The Nation Newspaper

Category: Money

  • CRR: 10 banks keep N2.3tr with CBN

    CRR: 10 banks keep N2.3tr with CBN

    Ten lenders have contributed N2.3 trillion to the Central Bank of Nigeria (CBN) in line with the Cash Reserve Requirement (CRR) policy of the regulator, Renaissance Capital (RenCap), an investment and research firm has said.

    CRR is a portion of banks’ deposits kept with the CBN as reserves.

    In a research report titled: Nigerian banks: The cost of Macro Stability, the firm explained that looking at the reported first half numbers for the 10 banks under its coverage, they have N2.3 trillion in cash reserve at the CBN earning zero interest.

    This, it said, represents an average CRR of 22 per cent for these banks, ranging from 18 per cent at First Bank of Nigeria Holding Company (FBNH) to 27 per cent at Zenith and Fidelity banks.

    This is up from an average of 11 per cent in 2012 and 16 per cent last year. In computing the implied CRR per bank, RenCap used the reported restricted deposits as a percentage of each bank’s naira deposits in the country.

    On average, it said restricted deposits have grown by 127 per cent between 2012 and June 2014, ranging from 72 per cent at Skye to 186 per cent at Diamond banks.

    “We believe the significantly tighter banking regulations explain the relatively low returns of the Nigerian banks versus sub Saharan Africa (SSA) peers; but on the flipside, they explain the country’s relatively stable macro conditions. Our view therefore is that for the Nigerian banks’ returns to improve sustainably over time, some loosening of monetary policy front will be necessary, particularly on the CRR,” it said.

    Continuing, it said last year was the year to take the pain, this year to stabilise and next year when lenders are expected to start seeing early signs of recovery. It said any loosening of monetary policy is unlikely until after the elections in December next year.

    It said: “We expect the Systematically Important Banks (SIB) rules in Nigeria to indicate a minimum CAR of 15 per cent for SIBs, with tier 2 capital capped at 25 per cent of total qualifying capital.

    “Above the 15 per cent, SIBs will be required to maintain a one per cent capital buffer that comprises entirely of tier 1 capital, which will raise the minimum CAR for SIBs to 16 per cent.”

    It said significantly tighter banking regulations explain the relatively low returns of the Nigerian banks against SSA peers; but on the flipside, they explain the country’s relatively stable macro conditions. “Our view therefore is that for the Nigerian banks’ returns to improve sustainably over time, some loosening of monetary policy front will be necessary, particularly on the CRR.

    “We would like to see Nigerian banks deliver returns comparable with those of their SSA peers, but we believe the operating and regulatory environment in Nigeria is significantly tougher than in other key SSA markets. Sector earnings have been broadly resilient, but some banks stand out, and these are our top picks in the space: Zenith, Access, Stanbic and FCMB banks,” it said.

    At sector level, we estimate the Nigerian banking sector now has a blended cash reserve ratio (CRR) of about 31 per cent, against 11 per cent in Ghana, 5.25 per cent in Kenya and five per cent in Rwanda.

  • Mansard grows revenue by 27% to N9.61b

    Mansard grows revenue by 27% to N9.61b

    Mansard Insurance Plc has announced its audited half year results for the period ended June 30, 2014 which showed it reported a 27 per cent growth in both gross premium written (GPW) and net premium income (NPI).

    The recorded GPW of N9.61 billion up 27 per cent from N7.55 billion it earned in June last year. The growth it said, was driven by increased patronage from both institutional and retail clients.

    The firm’s NPI also rose by 27 per cent to N4.47 billion as against N3.51 billion in 2013. The feat, it said was based on high retention rate based on due to improved retail per formance.

    Investment Income & Other Income stood at N1.55 billion, down 33 per cent from N2.3 billion recorded last year. The result, it said, was due to a one-off profit on disposal of an unquoted equity and unrealised gain on investment property in 2013. Equally, profit before tax stood at N993 million from N2.06 billion in 2013, a 52 per cent decline while profit after tax dropped by 56 per cent to N814 million, from previous N1.84 billion.

    Its Chief Client Officer, Tosin Runsewe said: “This year, revenue growth has been driven by deepening relationships through superior customer service delivery and our growing accessibility to customers. Our medium term focus is to rapidly grow our distribution channels such that our accessibility to all customers will be with ease and convenience. We expect the first half of 2014 growth pattern to continue during the second half of the year.”

