The Nation Newspaper

Category: Money

  • Stanbic IBTC to raise N30b Tier II capital

    Stanbic IBTC to raise N30b Tier II capital

    Stanbic IBTC, the Nigerian unit of South Africa’s Standard Bank, plans to raise up to N30 billion in Tier II capital.

    The  lender’s Managing Director/CEO, Mrs.  Sola David-Borha, who confirmed the capital raise during an analyst’s conference call,  told Reuters that the actual amount would depend on market conditions and regulatory guidelines. She did not provide a timeline.

    She said the lender is aiming for a 15 per cent loan growth for the second-half of 2014, targeting business customers, after it grew loans 18 percent in the first-half.

    Also, Ecobank Transnational Incorporated’s (ETI) unit in Nigeria, sold $200 million of dated subordinated notes due in 2021 to join other lenders in Nigeria raising funds through debt sales.

    The issuance has a yield of nine per cent and a coupon of 8.75 per cent, according to information from a person with knowledge of the offering, who asked not to be identified because they weren’t authorised to speak publicly.

    Bloomberg said Deutsche Bank AG and Standard Chartered Plc are the lead managers.

    The notes are expected to be eligible as Tier 2 capital by the Central Bank of Nigeria (CBN), according to the source.

    Also, Access Bank Plc sold $400 million of subordinated notes in June with the yield falling 80 basis points since they were issued to 8.7 per cent. First Bank of Nigeria sold $450 million of bonds on July 18.

    The banks are raising money to help fund power, oil exploration and manufacturing projects in the country. Ecobank Transnational, a lender based in the Togolese capital of Lome that operates in 36 African countries, said net income rose 15 per cent to $194 million for the six months through June.

    The stock rose 4.6 per cent to N18.33  yesterday, thereby adding to its 13 per cent advance this year. The 195-member Nigerian Stock Exchange All Share Index has gained 3.1 per cent in 2014. Ecobank’s Nigeria unit isn’t listed on the bourse.

  • Bank warns of asset price collapse

    Bank warns of asset price collapse

    Financial sector imbalances could cause sudden price reversals and sharp spikes in volatility, risks many macroeconomists are still blind to, says Reserve Bank of India governor Raghuram Rajan.

    Poor policy co-ordination and a continued failure to comprehend the dangers of financial cycles pose significant risks to the global economy at a time when central banks may be least equipped to deal with crises, Raghuram Rajan, governor of the Reserve Bank of India (RBI), says in an interview published by Central Banking journal yesterday.

    Unfortunately, a number of macroeconomists have not fully learned the lessons of the great financial crisis. Financial sector crises are not as predictable. The risks build up until, wham, it hits you.

    Rajan says problems do not appear to be arising from credit growth – although this is an issue in some emerging markets – rather from the rise in asset prices as investors around the world chase yields. The former chief economist of the International Monetary Fund fears a build-up of financial sector imbalances could cause sudden price reversals and sharp spikes in volatility. “We are taking a greater chance of having another crash at a time when the world is less capable of bearing the cost,” he says.

    “Unfortunately, a number of macroeconomists have not fully learned the lessons of the great financial crisis. They still do not pay enough attention – en passant – to the financial sector. Financial sector crises are not as predictable. The risks build up until, wham, it hits you,” Rajan says.

    Rajan fears central banks “may be exhausting room on the financial side and creating a situation where there will be a discontinuous movement in the financial sector”.

    A sudden shift in asset prices could happen in a variety of ways. The most obvious route would be as a result of investors chasing higher yields at a time when they believe central bank policies will protect them against a fall in prices

  • CBN limits banks’ Tier 2 Capital to 33%

    CBN limits banks’ Tier 2 Capital to 33%

    The Central Bank of Nigeria (CBN) has pegged Tier-2 or supplementary capital for banks at 33.3 per cent of Tier-1 Capital.

    The CBN in a circular to banks signed by the Director, Banking Supervision, Mrs. Tokunbo Martins, said, henceforth, total Tier Two capital, including Other Comprehensive Income (OCI) Reserves should be limited to 33.33 per cent of total Tier One capital.

    Tier 2 capital is supplementary bank capital that includes such items as, revaluation reserves, undisclosed reserves, hybrid instruments and subordinated term debt.

