The Nation Newspaper

Category: Money

  • ‘Banks’ loans hit N33tr in 12 months’

    ‘Banks’ loans hit N33tr in 12 months’

    By Collins Nweze

    Macroeconomic and Fixed Income Researcher at FBNQuest, Gregory Kronsten has listed the macroeconomic impact of the Covid-19 pandemic on the population.

    In a report, he said one bright spot has been the 21 per cent increase in the loan books of deposit money banks over 12 months to N3.3 trillion

    He explained that for manufacturing, the increase has been closer to 35 per cent.

    He said: “As well as leaning on the banks to boost lending as their regulator, the Central Bank of Nigeria has also multiplied and deepened its own credit interventions over the period. The beneficiaries are not identifying themselves and probably include few SMEs, yet the increase should help businesses in their hour of need,” he said.

    The investment and research firm, added:  “We see better access to bank credit and more government spending on the agenda too, but the principal driver of the (negative) growth number this year is Nigeria’s position a little apart from the global village. Its large agricultural economy and sizeable domestic market, together with limits to its international integration, together mean that its GDP will contract in 2020 by rather less than many of its peers. For the same reason (its uneven development), the rebound next year is set to be modest”.

    It also said the Nigeria Bureau of Statistics (NBS) data  shows a better-than-expected return to work after lockdown, particularly in rural areas. Most returnees work in agriculture and non-farm household firms.

    However, respondents are returning to companies with a fall in revenue relative to pre-COVID and with magnified operating challenges. Farmers have generally reduced the area planted to crops. There are large gaps in the safety nets of many households.

    “Closing with the impact of the virus on inflation, there are downward pressures such as a further weakening in consumption patterns due to the lockdown. However, there are also upward pressures such as the shutdown of factories and general supply chain disruptions. Our take is that the headline rate will see a further modest rise to 13.1 per cent year-on-year at year-end 2020 from 12.6 per cent in June.

  • FirstBank holds Fintech summit

    FirstBank holds Fintech summit

    Collins Nweze

    FirstBank of Nigeria Limited has held its virtual  FinTech Summit 4.0 in Lagos.

    It has a theme: ”How Blockchain and Artificial Intelligence will Disrupt FinTech in Nigeria”.

    The programme was part of the bank’s plan to deepen e-payment and enhance financial inclusion in the country.

    Group Executive, e-Business & Retail Products, Chuma Ezirim, said FirstBank has adopted the open data policy, and is partnering with Fintechs in getting more customers into the financial system.

    “We work closely with Fintechs, and our relationship with them is mutually beneficial. If you are a Fintech and you want to leverage on our data to get more people into the financial system, we will oblige you and ensure that whatever agreement we reach with you on your business idea is protected,” he said.

    Deputy Managing Director, FirstBank of Nigeria Limited, Mr. Gbenga Shobo said: “At FirstBank, we have been at the forefront of employing technology in the delivery of financial services in the country exemplified by our various products and services such as FirstMobile, USSD Banking services, FirstMonie Wallet, FirstMonie Agent Banking, FirstAdvance loans provisions.

    “The 2020 edition of our fintech summit has built on the successes achieved in the last three editions. We welcome the panelists as we look forward to the shared knowledge which will be integral to deepening the continued growth of banking technology, especially its impact on the Gross Domestic Product of Nigeria and the continent at large,” he added.

    The CBN recently promoted the use of regulatory sandbox which is a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.

  • CBN directs banks to share customers’ data with Fintechs

    CBN directs banks to share customers’ data with Fintechs

    By Collins Nweze

    The Central Bank of Nigeria (CBN) has asked commercial banks to share their customers’ data with financial technology (Fintech) companies to increase access to financial services and provide better services to customers.

    CBN Director, Payment System Management, Musa Jimoh disclosed this yesterday during the virtual FirstBank FinTech Summit 4.0 held in Lagos with theme: “How Blockchain and Artificial Intelligence will Disrupt FinTech in Nigeria”.

    He said the directive was in line with the apex bank’s five year vision and open banking regime policy that would require banks to open their account base to Fintechs to bring more people into the financial system.

    Jimoh described Fintechs as technology-enabled innovation in financial services that could result in new business models, applications, processes or products with an associated material effect on the provision of financial services.

    Fintech firms like Quick-teller, MoniDey, Baxi, PocketMoni, Unified Payments, Paga, Cellulant, to mention but a few are now part of the financial system, offering banking services to both the banked and unbanked within the population.

