Author: World Finance

Nigeria’s insurance opportunities rest with youth and technology

Posted on by World Finance

In the first parts of our interview with Val Ojumah and Adenrele Kehinde from FBNInsurance, they talk about how the business is working with communities to help them trust the country’s insurers, and about the growth potential in Nigeria’s retail insurance segment. In the final part we dive deeper into FBNInsurance’s growth plan, and how they’re targeting Nigeria’s growing youth with improved technology and service.

World Finance: What’s your growth plan, moving forward?

Val Ojumah: Into the future, we obviously know the external environment is changing very fast. There’s a huge opportunity arising from changing demographics. Many more young people are growing up now. Any company that is focused more on young people, and what they need, and all that goes with it, will obviously see growth in the future. And we are doing that.

There’s also a major migration of population from rural areas to cities, mainly because of jobs. Again, we recognise the impact of that in business, and we are also going to take advantage of all of that going forward.

World Finance: Are you using technology to help consumers engage with the insurance sector? Especially the youth that you’re reaching out to?

Adenrele Kehinde: Yes: nearly every Nigerian owns a mobile phone. So if you can do your transaction over a mobile phone, then you’ve got a larger part of the business.

All these young people, they want to get things on the go. They can’t wait, they can’t be filling in forms as we used to do. Business can’t continue as before. So we are following the trend, and we’re investing more money in technology.

Val Ojumah: Absolutely. If you ignore technology today, you will be counting your days on earth.

Before the end this year, we will have a mobile app, where every individual anywhere in the world can buy insurance from FBNInsurance. You can file a claim, you can check the status of your policy, you can do a whole lot more with that app. Going forward we will have a very elaborate digitalisation programme. So an essential growth plan in our business today.

World Finance: The chairman of the National Insurers’ Association has said that insurance has and will always be the backbone of the economy; how are you contributing to economic prosperity?

Val Ojumah: We’re contributing in several ways. Directly we have provided employment to about 3,000 people in just seven years. We are selling products that encourage people to save – and you know the impact of that on the economy.

Thirdly, the growth of the company has reflected in the gross written premium and in the profits before tax. We have contributed much more than most companies in the market to tax revenue for the government.

In just seven years we have done a lot more than anybody could have expected. And I think these are some of the ways we will contribute even more to the economy in the future.

World Finance: And so how do you see FBNInsurance evolving in the future?

Adenrele Kehinde: In the next two years, our strategy is to be among the first two in terms of return on equity. And we know that with the brand and with the support of our owners, we shall definitely get there.

At the moment, we have the fastest growth and we’ve won some laurels due to that. We’ve been rated A+ by Agusto Rating Index. We’ve won your award twice in three years. We also won the Cup of Nations award as the most profitable insurance company in Africa, from Sanlam this year. So we are growing, and we believe that the growth with continue.

World Finance: Adenrele, Val; thank you.

Adenrele Kehinde: Thank you very much.

Val Ojumah: Thank you very much.

Consolidation likely in Nigerian insurance following new requirements

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A lot of insurers in Nigeria focus on government revenue, but FBNInsurance has been concentrating on growing the retail insurance segment. Adenrele Kehinde and Val Ojumah explain where the growth potential lies in Nigeria, and the likelihood of consolidation among Nigeria’s 50 insurance companies as new regulatory requirements come into force. Continue the conversation with Val and Adenrele, where they talk about FBNInsurance’s growth plan; or go back to watch the first part of the interview, about transforming client relationships to rebuild community trust.

World Finance: Tell me more about the growth potential that exists. A lot of insurers have been focusing on government revenue, but you’ve been seeking growth elsewhere?

Adenrele Kehinde: Yes. We are concentrating more on retail, because we believe that with the huge population in Nigeria, it’s a virgin ground.

So we are ensuring that we give people the service they need and the products that are tailored to their needs. And as a result, we are not neglecting government patronage completely, but just see it as a cream on the cake if it comes.

World Finance: Now Val, many foreign insurers have been attracted to Nigeria’s huge growth prospects, to the extent that your regulator has introduced a rule to make sure that those opportunities don’t just get leeched overseas. Can you tell me how this is working?

Val Ojumah: It’s working very well, but I believe what the regulator is doing is to encourage growth locally, while admitting the expertise and abundant foreign capital that exists in other parts of the world.

Reinsurance is an important aspect of the insurance industry. So it shouldn’t be left just for anybody. That’s what our regulators are doing.

World Finance: Nigeria has more than 50 insurance companies; do you see consolidation in the future?

Val Ojumah: That’s possible. I think there are too many marginal players among the 50. There are only very few strong ones.

With the introduction of the risk-based capital supervisory model, the regulator said that there’s a great possibility of consolidation. Also with the introduction of the IFRS accounting system, there is a chance that some of these companies may not meet the minimum requirements going forward.

We have also been told that there may be chances that the minimum capital required to be in business may be raised, so for some and all of these reasons there’s the possibility that consolidation will happen in the near future. Which is good for us!

World Finance: You have a strong brand through your owners FBNHoldings and Sanlam Group out of South Africa: how does this reputation support you, and how are you working to build on it?

Val Ojumah: The brand equity of First Bank of Nigeria has done a great deal to help us achieve our purposes. It’s something that we will always uphold, because in Nigeria practically every family over the last 120 years has had one association or another with First Bank of Nigeria.

Adenrele Kehinde: Yes: our brand is our heritage, and has given us the trust and confidence that we need in the industry. These are trusted brands that have been tested; and people talk to us just because of this brand. Once they hear First Bank, they will talk to us. They want to do business with us.

And we are guarding it jealously, as well. We don’t want anything to tarnish that image. So we do things right, and we make sure that we give excellent service at all times.

World Finance: Adenrele, Val; thank you.

Val Ojumah: You’re very welcome, thank you.

Adenrele Kehinde: You’re welcome.

FBNInsurance on engaging Nigeria’s communities to rebuild trust

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Nigeria’s enormous population, growing middle class, and need for greater infrastructure investment, represents huge potential for the country’s insurance sector. But insurance penetration remains below one percent. Val Ojumah and Adenrele Kehinde from FBNInsurance discuss the reasons behind Nigerians’ lack of trust in insurance, and explain how they have revolutionising the insurer-client relationship to correct for the evils of the path. Continue the conversation with Val and Adenrele, where they talk about the growth potential in Nigeria, and FBNInsurance’s growth plan.

