The Nation Newspaper

Category: Money

  • Group praises NDIC’s roles in financial system stability

    A non-governmental organisation (NGO), African Peace and Development Initiative (APDI) has praised Nigeria Deposit Insurance Corporation (NDIC) for its commitment to the safety and stability of the financial system and for standing out as one of the leading deposit insurers in the continent.

    Its President, Mike Femi gave this commendation while presenting the Africa’s Meritorious Service Award of the organisation to the Managing Director/Chief Executive (MD/CE) of NDIC, Alh. Umaru Ibrahim in Abuja.

    According to him, the commitment of NDIC at keeping fate with its depositor protection mandate over the years and the various initiatives which it continued to bring to bear on the discharge of its mandate, particularly the recent Bridge Bank phenomenon had gone a long way in boosting confidence in the nation’s financial system.

    He said as a supervisor, it was heart-warming that NDIC had demonstrated overt transparency and professionalism in the conduct of its operation thereby serving as role model to other public institutions in Nigeria and the continent.

    On the award by the organisation,  Femi said the APDI whose membership covered 10 African countries instituted the award platform to recognise individuals with immense contributions to the economic growth and development of African countries with a view to encouraging them to aim for greater heights.

    He said the significance of the award underscored the few number of recipients which for 2014 was conferred on President John Dramani Mahama of Ghana and NDIC boss, Umaru Ibrahim.

    Ibrahim, represented by NDIC Director, Internal Audit, Ibrahim Tafida reiterated that the corporation  would continue to accord transparency, professionalism and diligence pride of place in the discharge of its mandate of deposit guarantee, banking supervision and failure resolution.

  • ‘Why credit bureau patronage is rising’

    The Managing Director, CRC Credit Bureau Limited, Tunde Popoola has said Central Bank of Nigeria (CBN’s) policy mandating banks to use at least two credit bureaux for all credit approvals has boosted patronage by over 25 per cent.

    He said since the policy became effective, top management of banks have demonstrated their interest on what is going on between the banks and credit bureaux.

    This, he added, has also shown how committed the CBN is to making sure that there is success for credit bureau operations.

    “It has been very significant, I must tell you. Since August last year, we got to daily threshold of usage that we have not had for a long time. That showed us that banks take the policy very seriously. So, that has led to significant improvement in relationship between us.

    “We now have banks showing interest in collecting data, updating data. Even the ease with which they submit data now has increased. Every bank should submit data not later than five days after month-end. The numbers of institutions that are submitting data now have increased tremendously. It cannot be less than 25 per cent increase in the number of institutions and volume of transactions,” he said.

    He said the competition in the sector is very healthy.

    He said: “As you know, lenders are known. It is a market that everyone knows. What we are trying to do is focus in the formal market, which are the regulated segment of the market, which are commercial banks, merchant banks, the leasing companies, microfinance banks, primary mortgage institutions. So, the competition has been very keen around that area. So we are competing for all these institutions.

    “But the issue has been how you have been how innovative have you been as a credit bureau. Can these people be able to access your platform. How long does it take them to be able to download information from your platform. What is the level of your relationship management. How easy is it for them to reach you, or for you to reach them?

    “And again, the quality of your report and depth of information they get from your platform, which have to do with the quantum of information you have and the number of institutions that are submitting information to you. These are what constitute competitive edge for us at CRC. For us, we have a much more robust credit information report that is rounded and comprehensive.”

    According to Popoola, the company has produced significant products to support our customers.

    “We have prided ourselves as the market leader, and we are focusing on thoughtful leadership. We want to be in the mind of everybody. We have moved from just collecting information from regulated entities to non-formal sectors. So, you se some level of patronage from corporative societies, pharmaceutical companies, among others,” he said.

  • Fears over foreign exchange reserves

    Analysts at FBN Capital have said the Central Bank of Nigeria (CBN’s) expectations of foreign exchange reserves increase to about $45 billion by year-end may not be realised.

    The reserves have come under pressure in recent months over declining oil prices and need to support the naira. The reserves stood at $39 billion on October 23, and were at $39.56 billion on September 26, down 0.15 per cent from the previous month, data from the CBN showed.

    Reserves stood at $39.62 billion in August and were $45.66 billion in September last year.

    Further analysis showed that reserves which were at $39.65 billion on August 25 and was at $38.4 billion on July 17. The rate of accretions to the reserves has been marginal but consistent since the CBN reviewed the bureau de change (BDC) policy guidelines.

