Bank NPLs (7) - Technical Analysis on Banks' NPLs - Profitability

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Friday, May 22, 2020 07:00 AM / by Debtors Africa/ Header Image Credit:   EcoGraphics


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B.1 Access Bank PBT 2009-2014

Chart 32: Access Bank PBT (N'mn) 2009-2014

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Source: NSE, Access Bank, Proshare Research


Access Bank had an upward trending PBT between 2009 and 2014. Access bank's highest PBT between 2009 and 2014 was N52.02bn recorded in Q4 2014, while it recorded losses of N10.64bn and N3.9bn in Q3 2009 and Q4 2009 respectively.

 

Access bank recorded its highest percentage increase in profit of +508.82% in Q4 2010. The high return on its profitability was led by its Nigerian operations, the Nigerian market contributed the highest profit to the Group. The surge in profit was driven by the recovery of the Nigerian economy, macroeconomic stability and various policies implemented by the Central Bank of Nigeria to boast economic activities. While the highest percentage decline of -3.31% in profit was recorded in Q4 2013, this was a result of macroeconomic challenges faced by the Nigerian economy, crude oil underperformance caused by oil theft and production losses, macroeconomic policies were set to stabilize the Naira, increase in CRR placed constraints on profits (see Chart 32).

 

B.1.1 Access Bank PBT 2015-2019

Chart 33: Access Bank PBT (N'mn) 2015-2019

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Access Bank PBT grew by +11.81% in Q4 2019. Its PBT increased from N103.19bn in Q4 2018 to N115.38bn in Q4 2019.

 

Access Bank had an upward trending PBT between 2015 and 2019. Access Bank highest PBT between 2015 and 2019 was N115.38bn recorded in Q4 2019, while its lowest profit of N16.52bn was recorded in Q1 2015.

 

Access Bank recorded its highest percentage increase in profit of +32.01%, business conditions were favorable both for the global scene and domestic scene, there was oil price adjustment, increase in oil production, stabilization of the Nigerian foreign reserves all led to improved performance of the banking industry. Access bank also recorded an increase in subsidiary contribution with UK and Ghana taking the lead, the bank also recorded an increase in deposits.

 

It recorded its highest percentage decline in profit of -13.47% in Q4 2017. Slow growth recovery from recession in 2016, macroeconomic headwinds, and exchange rate volatility all affected the profitability of the bank between Q4 2016 and Q4 2017 (see Chart 33).


B.2 Zenith Bank PBT 2009-2014

Chart 34: Zenith Bank PBT (N'mn) 2009-2014

Zenith recorded N243.84 in PBT in 2019, against N231.69bn recorded in 2018, that PBT had a year-on-year change of 5.25%.

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Source: NSE, Zenith Bank, Proshare Research

 

Zenith Bank had an upward trending PBT between 2009 and 2014. The highest profit of N119.79bn made by Zenith bank during the period was recorded in Q4 2014. The year 2014 was a challenging year for most Nigerian banks, however Zenith bank recorded an increase in its PBT by +8.3%. The lowest profit during the period under review was recorded in Q3 2009 with N13.22bn

 

Zenith Bank recorded its highest percentage increase in profit of 56.22% in Q4 2012. Despite the challenging business environment, especially in the restrictive monetary policies and the double-digit inflation rates, the bank's profit before tax grew by +56.22%, this is on the back of enhanced operational efficiency (see Chart 34). 

 

B.2.1 Zenith Bank PBT 2015-2019

Chart 35: Zenith Bank PBT (N'mn) 2015-2019

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Source: NSE, Zenith Bank, Proshare Research

Zenith Bank recorded a +5% growth in its PBT in Q4 2019. Its PBT increased from N231.69bn in Q4 2018 to N243bn in Q4 2019.

 

Zenith bank had an upward trending PBT between 2015 and 2019. The highest profit of N231.69bn was recorded in Q4 2018. Due to a challenging macro-environment, the bank recorded a reduction in gross earnings by +15%, but profit grew by +16% year-on-year this was achieved by optimization of its cost of funds, cost-to-income ratio and cost of risk (see Chart 35).

 

B.3 UBA PBT 2009-2014

            

Chart 36: UBA PBT (N'mn) 2009-2014

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Source: NSE, UBA, Proshare Research


UBA's had an upward trending PBT between 2009 and 2014. UBA's highest PBT between 2009 and 2014 was N56.2bn recorded in Q4 2014, while it incurred a loss of N28.5bn in Q4 2011.