    A bank’s reserve requirements include its Tier 2 capital in its calculation, but it is considered less reliable than its Tier 1 capital.

    Mrs. Martins  pointed out that lenders are required to note that unaudited OCI gains will not be recognised as part of capital, while unaudited OCI losses shall be deducted from the institution’s capital in arriving at total qualifying capital.

    The circular, titled: ‘Exclusion of Non-Distributable Regulatory Reserve and Other Reserves in the Computation of Regulatory Capital of Banks and Discount Houses,’ said the policy is part of the ongoing reforms by the regulator aimed at ensuring more prudent assessment of the regulatory capital of Money Deposit Banks.

    She said this is also in line with global efforts aimed at raising the quality and loss absorbency of the capital base of banks.

    The regulator said that the Regulatory Risk Reserve created pursuant to Section 12.4 (a) of the Prudential Guidelines which was effective on July 1, 2010, will henceforth be excluded from regulatory capital for the purposes of capital adequacy assessment.

    Also, collective impairment on loans and receivables and other financial assets will henceforth not form part of Tier 2 capital, while OCI Reserves will be recognised as part of Tier 2 capital, subject to the limits set in the CBN Guidance Notes on the Calculation of Regulatory Capital.

    Mrs. Martins said the provisions of this circular supersede the provisions of S. 12.4 (b) of the Prudential Guidelines as well as S. 2 of our Guidance Notes on the Calculation of Regulatory Capital.

  • Keystone Bank receives PCI-DSS Certification

    Keystone Bank receives PCI-DSS Certification

    Keystone Bank has received a Certificate of Compliance on the successful completion of the Phillips Consulting assessment on Payment Card Industry Data Security Standards (PCI-DSS).

    The PCI-DSS is an extensive set of guidelines developed by five of the top global payment card brands, and adopted worldwide by card services providers – Card Issuers, Banks, Transaction Switching Companies and Merchants – to better protect customers’ payment card information from compromise and fraud through increased controls around the storage, transmission and processing of card data.

    Speaking during the presentation ceremony, the Executive Director, Operations & Technology, Mrs. Yvonne Isichei, who stood in for the Managing Director/CEO, Keystone Bank, Philip Ikeazor, said that “Keystone Bank had engaged the services of PCI-DSS Qualified Security Assessors, Phillips Consulting Limited, to guide it through the implementation of the standard and conduct the final certification assessment.”

    She said the result of the assessment is that amongst other things, Keystone Bank achieved the “creation of a restricted Card Data Environment within our network; the identification and sanitisation of card data from the general network environment and Provision of training for our staff on card data security best practices and general awareness building on the PCI-DSS requirements.”

    While presenting the certificate, Mr. Wole Ogundare, Associate Partner, Phillips Consulting had encouraged Keystone Bank to continue to the atmosphere of compliance noting that “Compliance is not a destination but a journey.”

  • Union Bank seeks 30% loan growth

    Union Bank seeks 30% loan growth

    Union Bank is to boost its loan portfolio by 30 per cent in the second-half of 2014, after increasing it by 10 per cent in the first six months, targeting retail and business customers, its Chief Finance Officer, Mrs. Oyinkan Adewale, has said.

    “In the second half we would do 30 percent (in loans). We closed December 2013 at N231 billion loan book. We are looking generally in the region of 40 per cent growth for 2014,” she told Reuters.

    Union Bank was bailed out in 2009, along with eight other Nigerian banks in the wake of the  financial crisis that hit the financial services sector.

    A private equity consortium recapitalised the lender, which reported last week that its first-half pretax profit fell by a third, on lower gross earnings. Shares in Union Bank, which have fallen 14.3 per cent this year, were up 0.2 per cent at  N8.20 yesterday.

    Mrs. Adewale said she expected the second-half profit to be “strong” without giving a guidance for the full year, but said that the fall in the first-half was due to one-off writedowns in the first six months of 2013, which would not occur in the second half.

  • AfDB plans $3b support for Power Africa project

    AfDB plans $3b support for Power Africa project

    African Development Bank (AfDB) Group President, Donald Kaberuka has reaffirmed the lender’s support to advance the Power Africa initiative, with a commitment of $3 billion over a five-year period.

    This support was originally announced by the AfDB, as an anchor Power Africa partner on the continent, in July 2013. In 2013 only, AfDB interventions related to focus countries (Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania) amounted to over $600 million.

