, 300 housing units, 130 apartments and 44 housing units.

“The remaining three interventions were for equity investment in the Nigerian Mortgage Refinance Company of about $3m; and credit lines for on-lending for mortgage totalling $13m,” he said.

The minister said, over the years, the country had embarked on a series of housing initiatives but not one of them had been pursued with consistency or any measurable sustainability.

He added that the unsustainable efforts must change, and give way to a sustainable and well thought out initiative led by the government and subsequently driven by the private sector.

He said, “The first key to our roadmap in housing therefore is planning. We must never be tired to explain the necessity and importance of proper planning. It is the key to successful execution; it is the key to project completion; it is the key to cost control and reduction in variation requests and financial calculations.

“A plan is what is needed and it is what we are currently developing to make the housing policy a reality. Our plan requires first a clear understanding of who we want to provide housing for.”

Naira Drops To 367/Dollar Over Forex Policy Panic

Uncertainty over the Central Bank of Nigeria’s planned exchange rate policy has continued to rattle the foreign exchange market.

The local currency dropped against the United States dollar from 365 to 367 at the parallel market on Monday.

The naira, which has been under persistent pressure, fell to 371 last week before appreciating to 365.

Analysts linked the continued pressure on the naira against the greenback to the CBN’s prolonged delay in releasing the blueprint or details of the planned forex policy.

Economists, analysts and foreign exchange dealers have said the naira will appreciate significantly at the parallel market as soon as the CBN releases details of the planned forex policy.

They said the naira might plummet further against the dollar this week as the shortage of the greenback worsens.

The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, however, said the black market rate might strengthen if the official one was weakened and inflows from investors picked up.

He said, “The naira may trade around 300 to a dollar on the black market after the announcement, because we expect supply to improve.

“In the past weeks, the central bank had created doubt in the market, which triggered another round of speculation.”

The CBN Monetary Policy Committee had a few weeks ago said it would abandon its naira peg to the dollar and introduce a flexible currency regime.

It has not given how this will work and this has unsettled investors who are worried about getting caught in the middle of a devaluation.

The delay has, however, caused the stock market to record huge losses after recording landmark gains following the announcement of the plan to adopt the policy.

The central bank banned dollar sales to retail Bureaux De Change in January and reduced supply at its official interbank forex market in an effort to conserve reserves, now at their lowest level.

The World Bank had last Tuesday cut Nigeria’s economic growth forecast for this year, citing weakness from oil output disruptions, low prices and the CBN’s foreign exchange restrictions.

The lender, in its semi-annual Global Economic Prospects report, said Africa’s biggest economy was expected to grow by 0.8 per cent, down from an estimate of 4.6 percent in January.

FBN Capital Receives Accolades In The Banker, Global Finance, EMEA Finance Achievement Awards

FBN Capital Limited, the investment banking and asset management subsidiary of FBN Holdings Plc. has been recognized for consistent and outstanding performance by three reputable financial awards institutions. The firm emerged as the winner of the “Best Refinancing in Africa’ at the EMEAFinance Achievement Awards; the prestigious “Deal of the Year, Africa” at The Banker Awards; and the “Most Innovative Bank in Africa’ by Global Finance Awards for Accugas IV, Seven Energy’s senior secured term loan and revolving working capital facility.

Speaking on the winning transaction, Patrick Mgbenwelu, Director and Head of Debt Solutions for FBN Capital, said: “These awards reaffirm our ability to remain at the forefront of structuring and closing innovative financing solutions within the African Investment Banking industry. We are pleased to have upheld the trust our clients placed in FBN Capital to assist in heading, structuring and arranging the Accugas IV financing, and our team remains committed to launching similar robustly structured financings in the local market.”

FBN Capital was also awarded “Best Investment Bank in Nigeria’ by Global Finance Magazine for the fifth consecutive year. Commenting on the award, Lolade Sasore, Head of Marketing and Corporate Communications for FBN Capital stated, “We are honored to receive the recognition as an acknowledgement of the high standards we deliver for our clients whom we truly see as partners. As a member of the FBN Holdings Group, FBN Capital is committed to raising the bar much higher and offering our clients the most innovative solutions, demonstrating unrivaled market expertise and reliable business values.