World Finance: Nigeria’s insurance penetration is very low: tell me more.

Adenrele Kehinde: It is indeed very low, and there are many factors responsible for it.

Nigeria is a very religious nation, and we believe that God is good enough as an insurance and a protector. Some people see insurance as very morbid, and a reminder that death is imminent. Also there’s a general lack of trust. After the indigenisation law of the 1970s, many rich affluent Nigerians became owners of insurance companies with their families. Unfortunately, some of these owners saw insurance as a personal business; and due to wrong investments, when claims were due to be paid, the money had been invested on long terms, and the money was not available to pay claims. Which eroded the trust of people. And as you know, insurance is a promise based on trust. And once that trust is eroded, it’s a challenge to change people’s mindsets.

We have decided to do things right. We do what we promise: by paying claims promptly, and by providing excellent services.

World Finance: In the seven years that you’ve been in operation, what would you say is the biggest change you’ve effected in the insurance sector?

Val Ojumah: We have been revolutionistic in the way we communicate with our clients, the way we treat our clients. We have decided to simplify the insurance policies so that the gap between what we’re trying to say and what they see in our documents is eliminated as much as possible.

We have introduced a documentation and a claims processing system that has shortened the decision time to buy insurance and the decision time it takes to complete a claim.

Over time we have paid claims where we shouldn’t have: to engage communities in a different way, to correct the evils of the past, and make people enjoy the insurance experience with our company.

World Finance: How does FBNInsurance view the role you play in society, and how are you working with communities to grow that trust again?

Val Ojumah: It’s a role that is important: to educate the public about insurance going forward. To bring insurance education closer to the people. Because the only way you can succeed in playing the retail sector is by making the public part of your business, and making you part of the public.

Today, what FBNInsurance is doing is centered around CSR, among communities where we operate, and some of them are directed at our policyholders. So one of the products that we use specifically for this purpose is the FlexiEdu. Every family in Nigeria wants to send their children to school; but it’s probably the most expensive part of every family. So, this product speaks directly to those communities, and those families.

So what we do is use funds from this product to donate to charity organisations, to women’s organisations, and other community organisations that speak to developing education and education facilities in their areas. It’s come out quite successful in our favour over time.

World Finance: Val, Adenrele – thank you.

Val Ojumah: You’re very welcome, thank you.

Adenrele Kehinde: You’re welcome.

How BVI Business Companies power $1.5tr of investment worldwide

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The British Virgin Islands’ financial sector powers more than $1.5tr of investment around the world, and supports 2.2 million jobs. More than 400,000 BVI business companies are currently active, which enable the British Virgin Islands to be the seventh largest source of foreign direct investment. Gary Hales from BVI Finance explains how the BVI business company is used today, and how the islands’ Beneficial Ownership Secure Search scheme with the UK’s HMRC are helping it set new standards for transparency and security.

World Finance: The BVI business company is over 30 years old; how is it used today?

Gary Hales: There’s a wide range of reasons why companies are set up in BVI. And a lot of it is to do with capital flow around the world. They’re holding companies for either real estate assets, for succession planning for families, things like joint ventures being set up. Companies are set up for investment, so if people are putting funds in together to then invest in a different country around the world, or a different initiative, then a BVI company is a great product to utilise, to enable them to do that.

And for listings as well. You know, a number of companies are set up in BVI with anticipation to list in London, in New York. Those are the reasons.

And if you look behind it, what’s happened over the 30 years… BVI’s really focused on maintaining its reputation as being very well regulated. Adhering to all the global standards, to make sure we’re really at the forefront of what we’re doing.

World Finance: Give me some examples of the way that BVI business companies are being used to facilitate economic growth worldwide.

Gary Hales: So I mean, on some of the examples that I’ve mentioned. A BVI company being used for investment purposes is a perfect example. You know, you could be Chinese investors looking to invest in an infrastructure project in Africa, for example. And you may not want to set up the company in Africa, you may not want to set it up in Asia. You’re looking for a jurisdiction that’s tax neutral: you’ll still pay your tax as a company, but you won’t end up being double taxed through having it in BVI.

You know, if you look at the $1.5tr that flows through BVI, the tax that’s generated for governments around the world is in excess of $15bn. So there’s some real benefits that way, in terms of what’s being produced from the activities that go on within BVI.

World Finance: Now the BVI business company model has been replicated around the world; how have you adapted and updated it over the decades, to make sure that it remains competitive and relevant?

Gary Hales: As you mentioned earlier, there are approximately 400,000 companies incorporated in BVI, which makes us one of the world’s largest players in that particular market. And we’re constantly ensuring we’re adhering to global best practice. Whatever the OECD has put out there, the World Bank etc, we make sure that we meet those requirements.

If you couple that with things like having English common law, having a stable, democratically elected government, those sorts of things all help create this environment that we’ve got in BVI, that enables us to keep growing and keep developing and be recognised as a globally reputable jurisdiction.

World Finance: And on that point, you’ve recently introduced a Beneficial Ownership Secure Search programme – tell me more about that.

Gary Hales: So that’s off the back of the agreement we signed with the UK Exchange of Notes in April 2016. And basically, within all those 400,000 companies, the ultimate beneficial owner of those companies are on that system. So that if HMRC are doing a tax investigation on a particular company, they can request through the appropriate authorities in BVI for information on that particular company.

It’s been built by BDO, in conjunction with Microsoft. And I guess the best way I’ve described it – not being a techie myself – is the analogy of an apartment building. So, a hacker would have to get into the building. And then if you consider, in the building there are hundreds of apartments. And each apartment is a corporate service provider. So not only would a hacker have to get into the building, they’d have to then get into every single apartment within that building to gain access to all that information. So, extremely difficult – nigh-on impossible. And the level of security alone, just to get into each one of those, is the equivalent of your online banking.

So it’s really a world-class, innovative system that we have developed.

World Finance: We’ve talked about what BVI’s achieving for the world’s economies, but what do you want to achieve for the islands themselves?

Gary Hales: We play a number of different roles. Obviously we’re promoting and marketing BVI financial services. And the end result of that is obviously: that generates income for the island, which benefits the population. And, you know, 60 percent of BVI government’s income is from financial services, which then goes to build the hospitals, the roads, the normal infrastructure development.