    FBN Capital said the apex bank uses administrative measures to support its exchange-rate agenda. It said the mandatory recapitalisation of bureaux de change to stem leakages is one of such measures.

    According to the firm, the fall in the international price of Nigeria’s benchmark Bonny Light crude to about $95/barrel has fuelled fears that the CBN will be unable to hold the line on the naira exchange rate.

    “There remains a cushion of close to $20/barrel above the assumed export price in the 2014 budget although in reality pressures in the market develop far more quickly, which we can detect from the reluctance of offshore portfolio investors to participate in the most recent auctions of Federal Government of Nigeria bonds and Nigeria Treasury Bills,” it said.

    According to the firm, official statements give the impression that some of the oil production losses have been recovered, a claim, it said, it was unable to confirm in the absence of a unified source of metering.

    “As for the price, we do not think that global demand warrants significant further weakness. We also point to the many geopolitical risks and OPEC’s (Organisation of Petroleum Exporting Countries) interest in arresting the decline. The level of official reserves has settled on a plateau of $39.6 billion this month but still provides nine months’ merchandise import cover,” it said.

    Another measure to boost the naira, it said, is dollarisation of the banking system. “The CBN data though to March 2014 shows a limited build-up to 25.7 per cent of commercial banks’ total deposits,” it said.

  • CBN urges bank directors on corporate governance

    CBN urges bank directors on corporate governance

    The Central Bank of Nigeria (CBN) has urged bank directors on the need to imbibe sound corporate governance practices to sustain the stability of the banking sector.

    Its Deputy Governor Financial System Stability, Dr. Kingsley Moghalu, who spoke at the Financial Institutions Training Centre (FITC) 2014 Continuous Education Programme for Directors of Banks and Other Financial Institutions in Lagos, said the level of corporate governance in banks can sometimes reflect the culture of governance in the system.

    Speaking on the theme: ‘Enhancing Board Effectiveness for Enduring Quality of Banks’, he explained that in the advanced countries, the level of corporate governance in the banks before the global financial crisis was an extension of the larger governance culture in those countries.

    The banks, he said, were seen as private and profit making institutions and so the values of capitalism drove those institutions to the extreme and many of them collapsed.

    “This is what we have to avoid; and the responsibility is on you as bank directors. We do not want the privatisation of profits and socialisation of losses. You don’t run your bank well and when it is about to collapse, you start looking for CBN for accommodation.

    “The CBN under the previous administration reached a decision that no banks will be allowed to fail again. And it was a good decision. This was because; this country has gone through a very scarring and scary history of failed bank failures.

    “People have lost fortunes and as a result lost complete trust in the banks. But let’s not make it a habit. That is what I am saying. Going forward, do not count on the CBN, if you don’t run your banks well.”

    Moghalu said effective corporate governance stemming from good risk governance is critical to stable financial system.

    He said the global financial crisis would have been averted if there were effective risk and corporate governance practice in the financial system.

    He said: “Many of the bank directors don’t govern effectively the management of risks. If bank failure had not occurred, all those collateralised debt obligations and structured investment vehicles and other financial engineering which was an increase in the multiples of all the risks banks were taking, would not have taken place.

    “There are questions. And those who should be asking those questions are boards of directors of banks. So we believe that the failure of corporate governance, especially the failure of risk governance was a major cause of the global financial crisis.

    “Corporate governance is not just about compliance, it is about governing to create value, governing to build enduring institutions. Corporate governance is a key factor in financial systems. However in an environment like Nigeria, it is even more critical because it is bound up in a number of wide cultural issues.

    “It is also bound up in a number of wider governance issues. It is the same as public governance. This is because, to make impact, you have to have the same issues of integrity, ethics, avoiding conflict of interest, respecting processes and avoiding insider dealing. All these things are requirements for corporate governance.”

    FITC Managing Director/ Chief Executive Officer of FITC, Dr. Lucy Newman said the event was organised to take stock of the institutes’ journey since it was established 30 years ago.

    FITC used the opportunity to recognize its past leaders, strategic partners and high volume nominating institutions, frequently trained directors among others.

  • Enterprise: Heritage plans bigger, innovative lender

    Enterprise: Heritage plans bigger, innovative lender

    Heritage Bank Limited has said that its acquisition of Enterprise Bank will produce a bigger and more innovative lender.

    Managing Director/Chief Executive, Heritage Bank Limited, Ifie Sekibo said this at the sidelines of the Investiture programme of the Chartered Institute of Bankers of Nigeria (CIBN) held in Lagos.

