Rencap Sees Strong Economic Growth In Nigeria, Ghana, 2017 Profit Up 43%

Leading emerging and frontier markets investment bank, Renaissance Capital (Rencap), expressed strong sentiments about the capital market and economy of Nigeria and neighbouring Ghana, which it says could rank among the strongest performers in the coming months and year.
A statement by Renaissance Capital, sent to our correspondent on Tuesday, quoted Christophe Charlier, who was appointed the company’s chairman as saying it is for this reason its ground teams in both countries “are well-positioned to service clients in these (markets).
Charlier equally expressed excitement about the market in Egypt, describing it “as a truly fascinating growth story set to take off in the years to come.”
Announcing its financials for the full year ending December 31, 2017, with Rencap reported net profit from the core business rising by 43% year-on-year to $15.6m, which was despite the marginal 8% growth in operating income at $145m. It was driven mainly by the impressive performance of its derivatives business, whose revenue more than doubled in the reporting period.
Revenue growth, Rencap said in a statement on Tuesday, was also supported by its fixed income, currencies and commodities (FICC) division, which reported 78% growth in revenue. Cash equities business grew by 21%; besides the 43% healthy rise in the investment banking business, with debt capital markets as main driver.
Renaissance Capital’s operating expenses were up by 8% YoY to $121.7m, as a result of investment in personnel and new hires to meet growing client demand and to capitalise on market opportunities.
Equity-to-assets ratio for the period stood at 15%; total assets and equity amounted to $3,260m and $486mn, respectively, as of 31 December 2017.
Also commenting on the result, Ruslan Babaev, Co-CEO at Renaissance Capital, described 2017 as an excellent year for the company’s capital markets activities, as it highlighted an “unrivaled market offerings in emerging and frontier economies. We have led and executed a number of unique transactions.
This, he said, includes “a $400mn international bond issuance for Fidelity Bank Plc, a leading commercial bank in Nigeria; and the debut corporate infrastructure bond for Viathan Group, Nigeria’s largest captive and embedded power producer among others.”
He also recalled the maiden “corporate issue for a foreign borrower in the Russian domestic ruble market for Kazakhstan Temir Zholy, the state railway company of the Republic of Kazakhstan; the first-ever local currency international bond issue out of Georgia for Bank of Georgia; the debut $350m issue for Eurotorg, a privately owned retailer in Belarus.
These, he stressed, were among the “range of excellent opportunities across emerging and frontier markets” in 2017.
On the emerging capital market front, Rencap’s team, the statement continued, worked on a range of significant deals over the past year, such as the Initial Public Offering (IPO) of Obuv Rossii, the leading Russian footwear retailer in the mid-price segment; and the IPO of Waberer’s International, the largest vehicle operator in international full truckload transportation in Europe and the leading logistics company in Hungary. There was also an “accelerated bookbuild offerings for domestic and international companies. We plan to continue growing and reinforcing our positions in the Firm’s core regions, and capitalise on the opportunities arising in global emerging and frontier markets.”
Anna Vyshlova, Co-CEO at Rencap noted: “Our strong financial performance is a result of a continuous campaign for providing career development opportunities, promoting internal people and strengthening our team globally with the best professionals. In 2017 we made a number of important hires, including Petr Molchanov, Head of Investment Banking, Russia & the CIS, Andrey Volkovskiy, Head of Financial Institutions Investment Banking; Alexander Burgansky as Head of Oil & Gas Research and Alexander Fonarkov as Head of International Equity Trading in London as well as three hires in New York. We have progressed with the opening of our office in Cairo, having hired Ahmed Hafez as Head of MENA Research and his team.
“We were recognised as the top Frontier Brokerage in the prestigious Extel Survey in 2017, and were named the Best Bank in Frontier Markets by Global Finance magazine this year. On behalf of the management team, I would like to thank all of our employees for their great efforts, teamwork, dedication and passion for our business. We are incredibly grateful and look forward to another year of market-leading performance and growth across all of our key geographies.”
For Dmitry Razumov, General Director at ONEXIM Group, “it’s been ten years since ONEXIM entered into a strategic partnership and invested in Renaissance Capital. During this period we have witnessed a series of important milestones for the firm, including successfully surviving the global financial crisis, fully turning around its operations and returning to profitability, all while fighting off a range of market disruptions and sector challenges.
“Today, we see a much stronger firm, an independent, renewed, robust, agile investment bank, truly pioneering in the frontier markets space and providing a unique offering to its global investor client base. ONEXIM Group remains fully committed to further supporting Renaissance Capital and is excited to witness the Firm’s future growth.”