We’ve recently done this report with Capital Economics, which talks about the value that BVI adds to the world, and in the BVI there are 2,200 people who are directly employed in financial services. But if you look at all the knock-on effects of those who are driving taxis, working in restaurants, and shops etc: that actually takes another 3,000. So we’ve got 5,000-5,500 people directly or indirectly working in financial services in the BVI.

That supports 2.2 million jobs worldwide. So, for a population like that, it gives us a great deal of pride, in how we are contributing to the global economy.

World Finance: Gary, thank you very much!

Gary Hales: Pleasure.

BVI Finance: One day after Irma we were incorporating companies again

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We got BVI Finance’s Head of Business Development, Gary Hales, into the studio to talk about its latest report with Capital Economics, which explores the global economic impact of the British Virgin Islands finance services sector. But it was barely a month since Hurricanes Irma and Maria devastated the island, so first we had to check: is everything all right, out there? As Gary explains, the story for the financial services sector is, there is no story. They’re doing business again, and helping the island to rebuild.

World Finance: So what’s the situation like on the ground?

Gary Hales: So we’re almost a month since the first hurricane hit. So we had two: Irma and Maria. And I was on the ground for both of those, and it wasn’t in the job description, I did check! But they were absolutely frightening. Not only the hurricanes themselves, but the aftermath. To sort of, wander through the streets, there was no communication; obviously the phones were all down, all of the systems were down. I couldn’t contact my family back in the UK for a few days. And the devastation is really… words can’t describe. No bark on trees, no leaves on trees; everything is just completely destroyed. It does look like something out of a war movie.

So, there’s two elements to it. One is that just blows your mind away, you think: where do we start?

But on the flip side, how quickly people in BVI have recovered and got going. Perfect example on the financial services side, the day after the first hurricane hit, we were incorporating companies. One of our major law firms in BVI, Ogier, was involved in the Toys R Us chapter 11. That was done in BVI the day before the second hurricane hit.

So, the business recovery plans of firms in BVI have been phenomenal. The financial services commission, that was up and running straight away. We relocated our commercial court to St Lucia. So really, in relation to financial services, the story is that there is no story. All the things you could do prior to the hurricane you can still do now. So yes, there’s sorts of upheaval very much in terms of people’s homes destroyed, people living in one room. But everybody’s just pulling together, getting in and making things happen. So that camaraderie, that support, and that desire to strengthen BVI, make it even better than before, was apparent from literally day one.

World Finance: BVI Finance does have a long history of doing a lot of financial education, a lot of outreach work; are you all out on the ground, helping rebuild?

Gary Hales: Yes, I mean: for me it’s been quite an interesting couple of weeks before I came out to London. In the morning I was doing BVI Finance work, and in the afternoon I was out delivering into shelters. And everybody’s really mucking in: whether that’s clearing the roads, collecting and delivering aid, helping people… you know, finding them somewhere to live.

Within BVI Finance as an example, we’re creating a database of where there are rooms and properties that are available, that have power and access to drinking water. And I think, one thing I just want to mention is that: yes, everything is working. But the cost of rebuilding is $3-4bn. So it is a phenomenal amount of work and funding that’s going to be needed over the next couple of years, to really get BVI back to where it was, and even better than before.

World Finance: Gary, thank you very much.

Gary Hales: Pleasure, thank you Paul.

Commerzbank: Spearheading the digital revolution in banking

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Commerzbank is the backbone of Germany’s mittelstand – and its digital transformation strategy, Commerzbank 4.0, is helping the bank develop its multi-channel approach to helping its customers. Edith Weymayr explains how the bank is updating and adapting all its processes, and creating new products and services to better serve Germany’s evolving small and medium enterprises.

World Finance: Commerzbank 4.0 is the German powerhouse’s digital transformation strategy. Joining me is Edith Weymayr.

First and foremost for Commerzbank are your clients, so how are you working with them – first of all to understand their needs, and then to fulfil those needs?

Edith Weymayr: The digitalisation of our business does not mean that we offer fancy products to our clients, and at the same time keep the old style manual processes in the back office. It’s about end-to-end, front-to-back, digital solutions, in order to significantly simplify and improve our internal processes.

Digital transformation is not a matter of digitalisation, automation of all relevant processes. We also aspire to be at the forefront of new developments. To follow the trend and to recognise permanent changes in the banking sector.

World Finance: Can you give me some examples of the changes you’re seeing, and the new products and services that you’re offering?

Edith Weymayr: First of all there is our treasury management system. This is a system that offers CFOs a powerful comprehensive platform to organise their cash concerns. And it is connected to our Commerzbank banking portal, where regular updates are provided so that this system is always up to date.

Another example is our photoTAN scanner app, where our customers are able to authenticate payment transactions from their smartphone. Or our FX LiveTrader platform, which is a digital online foreign exchange trading platform, where transactions can be concluded with one click, and in addition this system provides information and prices for more than 100 currency pairs.

World Finance: How are you transforming your own internal operations?

Edith Weymayr: We want to be more efficient. We want to digitalise our processes and our product offering. And we will do this by digitalising 80 percent of our processes.

The main pillar of this initiative is our digital campus, where we bring together dedicated teams from all segments of Commerzbank, which work together in agile projects in order to digitalise all processes.

World Finance: Tell me more about the way you manage those client relationships; because they are incredibly important to Commerzbank; what’s your strategy?

Edith Weymayr: It is very important to us that we remain a close partner; that we keep this close relationship with our clients.

We feel convinced that this is the right approach towards our clients, a multi-channel approach via digital solutions for every day processes and the personal relationship with our client.

The proof for this approach is that since 2011 we were able to increase the customer satisfaction by 27 percent.

World Finance: Commerzbank is the backbone of Germany’s mittelstand, so what challenges are these customers specifically facing?

Edith Weymayr: First of all, a growing organisation and demographic pressure, which may lead to skill shortage. And this skill shortage could affect growth patterns.

By conducting surveys among 2,000 corporate customers in Germany – which we call business owners view – with the result of these surveys we provide a platform for our customers to change their ideas, maybe solutions concerning these topics.

Another challenge is of course the climate change and resource scarcity, which could affect the supply chain of our customer.

We advise our clients on energy efficiency. We are one of the largest funders of renewable energy.

One of the challenges all companies are facing at the moment is of course digitalisation and industry 4.0. We are offering our clients an open dialogue, and our digital product offering is linked with the IT system of our clients. These technical solutions will be crucial for the future of our customers.

World Finance: And how does Commerzbank ensure a simple, reliable client experience outside of Germany’s borders?