    Recall that HBCL Investment Services Limited (HISL) promoted by Heritage Bank recently paid N56 billion to acquire Enterprise Bank from the Asset Management Corporation of Nigeria (AMCON).

    Commenting on the integration of the two banks, Sekibo said the acquisition will enable the bank become bigger and more innovative.

    Sekibo, who along with the Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele and two other bank chief executives were awarded Honorary Senior Members of CIBN, said that to achieve the above, the bank would focus more on training and would be guided by the standards and codes of the Institute.

    He said: “It is an honour that in so short a time the institute would award me Honourary Senior Membership.  This award would impact on our bank because we would be clear in our focus because the institute is the guiding institute that helps the industry set standards and educate on codes of conduct.  So this would lead to increased awareness of the standards within our institution and it would also enable us run our training programme in line with the institute. It also means there would be a lot of training which is why the institute is important for us. So we would have these training as one family not as two organisations. So look out for a much stronger and bigger organisation.”

    Similarly, Heritage Bank in a statement said that the combination of the two banks will produce a force to be reckoned with and a paradigm shift in the banking industry. The bank said, “We have always seen Enterprise Bank as one of the potential giants in Nigeria’s banking landscape. With a truly vast branch network, innovative and professional staff, solid assets and large customer base, Enterprise Bank is easily one of the preferred banks for value creation wherever you might be in the country.

     

     

    “The partnership process will seamlessly birth an entity that would be optimum of excellence and innovation. In less than two years, we have redefined the concept of banking and emerged as one of the fastest growing banks in Africa. Partnering with Enterprise Bank,  whose vision is in line with ours, will ensure we continue delivering distinctive financial services, building on our legacy of innovation while creating, preserving and transferring wealth across generations.”

  • Experts harp on savings, investments

    Experts harp on savings, investments

    Working class Nigerians need to develop early culture of savings and investments in order to create healthy pool of assets that could sustain them beyond their working years.

    Financial and investments experts who spoke at a one-day financial workshop organised by Klass and Korporate Consultants International for staff of Chevron Nigeria underscored the importance of working knowledge of financial and investment management in order to ensure sustainable living standards during and after working phase.

    Regional head, public sector, South-South and South-East, Ecobank Nigeria Limited, Mr. Abayomi Adeyeri, who was the guest speaker at the workshop, said people with adequate financial and investment knowledge would be able to make sound decisions that would ensure that they are able to live sustainable and wealthy life.

    According to him, the purpose of the workshop was to activate staff potentials in order to expand their overall total income.

    “Your money should work for you rather than you work for your money. The participants should be able to make sound financial decisions at the end of the class, convert debts to savings, savings to investments and in the long run, retire strong, early and wealthy,” Adeyeri said.

    The workshop had eight modules including goal setting, budgeting, savings and investments, planning for a secure retirement, insurance, stress management among others. The workshop also dwelt on personal income basics, roadmap and personal income management as well as how to manage debt and balance assets and liabilities.

    Participants were also made to understand how to set goals, plan for the children, pay loans, and avoid some obvious financial traps by money lenders.

    Head, Human Resources Department, Chevron Nigeria, Mr. Babs Ajayi, said the workshop was an excellent opportunity to broaden staff knowledge and make necessary shift to position them for success.

    “Presenters were excellent in their fields. The programme was very robust and without a doubt a time very well spent,” Ajayi said.

    Chief executive officer, Klass and Korporate Consultants International, Omoefe Siakpere, pointed out that the main reason why most big earners find themselves broke later in life is because of lack of financial planning.

    According to her, planning for the future entails an extensive process of the various elements of a financial plan that should be integrated into overall lifestyle which outlives physical existence to include a person’s estate.

    She identified personal income management as one of the fundamental elements for a secure future and rejected insinuations that Chevron staff are too rich to get broke.

    “The truth is, money is never enough. What you know comes to play, and even if you earn N10 million a month, and you do not have enough knowledge to sustain that money, at the end of the day, it all goes down the drain,” Siakpere said.

    She pointed out that many workers of Chevron and other oil companies still have challenges after retirement, noting that the workshop was aimed at correcting that.

    She said the training would possibly become regional as Chevron staff in Warri had already undergone a similar training.

    “I think it’s going to be a regional training. We were in Warri the other day and we are in Lagos today and we are going to be in Port Harcourt and Escravos just to enlighten them because this is important,” Siakpere said.

    She praised the management of Chevron for taking into consideration the future of their staff and urged Nigerians to plan for their future.

    “My message to Nigerians is that when you fail to plan, you are planning to fail,” she said.

