The Nation Newspaper

Category: Money

  • AfDB inaugurates $35m scheme

    The African Development Bank (AfDB) has launched a public financial and macroeconomic management capacity-building project worth $35 million.

    It was approved by the bank’s board last December.

    The inauguration came at a workshop in Khartoum, Sudan, and presided over by the State Minister of Finance and National Economy, Magdi Yasin, and attended by high government officials from the Ministry of Finance and National Economy, Central Bank of Sudan, Taxation Chamber, Khartoum Stock Exchange, and Customs Authorities.

    The AfDB was represented by Suwareh Darbo, Officer-in-Charge (OIC) of the Sudan Field Office, who presented a speech at the opening  on behalf of the Resident Representative.

    The bank said in a statement that the workshop was also attended by staff from the bank, including Camille Karamaga, the Project Task Manager; Tadesse Melaku, Financial Analyst; and Asaye Adal Fasil, Procurement.

    The project’s overarching objective is to build and enhance transparency, accountability and efficiency in the use of public resources, macroeconomic policy and debt management through institutional strengthening and capacity building.

    The state minister commended the bank’s continuous support to Sudan, promising to provide the utmost support to the project team to effectively implement this important project.

    The state Minister further underscored that the project was essential for better management of public resources in the context of the government’s Poverty Reduction Strategy Paper. For his side, the OIC of the Sudan Field Office, underscored the fact that the realisation of the project bears is a concrete testimony to both the bank’s and the government’s commitment to financial governance, which is critical for the country to realise its development aspirations.

    The OIC also emphasised the project’s alignment with the pillars of the Interim Poverty Reduction Strategy Paper (I-PRSP) and the National Development Plan (2012 to 2016), both of which strengthen governance and institutional capacity in the public sector.

  • Fed Govt to cut taxes for telecom firms

    Fed Govt to cut taxes for telecom firms

    The Federal Government is planning to reduce taxes on telecommunications infrastructure to encourage firms to spend more on their networks, Communications Technology Minister Dr Omobola Johnson has said.

    “For every naira that is spent on infrastructure, about 70 per cent of it is spent on taxes. We’re going to bring that down to a much more reasonable level at 30 to 40 per cent,” she told Bloomberg.

    Mobile phone firms, including MTN Group Ltd and Bharti Airtel Ltd of India, have examined ways to offload networks to reduce exposure to costly African infrastructure.

    Apart from taxes, the operators also face the challenges of unreliable power supply and the threat of bomb attacks from Islamist militants.

    MTN and Airtel were both fined early this year for poor service standards. While the laws allow only the Federal Government to tax mobile phone firms, states and local authorities have found other ways to raise cash by levying operators’ infrastructure, including towers and base stations, Johnson said.

    Regional governments shouldn’t charge a retail store N10 million ($60,808) and phone firms N100 million for the same-sized space, she said. MTN is planning to sell a stake in its mobile tower network, worth over $1 billion.

    Sunil Mittal, the billionaire Chairman of India’s largest mobile phone operator Airtel, said in a May interview that operators were unfairly taxed in the country because the industry supports other areas of the economy.

    Nigeria is a target for international phone firms eager to tap into demand from the country’s 170 million people.

    The total number of connected mobile phones increased to 177 million in April, compared with 170 million at the start of the year, according to the Nigerian Communication Commission (NCC).

     

  • Bond Issue: Oyo, Kaduna appoint Sterling as receiving bank

    Bond Issue: Oyo, Kaduna appoint Sterling as receiving bank

    The governments of Oyo and Kaduna states have appointed Sterling Bank Plc as receiving bank for their bond issuance programme.

    Oyo State is raising N5 billion, while Kaduna State is raising N15 billion. The bonds are being raised  to generate funds for development projects.

    Sterling Bank’s Head of Structured Finance, Mr. Lanre Olalusi who made this known in Lagos at the weekend said the choice of the bank may have been influenced by its track record in collections.

    For instance, he said Sterling Bank collects Visa fees for the British High Commission, French Embassy, Dubai and the United Arab Emirates (UAE).

    Similarly, he said the bank collects school fees in conjunction with Interswitch using the Paydirect platform.

    Olalusi also noted that the bank’s adherence to rules as specified by the regulatory authorities based on antecedents, transparency and professional service delivery in a timely manner also stood it out as a financial institution of choice for the programme.

    His words: “The antecedents of Sterling Bank in this business are unparalleled. This business is all about experience, deep understanding of the terrain, sincerity and trust.

    “Sterling Bank has demonstrated all these qualities in similar transactions. The issuing houses also look out for banks with rich experience in the business and they are comfortable with Sterling Bank based on our past experience. For instance, Sterling Bank handled a similar responsibility for Wema Bank during its capital raising exercise and it was a huge success”.

    While assuring that the bank would provide the necessary support to the issuing house, Olalusi said  the bank would continue to offer top notch service and robust platforms to ensure the success of the exercise.

    He commended states for approaching the capital market to raise funds, adding that this would help to bridge the country’s infrastructural deficit and uplift the living standard of the populace.

    “Such medium to long term financing are typically channeled towards infrastructure and developmental projects like construction of roads, rural electrification, and the execution of housing and water supply schemes which have direct impact on living standard of the people,” he said.

     

  • FBN Capital is lead arranger for Oando’s Conoco Phillips deal

    FBN Capital is lead arranger for Oando’s Conoco Phillips deal

    CBN Capital Limited acted as Joint Mandated Lead Arranger, Facility Agent and Financial Modeling Bank on the Oando Energy Resources (OER) acquisition of Conoco Phillips Facility. The facility, an Oil Mining Licences (OMLs) 60, 61, 62, 63, 131 and 145 (the Target Assets) is located in an oil and gas producing zone in the Niger Delta.