    Its Chief Financial Officer, Mrs. Rashidat Adebisi said that the 52 per cent drop in profitability was expected.

    Commenting further on the performance, she said “Also putting a drag on profitability was the 53 per cent growth in Net Claims over last year. This growth was driven by lower recoveries from reinsurance as most of the claims were within our retention limits”.

    She added that overall, the firm’s March 2014 performance is very much in line with its projections for the period. “We look forward to a better June as this would deliver better underwriting performance as experience has shown,” she said.

  • Sterling Bank bags PCI recertification

    Sterling Bank bags PCI recertification

    The Council of Payment Card Industry (PCI) has recertified Sterling Bank Plc barely one year after it was certified by the council. The feat, the bank said, is recognition of its compliance with standard practice in cards management implementation of all security controls to protect cardholders’ information.

    The bank’s Group Head, Strategy & Communications, Shina Atilola disclosed to newsmen in Lagos that the recertification of the bank by PCI’s Council  is  a testimony of the its resolve to adequately protect information about its customers from going into wrong hands.

    He explained that Sterling Bank as a responsible financial institution has put in place the right mechanisms to ensure non-disclosure of information about customers to unauthorized persons and ensure that information is not compromised at any point in time adding that the bank will continue to uphold the tenet of confidentiality, integrity and availability in the handling of information of its customers.

    He said the bank has deployed tools to improve the security of information about our customers and the Bank, and create security awareness among internal and external customers on how to secure their information.

    He however advised organizations in the country as well as individuals to protect information about them carefully to avoid the use of such information for criminal activity. According to him, Nigerians must continue to see the need to dimension the risks associated with information leakages and avoid treating sensitive information with levity.

  • Nigeria leads South Africa, others on retail opportunities, says RMB

    Nigeria leads South Africa, others on retail opportunities, says RMB

    Rand Merchant Bank (RMB) has said Nigeria is leading South Africa, Egypt, Ethiopia, Libya and Democratic Republic of Congo in offering some of the best opportunities for retailers looking to invest in Africa.

    RMB, which is the investment banking unit of FirstRand Ltd said in a report yesterday population size and growth rates, gross domestic product per capita and urbanisation rates were some of the criteria used in compiling the list.

    “Those are probably the most favorable prospects for retail investors, but they aren’t the only markets available. In the next few years, you could see that changing as your income dynamics change,” Nema Ramkhelawan-Bhana, an Africa analyst at RMB told Bloomberg.

    With about 173 million people, Nigeria is Africa’s most populous nation and has the continent’s biggest economy. McKinsey & Co. said in a July report that the West African nation could be one of the world’s top 20 economies by 2030 with a consumer base exceeding the current populations of France and Germany.

    Disposable income in Africa will probably grow at an average rate of 5.5 percent a year until 2030, the bank said in a report on investing in Africa. By then, the continent’s highest-performing cities will have a combined purchasing power of $1.3 trillion, compared with $750 billion currently, according to RMB.

    While population trends are a key driver of opportunities for retailers, large-scale urbanization pose risks in terms of social problems and unemployment, said Celeste Fauconnier, an Africa macro strategist for RMB.

    “The risk of urbanization is that your slum areas are dominant” within fast-growing cities, Fauconnier said. “Africa’s got the youngest population in the world, which is great for productivity, if they had jobs.”

    Meanwhile, FirstRand Ltd is setting aside $924 million for expansion across Africa as profit increases from regions outside its home market of South Africa.

  • Visa, Apple partner on e-payments

    Visa, Apple partner on e-payments

    Visa has announced it is supporting consumer payments with the new iPhone 6 and other Apple devices. The global payment company said its Token Service will allow participating financial institutions in the United States and later globally, to add Visa debit and credit cards to Apple Pay,  Apple’s new payment service. Such platform, it said, would enable customers make easy and secure purchases at select merchants both in stores and in apps.

    “Visa Token Service technology works by replacing sensitive payment account information found on plastic cards with a digital account number or “token” that can be safely stored on mobile devices and used for in store and in app purchases,” it said announcing that it will roll out the service to financial institutions in phases.

    It will initially support early participants in the Apple Pay launch, and then extending the service availability to all of its US clients.

    “Combining the trust, scale and security of Visa payments with Apple Pay will accelerate adoption of mobile payments. We said from the beginning that token services would provide great new consumer and merchant experiences, and you’re seeing it today in our efforts with Apple, and there’s more to come,” Chief Executive Officer, Visa Inc, Charlie Scharf said.