Edith Weymayr: First of all, if we look across the border, we offer a pan-European network to our clients. We maintain about 200 branches in 14 European countries. But our international clients, they expect that we act and think on a global level. We maintain well-established relationships with our international clients. And they’re now about 60,000 clients around the world.

At the same time, we know that banking even internationally is people’s business, and that’s the reason why we exported our successful relationship model abroad.

In our foreign branches are multi-lingual relationship managers who accompany our clients locally. They have deep knowledge about what’s going on, about the advantages maybe about the risks, and they give advice: how to export, and how to move on the ground.

In addition, they coordinate the global client service team and if necessary they involve product specialists.

World Finance: Edith, thank you very much.

Edith Weymayr: It was a pleasure for me, thank you.

Country by country reporting: managing your tax reputation risk

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The OECD’s BEPS initiative was a response to rising public anger at multinational corporations’ aggressive tax planning. The BEPS actions make companies’ transfer pricing arrangements more transparent to tax authorities – but there’s concern it will go further. This is the final part of a three video series with Vertex: if you haven’t already, watch Bernadette Pinamont discuss the main challenges adapting to country-by-country reporting, and Nanzo Manzano explain how businesses can update and future-proof their processes.

Bernadette Pinamont: Companies must assume – and be prepared for – the country-by-country report in particular to be made public, and/or potentially leaked. And they must be ready to defend themselves, and state their facts and circumstances in public, to defend how aggressive or conservative they may have been in tax planning.

Nancy Manzano: Tax reputational risk is not super brand-new. I mean, back when I was leading tax departments, you know: we didn’t want any bad tax news showing up as a headline. Nowadays that’s probably not good enough. There is so much media attention down to a very grassroots, social media level, around this issue of base erosion and profit shifting, and all of the things that companies are doing to avoid paying tax. That it’s very much something that on a daily basis companies need to be paying attention to.

We need to make sure that the tax story that the company has created for itself is something that they can explain to not just tax authorities, but to the general public as well. Because the public is really hungry for, you know, the kind of tax transparency that the country-by-country report is providing. The problem is, they just don’t know how to interpret it.

Bernadette Pinamont: Many companies will say the CbCr report is only nine elements; it is not the whole story, it is not the whole value prop for transfer pricing, it only tells you a certain slice of the picture.

Nancy Manzano: So, giving them that access to that information, without some defensible and understandable language would be really risky. I think some education around the full economic picture of the base erosion and profit shifting initiative, and the changes that it could bring about, could be really helpful for people to understand.

World Finance: So how do tax professionals need to adapt to this new age of tax transparency?

Nancy Manzano:  I think tax people in general kind of have this tendency to hold back, just a little bit, until they know that something’s really real. Until they have all the information around that something. But I think the pace at which things are coming at tax departments nowadays – they don’t really have that luxury anymore, to kind of wait.

Bernadette Pinamont: The tax department of today has to be even more agile and quicker. They are always challenged with new administrative filing requirements, new legislative changes, new audits, whether it’s aggressiveness by a local state or municipality, or it’s the countries. And they’re forced with looking at some pretty quick turnaround times to be able to inform their CFO or CEO what does that legislation mean that I just read this morning? And that will be their future.

Nancy Manzano: We’re shifting to a world where doing things using manual processes time after time is becoming even more risky, with each new initiative, with each new public disclosure requirement. So you’ve got to find systems and processes that can help you get through that, and you’ve got to have the right technology, and you’ve got to have the right people to run that technology in the tax department.

Finally – and I think most importantly – we’ve really already entered into a world where tax shaming is commonplace. Now tax departments really in earnest have to be able to stay away from the prying eyes and ears of the tax paparazzi.

So, I would say: be ready. To answer the questions from whomever they come. Whether they be internally or externally. Be ready.

Country by country reporting: future-proofing your processes

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Tax departments in multinational corporations are preparing to meet the OECD’s country-by-country reporting standards. Not only do they need to be ready for year one, but they need to future-proof their processes to be equipped for further changes. This is the second part of a three video series with Vertex: if you haven’t already, watch Bernadette Pinamont explain the challenges in country-by-country reporting, and then watch Nancy and Bernadette discuss tax reputation risk.

Nancy Manzano: Multinationals should be asking themselves a number of questions to assess their readiness for the upcoming country-by-country reporting requirements.

Where’s my data going to come from? What kind of systems does it reside in? And can those systems provide the data in the right format? For example, in legal entity format, as opposed to maybe, management reporting format.

Do they have control over the data that they’re going to be asking for? A lot of times they’re not even done in the same financial systems that maybe the corporate headquarters uses to produce the financial statements.

Next, they should be asking, well, do I need to invoke any new processes or implement any new technology to help me perform the tasks that I need to, in order to complete the country-by-country reporting?

And then, once the data is collected, all those sources are identified, can I easily reconcile that data back to other supporting documents.

World Finance: Deploying the right technology at the right points in the workflow will help tax departments be more efficient in collating, reporting, and reconciling all the information that they need.

Nancy Manzano: Multinationals are going to need to be able to address the inherent data management issues around the collection and the conversion and the aggregation of the data by country. The goal here is to create this repeatable, accurate, efficient process that they can use year after year to be able to do their country-by-country report.

The technology that they choose is going to need to be able to handle the multiple sources of data in the multiple formats that it may reside. It’s going to need to be able to identify errors – hopefully earlier in the process, as opposed to later in the process. It’s going to need to help them minimise the manual work that they have to perform on the data, because we all know that the more manual manipulation you have to do to your data, the riskier it becomes. And they’re going to need to reconcile that data back to those other financial filings: local country tax returns, worldwide consolidated financial statements, transfer pricing documentation and the like.

World Finance: And aside from adding to tax departments’ day to day, the country-by-country report presents some higher level challenges for MNCs.

Nancy Manzano:  The OECD has already said they intend to revisit the data that is presented on the country-by-country form in 2020, to see if there are additional data elements that they want to add.

Some of the other challenges are around, perhaps a lack of clarity around some of the definitions. Having enough resources to do the initial implementation, and all of the research, and delving into data sources that that’s going to require. As well as doing it on an annual basis, because this is going to happen year after year. And then also dealing with all the new audit activity around transfer pricing.

On top of all that – perhaps the most concerning challenge – is that we’ve got a whole new risk being introduced to the tax department, and that is what we call tax reputation risk. Really a new concept for the tax department to manage.