    President, Delta Chevron Employees Cooperative Society Limited, David Ikutegbe,said the programme is meant for a secure future and could not have come at a better time.

    We discovered that our members are not doing well after retirement. So while they are still in service, we tell them of the need to bridge the gap. They should start planning for a secure future. That’s why we hire competent consultants to come and talk to them on how they can secure their future,” Ikutegbe said.

    In his remarks, general manager, Delta Chevron Employees Cooperative Society Limited, Olusoji Akinwande, said that the whole essence of putting the programme together was to take Chevron members to the next level.

    “We want to go beyond the regular loan and thrift services and we really want to see our members do well. We want to see them retire very successful and happy. That’s the whole essence of putting this programme together,” Akinwande said.

    He said the workshop offered an avenue for Chevron staff to understand that the best time to start planning for their future is now.

    “Not just planning, they have to plan smart and they have to plan ahead of time,’ he added.

    Participants expressed satisfaction at the end of the workshop.

    Another participant, Bassey Ephraim, said he learnt how to set goals and stand by them.

  • Stockbrokers explore financing options for entertainment industry

    Stockbrokers explore financing options for entertainment industry

    Stockbrokers would this week explore possible options and frameworks for developing amenable finances to Nigerian entertainment industry.

    Stockbrokers and other financial pundits would consider ways and means to support the growing entertainment industry with affordable and viable finances through the Nigerian capital market.

    The entertainment industry will be the focus at the Chartered Institute of Stockbrokers (CIS)’s annual stockbrokers’ conference which will be taking place in Lagos on October 30 and 31 with the theme; ‘The capital market as the key catalyst to developing the entertainment industry in Nigeria’.

    Chairman, 2014 Annual Stockbrokers’ Conference and executive director, Stanbic IBTC, Mr. Akeem Oyewale, said the entertainment industry has not benefited from the capital market because the capital market has not been able to provide solutions that could get the entertainment industry cheaper capital that could boost the industry.

    According to him, there are so much money in the entertainment industry yet untapped and stockbrokers would use the conference to enlighten the practitioners in the  industry on the opportunities in the capital market.

    “Given the reach at which our entertainment industry has taken Nigeria to, with Nollywood as the third largest film industry after Nollywood and Bollywoodand the  fact that the financial aspect of entertainment industry is large and the Nigerian capital market being the second largest in Africa and one of the leading emerging market in the world, there should be a coherence between the entertainment industry and the capital market,” Oyewale said.

    In his remarks, managing director of Cordros Capital Limited, Mr. Wale Agbeyangi pointed out that the latest rebasing showed that the entertainment industry is a significant contributor, noting that the capital market will give a framework for adequate funding of the industry.

    He added that involvement in the capital market would ensure that the entire nation participate from the profitability and wealth created in that industry.

    Expected speakers at the conference include the governor of Lagos state, Mr. Babatunde Raji Fashola, chairman of Silverbird group, Ben Murray-Bruce, the director general of Securities and Exchange Commission, Aruma Otteh, the chief executive of the Nigerian Stock Exchange, Oscar Onyema and many other personalities in the entertainment and financial sectors.

     

  • UBA grows Q3 top-line by 12% to N211b

    UBA grows Q3 top-line by 12% to N211b

    United Bank for Africa (UBA) Plc grew its top-line by 12 per cent to about N211 billion in the third quarter as the bank’s core banking operations further stimulated overall performance.

    Key extracts of the interim report and accounts of the bank for the nine-month period ended September 30, 2014 released at the weekend showed that interest income grew by 12.5 per cent, nudging the bank’s gross earnings by 12 per cent to N210.7 billion. The bank had recorded gross earnings of N188.02 billion in the comparable period ended September 2013.

    Interest income had risen from N132.76 billion recorded in third quarter 2013 to N149.41 billion in 2014. Net interest income also rose from N78.16 billion to N81.96 billion. Operating income increased to N138.39 billion in 2014 as against N129.87 billion.

    Group managing director, United Bank for Africa (UBA) Plc, Mr. Philips Oduoza, said the growth in gross earnings reflected the increasing business activity across the bank’s operations.

    According to him, the bank has been supporting businesses and institutions with the finance they need to exploit emerging opportunities on the continent.

    He noted that the operating income of N138 billion for the nine-month period to 30 September, 2014 represented a 6.6 per cent increase over the corresponding period of last year, showing the strong underlying operating efficiency of UBA business globally, and the capacity of the business to remain profitable.   The bank made a profit before tax of N42.54 billion and a profit after tax of N33.6 billion for the period.