    Under the enhanced partnership announced Tuesday, the United States and AfDB will collaborate on scaling up the use of off-grid and mini-grid technologies, supporting geothermal power development, and strengthening regional power trading between African countries among others.

    Over the next year, the AfDB expects to commit around a billion dollars in support of energy projects in Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania, the six Power Africa focus countries. Once implemented, these operations would contribute towards five to 10 per cent of the stated Power Africa goal of developing 10,000 megawatts of new power generation in Sub-Saharan Africa.

    The AfDB supports far-reaching power sector reforms and provides technical assistance, financing and guarantees for power generation, transmission and distribution projects in Africa.

    The AfDB Group – including the concessional lending window African Development Fund (ADF), to which the United States contributes – works directly with governments and private investors to advance critical reforms needed to attract public and private financing and build the capacity in Africa’s power sector. AfDB commitments to Africa’s energy sector currently total over $12 billion, and are projected to increase by $2 billion in the coming year.

  • Recapitalisation:1000 BDCs may emerge

    BureauX De Change (BDCs)  are waiting for the Central Bank of Nigeria (CBN) to release the list of operators that met the July 31 recapitalisation deadline, Managing Director, Blue Wall Bureau De Change (BDC) Limited Lucky Aiyedatiwa has said.

    He told The Nation that feelers indicated that about 1,000 operators may make emerge.

    Aiyedatiwa, who is former Association of Bureau De Change Operators of Nigeria (ABCON) president, said: “We are waiting. The collation process is ongoing. I think that the CBN may complete the collation before the week runs out.”

    He said operators that hitherto ran four or more BDCs would be forced to go for only one licence because of the new huge capital base. Duplication of ownership, he said, would no longer be feasible.

    ABCON President Alhaji Aminu Gwadabe said the policy was an indirect attempt to empower few operators and force many others out of business.

    ABCON proposed a 40-week timetable for operators to meet the new minimum capital requirements. The proposal, he said, was sent to CBN for consideration. He said though CBN extended the deadline to July 31, the time was still too short to enable BDCs comply with the statutory and legal requirements of the new policy.

    The timetable, he said, contained actions needed to be taken to enhance the successful implementation of the policy for the subsector.

    Managing Director, Kayewd Bureau De Change (BDC) Limited, Rotimi Dada said the CBN was still selling only $15,000 to BDCs as against $50,000 before the policy was announced.

    Dada  said CBN was “a bit hasty” by cutting the dollar sales to BDCs, adding that the regulator should consult with stakeholders on what to be done. CBN, he said, should see the BDCs as macroeconomic factors that favour the economy.

  • FCMB leads Oando deal

    FCMB Capital Markets, the investment banking arm of the  FCMB Group, has emerged the lead arranger in the ConocoPhillips acquisition agreement signed by Oando Plc.

    The agreement signing and completion ceremony took place in France.

    FCMB Capital Markets Limited,  played the dual role of the Mandated Lead Arranger and Technical Bank, while First City Monument Bank Limited, its sister company, was one of the major lenders in the transaction, a statement from the lender said.

    The $1.65 billion deal, which is expected to increase Oando’s crude oil production from about 5,000 barrels per day to 50,000 bpd, was concluded following the satisfaction of all statutory requirements and approval of the Federal Government.

    “This acquisition satisfies our criteria for assets in production, as well as excellent appraisal and exploration prospects,” Wale Tinubu, Chairman, OER said.

    FCMB’s emergence comes as local banks are increasing their investment banking (IB) capacity to handle the most sophisticated deals. Three Nigerian firms –Vetiva Capital Managements Ltd, FCMB Capital Markets and FBN Capital finance – emerged in the top 10 lists for Sub-Sahara Africa Equity Capital Markets fee rankings for first half of last year, according to data from Thompson Reuters deals intelligence.

    Domestic firms are developing investment-banking capacity as deals explode in Africa’s largest economy, powered by an emerging middle class and rising consumer spending. Projected growth rates of roughly 7.1 per cent per year through 2030, would raise Nigeria’s total Gross Domestic Product to more than $1.6 trillion, making it a top-20 global economy, according to consulting firm, McKinsey, in a report released last week.