 

UBA recorded its highest percentage increase in profit of +282.52% in Q4 2012. The improved profitability was driven by strong earnings growth, increase in return on assets. While its highest percentage decline in profit of -985.24% was recorded in Q4 2011. Tight monetary policies rolled out by the CBN and macroeconomic challenges would be possible reasons for the poor performance of the bank, increase in MPR, exchange rate volatility, slowdown in credit growth, political disturbances impacting the operation of the Cote d'Ivoire market of the Group, all had an impact of the profitability of the Group in Q4 2011 (see Chart 36).

 

B.3.1 UBA PBT 2015-2019

Chart 37: UBA PBT (N'mn) 2015-2019

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Source: NSE, UBA, Proshare Research

 

UBA PBT grew by +4.23% in Q4 2019. Its PBT increased to N111.29bn in Q4 2019 from N106.77bn in Q4 2018. UBA had an upward trending PBT between 2015 and 2019. UBA recorded its highest PBT of N111.29bn in Q4 2019, while its lowest profit was N18.1bn recorded in Q1 2016.

 

UBA's highest percentage increase in profit of +32.41% was recorded in Q4 2016. In spite of the tight monetary policies in the domestic economy especially the full implementation of the Treasury Single Account (TSA) which sterilized both the Naira and foreign currency, UBA recorded its highest percentage increase in profit during the period under review. The high percentage increase in profit was primarily driven by growth in the African subsidiaries, largely by increase in customer and retail deposit.

 

UBA's lowest percentage increase in profit of +1.43% was recorded in Q4 2018.  Despite the slow but positive macroeconomic indices recorded in most of the bank's market particularly in Africa, the bank recorded a slow growth in profit. The domestic economy was characterized by foreign exchange market volatility, depreciation of the Naira, and uncertainties around the 2019 general elections (see Chart 37).

 

B.4 FBNH PBT 2010-2014

Chart 38: FBNH PBT (N'mn) 2010-2014

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Source: NSE, FBNH, Proshare Research

 

FBNH had an upward trending PBT between 2010 and 2014. Its highest profit of N94.06bn was recorded in Q4 2014 while the lowest profit recorded during the period was N14.31bn in Q1 2011. There was percentage increase and decrease in profit during the review period.

 

It recorded its highest percentage increase in profit of +139.8% in Q4 2012, this was driven by the commercial banking business group which contributed the highest to the Group. Increase in its profit was achieved primarily by increase in interest income from loans and advances, as well as investment securities, while it recorded a percentage decline in PBT of -2.75% in Q4 2013. This was as a result of the Nigerian macroeconomic environment and policies rolled out by the CBN which reflected negatively on the profitability of the Group, seeing the increase in contribution from UK, DRC and pension custody but the increase was muted by First Bank of Nigeria's performance (see Chart 38).

 

B.4.1 FBNH PBT 2015-2019

Chart 39: FBNH PBT (N'mn) 2015-2019

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Source: NSE, FBNH, Proshare Research

 

FBNH PBT grew by +28.04% in Q4 2019. Its PBT increased from N65.29bn in Q4 2018 to N83.6bn in Q4 2019.

 

FBNH had an upward trending PBT between 2015 and 2019. The highest profit recorded during the review period was N83.6bn in Q4 2019 while the lowest profit recorded during the period was N15.67bn in Q2 2017.

 

It recorded its highest percentage increase in profit of +147.63% in Q4 2017, this was on the back of decline in impairment charge on credit losses. While its lowest percentage increase in profit of +6.68% was recorded in Q4 2016, this was as a result of macroeconomic challenges, such as, contraction of the Nigerian economy, devaluation of the domestic currency and worsening asset quality as well as increased regulatory restrictions, all reflected negatively on the profitability position of the bank (see Chart 39).

 

B.5 GT Bank PBT 2010-2014

Chart 40: GT Bank PBT (N'mn) 2010-2014

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Source: NSE, GT Bank, Proshare Research

 

GT Bank had an upward trending PBT between 2010 and 2014. It recorded its highest PBT of N116.39bn in Q4 2014 while it recorded its lowest profit of N17.97bn in Q1 2011.


It recorded its highest percentage increase in PBT of +65.96% in Q4 2012, this was driven by cost effective strategies employed by the bank, growth in the loan book, growth in investment in government short term debt securities and increase in deposits from customers.

 

It recorded its lowest percentage increase in profit of +3.94% in Q4 2013, during this period under review, the CBN rolled out restrictive monetary policies to contain inflationary pressures, variances between official and black market rates due to the struggle of the Naira against foreign exchange, depletion of the foreign reserves and excess crude account all reflected negatively to the financial position of GT bank (see Chart 40).

