The Nation Newspaper

Category: Money

  • Naira crash: Emefiele summons emergency meeting today

    Naira crash: Emefiele summons emergency meeting today

    The Governor of the Central Bank of Nigeria (CBN),  Godwin Emefiele has scheduled an emergency meeting with operators in the foreign exchange market toady.

    It is the first direct meeting the apex bank’s boss will be having with  stakeholders since the pressure on the naira heightened.

    The Nation findings showed that the meeting will enable Emefiele gather more facts on how to save the naira from further slide.  The CBN had on Friday, raised weekly dollar sales to Bureaux De Change (BDCs) operators from $15,000 to $30,000. The decision is part of the regulator’s continued efforts to strengthen the naira which on Friday traded at N208 to dollar at the parallel, or black market.

    A circular to authorised dealers signed by CBN Director, Trade & Exchange, Olakanmi Gbadamosi, said the increase is in line with the ongoing review of developments in the foreign exchange market and is intended to deepen the BDC’s segment. He said  the policy takes effect from January 28, 2015.

    He said  while, the CBN will sell to BDCs weekly at the prevailing interbank rate, BDCs are expected to sell to the public at not more than 3.5 per cent above the CBN selling rate.

    “Consequently, all BDCs are to ensure that their designated accounts in the CBN are duly funded with the equivalent naira proceeds, not later than 48 hours before the bidding date,” he said.

    Gbadamosi also advised operators to ensure strict compliance with the provisions of the extant regulations on the disbursement of forex cash to their respective customers, as any case of infractions will be sanctioned.

    The CBN had earlier in the week, stopped, with immediate effect, sale of forex through the Retail Dutch Auction System (RDAS) and interbank to BDCs operators limiting their only source of funds to the weekly allocations.

    Gbadamosi, said the weekly sales of forex to BDCs will be sustained by the CBN based on the liquidity needs of the market, adding that the regulator took the decision based on ongoing review of developments in the foreign exchange market and the need to check speculative demand in the market.

  • FCMB to unveil business account in Aba, Onitsha

    FCMB to unveil business account in Aba, Onitsha

    First City Monument Bank (FCMB) Limited, will this week unveil its Personal Business Account to traders and other businesses in the commercial cities of Aba, in Abia State and Onitsha in Anambra State.

    The FCMB product, which was introduced last November, guarantees traders, merchants, self-employed professionals and artisans, who operate businesses in their personal names, security in the conduct of such businesses in the event of unexpected disasters such as fire and flood incidents.

    In a statement, the bank said the launch of the product will hold in Aba today, that of Onitsha is slated for Friday, January 30, 2015. The product which was launched at the Oluwole market on Lagos Island and Alade Market, Ikeja in Lagos last year has been described as a positive development by traders.

    FCMB explained that the introduction of the Personal Business Account is in line with its value as a helpful financial institution committed to the protection and growth of the businesses of its customers, adding that the bank will complement its existing wide range of value-added offerings to customers.

  • Adeola seeks support for social media

    Adeola seeks support for social media

    The Managing Director, Sterling Bank Plc, Yemi Adeola has said the premier Social Media Awards Africa held in Lagos at the weekend,  was designed to recognise and celebrate excellence, creativity and enterprise in the use of social media – through its tools and platforms by individuals and organisations across Africa.

    He said the event was an opportunity to showcase the very best in Social Media on the African continent and reward individuals and institutions that have added value to the continent through the unique use of social media.

    “We at Sterling Bank are more than happy to associate with this noble initiative because of our focus and commitment to advancing human and social development across Africa. We are also interested in growing relevance of social media around the world with Africa in particular,” he said.

    Adeola said Sterling Bank cannot overlook the importance of social media in today’s society and the increasing role it plays in the lives of people on a daily basis, hence the need to identify with the Award.

    He said beside providing a platform for the bank to further consolidate its position as a leading light in the social media space, the bank has taken this project as one of our Corporate Social Responsibility initiatives.

    A member, Advisory Board, Social Media Africa Awards,  Mrs. Ini Onuk, said with the four major categories and 15 awards, the SMAA is a genuine, timely intervention for promoting distinctive creativity, peerless innovation and pervasive developments on the African Continent through the best use of social media platforms and the rest of the social web.