Country by country reporting: is your business ready?

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After years of political pressure around corporate tax avoidance and transfer pricing, the OECD announced a plan to address base erosion and profit shifting. Its recommendations – 15 actions – are now being adopted by its member countries. Tax automation experts Vertex are helping multinational corporations prepare – and they’re finding businesses are particularly concerned about action 13, and the country-by-country report. This is the first part of a three video series with Vertex: watch Nancy Manzano explain how to update your tax processes, and then watch Nancy and Bernadette discuss tax reputation risk.

Bernadette Pinamont: Action 13 has three components: it has the master file, the local file, and the country-by-country report. And certainly the country-by-country report is grabbing all of the headlines.

Some global multinationals are worried about filing the country-by-country report. Some are worried that it will be leaked, and it will be in the press for all to see, and they will need to step up to defend what is on the country-by-country report.

Some are worried about the expected increased audits. Large global multinationals are already seeing their audits change; and by change I mean, the aggressiveness of the audit is changing. So many companies are more focused on reviewing their transfer pricing methodologies and looking at their contracts and their substance.

World Finance: This is further complicated because countries are adopting and adapting the OECD’s recommendations in three different ways.

Bernadette Pinamont: The first is that there are many countries who are following exactly the OECD guidelines – the form itself, the timeline for adoption and filing: following exactly the guidelines as prescribed.

There’s a second group of countries – the US, for example – where we did not adopt action 13 in full. We did not adopt the master file and local file, and the reason for that is that the US has always had documentation compliance for transfer pricing, and it covers the majority of what the OECD guidelines for master file and local file prescribe, and there was no need for the US to adopt those.

And there’s a third group of countries like Mexico, which are adopting action 13 in full, but then with respect to the country-by-country report, adding to the requirements of what needs to be disclosed. For example, details around intercompany royalty transactions. So they’re expanding the requirements and the details on the report.

World Finance: They also need to prepare for the existing requirements to change. The OECD has already announced a review of its actions for 2020.

Bernadette Pinamont: Multinationals need to keep an eye on a lot of information and detail on their intercompany transactions with related parties, because I do believe that that’s where some of the expansion is going to be.

I think the potential for the audit creates another challenge for companies to think about. And that is even though the OECD guidelines don’t ask for any reconciliation of the country-by-country report to other documents, if you’re faced with an audit and it’s a transfer pricing audit, they need to be ready to reconcile the country-by-country report to existing transfer pricing documentation, to other forms that they filed with intercompany transactions detailed, and they have to be ready to reconcile that to financial statements, both local, statutory financials, and audited worldwide financials.

BMO’s new digital services help businesses bank from home

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As businesses embark on their digital transformation journey, they’re investing in making their activities more automated, more efficient, and ultimately, easier for staff and customers alike. This extends to their finances too: BMO’s commercial clients simply want to focus on managing their business, with their banking as easy and convenient as possible. BMO’s head of business banking Andrew Irvine explains how the bank is acheiving this for its clients. He discusses the latest innovations they’ve introduced, and the fintech pipeline they’ve created to foster collaboration with fresh graduates and entrepreneurs.

Andrew Irvine: So how has business banking in Canada evolved this year? I’d say, first and foremost, client expectations regarding simplicity, ease of banking, and particularly the ability to leverage digital channels, is ever-increasing. And we’re seeing that in our branch environment. If we look on a year-over-year basis, in-branch transactions are down double digits. And clients are essentially interacting with us digitally ever more.

That being said, one thing that hasn’t changed is our client’s desire for good, trusted advice. And that’s something that we continue to see in the marketplace as a differentiator for us.

World Finance: Talk me through the digital journey that your clients are going on.

Andrew Irvine: Clients want to manage their business, and wherever possible they want banking to be easy.

So from a digital standpoint, the more we can accommodate their service interactions at their own place of work, the better.

In Canada, cheques are still quite popular as a payment method. Particularly among businesses. And so we’ve created a capability that we’re the market leader on, where clients can scan cheques at their place of work through one of our scanners, and deposit those moneys right into their bank account, without ever having to walk into a branch. And they love it.

So it’s all about making their lives easier, and allowing them to go about running their business, versus thinking about their banking.

World Finance: Talk me through the workflow of those innovations – starting from the conversations with your clients, finding out that there’s a need you could fulfil; through to actually forming partnerships with the technological innovators.

Andrew Irvine: The first thing we do is, we spend a lot of time listening to our clients. Monthly surveying our customers; we also have regular advisory councils. Clients speak with us about areas where we are providing terrific service, and areas where we can improve our capabilities.

We also spend a lot of time working with accelerators and emerging companies to ensure that we’re leveraging the newest ideas that are coming out. So we have a relationship here in Toronto with a world-class accelerator called the DMZ – part of the Ryerson University. We’re inviting early-stage companies to apply to be part of the accelerator. We’ll choose to work with six of these companies, and we’ll mentor them over the course of four months, with the opportunity to actually do a proof of concept with them.

We did this programme last year, and we actually have one company, a company called FormHero, live on our website today. And we’ve seen improvement in the uptake of our credit card offering as a great example through the FormHero solution.

So really it’s about, first of all, listening to our clients; and then second of all, participating in the new fintech ecosystem, so that if there are ideas and opportunities that we like, we can bring them onto our platform.

World Finance: What challenges and what opportunities are you seeing for commercial banks today?

Andrew Irvine: We’re seeing a lot of new and interesting companies move in to the banking space. What we know to be true is that incumbent institutions like ours do a number of things very well.

First, we’re highly trusted. BMO’s celebrating its 200 year anniversary this year, so we’ve been in the banking business a long time. And that means that we have strong elements of trust, we have effective regulatory know-how, we know how to protect our clients’ data, and we have distribution. Those are very strong capabilities.

What we need to do is improve the capabilities we have so that payments are easier, more intuitive. One I might touch on is bulk email money transfer. This is the ability to send money to a client or customer of yours by just knowing their email address.

We need to be faster. When clients are coming to us about opportunities to grow their business, and potentially provide financing for them to do just that, they want us to be providing answers much more quickly.

We’re actually working on capabilities as we speak to simplify the adjudication of smaller loans – around half a million dollars and under – to be able to do that within 10, 20, 30 minutes.

World Finance: What else is next for BMO?

Andrew Irvine: I think it’s continuing to evolve our capabilities. The world doesn’t stand still, and the pace of change is ever-increasing.