    The companies are helping consumers in bill payments, retail payments, airtime purchases and use of Unstructured Supplementary Service Data (USSD) transactions. They also collect payment from all spectrums of the population – whether banked or not.

    Jimoh said the CBN is also boosting the use of artificial intelligence in banking, and promoting digital payment access all sectors of the economy.

    “We have also released the quick response -QR Code framework which is expected to help drive the ecosystem, and provide a central database that will promote financial inclusion,” he said.

    Read Also: ‘CBN opened NIPOST’s stamp duty account’

    Also speaking, Group Executive, e-Business & Retail Products, Chuma Ezirim, said FirstBank has already adopted the open data policy, and is partnering with Fintechs in getting more customers into the financial system.

    “We work closely with Fintechs, and our relationship with them is mutually beneficial. If you are a Fintech and you want to leverage on our data to get more people into the financial system, we will oblige you and ensure that whatever agreement we reach with you on your business idea is protected,” he said.

    Speaking on the event, Deputy Managing Director, First Bank of Nigeria Limited, Mr. Gbenga Shobo said: “At FirstBank, we have been at the forefront of employing technology in the delivery of financial services in the country exemplified by our various products and services such as FirstMobile, USSD Banking services, FirstMonie Wallet, FirstMonie Agent Banking, FirstAdvance loans provisions.

    “The 2020 edition of our fintech summit has built on the successes achieved in the last three editions. We welcome the panelists as we look forward to the shared knowledge which will be integral to deepening the continued growth of banking technology, especially its impact on the Gross Domestic Product of Nigeria and the continent at large,” he added.

    The CBN recently promoted the use of regulatory sandbox which is a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight, subject to appropriate conditions and safeguards.

    This would enable the bank stay abreast of innovations while promoting a safe, reliable and efficient Payments System to foster innovation without compromising on the delivery of its mandate.

    He said the CBN has already released a framework that defines the establishment, rules and operations of a Regulatory Sandbox for the Nigerian Payments System in order to promote effective competition, embrace new technology, encourage Financial Inclusion and improve customer experience, with a view to engendering public confidence in the financial system.

  • Wema Bank launches  collateral-free SMEs’ loans

    Wema Bank launches  collateral-free SMEs’ loans

    By Collins Nweze

    Wema Bank has launched collateral-free SMEs’ loans to assist businesses negatively affected by the Coronavirus pandemic to grow their operations.

    In a statement, the bank said the product is in line zthe bank’s continued   raesponsibility to support fight against the ongoing global health crisis.

    The SME loan products support businesses in need of working capital finance can get up to N10 million without collateral to meet their short-term business needs.

    This facility is available for business owners who are in segments such as trade /general commerce, schools, pharmacies, hospitals, clinics and diagnostic centres. Also, in the bank’s quest to enhance reach and accessibility of these facilities, it has made it available to both new and existing customers of the bank (including those doing business with their personal names).

    “The bank is also offering up to N5 million without collateral and up to 12 months repayment period to businesses that are doing trading or general commerce while school owners can get up to N10 million without collateral with also 12 months repayment period.

    “Health sector businesses like pharmacies, hospitals, clinics and diagnostic centres can also get up to N5million without collateral with up to 12 months repayment period to meet working capital needs. In an earlier communication, the bank had stressed how critical it is to support players in the health sector, especially with the realities of the time.

    “For us, we will continue to put the health of Nigerians and the safety of our communities first,” said the Managing Director/CEO Wema Bank, Ademola Adebise.

    “It is our joy to see players in the health sector grow during this difficult time and we encourage them to take advantage of all our support programmes to keep their businesses afloat.”

    Recall that the bank earlier suspended loan repayments for SMEs for 3 months with effect from April 1st, 2020, to mitigate the crippling effects of the COVID-19 pandemic on small and medium scale business across the nation.

  • Nova Merchant Bank: why we raised N10b bond

    Nova Merchant Bank: why we raised N10b bond

    By Collins Nweze

     

    The  Chief Financial Officer, Nova Merchant Bank, Ifeanyi Chukwuonye, has disclosed that the N10 billion seven-year subordinated unsecured bond issuance by the bank was in line with its corporate strategy to raise long-term funds.

    The bank’s operations were not affected by the COVID-19 pandemic, and would continue to tap into identified opportunities, he said.

    Chukwuonye said the company anticipated the impressive market reactions to its bond issuance, and it was delighting to know the bond was oversubscribed by over 300 per cent.