“Providing sound professional advice and execution capabilities in supporting the financing, investing, trading, securing and advisory needs of our clients is our singular focus, and our partners remain confident that they can rely on us to look beyond today and create opportunities for their tomorrow.” she added.

EMEA Finance is a leading bi-monthly global industry publication that reports on the major financial events and happenings initiated and influenced by the international financial industry in Europe, the Middle East and Africa. The award celebrates the Best Refinancing in Africa taking into consideration its market strength, profitability, growth and earnings, as well as the potential and quality of management of the financial institutions.

The Banker, a part of the Financial Times Group, has been providing global financial intelligence since 1926 and for the annual Awards, one winning bank is selected for each of the 120 countries judged; while the Global Finance awards uses a series of criteria including market share, number and size of deals, service and advice, structuring capabilities, distribution network, efforts to address market conditions, innovation, pricing, after-market performance of underwritings and market reputation to score and select winners

Arthur J. Gallagher & Co. Acquires Wisconsin Employee Benefits Firm

Arthur J. Gallagher & Co. Acquires Wisconsin Employee Benefits Firm

June 14, 2016
Arthur J. Gallagher & Co. has acquired The Buchholz Planning Corp. (BPC), located in Madison, Wis. Terms of the transaction were not disclosed.

Founded in 1968, BPC provides employee benefits consulting and brokerage services for middle-market and large businesses and individuals throughout the United States. The firm specializes in offering life and disability insurance products and services to healthcare organizations.


William Buchholz, his partners and his associates will continue to operate at their current location under the direction of Bill Ziebell, head of Gallagher’s North Central employee benefit consulting and brokerage operations.

Arthur J. Gallagher & Co., an international insurance brokerage and risk management services firm, is headquartered in Itasca, Ill.

Zurich’s New CEO Greco Reorganizes Company, Simplifying Structure

June 10, 2016 by Jan-Henrik Förster, Oliver Suess and Jeffrey Vögeli

Zurich Insurance AG’s new chief executive officer, Mario Greco, is shaking up the largest Swiss insurer after an unexpected jump in claims last year forced it to abandon a takeover and prompted his predecessor’s exit.

Zurich is merging its biggest units, global life and general insurance, and reorganizing along geographical lines. The four regional heads —  for Europe, the Middle East and Africa, North America, Latin America and Asia Pacific — will report directly to Greco. The company’s business with its global corporate clients with remain in a separate division.


“This structure is more efficient than the previous one,” Greco, 56, said on a conference call with reporters on Friday. “There will be a contribution to cost savings, but we need to quantify that precisely and we’re not ready to do that today.”

Greco took over at Zurich in March after three years running Italy’s largest insurer, Assicurazioni Generali SpA. Martin Senn, who beat out Greco for the top job at Zurich in 2012, stepped down in December after unexpectedly high claims in the general-insurance unit led the company to scrap a takeover bid for RSA Insurance Group Plc. Senn committed suicide last month.

Zurich shares fell 0.7 percent to 226 Swiss francs ($234.27) as of 11:03 a.m., compared with a percent decline in the Stoxx 600 Insurance index. The stock dropped 15 percent in the past year, versus a 14 percent slump in the index.

Savings Targets

Zurich, along with European rivals, has struggled to improve profitability amid lackluster economic growth, stricter regulatory requirements, record-low interest rates and subdued prices in some markets. The company’s complex and opaque structure has been criticized by analysts as an impediment to improving efficiency and earnings.

The insurer will provide an update on savings in coming months, while confirming the existing targets “for now,” Greco said. Zurich previously said it plans to cut costs by more than $300 million this year.

The revamp “absolutely makes sense,” said Stefan Schuermann, a Vontobel analyst with a hold rating on the stock. “We expect Zurich to overachieve on its costs savings targets and improve its sales dynamics.”

Too Complex

The insurer also appointed Kristof Terryn to the new role of chief operating officer. Robert Dickie, chief operations and technology officer, will leave in the coming months after a transition period, the company said. Terryn was previously head of the general insurance business.

During Greco’s tenure at Generali, he cut costs, revamped businesses, reduced debt and sold units to focus on the company’s main business. He raised about 4 billion euros ($4.5 billion) selling assets, including a U.S. reinsurer and Swiss private bank BSI Group.

“This is similar to what he did at Generali, simplifying the structure,” said Rene Locher, an analyst at MainFirst in Zurich. “Of course it also opens the door to get some costs out. Zurich has grown way too complex over the years.”