    He said Apple Pay lets customers make purchases in some of the most highly visited stores and within apps on the App Store with just the touch of a finger, using the new iPhone 6 and other Apple devices. Visa account holders will continue to receive all of the rewards, benefits and security offered by Visa credit and debit cards.

     

     

  • Diamond Bank expands Lagos retail network

    Diamond Bank expands Lagos retail network

    Diamond Bank Plc has opened a flagship branch that would enable the lender provide banking needs of its retail customers.

    The branch, located at Ajose Adeogun, Victoria Island, Lagos, was inaugurated by the Group Managing Director/CEO, Alex Otti.

    He said the model branch is what the lender’s customers should expect going forward. “This is a new generation Diamond Bank and this is what customers should expect in the future. This is a flagship branch and there a couple of branches we have opened and we decided to showcase this today,” he said.

    Otti explained that the branch has a well-equipped electronic branch, made up of Automated Teller Machines (ATMs), an ATM gallery, telephone banking as well as internet banking facilities.

    Continuing, he said:  “This is banking of the future. This is a four floor building which has private banking, corporate banking and retail banking. We are leading in terms of digital banking but you cannot rule out brick and mortar.”

    Otti said, presently, Diamond Bank is among the industry leaders in terms of electronic banking. He noted that the recently launched MTN Yellow Account by the bank, has been praised by customers and would provide banking services to both the banked and unbanked within the population. It is also an avenue to boost the Central Bank of Nigeria (CBN) financial inclusion policy.

    On his part, the Deputy Managing Director, (Retail Banking), Diamond Bank, Mr. Uzoma Dozie said: “This branch is not like the traditional bank, it is actually to make customers feel more comfortable and we are removing the theatrical branch layout and making it your home outside your home.” The lender, he added, is planning to roll out more branches, e-branches nationwide.

  • CIBN plans banking, finance confab

    CIBN plans banking, finance confab

    The Chartered Institute of Bankers of Nigeria (CIBN) has concluded arrangements to hold the eight Banking and Finance Conference in Abuja. The event, focused on transforming Nigeria’s payments systems into global reckoning will hold from September 23 to 24, 2014.

    The institute said it has assembled high profile and seasoned experts from the public and private sectors of the economy to address the topical issues at the conference.

    To participate at this year’s conference are Co-ordinating Minister for the Economy/Minister for Finance, Dr. Ngozi Okonjo-Iweala; Minister of Industry, Trade and Investment, Dr. Olusegun Aganga and Minister of Communication Technology, Mrs. Omobola Johnson  who will present the Government perspectives.

    Also to speak are Country Director, Visa Central & Eastern Europe, Middle East and Africa, Ade Ashaye and Co-founder, Pagatech Nigeria Ltd, Mr. Jay Alabraba who will give the private sector perspective. The focus of the Conference is “Positioning Nigeria’s Payments Systems for Global Competitiveness” which is deliberately designed to further support the Payment Systems Vision 2020 (PSV2020) initiative of government is expected to further promote privacy, integrity, compatibility, good transaction efficiency, acceptability, convenience, mobility, low financial risk and anonymity in the Nigerian financial system.

  • Money laundering, terrorism financing rise in Africa, says GIABA

    The Inter-Governmental Action Group against MoneyLaundering in West Africa (GIABA), has said  threats posed by money laundering (ML) and Terrorist Financing (TF) to the West African region have become more pronounced over the past decade.

    In a statement, the agency regretted that knowledge of the two phenomena and the various dimensions of their manifestations are low in the region, adding a critical factor responsible for this low level of knowledge in the region, is the dearth of local expertise to enable the generation and deepening of knowledge in the emerging field of ML/TF.

    However, to bridge this the gap in the region, GIABA initiated an Annual AML/CFT Research Grant to build regional capacity for research on ML/TF by providing some funds to facilitate the conduct of short-term studies on identified research topics.

    The body has, through the grant, been empowering civil society in Ghana in the implementation of AML/CFT Measures; Financial Inclusion and Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) Standards in Sierra Leone and Money Laundering Through Non-Profit Organisations in West Africa, among other interventions.

    The agency has also been involved in the development of effective civil society interventions for managing cross border cash flows in the informal sector.

    It said the report on Financial Inclusion and Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) standards in Sierra Leone, which assessed the link between financial inclusion and AML/CFT, showed that while the former helped to lower ML/TF risks, a wholesale implementation of the latter without regard to the economic and financial peculiarities of the country could exclude most poor individuals and households from the formal banking and financial systems and, by extension, undermine AML/CFT efforts.