    “We are confident that our performance will continue to improve in the last quarter 2014, with increased contribution to Group Balance sheet from the African subsidiaries,” Oduoza said.

    Oduoza had recently outlined that the bank’s key strategic imperatives remain as defined in 2013 under the bank’s “Project Alpha” adding that the bank will leverage on the viable platform established in 2013 to further consolidate on the current growth momentum.

    According to him, as a proactive bank, UBA has adequately resourced and re- aligned its structures to optimise emerging opportunities arising across all the regional blocs, while also adopting appropriate risk management frameworks to mitigate likely exposures in its operations both within the local and global environment.

    “We will adopt a very aggressive approach to market and ensure focused implementation of our strategic priorities, to drive achievement of our corporate targets,” Oduoza added.

  • E-commerce to hit $75b by 2025, says UBA Chief

    E-commerce to hit $75b by 2025, says UBA Chief

    The Deputy Managing Director and CEO, UBA Africa, Kennedy Uzoka, says the e-commerce market in Africa will hit $75 billion by 2025.

    He spoke following the bank’s deal with Ixaris and its Nigerian partner “Ojapay” meant to deploy a virtual card platform across its 20 African markets. He said the bank will use Ixaris Payment Server to deliver innovative payment options for individuals and corporates.

    Uzoka said many consumers and businesses across the continent currently lack a secure, convenient and low-cost means to make purchases online. The bank, he said, selected Ixaris payments server to quickly and cost-effectively deploy payments programmes based on virtual prepaid cards.

    “We have partnered with Ixaris and Ojapay to make this convenient payment option available to customers because virtual cards are not only easy and convenient to use but also protect users against online fraud. They will offer our customers across Africa a new layer protection and security for their online transactions.” Uzoka said.

    He said the banks’s new virtual card option will enable more than 10 million customers across 20 African markets to make safe and easy online purchases at any online merchant worldwide.

    The new virtual payment card will also enable the bank’s corporate clients take advantage of the wider range of goods and services available on the Internet, while also enhancing internal controls through full traceability of purchasing and payments activities.

    Founder and CEO of Ixaris, Alex Mifsud said: “We are excited to be working with UBA, one of the most respected banks in Africa, to help bring safe and convenient e-commerce to millions of people who can really benefit from it. This deal shows how open payments platforms like Ixaris Payments Server are transforming how banks approach the product development lifecycle for payments.  By using this technology, enterprising banks like UBA can bring compelling payment applications to the market at a fraction of the time and cost it would take using traditional methods”.

     

  • Sterling Bank assures on support for economy

    Sterling Bank assures on support for economy

    Sterling Bank Plc has assured that it will continue to partner all sectors to ensure to grow the nation’s economy.

    This assurance was given at the weekend by the bank’s Group Head, Strategy & Communications, Mr. Shina Atilola at the Pret-a-porter, a fashion show sponsored by the lender in Lagos.

    The sponsorship of the show, he said, demonstrate the bank’s reputation as one of the leading institutions, spearheading the development of entrepreneurship in the country.

    Pret-a-Porter is a soiree and networking event that brought together the best of the players in the fashion industry for an evening of intimate ideas exchange and an exhibition of ready-to-wear collections from some of Nigeria’s leading fashion expressions.

    The exhibition which is an initiative of Lagos Laid Bac and held at Wheat Baker Hotel, Ikoyi was attended by government officials, editors, civil society, retail organisations and academics who shared their experiences on value chain development and discussed how best smallholders can be incorporated into value chains in order to promote garment production and rural development.

    Some of those who attended the event included the Assistant Creative Director, Ruff and Tumble, Ifueko Igiehon; Founder of Konga, Mr. Sim Shagaya; the  CCO, Mr. Mark Russell; and Head of Fashion, Konga, Mr. Ochije Nnani.

    Mr. Atilola in a statement signed by the Bank’s Head of Communications, Mr. Ayoola Ashaolu noted that the recent changes in African countries, particularly in Nigeria have necessitated the private sector involvement in tackling the issue of youth unemployment through enterprise, hence the sponsorship of the programme by the Bank.

    The statement reads in part: “African countries have a younger population in comparison to most other continents. In addition, the unemployment rate among young people is high despite the fact that most of them have received a high level of education.

    In his remarks at the event, the Chief Operating Officer of Laid Bac, Mr. Chucks Nwachukwu explained that the programme was packaged to address the major challenges facing the youths in the country in creating business enterprise. “The creation of enterprises is one response to youth unemployment”, he stated.