    “Social media has reconfigured the way in which all businesses and public entities now communicate. Open-sourced and inherently radical, it has created a space adverse to the tight image controls that brands once successfully exercised,” she said.

    She said that before now, it was almost impossible to reach certain brands, persons and products but with social media, marginalised dissenters can now make mince meat of the mightiest multinational brands thanks to an explosion of public platforms that have created unlimited venues for sharing facts, spreading rumours and propagating aggressive calls to action.

  • UBA assures investors on naira stability

    UBA assures investors on naira stability

    Group Managing Director/CEO, United Bank for Africa (UBA) Plc, Phillips Oduoza has urged investors in Nigeria not to panic over falling crude oil prices and exchange rate volatility as the country has enough reserves to support the local currency.

    Speaking to CNBC Africa on the sidelines of the World Economic Forum (WEF) at the weekend, in Davos, Switzerland, the bank chief said that at $34 billion, Nigeria has enough external reserves to support the naira. “I do not see any significant devaluation of the currency happening,” said Oduoza.

    He also explained that Nigeria faced similar challenges in 2008/2009 and the country learnt a lot from that experience, which will come in handy in managing the current currency challenges. “In my opinion, the Central Bank of Nigeria (CBN) is handling the challenges very well because they have come out with tools and instruments to stabilise the exchange rate and we are beginning to see some form of stability in the market,” he said.

    Oduoza explained that the foreign investor community does not need to panic since the country has no form of currency or capital restriction. He also dismissed any fears that there will be a rise in non-performing loans due to exposure of the banking industry to companies in the oil and gas sector.

    “The international oil companies are very versatile and have hedged their positions for a very long time. Most of them also have foreign currency receivables. So, what you are likely to see is an elongation of the tenure or restructuring of these loans rather defaults. So, you are unlikely to see any significant increase in non-performing assets,” explained Oduoza.

  • NDIC cuts insurance premium for banks

    NDIC cuts insurance premium for banks

    The Nigeria Deposit Insurance Corporation (NDIC) has reduced the insurance premium rate for all Deposit Money Banks (DMBs) in Nigeria.

    The Managing Director/Chief Executive, NDIC, Alhaji Umaru Ibrahim, also said the board of the corporation granted further reliefs to the DMBs at its last meeting last year by reducing the insurance premium basis rate from the existing 40 to 35 basis points. He said the new premium rate would take effect this month.

    In a statement, NDIC which covers 97 per cent of the bank depositors, said the reduction is part of its determination to contribute to the financial system stability and promote public confidence in the banking sector.

    He said the premium reduction was initiated to consolidate on the gains achieved by the corporation’s migration from Flat Rate Premium System (FRPS) to Differential Premium Assessment System (DPAS).  The DPAS approach, it explained, takes into consideration the risk each lender poses to the system and encourages them to adopt sound risk management practices.

    According to Ibrahim, the insurance premium rebates were part of the NDIC major contributions toward improving the intermediation role and other banking-related activities of the DMBs.

    The NDIC boss pointed out that Principle 11 of the core principles for effective deposit insurance system requires Deposit Insurance Agencies (DIAs) to set aside adequate funds to ensure depositors’ prompt reimbursement in the event of any bank failure. He also said the corporation would from 2015 set new coverage levels for the DMBs in view of their relatively large volumes of deposits.

    It would be recalled that the corporation began the insurance premium rebate since the commencement of DPAS in 2008 but the import began in 2010 sequel to the board’s decision to contribute to the financial stability fund that was spearheaded by the Central Bank of Nigeria (CBN).

    The corporation had supported the fund through the reduction of premium base rate from 50 to 40 basis points to reduce the premium burden on the DMBs.

    By 2012, 2013 and 2014, the corporation had granted a total rebate of N53 billion, N63.6 billion and N75.98 billion respectively; thus a cumulative refund sum of N192.6 billion to the DMBs.

  • GTBank donates N40m to Red Cross, DwB

    GTBank donates N40m to Red Cross, DwB

    Guaranty Trust Bank has  donated N40 million to Swiss Red Cross and Doctors without Borders (DwB)in its support  towards the Ebola Virus Disease (EVD) Intervention strategy in West Africa.