    “Obviously, we will be going back to the market in no-distant future. The proceeds of the bond issuance will be used to create a long-term loans, and increase earning capacity of the bank’s assets,” he said.

    Read Also: Access Bank warns customers to beware of e-fraudsters

     

    According to him,  the performance of the bank in the last three years was great, with impressive and profitable operations, adding that the bank has been able to run efficiently, with a bright future ahead for the merchant lender.

    “The long-term goal of Nova Merchant Bank is to build a sustainable and noble merchant bank that will be the price of our investors. The bond is one of the things in stock to achieve long and short term goals in the bank,” he added.

    He explained that in spite of volatility in markets due to COVID-19 pandemic, the transaction was highly demanded with a diversified order book made up of discerning investors, including asset managers, insurance companies, domestic pension funds, non-financial institution corporates, high net-worth individuals as well as international fund managers.

     

  • Ecobank unveils special loan for female entrepreneurs

    Ecobank unveils special loan for female entrepreneurs

    By Collins Nweze

    Ecobank Nigeria has unveiled a special loan package for female entrepreneurs in the country.

    The Ecobank Female Entrepreneurs’ Initiative (EFEI) loan is designed to empower female entrepreneurs.

    According to Head, Consumer Asset Product, Ecobank Group, Daberechi Effiong, the EFEI loan is targeted at boosting small scale businesses owned by women, adding that it is a further demonstration of the importance the bank attaches to the role of women in sustainable development and contribution to the nation’s economy.

    Mrs. Effiong, also the EFEI Coordinator, explained that prospective female business owners could access credit with interest rates as low as 1 per cent, noting that the process for accessing the credit facility is easy and stress-free.

    “The EFEI loan is one of our several ways of further encouraging female entrepreneurs in the country. As a bank, we believe empowering women will enable them play their role better in the society and the economy. This loan would position them for increased participation, validation and contribution to their communities. The terms and conditions for accessing the loan are simple and easy such that many female entrepreneurs could readily avail themselves of the opportunity and grow their business.”

    Read Also: Ecobank extends agric loan to 70,000 farmers

     

    She advised the women business owners to approach the bank online through the bank’s social media platforms.

    EFEI was introduced by the bank to assist women business owners.

    Earlier, Ecobank trained over 140 female business owners through the EFEI platform on digital marketing skills in its state-of-the-art Academy.

    This was a follow up to a two-day capacity building on cash flow management and EFEI business opportunities held last year.

    The digital training drew participants from Lagos and its environs and they were exposed to seminars, networking events, loans, trade fairs and exhibition of customers’ products.

  • Access Bank warns customers to beware of e-fraudsters

    Access Bank warns customers to beware of e-fraudsters

    By Collins Nweze

    As the banking industry witnesses increased regulatory scrutiny due to the impact of COVID-19, bank customers have not been spared from the whims of fraudsters.

    Access Bank has once again urged customers to remain vigilant and beware of the common tricks used by fraudsters to rob them of their money.

    The Executive Director of Retail Banking, Access Bank Plc, Victor Etuokwu, expressed concern about the growing number of fraud cases being reported. He implored customers to take more responsibility in safeguarding their funds and offered reassurance of the Bank’s commitment to providing information relevant to identifying and fending off fraudsters.

    “Over the last few months, the number of reported fraud cases has spiked considerably. This is not unexpected as the current economic hardships experienced due to COVID-19 has caused many to be vulnerable. However, this trend has become very disturbing, while we urge customers to become more aware of the tactics employed by fraudsters. Access Bank will continue to educate customers on how to avoid falling victims as well as deploy resources to ensure the security of customers funds.” Etuokwu said

    Read Also: Access Bank launches self-service USSD to curb fraud

    “The bank has identified smishing, phishing, social engineering, and identity theft as the most common methods used by fraudsters. To aid the fight against this common enemy, we have put more power in the hands of our customers, through the *901*911# USSD code. We have provided a platform through which customers can immediately deactivate their USSD profile by dialling *901*911# from any phone in the event their mobile devices get lost or stolen,” he continued.

    Through the years, Access Bank has remained committed to educating its customers, informing and protecting them from fraudsters. The Bank has created dedicated pages on its official website that constantly educate customers on the schemes and tricks employed by fraudsters.

    Responding to queries made by customers saying fraudsters approached them disguising as the bank’s staff, Etuokwu added: “Customers should be on alert as the bank will never ask for personal information, such PIN, BVN, 16-digit card number, CVV, password, OTP or authentication code for the mobile banking app. We urge our customers to ignore, such calls, text messages or emails.”