  • Different strokes for different banks

    Different strokes for different banks

    For many banks, the second quarter which ended in June was not a season to cheer about. Their profits dipped. Some are blaming it on the Central Bank of Nigeria (CBN) policies which reportedly cut banks’ loanable funds and income margins. But, what was the magic for those that made profit? COLLINS NWEZE reports.

    Capital is key to business. This explains why banks panicked when the Central Bank of Nigeria (CBN) raised Cash Reserve Ratio (CRR) on public sector deposits from 12 per cent to 50 per cent in July, last year. In March, the ratio was raised to 75 per cent.

    CRR on private sector deposits also rose by 300 basis points from 12 per cent to 15 per cent during the last CBN Monetary Policy Committee (MPC) meeting in March.

    Seeing the effect of previous hikes on banks’operations, the MPC left CRR, Monetary Policy  Rate (MPR) and other indicators unchanged at its last month’s meeting. For many banks, especially those with weak deposit base, it was bad business.

    These policy adjustments creamed  off over N1.5 trillion from banks’ vaults and put it in CBN’s custody. When banks started releasing their fiscal year 2013 results, many pundits were interested in knowing the impacts changes in cash reserve, reduction on Commission on Turnover (COT), removal of Automated Teller Machine (ATM) charges and increase in contribution to the Asset Management Corporation of Nigeria (AMCON) levy had on their profit.

    Some of the banks posed good results; other had a poor showing.

    The half year ended June 30 result of Skye Bank indicated that its Profit Before Tax (PBT) dropped to N7.266 billion as against N10.545 billion during the corresponding period in 2013. Profit after tax also decreased to N5.786 billion as against N8.428 billion the previous year.

    With gross earnings of N63.9 billion, interest expense dropped by 24 per cent yearly to close at N20.7 billion compared to N27.2 billion as at June, last year, in line with the bank’s operational strategy of increasing the volume of low cost funds in its deposit portfolio.

    “Our loan impairment charge increased by 100 per cent year-on-year to N5 billion, being a deliberate policy of aggressive provisioning early in the year to enable a fairly sustained position and avoid high-figure concentration in the last quarter. Exchange earnings improved by five per cent to N5.8 billion compared to N5.5 billion of the corresponding period in 2013,” the bank said.

    Giving insight on the reasons for poor outing of most banks, Timothy Oguntayo, the new Chief Executive Officer/Managing Director Skye Bank Plc, at a briefing, said the 0.5 per cent sinking fund being contributed to the Assets Management Corporation affects operating expenses.

    Fidelity Bank Plc’s PBT for the half year ended June 30, stood at N9.43 billion, its Chief Executive Officer, Nnamdi Okonkwo, has said. The PBT represents a drop of 16 per cent from N11.2 billion recorded in the Half Year ended June 30, 2013. However, second quarter PBT was N4.97billion, which represents a growth of 12 per cent from N4.45 billion recorded in first quarter of the year.

    Total Customer Deposits declined by five per cent to N766 billion as at June 30, this year from N806 billion as at December 31, last year as we rebalance our deposit book on account of high Cash Reserve Requirement on public sector deposits and continuous re-pricing of the deposit book.

    “On a quarterly basis deposits recorded a marginal growth in second quarter 2014 while interest expense remained flat in a period of increased monetary tightening. Net Loans and Leases grew by three per cent to N438 billion as at June 30, 2014 from N426 billion as at December 31, 2013, loan growth was 19 per cent from June 2013 to June 2014,” it said.

    Okonkwo said the result is in line with the lender’s 2014 fiscal year and medium term Return on Equity (ROE) target, adding that the lender’s shareholders’ funds stood at N166.38 billion within the period.

    He said the result showed a gradual impact of some of the transformation it commenced at the beginning of the financial year, adding that the PBT rose by 12 per cent in the second quarter and net interest income improved by 32 per cent between June 2013 and June 2014.

    “We are confident that the profit and efficiency momentum will be sustained in the coming quarters as we implement our newly tested lending structures, to grow the loan book in the Small and Medium Enterprises (SMEs) and retail segment while consolidating on our niche corporate banking play,” he said. He said the lender’s gross earnings grew by one per cent from N62.9 billion recorded in first half of 2013 to N63.3 billion that of this year.