 

B.5.1 GT Bank PBT 2015-2019

Chart 41: GT Bank PBT (N'mn) 2015-2019

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Source: NSE, GT Bank, Proshare Research

 

GTBank PBT grew by +7.84% in Q4 2019. Its PBT increased to N231.71bn in Q4 2019 from N215.59bn in Q4 2018.

 

GTBank had an upward trending PBT between 2015 and 2019. GT Bank recorded its highest profit of N231.71bn in Q4 2019 while it recorded its lowest profit of N30.68bn in Q1 2016.

 

GTBank recorded its highest percentage increase in profit of +36.82% in Q4 2016. Despite the macroeconomic challenges faced by the banking industry such as contraction of the domestic economy and devaluation of the Naira, GT Bank recorded it highest percentage increase in profit during this period, this was achieved by expansionary policies rolled out by the CBN such as the liberalization of the FX and clearing the pent-up FX demand via the sale of FX forwards.

 

While it recorded its lowest percentage increase in profit of +7.66% in Q4 2018, this was primarily as a result in the dip in the loan book which affected the financial position of the bank (see Chart 41).

 

B.6 ETI PBT 2009-2014

Chart 42: ETI PBT (N'mn) 2009-2014

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Source: NSE, ETI, Proshare Research

 

ETI had an upward trending PBT between 2009 and 2014.The highest profit within the time period was N88.44bn in Q4 2014. While the lowest profit within the time period was N7.94bn in Q1 2012. 

 

The highest percentage increase in profit of +150.01% was recorded in Q4 2014, this was achieved primarily on the back of revenue gains and strategic cost management. While it recorded its highest percentage decline of -34.03% in Q4 2013, this was primarily as a result of macroeconomic challenges faced both domestically and internationally and the parent company ETI generated no distributable earnings during the period under review (see Chart 42).

 

B.6.1 ETI PBT 2015-2019

Chart 43: ETI PBT (N'mn) 2015-2019

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Source: NSE, ETI, Proshare Research

 

ETI PBT grew by +8.12% in Q4 2019. Its PBT increased to N146.54bn in Q4 2019 from N135.53bn in Q4 2018.

 

ETI had an upward trending PBT between 2015 and 2019. Its highest profit of N146.54bn was recorded in Q4 2019 while it recorded a loss of N33.71bn in Q4 2016.


Its highest percentage increase in profit of +361.98% was recorded in Q4 2017, this was driven by a significant reduction in impairment losses on loans and advances. The bank recorded its highest percentage decline in profit of -183.05% in Q4 2016, this was as a result of macroeconomic challenges faced by the Group both domestically and internationally, asset quality issues emerging in the Group's Nigeria market and an increase in non-performing loans in other subsidiaries like the Francophone West Africa and Central and Southern Africa (see Chart 43). 

 

B.7 Unity Bank PBT 2010-2014

Chart 44:  Unity Bank PBT (N'mn) 2010-2014

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Source: NSE, Unity Bank, Proshare Research

 

Unity bank recorded an upward trending PBT between 2009 and 2014. Unity bank recorded its highest profit of N13.64bn in Q4 2014 while it recorded its largest loss of N33.64bn in Q4 2013.

 

Its highest percentage increase in profit of +163.49% was recorded in Q4 2010 primarily driven by increase in total deposits. The highest percentage decline in profit of -620.97% was recorded in Q4 2013. Contractionary policies rolled out by the CBN, like the reduction in income from commission on turnover, increase in CRR on public funds and increase in AMCON levy impacted negatively on the profit position of Unity bank, in addition, full provisioning on classified accounts as well as other assets had negative impact on the bank (see Chart 44).

 

B.7.1 Unity Bank PBT 2015-2019

Chart 45:  Unity Bank PBT (N'mn) 2015-2019

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Source: NSE, Unity Bank, Proshare Research

 

Unity bank had a downward trending PBT between 2015 and 2019. Unity bank recorded its highest profit of N10.35bn in Q3 2015, also unity bank made a loss of N14.24bn in Q4 2017.

 

It recorded its highest percentage increase in profit of +109.91% in Q4 2018, while its highest decline in profit of -884.31% was recorded in Q4 2017 (see Chart 45).


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B.8 Wema Bank PBT 2009-2014

Chart 46: Wema Bank PBT (N'mn) 2009-2014

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Source: NSE, Wema Bank, Proshare Research


Wema bank had upward trending PBT between 2009 and 2014. Within the study period, Wema bank made both losses and profit in different quarters of the year. It recorded its highest profit of N13.14bn in Q4 2010 and it had its highest loss of N4.94bn in Q4 2012.