    The response to Ebola outbreak by Swiss Red Cross and Doctors without Borders started in early 2014 with the establishment of Ebola Case Management Centers (CMCs), provision of beds in isolation and transit centres, proper disposal of dead bodies and provision of medical personnel and supplies.

    The lender said in a statement that after a few months of properly executed intervention measures by these organisations, there is remarkable gradual decline in the outbreak. However, more action is required to combat further outbreak as well as effective implementation of World Health Organisation (WHO) Global Roadmap against Ebola.

    The bank said the fund would help dispatch trained personnel, create mobile laboratories to improve diagnostics, set up more Ebola case management facilities in remote areas, create regional network of field hospitals to treat medical personnel and address the collapse of state infrastructure.

    The Managing Director and CEO of Guaranty Trust Bank plc, Mr. Segun Agbaje, said the lender would continue to lead the way as a responsive and socially responsible corporate organisation in line with its strategic Corporate Socially Responsibility (CSR) objectives.

  • BoI, Ecobank sign pact on SMEs

    BoI, Ecobank sign pact on SMEs

    Bank of Industry (BoI) has signed a memorandum of understanding (MoU) with Ecobank Nigeria to provide loans at low interest rate to the Small and Medium Enterprises (SMEs)sub-sector.

    Managing Director/Chief Executive, BoI, Mr. Rasheed Olaoluwa, while speaking at the event in Lagos, said Ecobank and nine other banks in the country were selected based on their support to the SMEs, adding that the low interest rate will heighten activities in the sub-sector.

    According to the MoU, the 10 banks would provide working capital loans to SMEs qualified by the BoI at interest rate of Monetary Policy Rate (MPR) plus six per cent, with tenor ranging from six months to 12 months.  The BoI on the other hand would provide Term Loans to the qualified SMEs at between nine and ten per cent rate with tenor ranging from three to five years, and moratorium of six to 12 months.

    Deputy Managing Director, Ecobank Nigeria, Tony Okpanachi, explained that the selection of Ecobank by BoI was in recognition of the massive support the bank has offered the sub-sector over time.  He observed that the support has won the Ecobank several awards and recognitions in recent times.

  • Restructuring: UTC replaces board

    Restructuring: UTC replaces board

    UTC Nigeria Plc yesterday took a massive sweep in its ongoing restructuring exercise with the replacement of its entire six-man board of directors.

    A regulatory filing obtained by The Nation yesterday indicated that a new board of directors has been constituted to reflect the change in the ownership interests and key points of restructuring, which had saved the ailing food company from being delisted from the Nigerian Stock Exchange (NSE).

    The new board of directors included Mr Olaoluwa  Akinkugbe, as chairman, and Ms Imoni Akpofure, Mr Offong Ambah,   Ms Olubunmi Fayokun, Ms Olatoyosi Kolawole and Mr Adedotun Sulaiman, as directors.

    The new board replaced the previous board under the chairmanship of former director general of the NSE, Apostle Hayford Alile and other directors including Mr. Fola Adeola, Engr. Kadri Adebayo Adeola, Mr. Deji Alli, Mr. Bode Adedeji and Mr. Victor Gbolade Osibodu.

    The new chairman of board of directors, Mr. Akinkugbe, is currently the National President of the Nigerian American Chamber of Commerce. He is also on the boards of many companies and associations including Mouka Nigeria Limited and Lagos Business School Alumni Association.

    UTC Nigeria’s share price yesterday remained unchanged at its nominal value of 50 kobo, the price it has been for many years.

    Sources in the know said the change in the board of directors was the crux of recent restructuring initiatives.

    UTC Nigeria had last year listed among companies to be delisted by the NSE for failure to comply with post-listing requirements, including poor and late submission of earnings report, a recurring failure that had earned it sanctions and fines in the previous years.

    The company however had reached out to the NSE with details of its restructuring programme. This staved off the delisting.

    The NSE had in late June 2014 issued a three-month notice of compulsory delisting to some 24 companies for various corporate governance and post-listing failures, especially non-release of financial reports and accounts for several years.

    The affected companies included Investment and Allied Insurance Plc, Goldlink Insurance, Afroil, Rokana Industry, IPWA, West African Glass Industry, Nigeria Wire and Cable, Starcomms, Daar Communication, Mtech, Big Treat, G.Cappa, FTN Cocoa Processing and UTC Nigeria.