    Also, First City Monument Bank (FCMB) Group second quarter result for the period ended June 30, 2014 showed the PBT grew by 4.6 per cent to N11.14 billion, while PAT rose by 3.2 per cent to N9.6 billion during the period.

    FBN Holdings Plc, the holding company for First Bank of Nigeria (FBN) Limited and its previous subsidiaries, grew its top-line by 7.9 per cent to N212 billion in the first half of this year.

    Interim report and accounts of FBN Holdings for the period ended June 30, this year released at the weekend showed that gross earnings rose by 7.9 per cent to N212 billion in first half 2014 as against N196.4 billion recorded in comparable period of 2013. The top-line showed mixed performance from the interest and non-interest incomes.

     

    Analysts’ views

    Equities analyst at Renaissance Capital (RenCap), an investment and research firm, Adesoji Solanke, said lenders must be disciplined on the cost line, and properly manage their impairment charges before they could deliver earnings growth. He said most banks’ managements acknowledged the current challenges and their initial focus will be on reducing the funding costs by continuous downward re-pricing of costly term deposits.

    For Fidelity Bank, Solanke said the lender would be significantly more focused on driving e-banking products for customer mobilisation. On the asset side, he said Fidelity is positioning itself to be a Small and Medium Enterprise-focused bank, and, coupled with its payroll lending retail book, management expects combined exposure to rise to 50 per cent over the medium term (2017), from 28 per cent last year.

    He said the bank’s management has also been re-pricing the existing loan book and plans to periodically review all concessions and lending rates. “The turnaround process is under way, but we think in the short term, investors are likely to retain a preference for the more liquid and relatively cheap tier one names,” he said.

    Vetiva Capital Management analysts predicted that on an aggregate level, the banking industry 2014 gross earnings would take a potential $690 million annual hit, assuming a 12 per cent yield on the newly sterilised CRR deposits. They said the impact will vary from bank to bank depending on how much public sector deposits on their books.

    But Sterling Bank Executive Director, Abubakar Suleiman, disagreed that banks have performed poorly. “If you look around, most banks in Sub Saharan Africa did not do better than 15 per cent Return on Equity (ROE) in 2013. Nigerian banks are averaging 20 per cent ROE. So, that is not poor performance. Also, it is at a time that the sector is also growing. Is it true that the headwinds exist? Yes,” he told The Nation.

    Suleiman said the cost of resolution for the crisis of 2009 is something that will be with banks for a while but that, he added, should not stop them from aspiring to deliver good returns. “These are difficult times. A time when the government and regulatory authorities are trying to stabilise prices, including exchange rates and interest rates, and the choices available to them are limited”.

    And again, these are not policies that will be there forever. They will be applied in the best interest of the country, and when things stabilise, we expect some of these policies to be reversed and profitability will improve for the banks,” he said.

    He said the CBN could not allow a certain level of liquidity in the system when there is pressure from the exchange rate. “And even the banks themselves are not better-off if liquidity is allowed in the system because what they gain, in terms of interest income, they may end up losing if there is significant devaluation or devaluation that is not managed properly. In my view, the CRR hike is something that must happen, and is not going to prevent any serious minded bank from returning decent ROE,” he said.

    Suleiman said his bank achieved its objective, and the target that was set for last year despite the difficult operating environment. Suleiman said the increase in top line performance is impressive considering the harsh regulatory environment and the tightening stance of the CBN which have put pressure on earnings of most banks.

    “Most importantly, we also reduced our cost to income ratio, and we are a more efficient bank today than we were before. We also achieved a 40 per cent growth in our risk assets, and 22 per cent growth in total assets. So, it is an encouraging performance that we are very proud of and intend to repeat in 2014,” he said.

     

    Banks’ reactions

    Banks are raising dollar-funds to fund businesses in power, oil and gas sectors. The lenders are also embracing e-payment to reduce cost of operation while also improving their commitments to Small and medium Enterprises (SMEs) sector. There is also renewed zeal to fund mortgage, agricultural and educational businesses. Banks are also reviewing their business development strategies aimed at achieving improved earnings.

    In late April, the Group Managing Director, UBA Plc, Phillips Oduoza,  announced a major shift in the lender’s business model and strategy to improve its earnings in Nigeria and African subsidiaries. The bank has 18 subsidiaries across Africa.