Its highest percentage increase in profit during the study period was +248.18% in Q4 2010, primarily due to an increase in customer deposit. While the highest percentage decline in profit was -128.69% in Q4 2011 (see Chart 46).

 

B.8.1 Wema Bank PBT 2015-2019

Chart 47: Wema Bank PBT (N'mn) 2015-2019

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Source: NSE, Wema Bank, Proshare Research


Wema Bank PBT grew by +40.92% in Q4 2019. Its PBT increased to N6.76bn in Q4 2019 from N4.8bn in Q4 2018.

 

Wema Bank had an upward trending PBT between 2015 and 2019. Wema bank recorded its highest PBT of N6.76bn in Q4 2019 while its lowest profit of N505mn was recorded in Q1 2016.

 

Its highest percentage increase in profit of+59.42% was recorded in Q4 2018, despite the domestic economy slow growth, Wema Bank recorded its highest profitability during the period under review, this was driven primarily by an increase customer deposit and maintaining the non-performing loan (NPL) below the regulatory limit. 

 

Wema Bank recorded a significant decline in its profit of -7.27% in Q4 2017. Foreign exchange illiquidity and heightened NPLs reflected negatively on the profit position of Wema Bank (see Chart 47).


B.9 Union Bank PBT 2009-2014

Chart 48: Union Bank PBT (N'mn) 2009-2014

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Source: NSE, Union Bank, Proshare Research 

 

Union Bank had an upward trending PBT between 2009 and 2014. Union bank recorded profits and losses during the study period. It recorded its highest profit of N36.45bn in Q4 2010 while it recorded its highest loss of N122.41bn in Q4 2011.

 

Union Bank's highest percentage increase in profit was +635.16% in Q4 2014, in spite of restrictive policies rolled out by the CBN, such as, increase in CRR both on public and private sector funds and reduction in commission on turnover, Union bank recorded its highest profit during the period under review, this was achieved as a result of a one-time accounting impact from subsidiary disposals.

 

Union bank highest percentage decline in profit of -435.79% was recorded in Q4 2011, this was largely as a result of the provisioning for long outstanding reconciliation items as well as the provisioning and disposal of non-performing loans to AMCON (see Chart 48).

 

B.9.1 Union Bank PBT 2015-2019

Chart 49: Union Bank PBT (N'mn) 2015-2019

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Source: NSE, Union Bank, Proshare Research


Union Bank PBT grew by +34.63% in Q4 2019. Its PBT increased from N18.45bn in Q4 2018 to N24.84bn in Q4 2019.

 

Union bank had an upward trending PBT between 2015 and 2019. Union bank recorded its highest profits of N24.84bn in Q4 2019 and lowest profit of N2.49bn in Q1 2015.


Union bank highest percentage increase in profit of +34.63% was recorded in Q4 2019, largely driven by increase in customer deposits due to consumer confidence in the bank. While its highest percentage decline in profit was -1.39% recorded in Q4 2017 (see Chart 49).

 

B.10 FCMB PBT 2009-2014

Chart 50: FCMB PBT (N'mn) 2009-2014

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Source: NSE, FCMB, Proshare Research


FCMB had an upward trending PBT between 2009 and 2014. FCMB recorded its highest profit of N23.9bn in Q4 2014. It made a loss of N11.35bn in Q4 2011.

 

FCMB recorded its highest percentage gain in profit of +243.10% in Q4 2012. While it experienced a significant percentage decline in profit of -225.81% in Q4 2011 caused by its huge loss of N11.35bn incurred in Q4 2011 (see Chart 50).

 

B.10.1 FCMB PBT 2015-2019

Chart 51: FCMB PBT (N'mn) 2015-2019

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Source: NSE, FCMB, Proshare Research

 

FCMB PBT grew by +9.15% in Q4 2019. Its PBT increased to N20.13bn in Q4 2019 from N18.44bn in Q4 2018.

 

FCMB PBT between 2015 and 2019 was upward trending. FCMB recorded its highest profit of N20.13bn in Q4 2019. While the lowest profit of N1.98bn was recorded in Q1 2017.  

 

It recorded both percentage increase and decline in profit during the period under review. Its highest percentage increase in profit of +109.2% was recorded in Q4 2016. While it experienced a significant decline in profit by -29.47% in Q4 2017, as profit declined from N16.25bn to N11.46bn in Q4 2017 (see Chart 51).