What we know first and foremost is that client-centricity is critical. So we need to listen to our clients, to be a trusted advisor to them, and to build capabilities that they feel are relevant to them in making banking easier.

World Finance: Andrew, thank you very much.

Andrew Irvine: Thank you.

Exploring Vietnam’s new derivatives market with BIDV Securities Company

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In June 2017, Vietnam opened its derivatives market. Five companies are authorised to trade on the new market, which is hoped will make the country’s stock exchange even more attractive. BIDV Securities is one of those companies – its CEO, Đỗ Huy Hoài, discusses the instruments currently available and planned for the future, as well as the changes already being seen on Vietnam’s main stock exchange.

World Finance: The new derivatives market: what instruments are available, and how much interest has there been so far?

Đỗ Huy Hoài: The main products that will initially be available are stock index futures of VN INDEX and HN INDEX, and government bond futures.

I think that along with continued market development, there will be more and more products. These products are quite new to the Vietnamese market. The authorities are fully aware of this and taking it into consideration for their strategic planning.

Government agencies, as well as securities companies, have also been offering training programs for investors, promoting and giving guidance on conducting transactions, as well as introducing these products’ benefits to individual and institutional investors.

Regarding institutional investors with high-volume transactions, they will participate in the high-value stock index futures and high-value government bond futures.

We also hope that institutional investors will get on board faster. And the market will become more dynamic.

World Finance: What other instruments are planned for the future, and what’s the timeline?

Đỗ Huy Hoài: In the near future, products offered on the market will follow two directions. First, products will be diversified for both individual and institutional investors.

Second, products will bring a level of liquidity to the market, which will make it livelier.

Following the same directions, we will also provide one additional investment channel for investors, known as warrants.

In order to facilitate the market’s liquidity, there will be products that allow investors to sell securities during the settlement period or on the T+0 basis (same day settlement).

World Finance: Investment on the main stock exchange reached $20bn in February of this year; what have been the main investment trends you’ve been seeing?

Đỗ Huy Hoài: On average, the total trading value reached VND 4.5-5trn per trading session, which means that market liquidity is very high, equivalent to periods prior to the financial crisis in 2008.

And with such momentum, there are industries on the centralised stock market that have seen remarkable development, for example the banking industry.

Some bank stocks have seen a growth of over 95 percent: for instance, those of Asia Commercial Bank.

In second place is the real estate market, especially resorts. This is another industry with very positive signs of growth in early 2017.

In addition, stocks of the petroleum industry indicate a potential for positive growth.

World Finance: Foreign direct investment in Vietnam reached $15.8bn last year: how has the government been ensuring Vietnam presents an attractive business climate?

Đỗ Huy Hoài: The Vietnamese government has been aware of the need to create a favourable environment for economic development.

First, the Vietnamese government adopted a resolution aimed at perfecting the socialist-oriented market economy, which calls for completing the legal systems, market institutions and agencies’ operations to create the most convenient and friendly environment for investors.

Secondly, the Vietnamese government adopted a resolution regarding private economic development.

The private sector currently accounts for 40 percent of Vietnamese GDP, playing an important role in the whole country’s development.

This will help them gain access to resources, sources of financing and legal systems so that they can then access investment opportunities that help them develop their businesses.

Third, the Vietnamese Government has also agreed on a vital resolution regarding state-owned enterprises.

SOEs shall continue to be actively equitised. In sectors where State control has been deemed unneccessary, SOEs that have undergone equitisation will have their remaining state-held shares sold off on the open market. SOEs that have yet to undergo this process will continue to be equitised.

World Finance: What does the future hold for Vietnam, and for BIDV Securities Company?

Đỗ Huy Hoài: In the near future, the work of drafting second-generation legal documents will take the stock market another step forward.

When our securities market is perfected it will approach international practices and will bring more opportunities for future economic development.

Following the same trend, BIDV Securities Company, on the one hand, actively participates in a range of market activities and supports investors in their businesses, and on the other hand, collaborates with state agencies such as the Vietnam Securities Depository to help develop the stock market in general.

The investment banking model is one that we are continuing to pursue and prepare for, so that if and when the law is in place, we will be one of the first entities to adopt investment banking.

By becoming an investment bank, BSC will be able to support the market better and help BSC to grow stronger in our business.

World Finance: Đỗ Huy Hoài, thank you.

Đỗ Huy Hoài: Thank you.

Brazilian capital markets recover after government’s economic U-turn

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Brazil’s economy has been recently rocked by scandal after scandal. The Bovespa index had its worst day since 2008 in May 2017, when newly appointed president Michel Temer was named in yet another bribery investigation. But the story of Brazil is one of two halves, explains Huw Jenkins from Latin American investment bank BTG Pactual. The first is its recent political instability, but the second is its recovery from recession. President Temer’s new economic team and positive legislation are pushing the country back to a place where investors have confidence – and infrastructure, real estate and retail are all now seeing strong growth in activity. Watch the second half of our interview with Huw, where he dives deeper into the equity issuances and M&A activity that’s come back to Brazil in 2016-17.

World Finance: Brazil is open for business, but investors are cautious; what should they be keeping their eyes on?

Huw Jenkins: It’s been a time of very significant political instability in Brazil. And that’s clearly rocked investor confidence. So we’ve seen the impeachment of President Dilma Rousseff, and we’ve seen the allegations brought against President Michel Temer.

But I think the story of Brazil is a story of, sort of two halves. One is this political instability, and the other is recovering from a very significant recession. Which was really triggered in many ways by the policies of the previous government, which resulted in an inflated public sector, very high levels of borrowing, and therefore a very low level of confidence from foreign investors.

In a way, there’s been a sort of, strange Brazilian miracle, where we’ve had Mr Temer – who was on the same ticket as Dilma Rousseff, as the vice president – introduce a 180 degree change in government policies. So we’ve seen some very significant legislation, a fiscal responsibility law, a labour law which is significantly improved the ability for flexible labour contracts in Brazil. And generally a move towards creating a much more flexible, modern, open market economy.

So I think investors are now generally looking more at the macroeconomic fundamentals, and a little bit less at the political instability.

World Finance: How is that actually coming through in investments and in business growth?

Huw Jenkins: You know it’s interesting. I can say we certainly haven’t yet seen it in business growth. So I think one of the big challenges for this government is, can they actually deliver both economic growth and job growth before the elections in 2018? And that’ll be very important I think for setting the tone for 2018 and beyond.