    Others included Stockvis, Nigeria Sewing Machine, Jos International Breweries, Capital Oil and Golden Guinea. The NSE had indicated that while the five of the companies including Stockvis, Nigeria Sewing Machine, Jos International Breweries, Capital Oil and Golden Guinea were penciled for delisting because they failed to regularize their listing status, other companies were being delisted because they have failed to submit requisite financial and operational statements.

    The Exchange however later confirmed that 14 companies have started some steps to regularize their listing status. These included Goldlink Insurance, Rokana Industry, IPWA, Daar Communication, G.Cappa, FTN Cocoa Processing, UTC Nigeria, Stockvis, Nigeria Sewing Machine, Capital Oil and Golden Guinea Brewery.

    The NSE had told The Nation then that it might consider a bouquet of waivers and incentives for ailing companies that have opted to restructure their operations in order to meet the stringent corporate governance standards required of quoted companies.

  • CBN stops dollar sales to BDCs

    CBN stops dollar sales to BDCs

    The Central Bank of Nigeria (CBN) yesterday, stopped, with immediate effect, sale of dollars (forex) through the Retail Dutch Auction System (RDAS) and interbank to Bureau De Change (BDC) operators.

    A circular to authorised dealers signed by CBN Director, Trade & Exchange, Olakanmi Gbadamosi, however said the weekly sales of forex to BDCs will be sustained by the CBN based on the liquidity needs of the market.

    He explained that the regulator took the decision based on ongoing review of developments in the foreign exchange market and the need to check speculative demand in the market.

    Both the interbank and RDAS funds, he said, should be used for strictly funding of Letters of Credits, Bills for Collection and other invisible transactions. However, this is subject to appropriate documentation as provided by extant regulations.

    The RDAS and interbank funds, the he said, should no longer be sold to BDCs and other authorised dealers. “In continuation of the review of developments in the foreign exchange market and to curb speculative demand in the market, both the RDAS and interbank funds should henceforth be used, strictly for funding of Letters of Credits, Bills for Collection and other invisible transactions. It is also subject to appropriate documentation as provided by extant regulations,” Gbadamosi said.

    The CBN also reviewed upwards, the Net Foreign Exchange Trading position from 0.1 per cent of the shareholder’s fund unimpaired by loses, to 0.5 per cent of the shareholder’s fund unimpaired by loses.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun told The Nation that the CBN by the circular has not only stopped selling dollars through the specified channels to BDCs, but also stopped banks from doing same.

    He said the circular followed CBN Governor, Godwin Emefiele’s directive that the regulator can only meet all legitimate transactions of dealers. He explained that before now, BDCs relied heavily on banks in souring their forex, and that with the policy directive; volume of dollars to the operators will shrink.

    The CBN two weeks ago, given approval to additional 102 BDCs, bringing the total approved operators to 2,544 since the recapitalisation deadline elapsed in July.

    The CBN had in June announced a new minimum capital requirement of N35 million for the operation of BDCs in the country, up from the N10 million it was previously.

  • Entrepreneur praises Emefiele on reforms

    Entrepreneur praises Emefiele on reforms

    An Entrepreneur and auto dealer in Lagos, Adejare Adegbenro has commended the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele for his reforms in the apex bank.

    Adegbenro, who is the Managing Director/CEO of Balmoral International Limited, said in less than a month in office, the cashless policy became effective nationwide on June 30, though, spearheaded by his predecessor. He described his reforms as ‘having human face.’

    The cashless policy started in January 2012, in Lagos as a pilot exercise before moving to Rivers, Kano, Ogun, Abia, and Anambra States as well as FCT, Abuja.

    The businessman, who is also a grandson of the late elder statesman and frontline nationalist, Pa Alfred Rewane, was particularly happy with Emefiele’s achievements in redirecting the activities of the Bureau De Change (BDC) in line with his ongoing reforms. He said: “His record of success arguably remains unprecedented.”

    The current sanity in the operations of BDC in the country, according to him, is a welcome development from the unorganised system with the attendant leakages and impunity that has become the order of the day.

    He praised the CBN’s Governor’s courage and wisdom in the way he handled the initial protest and resistance that greeted his efforts at sanitising this sub-sector of the economy, adding that he supported Emefiele’s decision to block the leakages.