–With assistance from Sonia Sirletti.

Duffy Insurance Acquires Jay Colangelo Insurance in Massachusetts

Duffy Insurance Agency, a family-owned, independent agency based in Lynn, Massachusetts, announced that it has acquired Jay Colangelo Insurance Agency of Chelmsford, Massachusetts. Terms of the transaction were not disclosed.

Jay Colangelo Insurance Agency was established in 1994. The agency’s principal James “Jay” Colangelo and his staff of four will remain working out of their Chelmsford location under the current agency name.

This latest deal marks the third acquisition that Duffy Insurance has completed in past three years: it acquired Connolly Insurance Agency of Peabody in 2015 and Mary Modugno Insurance agency of Lynn in 2013.

Founded in 1996, Duffy Insurance services personal and commercial insurance customers throughout Massachusetts. Based in Lynn, Duffy Insurance has 20 staff members and additional Massachusetts offices in Peabody, Gloucester and now in Chelmsford.

Insurers Provide Cover for German Banks Stashing Billions of Euros

Insurers Provide Cover for German Banks Stashing Billions of Euros

June 14, 2016 by Jonathan Gould
Europe’s top insurers are selling protection to German banks that hoard billions of euros of cash in vaults to avoid paying a penalty by parking it at the European Central Bank, company executives told Reuters.

The sums are so big they are also setting up consortia to insure cash storage spaces, responding to banks’ growing desire to escape the negative deposit rate introduced by the ECB to encourage banks to lend money, executives said.


Allianz, the region’s largest insurer, and ERGO, Germany’s second biggest player, told Reuters they are seeing an upsurge in inquiries for cash insurance by German banks. Germany’s Talanx and France’s AXA said they offer similar policies.

On large amounts, these can cost less than half the price of keeping the money at the ECB and executives said banks and insurers are striking deals to underwrite holdings of 2 billion ($2.3 billion) to 4 billion euros.

“In recent months, we’ve seen an increased interest from financial institutions such as banks for higher limits for cash coverage in secure facilities,” said Philip Beblo of Allianz Global Corporate & Specialty in Munich.

Storing cash is particularly popular in Germany, where Finance Minister Wolfgang Schaeuble and banks have been critical of the ECB. The executives said they were not aware of similar requests for cash protection so far from banks from other European countries and Switzerland, where the central bank has also set negative interest rates, has not seen such a trend.

Last week, two officials told Reuters that Germany’s second-biggest lender, Commerzbank, was mulling holding billions of euros in vaults.

The ECB introduced the penalty charge to encourage banks to lend their money to help stimulate the economy rather than parking it at the central bank.

But with economic prospects dim, banks are either unwilling to take the risk of lending or companies and consumers are reluctant to borrow. Compounding this problem, there is ever more cash in circulation, due to ECB money printing.

The extra cash has flowed towards the core of the euro zone and Germany, leading to a glut of liquidity.

Cheaper Costs

Compared to the more common electronic transfer of money, storing and moving billions of euros of banknotes presents a logistical challenge because banknotes are heavy to move in large quantities.

Two billion euros in 200 euro notes, for example, weighs roughly 11 tons.

The cash may also be stolen or catch fire, two of the chief risks that insurers protect banks against.

The steep penalty from central banks, however, makes keeping physical cash a more attractive alternative.

The negative deposit rate of 0.4 percent translates into a charge of 4 euros a year on each 1,000 deposit at the central bank, making it expensive for German banks which have access to large amounts of cash.

A second insurance industry executive, who asked not to be named, said that the cost of storing and insuring the cash against catching fire or theft could be as little as half that amount.

He calculated that the cost of security as well as insuring against loss of the cash would amount to between 0.2 and 0.25 percentage points less than the ECB’s penalty rate.

The risk of insuring large amounts of cash is typically distributed so that no single insurer is on the hook for the whole amount.

The lead insurer arranging a deal with a bank may have four to six co-insurers to cover 1 billion euros. That panel could expand to 10 or more for larger amounts, with insurers typically seeking to limit individual exposure to $300-$400 million.

($1 = 0.8856 euros)

(Additional reporting by Carolyn Cohn in London and John Revill in Zurich; editing by John O’Donnell and Anna Willard)