  • Companies’ valuation should be transparent, says Coronation Capital

    Companies’ valuation should be transparent, says Coronation Capital

    Coronation Capital has concluded a virtual Corporate Finance & Business Valuation Masterclass during which a Professor at the Stern School of Business, New York University, Aswath Damodaran, educated participants on the gains of valuation and corporate finance, reports COLLINS NWEZE.

    Coronation Capital has reiterated the gains of building a financial system where stakeholders have deep knowledge of corporate finance and valuation principles to guide their investment decisions.

    In lectures under the auspices of Coronation Capital’s second Corporate Finance and Business Valuation online masterclasses, Professor Aswath Damodaran of the Stern School of Business, New York, University, United States pointed out that running away from uncertainty does not fix the analysts’ difficulties.

    He argued that the best approach was to confront the problem by modelling uncertainty and incorporating the model outcome in the analyst’s valuation formula.

    On the most significant learnings over the years, Damodaran stated that changes in corporate behaviour and active investing reflects a much flatter world where competition has to be taken into consideration. “With globalisation, everyone is exposed,” he said.

    He further stated: “Every bubble that bursts, creates permanent changes in how we live,” adding that the principles of valuation are the same though data and tools used are richer than what they were in the past.

    Advising financial professionals, he emphasised the need to value companies based on where they are located, not where they are incorporated, adding that valuation needs to be forward-looking and dynamic. For corporates like Coronation Capital, the iconic professor explained that with a culture of learning, people should not be punished based on outcomes but on processes, because processes matter more.

    On the downside to globalisation, he stated that emerging markets offer growth opportunities but they are also riskier, adding that if the growth is taken into account, the risk must also be considered.

    “Two ways of estimating the country risk premium include Sovereign default speed and adjusting for equity risk,’’ he said.

    Explaining the concept of company exposure to risk, the finance expert said the danger of focusing on revenue is that it misses other exposures to risk (production and operations), adding that the default approach in valuation has been to assign country risk based upon your country of incorporation. “As companies globalise and look for revenue in foreign markets this practice will underestimate the costs of equity of developed market companies with significant emerging market exposure and overestimate the costs of equity of emerging market companies with significant developed market risk exposure,” he said.

    The areas of  covered at the programme include discounted cash flow model, risk premiums, loose ends in valuation, the cost of debt, and the downside to globalisation and ways to estimate a company’s growth rates, patterns and country risk exposure, among  others.

    Continuing, Damodaran gave some key perspectives on valuation while taking a look at the discounted cash flow model, the process of setting the same up and various case studies.

    He further addressed some misconceptions around valuation and gave an insight into what valuation entails for the financial market and the economy. He also gave participants opportunity to ask questions and obtain clarity on general corporate finance and business valuation principles.

    In his welcome address, Chairman of Coronation CapitalAigboje Aig-Imoukhuede, described the event as a critical learning point for stakeholders in corporate finance and valuation business.

    He disclosed that for the nation’s financial system to get the best investment, stakeholders should have a deep understanding of corporate finance and valuation principles.

    Aig-Imoukhuede described the second edition of the masterclass as another critical learning point for stakeholders in corporate finance and valuation.

    Managing Partner, Coronation Capital, John Opubor, said there is a consistent and clear theme in Damodaran’s lecture, which further emphasises the need to return to the real fundamentals in challenging times like we are.

  • Kwara deputy governor, wife test positive

    Kwara deputy governor, wife test positive

    Agency Reporter

    Kwara State Deputy Governor and Chairman of the State Technical Committee on COVID-19 Kayode Alabi, and his wife, Abieyuwa, have tested positive for the virus.

    Both the deputy governor and his wife submitted themselves for the test after they showed slight symptoms of the virus.

    Chief Press Secretary to the Governor and spokesman for the technical committee, Rafiu Ajakaye, disclosed this on Tuesday in a statement in Ilorin.

    Read Also: Positive cases drop by 2,000 in July – FG

    “The results of their test are positive. The second couple are very stable and in high spirits and are now undergoing standard management protocols supervised by the government’s medical team.

    “Immediate contact tracing and tests, among other safety protocols, are being done for persons who have met with the couple in the past few days,” Ajakaye added.

    Also, it was learnt that the Chief Judge of the Federal High Court, Justice John T. Tsoho and members of his immediate family underwent two COVID -19 tests, which results turned out negative for all of them.