But if you look at the investment side of the coin, you can see that foreign direct investment has remained very strong in Brazil. So even though they were running a current account deficit over the last three years, that’s been more than compensated by very high levels of FDI. And we continue to see that in our M&A franchise.

And then on the capital markets side, after a very quiet period in 2014 and 2015, from the second half of 2016, we’ve seen a very significant pickup in equity capital market activity.

And that was really as a result of the impeachment of Dilma Rousseff, and the introduction of the new government. So there was generally a scene of significant improvement in the macroeconomic scene.

And then secondly, inflation started to tail off. And that of course started to create the conditions for reducing interest rates. Which as we know is constructed for equity markets. So then we started to see issuance re-emerge.

World Finance: Where are we seeing that activity come back?

Huw Jenkins: So we’ve seen it in real estate, we’ve seen it in retail, in car rental, in infrastructure. Less so in finance, but I would say broadly, across the board, there’s a hunger for capital in Brazil, where balance sheets have been starved of new capital, new investment.

There are now strong investment opportunities, and a willingness to come to the markets and issue, even on what looked like reasonably low prices relative to historical price levels.

But the real shift has been the interest by international investors in Brazil. And I think with the recovery of the commodity cycle in the second half of 2016, these improvements on the macroeconomic side that I’ve described. Together with, generally, an improving emerging markets environment from about that time. International investors have started to look at Brazil again. And of course, it’s that marginal investor which dictates the price and determines the success of these transactions.

World Finance: So what should the government be looking at to make sure that this sustained interest from international investors can continue for the next few years?

Huw Jenkins: You know, I think it’s going to be a function of continuing to see the political noise decrease. There’s a very important event with the election of the next president in the fall of 2018. Continuing to see the macroeconomic numbers play out. And at some point, starting to see the conclusion of these corruption investigations.

And it feels as though the scope of these investigations are now much better understood, and we’re moving towards a resolution. So perhaps people are less anticipatory of significant shocks from these investigations.

World Finance: Huw, thank you very much.

Huw Jenkins: Thank you.

Infrastructure leads as investment activity returns to Brazil

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Brazil’s economy is in the middle of a strange miracle, as economic stability emerges out of the recent politically tumultuous years. Latin American investment bank BTG Pactual recently acted as joint bookrunner for infrastructure company CCR, in the largest offering in Brazil since April 2015; vice chairman of the board Huw Jenkins explains what this represents about the country’s economic recovery. He also talks through other infrastructure deals with toll road operator EcoRodovias and water company Odebrecht Ambiental; as well as retailer Lojas Americanas and retail player BR Malls.

World Finance: I’m with Huw Jenkins from Latin American investment bank BTG Pactual, and we’ve been talking about how equity activity is finally back on the books for Brazil.

You recently acted as joint bookrunner for the largest offering in Brazil since April 2015 – tell me more.

Huw Jenkins: CCR is an infrastructure company focused in particular on transportation and roads. It’s been an extremely successful deployer of capital within that space in Brazil.

And I think as I mentioned earlier, with the development of a new economic paradigm – we’ve moved out of a recession, started to see some recovery, and a kind of new Brazil. If we get the wind at our back with a good election in 2018, some economic recovery, some recovery in jobs, then we could see a very attractive environment for Brazil.

And especially for an infrastructure company like CCR, which tripled its value over the last 10 years, and is in a position to capture the benefits of a declining interest rate environment, improved government regulation for concessions and infrastructure. And an improved environment internationally, in terms of the way in which investors look at Brazil.

I think that everyone’s always seen Brazil as a country that was short of capital investment. That there was insufficient roads, ports, airports, telecommunications, power generation. And therefore the opportunity to attract foreign capital, because of the relatively high returns in those sectors in Brazil, has always been strong.

World Finance: You were also involved in two large retail transactions; investors are confident this is an area of growth?

Huw Jenkins: I think you might be thinking of BR Malls and Lojas Americanas. Lojas Americanas is definitely a retailer, and clearly benefits from the view that consumer demand is recovering in Brazil, and we will see an improvement in that sector. And indeed, just in the last week we’ve seen one of the largest transactions executed in Brazil – the IPO of Carrefour Brazil. Which reinforces investor appetite for the consumer sector.

The other transaction that we were involved in – BR Malls – is more of a real estate play. Where again, people are looking to capture the benefits of a declining interest rate environment, and what that will do to real estate valuations and the valuations for BR Malls.

World Finance: You’ve also enjoyed strong momentum in your M&A activity in the last couple of years; what have been the most interesting transactions you’ve been part of?

Huw Jenkins: BTG Pactual as a domestic player tends to focus on advising domestic companies that are looking for international buyers. So we advised Odebrecht Ambiental, the major water company in Brazil, which wound up being acquired by Brookfield of Canada, an infrastructure investor.

We acted for EcoRodovias, which is another toll road operator in Brazil, which we sold to Gavio, the Italian operator. And that’s another example of the interest in the infrastructure sector.

We’ve also been involved in transactions in other sectors: real estate and healthcare. But probably still I would say the strongest interest is in infrastructure.

World Finance: What would you see as the future for investment in Brazil?

Huw Jenkins: Having gone through a period – perhaps 10 years ago – where people were over-optimistic, people then became extremely pessimistic. And somebody once told me a story about Brazil, and said something along the lines of, ‘It’s never as good as they tell you, and it’s never as bad as they tell you.’

And I think Brazil is now entering a phase where, it’s going to surprise to the upside. Even though there’s been this political uncertainty. As I mentioned before there’s been this kind of strange miracle, where we’ve wound up passing some very constructive legislation, despite the weakness of the political groups in Brazil. And I think that lays the foundations for the fundamentals of very strong resources base, very large and growing population, relatively underlevered economy where there’s relatively low levels of domestic credit penetration. All of that I think can produce very attractive returns for investors over the next five, 10 years.

World Finance: Huw, thank you very much.

Huw Jenkins: Thank you.

First Bank: Feeding Nigeria’s 200 million people will be huge business

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Nigeria imports nearly a shipload of rice every week. But it is one of the most agriculturally fertile countries in Africa. The challenge, says First Bank of Nigeria MD and CEO Dr Adesola Adeduntan, is that the land is used by subsistence farmers, and is yet to be fully commercialised. He explains the work First Bank is doing in this sector, including helping farmers to form cooperatives in order to finance the right agricultural inputs and equipment. The potential of a food-secure Nigeria is huge. This is the second half of our interview with Dr Adeduntan; in the first half he discusses Nigeria’s general business outlook and First Bank’s financial inclusion targets.