     

  • CBN, NDIC urged to address customer abuse

    The Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC) and other regulatory and supervisory authorities have been urged to take seriously the rising cases of customer abuse in the financial services sector.

    The Consumer Protection Unit of the CBN is to ensure that banks’ customers enjoy not only quality services but also protection from excessive charges and outright loss of funds through fraud and forgery.

    President, Bank Customers Association of Nigeria (BCAN), Dr. ‘Uju Ogubunka, called for a functional helpdesk at banks’ headquarters where consumer complaints could be lodged. He also urged the regulators to review existing consumer complaints management framework in the sector to protect the interest of customers.

    Ogubunka, who said this in a communiqué issued at the group’s maiden bank customers summit in Lagos, said such review would help lenders in achieving quick resolution of complaints.

    Ogubunka, who was Registrar, Chartered Institute of Bankers of Nigeria (CIBN), said the regulators should also support BCAN in the propagation of its programmes which are critical in deepening financial awareness in the country and  achieving greater penetration of financial education.

    He said lenders should also consider extending their consumer complaints desks to zonal and branch offices to facilitate quicker resolution of cases.

    He said participants recognised the inter-dependence of the operators, regulators and bank customers in creating a sound, stable, sustainable and resilient financial system.  The participants also agreed that a lot has happened in the banking industry that has made the formation of BCAN imperative.

    The ex-registrar also wants regulators to facilitate the realisation of CBN’s financial literacy/inclusion objective, as well as inculcate appropriate banking habits and culture among the populace.

    He said BCAN should also rally bank customers and consumers of banking and financial services for the promotion and protection of their interest in the face of daunting challenges against them.

    According to him, BCAN also agreed that banking should be conducted based on acceptable values and best practices, stressing that BCAN will intensify efforts at fostering mutual understanding, trust and confidence between banks and their customers through customer education. He said the step will strengthen and ensure the realisation of CBN’s financial literacy/inclusion and other programmes.

    He said the BCN should also organise awareness programmes in the areas of Guide to Bank Charges, Financial Literacy and Inclusion as well as Banking Policies, Regulations, Products/Services for the benefit of consumers in particular and stakeholders in general.

    The group should also collaborate and partner with organisations and individuals who share its vision and objectives in order to be able to extend its services to the nooks and crannies of the country for positive multiplier effect.

    It also should create sustainable platform for the provision of advisory and counselling services in banking and finance to its members and the interested public in order to deepen their knowledge and ability to make the right financial decisions and choices.

    The group also pledged to work closely with the regulatory and supervisory authorities to ensure that banks are held accountable for any unethical, unprofessional and risky products, services and practices they introduce into the financial system and to customers/consumers.

     

  • Unified Payments gets nod to process National eID cards

    Unified Payments said it iscommitted to the processing of payment application in the new National Electronic ID Card (eID) issued by the National Identity Management Commission (NIMC).

    Unified Payments is a payment transaction processing company owned by Nigerian banks.

    In a statement, the Unified Payments said its role in the project is to further demonstrate its leadership position in the e-payment industry.

    It explained that with the eID card, Nigerians will have the ability to deposit funds, receive social benefits, pay for goods and services at merchant locations within and outside the country, as well as draw cash from Automated Teller Machines (ATMs) around the world.

    Under the processing arrangement, Nigerians identity data would be hosted and managed exclusively by NIMC while payment data would be hosted and managed by Nigerian banks and Unified Payments.

    The firm’s Managing Director and Chief Executive Officer (CEO), Agada Apochi, commended NIMC for the bold step and the technological achievement, adding that the initiative would help drive financial inclusion as well as stimulate economic activities in the country.

    NIMC Director-General and Chief Executive Officer (CEO), Chris E. Onyemenam said Unified Payments was selected as the pilot processor of the payment aspect of the card based on its exceptional track record.

    “Being the first processor in Nigeria certified to process EMV chip cards, the first to achieve the Payment Card Industry Data Security Standard (PCI-DSS) certification as well as its ownership by Nigeria banks, we have to entrust them with the role of processing the payment application in the National Identity Card,” he said.

    Unified Payment Services Limited otherwise known as Unified Payments is a card-neutral and option-neutral payments service provider founded in 1997 and owned by a consortium of Nigerian banks.