    The court’s Acting Information Officer, Catherine Oby Nwandu, made this public in a statement issued in Abuja

    The statement reads: “The Federal High Court of Nigeria is pleased to announce that the Chief Judge of the Federal High Court of Nigeria, Justice John T. Tsoho, with members of his immediate family have undergone  two COVID -19 tests that have  both turned out negative for all of them.

    “The first test was done at the beginning of the 14-day self-isolation, while the confirmatory test came thereafter. Both tests were conducted by the NCDC.”

  • FCMB Group posts N11.1b half-year profit before tax

    FCMB Group posts N11.1b half-year profit before tax

    By Collins Nweze

    FCMB Group Plc has achieved N11.1 billion profit before tax (PBT) for the half-year ended June 30, 2020.

    The PBT represents 26 per cent growth compared to N8.8 billion in the corresponding period in 2019.

    Profit after tax increased by 29 per cent Year-on-Year to N9.7 billion. This translates to a return on average equity(RoAE) of 9.4 per cent and earnings per share of 49 kobo, a Year-on-Year improvement of 16 per cent and 29 per cent, respectively.

    FCMB Group is a holding company divided along three business groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Corporate & Investment Banking (the Corporate BankingDivision of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited) as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).

    The half year results also showed that the Group recorded an increase in gross revenue by nine per cent to N98.2 billion as against N89.8 billion for the same period last year.

    Net interest income equally rose by 17 per cent for the first half of 2020 to N45.4 billion from N38.7 billion posted in the first half of 2019, while non-interest income stood at N17.5 billion, an increase of 14 per cent compared to N15.3 billion within the six months period last year.

    Moreover, the financial institution intensified the tempo of its strong commitment and support to the growth of businesses and the Nigerian economy in general. For example, loans and advances grew by 29 per cent Year-on-Year and four per cent Quarter-on-Quarter to N794.6 billion.

    Customer deposits went up by 28 per cent Year-on-Year and 11 per cent Quarter-on-Quarter to ₦1.1 trillion in June 2020, implying a significant increase in confidence in the institution.

    Read Also: FCMB promotes offshore expansion for SMEs

    Total assets surged upward by 31 per cent Year-on-Year and four per cent Quarter-on-Quarter to ₦1.97 trillion as at June 2020. The Group’s capital adequacy ratio stood at 17.3 per cent, which is above the minimum requirement set by the Central Bank of Nigeria. Liquidity ratio was 32.2 per cent.

    Customer base across the Group grew by 29 per cent Year-on-Year from 5.9 million to 7.7 million.

    The subsidiaries of FCMB Group, who are market leaders in their respective segments, also performed satisfactorily within the six months period. The Commercial and Retail Banking arm (comprising First City Monument Bank Limited, FCMB UK, Credit Direct Limitedand FCMB Microfinance Bank) reported a 42.9 per cent Year-on-Year increase in PBT. This was due to an increase in net interest income, fixed income instruments, trading income and foreign exchange income. PBT also improved by 4.1 per cent Quarter-on-Quarter due to an increase in fixed income instruments, trading income and FX Income, as well as a decrease in expenses due to operational efficiency.

    Corporate & Investment Banking (comprising the Corporate Banking Division of the Bank, FCMB Capital Markets Limited and CSL Stockbrokers Limited) saw its performance improve Quarter-on-Quarter. This was driven by an increase in net interest income and non-interest income. CSL Stockbrokers returned to strong and sustainable profitability, moving from a PBT of N18 million in half year 2019 to N201million in half year 2020, representing a 1034 per cent Year-Year growth.

    Investment Management (comprising FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited) grew its Assets Under Management (AUM) by 7% Quarter-on-Quarter and 28% Year-on-Year to N455 billion. The growth in AUM reflects the increasing effectiveness of product sales strategy, which leverages the FCMB Group’s distribution strength and digital innovation. The Group’s Pensions business contributed 75% of half year 2020 AUM, compared with 83% within the same period in 2019. Other business linesaccounted for 53% of the N99 billion Year-on-Year growth in AUM.

    Analysts are of the opinion that with this impressive performance despite the challenging operating environment, FCMB Group is on a stronger pedestal to sustain its leading position in the financial industry and the Nigerian economy.

    Over the years, the institution has created tremendous opportunities and added significant value to customers, shareholders and other stakeholders through innovation and its customer-focused approach anchored on its culture of excellence.