World Finance: I’m with Dr Adesola Adeduntan, managing director and CEO of First Bank of Nigeria, and we’re discussing the country’s agricultural sector.

How is agriculture changing in Nigeria, and what’s driving it?

Dr Adesola Adeduntan: Agriculture has always been a key component of our GDP. What hasn’t happened is to transition agriculture from subsistence farming to commercial farming.

We import, I think, a shipload of rice almost every week. And for every shipload of rice imported to Nigeria, it’s costing us about 15,000 jobs.

Importation of foodstuff into Nigeria is one of the biggest consumers of our hard-earned foreign currency. A country should, give or take, be able to feed itself. Especially a country that is as endowed as Nigeria.

So that is actually the revolution that is ongoing now: so that we begin to have agricultural enterprises that have the required skill to be able to compete globally.

As a country it’s an area we must get right.

World Finance: What’s been the economic impact of Nigeria importing a significant portion of its food up until now? And what would be the benefits of that improved food security?

Dr Adesola Adeduntan: Nigeria today is a country of almost 200 million people, so the business of feeding our people alone is a big business.

If we can grow our own food – over and above the security that that provides – the savings in terms of foreign currency could be very significant.

Indeed, it will help us to generate foreign currency, because there’s a renewed focus on crops that we can export – and we use that to generate export proceeds.

It also helps us to address the issue of youth unemployment. If you commercialise agriculture, and we can get more and more youth into that sector of the economy, then we address the issue of unemployment.

So the benefit of getting agriculture right cannot be underestimated.

World Finance: Tell me more about the work you’re doing in agriculture: what kind of support are you offering specifically in this sector?

Dr Adesola Adeduntan: Over and above making loans available, we have what we call the Outgrower Scheme, where farmers are basically arranged or organised into small groups, and we provide financing to them. And there’s an off-taker who takes their produce off them. So that way the risk of default is minimised.

So we provide financing targeted at helping them to source the right seed, the right fertiliser, the right equipment.

We’re also supporting the large-scale producers – especially those who are in the value-adding section of the agric chain.

We partnered with the Federal Ministry of Finance to organise an Agric Expo, that brought together key players in the agriculture value chain, where we discussed how would the country sustain the current development that we are beginning to see in agriculture. Agriculture should be the biggest economy in Nigeria: with a population of about 200 million people, huge arable land; with the right policy, with the right type of financing, agriculture and the business of just feeding 200 million people will be a massive, massive business.

So we are focusing our energy, and we are developing the right products, we are developing the right services, to ensure that we support the agricultural value chain.

World Finance: Dr Adeduntan, thank you very much.

Dr Adesola Adeduntan: Thank you.

First Bank of Nigeria targets 30m customers in financial inclusion drive

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Nigeria’s economy has been severely punished by the ongoing slump in oil prices: crude sales make up more than 90 percent of the country’s export earnings. In a global economy of continuing uncertainty and dramatic change, what does the future hold for Nigeria? Dr Adesola Adeduntan, MD and CEO of First Bank of Nigeria, explains how the business is helping the country grow. Watch the second half of our conversation with Dr Adeduntan, about the huge growth potential for Nigeria’s agricultural industries.

World Finance: What’s First Bank’s global business outlook for 2017?

Dr Adesola Adeduntan: At First Bank, overall we are cautiously optimistic. We keep on focusing on development in the economy of the US, given the impact that it has on the global economy.

The Chinese economy is another economy of interest to us in Africa, given the fact that China is a major importer of commodities, and most of the economies in Africa are commodity dependent.

As you rightly highlighted, Nigeria is an oil-dependent country. What has happened in the course of 2016 is that the price of crude oil has relatively stabilised around $50 to a barrel. The level of production has also gone up. And we’re already beginning to see the impact of these two fundamental changes in the quantum of foreign currency that is available to fund growth in the economy.

So, when you look at where we are today as a country, and we look at where we were in 2016, generally we are more positive about the trajectory in which the economy is growing. And for us as First Bank, the largest financial institution in the country, we are fully embedded in the economy of Nigeria.

For First Bank it is not just about profitability; it’s also about supporting growth, the general growth, in the economy.

World Finance: You describe First Bank as being really embedded in the Nigerian economy; as the Nigerian economy continues to grow, how are you going to ensure that First Bank’s growth matches or exceeds that?

Dr Adesola Adeduntan: As we move into the execution phase of our current business strategy, it’s about financial inclusion, it’s about leveraging technology to pull more people into the banking segment.

So, we do have this very ambitious plan to grow the number of customer accounts from where it is today – about 14.5 million customer accounts – we plan to grow that to about 30 million customer accounts in the course of three to four years.

We have the largest branch network – in excess of 750 branches. We also have the largest number of ATMs. We have the largest customer base. We have the largest number of subscribers. So, we are fully embedded into the economy.

We have identified the growth areas that are priority to the government, and we are giving very targeted support into those areas. So, SMEs for example is an area we have always focused on. We are the biggest lenders to SMEs in the country, and that continues to be an area of focus.

World Finance: With the largest branch network in Nigeria, how are you keeping costs efficient?

Dr Adesola Adeduntan: We set ourselves a very ambitious cost-to-income ratio target, and within one year of implementing our strategy, we’re actually number two in terms of cost-to-income ratio.

Over the next 24 months, we will centralise transaction processing in a single location. We will standardise processing in that single location. It’s expected to enhance the quality and the strength of our culture and environment.

Our cost to serve is expected to come down. And when our cost to serve comes down, that means more value will trickle down to the bottom line for our shareholders.

World Finance: And how are you maintaining a sustainable capital adequacy ratio?

Dr Adesola Adeduntan: We continuously evaluate our capital position. We evaluate our business plan, and our business development, and we ensure that both go hand in hand.

So with that process – which is being handled at the very senior level of our institution – our capital is continuously monitored and managed.

World Finance: So the future for First Bank: optimised and optimistic.

Dr Adesola Adeduntan: The future is very, very bright. With all the changes that we’re making, we see significant enhancement of our values over the next three years. And for our investors and our key stakeholders, it can only be positive for them.

World Finance: Dr Adeduntan, thank you very much.

Dr Adesola Adeduntan: Thank you.