    The lender had in May 1, split its operations into two broad directorates, UBA Africa and UBA Nigeria, both under UBA Plc. The bank also appointed two deputy managing directors to head the UBA Africa and UBA Nigeria directorates, and mandated each division to contribute 50 per cent to the lender’s group profit targets.

    He said competition between the two directorates will be positive and improve its earnings. “We have taken a decision on how to drive Nigeria and African divisions and earn the full benefits of our investments,” he said.

    Oduoza said the bank was not restructuring, but was redeploying its resources in a  optimally to achieve its objectives and improving earnings.

     

  • Why banks must curb fraud, by Emefiele

    Why banks must curb fraud, by Emefiele

    Which continent has the highest fraud cases? It is Africa, according to the 2013 Global Fraud Report.

    Central Bank of Nigeria (CBN) Governor Godwin Emefiele, who made this known at the Chief Compliance Officers of Banks in Nigeria (CCOBIN) Conference in Lagos, said the report was a wake-up call for the region’s financial institutions to stem fraud and related incidences.

    According to him, among other regions surveyed, Sub-Saharan Africa scored 77 per cent as the area with the most prevalent fraud problems. For physical assets thefts, it scored 47 per cent; corruption, 30 per cent; regulatory or compliance breaches, 22 per cent; internal financial frauds, 27 per cent and misappropriation of organisational funds, 17 per cent. It also showed that 2.4 per cent of the regions revenues are lost to fraud.

    Represented by Deputy Governor, Operations Adebayo Adelabu, Emefiele said though the need for compliance has imposed additional costs on banks, the right thing must be done to protect the system from local and international fraudsters.

    He advised banks to always comply with regulations as risks of non-compliance is costly, saying: “If they think compliance is costly, let them try non-compliance.”

    Emefiele said while fraud and corruption were international in coverage, their incidence was pronounced in third world countries, including Nigeria because of result of perverse incentives.

    To overcome this challenge, he said financial institutions were required to keep track of transactions involving high risk customers, such as Politically Exposed Persons (PEPs) and Financially Exposed Persons (FEPs).

    He said it was because of these consequences that regulatory bodies, have set up standards and regulations to curb the menace.

    Emefiele said Nigeria has adequate legal and regulatory measures for addressing breaches of the Know Your Customer (KYC), Customer Due Diligence (CDD) and Enhanced Customer Due Diligence (EDD) provisions. “It is the application of these KYC provisions that are meant to reveal illegitimate sources of funds and trigger investigation by relevant stakeholders that matters. Like in many developing countries, compliance has been a major regulatory challenge in Nigeria,” he said.

    In his presentation, founder and Managing Director, DataPro Limited Abimbola Adeseyoju said criminals know that there are compliance procedures, such as KYC. They, therefore, come prepared, hence the need for lenders to go the extra mile in verifying their customers’ identities.

    He said fraudsters either modify their identity slightly, or create a synthetic identity which can be detected through a Link Analysis Solution. This applies advanced analysis to determine the risk level for both the network and every individual associated with the network, he said.

    Examples of attributes that could be shared and linked are Personal Identity Information, Account Information and Transactional Information.

    “Once the entities are linked together, advanced analytics are applied to determine the level of risk and create a risk score. The i2 Notebook used by the Financial Intelligence Unit (FIUs), among others, enables them to search multiple data sources simultaneously, find hidden links and entities and visualise transactions and timelines,” he said.

    Adeseyoju advised financial institutions to pay special attention to all complex, unusually large transactions, or unusual patterns of transactions that have no visible economic or lawful purpose. Continuing, he said the lenders should investigate suspicious transaction and report its findings to the NFIU immediately.

    Deposit Money Banks (DMBs) have in the last three years committed over N2 billion to the KYC, CDD and EDD provisions, The Nation has learnt.

    Management Executive, Obrien Research & Data Management Bright James said so much investment was going into KYC, CDD, EDD, pension statement verification and reference letters for banks’ staff, adding that the lenders were going the extra mile in verifying customers’ details at the commencement of business relationship.

    The verification, he said, became more helpful for banks, especially in handling those seeking credit, or customers that want to borrow.

    “The KYC verification by independent enquiry is good for banks. Bank staff are doing their best in carrying out these roles, but contracting it to consultants has proved to be more reliable for banks,” he said.