 

B.11 Sterling Bank PBT 2009-2014

Chart 52: Sterling PBT (N'mn) 2009-2014

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Source: NSE, Sterling Bank, Proshare Research

 

Sterling Bank had an upward trending PBT between 2009 and 2014. Sterling bank recorded losses and profit during the review period. Sterling bank recorded its highest profit of N10.75bn in Q4 2014 while it recorded its highest loss of N11.63bn in Q4 2009.


Also, Sterling bank recorded both percentage increase and decrease in profit. Its highest percentage increase in profit was +142.59% in Q4 2010. While its highest percentage decrease in profit of -30.18% was recorded in Q4 2011 (see Chart 52).

 

B.11.1 Sterling Bank PBT 2015-2019

Chart 53: Sterling PBT (N'mn) 2015-2019

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Source: NSE, Sterling Bank, Proshare Research

 

Sterling Bank PBT grew by +12.47% in Q4 2019. Its PBT increased from N9.49bn in Q4 2018 to N10.67bn in Q4 2019.

 

Sterling Bank recorded its highest profit of N11.02bn in Q4 2015 while it recorded its lowest profit of N2.03bn in Q1 2017.

 

During the review period, sterling bank recorded both percentage increase and decrease in profit. Its highest percentage increase of +35.11% was recorded in Q4 2017 while it recorded its highest percentage decline in profit of -45.54% in Q4 2016 (see Chart 53) 

 

B.12 Fidelity Bank PBT 2009-2014

Chart 54: Fidelity Bank PBT (N'mn) 2009-2014

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Source: NSE, Fidelity Bank, Proshare Research

 

Fidelity Bank had an upward trending PBT between 2009 and 2014. Fidelity bank recorded its highest profit of N21.63bn in Q4 2014 while it recorded its lowest profit of N2.05bn in Q2 2009.

 

It recorded both percentage increase and decrease in profit. Its highest percentage increase in profit of +181.91% was recorded in Q4 2012. While it recorded its highest percentage decline in profit of -58.25% in Q4 2013 (see Chart 54).

 

B.12.1 Fidelity Bank PBT 2015-2019

Chart 55: Fidelity Bank PBT (N'mn) 2015-2019

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Source: NSE, Fidelity Bank, Proshare Research

 

Fidelity Bank PBT grew by +20.98% in Q4 2019. Its PBT increased to N30.35bn in Q4 2019 from N25.09bn in Q4 2018.

 

Fidelity bank had an upward trending PBT between 2015 and 2019. Fidelity bank recorded its highest PBT of N30.35bn in Q4 2019 while it recorded its lowest PBT of N4.03bn in Q1 2016

 

It recorded both percentage increase and decrease in profitability. Fidelity bank recorded its highest percentage increase in profit of +83.55% in Q4 2017 while its highest percentage decline in profit of -21.13% was recorded in Q4 2016 (see Chart 55).

 

B.13 Stanbic IBTC Bank PBT 2010-2014

Chart 56: Stanbic IBTC Bank PBT (N'mn) 2010-2014

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Source: NSE, Stanbic IBTC Bank Proshare Research

 

Stanbic IBTC Bank had an upward trending PBT between 2010 and 2014.  Its highest profit recorded was N43.53bn in Q4 2014 while its lowest profit recorded during the period was N3.44bn in Q1 2012.

 

It recorded percentage increase and decrease during the period. Stanbic IBTC Bank recorded its highest percentage increase in profit of +115.71% in Q4 2013 while it recorded a percentage decline in profit of -16.89% in Q4 2011 (see Chart 56).

 

B.13.1 Stanbic IBTC Bank PBT 2015-2019

              

Chart 57: Stanbic IBTC Bank PBT (N'mn) 2015-2019

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Source: NSE, Stanbic IBTC Bank, Proshare Research

 

Stanbic IBTC Bank PBT grew by +3.15% in Q4 2019. Its PBT increased from N88.15bn in Q4 2018 to N90.93bn in Q4 2019.

 

Stanbic IBTC Bank had an upward trending PBT between 2015 and 2019. Its highest profit recorded was N90.92bn in Q4 2019 while its lowest profit recorded during the period was N4.82bn in Q1 2015.

 

It recorded both percentage increase and decrease in profit during the period. Stanbic IBTC Bank recorded its highest percentage increase in profit of +64.38% in Q4 2017 while its lowest percentage increase in profit of +44.12% was recorded in Q4 2018 (see Chart 57).


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Related Reports (PDF)

1.      Download the Full PDF Report - Debtors Africa, May 13, 2020

2.     Executive Summary PDF - Proshare, May 14, 2020

3.     AMCON and Financial Services Debt Burden in Nigeria - Aug 17, 2018


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