    The landmark deal of about $1.6 billion was financed with a combination of debt and equity. The debt portion comprised a $450 million RBL facility provided by both Nigerian and offshore banks and a $350 million Corporate facility provided by Nigerian banks, leveraging OER’s existing portfolio comprising OMLs 90, 13, 56 and 125/134.

    Also, the funds were provided by FirstBank of Nigeria Limited, Diamond Bank, FCMB, Ecobank, Zenith Bank, UBA, Vitol and Enterprise Bank.

    Other financial parties to the transaction include FBN Trustees as Security Agent; First Bank of Nigeria Limited as Hedge Provider; and FCMB Capital Markets also as Joint Mandated Lead Arranger.

    Chairman, OER, Adewale Tinubu said: “We believe in the significant potential that the Nigerian oil and gas industry holds and are privileged to play a pivotal role in its consolidation, growth and development. We will continue to seek strategic opportunities that provide a platform for enhanced growth and value creation for our stakeholders”.

    Chief Executive Officer, OER, Mr. Pade Durotoye said: “This transaction represents a transformational leap forward for our Company and is in keeping with our overall strategy to grow our portfolio of Nigerian-based assets by focusing on those opportunities that deliver high quality growth in reserves and production.”

    the instrumental role we played in assisting OER with structuring and arranging the financing for the acquisition”. We feel a strong sense of responsibility to support the development and growth of indigenous companies in the upstream oil and gas sector, and will continue to deploy our resources and expertise towards enabling these companies to meet their financial and strategic objectives”.

    Speaking on the transaction, Director and Head Debt Solutions, FBN Capital Limited, Patrick Mgbenwelu said: “We appreciate the responsibility and trust OER has placed with FBN Capital to advise and arrange the financing for the acquisition of the Conoco Phillips’s assets in Nigeria.  FBN Capital remains committed to further strengthening this relationship, and to supporting OER and Oando Plc in realizing their future financing goals and objectives”.

     

  • Access Bank advises entrepreneurs on funding

    Access Bank advises entrepreneurs on funding

    Access Bank Plc has advised entrepreneurs on steps they need to take in addressing funding challenges they face in their businesses.

    Speaking yesterday at the ongoing Fifth Annual Young Entrepreneurs Network (YEN) Conference in Lagos, its Head, Women Banking Unit, Access Bank, Titilola Familoni said the entrepreneurs need to keep proper records of their transactions and operations, as such would support their loan application process.

    She said lenders approve loans base on statistics or information available to them as required by Central Bank of Nigeria (CBN). According to her, there is also need for entrepreneurs to put the right structure in place for their businesses to grow adding that proper accounting show seriousness on the part of the entrepreneurs. She said a bank will always ask for collateral for a loan because it is a requirement from the CBN.

    Familoni said: “Entrepreneurs need to get their records right as such would help them in accessing funding from banks. When the records are right, no bank can say no to a loan request.”

    Besides, she advised the entrepreneurs to invest in their personal and staff training to equip them with challenges that face businesses.

    “You do not need to reinvent the wheel. See what other entrepreneurs have done and learn from that. Such experience will help speed up your growth and development,” she said.

    Familoni said entrepreneurs do not need to be in a hurry to grow their businesses without doing proper homework.   “Entrepreneurs need to know how banks think. Banks do not like funding a customer’s risk. A bank will endure that it is protected from whatever risk that lending to a customer carries. Equity is important in business. A customer desirous of a loan need to have a savings culture.

    “Entrepreneurs need to prepare themselves before approaching a bank for a loan. Preparation makes the borrower to approach the bank from superiority point of view and he will get the loan,” she said.

    She said Access Bank is also looking at ways of assisting entrepreneurs to realise their goals, by identifying and solving challenges that affect their businesses.

    According to her,  Small and Medium Enterprises (SMEs) need to properly structure their businesses as such would make funding attractive to banks. “We have discovered that many of SMEs had no business plans and are owned by one person who does all the work and usually has no business plan. This has to stop if they want a bank to take them seriously especially when it comes to giving out loans,” she said.

    She noted that the bank would ensure proper training on basic cash flow forecasting and analysis skills for customers towards overcoming some of the challenges that come with faulty reports.

    “Most times people think that banks can just jump in and finance a business. But our approach is different. We need to first know and understand what the customer is doing before giving out loans. Remember that the money belong to the depositors and has to be protected,” she said.

  • Stanbic IBTC supports product devt

    Stanbic IBTC supports product devt

    Stanbic IBTC Bank has reiterated its committed to provide ‘branchless’ transactional banking and enhancing its product development strategy, the lender’s Head, Transactional Products & Services, Babatunde Macaulay has said.

    Speaking at a trade and finance forum for stakeholders, he said aside innovative banking products and services, customers have become even more sophisticated in their demand for specialised solutions. He said: “We are all witnesses to the growth of mobile telephone, the adoption of card solutions, and the drive towards financial inclusion and a cashless society.

    “They provided insights into how awareness and savvy the banking public has become. Stanbic IBTC as a leading international bank focuses on developing customised products and solutions for different segment of our markets.”

    He said the forum will be an annual event and will take on topical and relevant issues as it relates to trade finance in the country.

    Macaulay said the lender’s core value is “upholding the highest levels of integrity.” He said the lender is transparent in dealing with its customers and their transactions. “We follow the Central Bank of Nigeria guide to banker’s tariff and all modifications are discussed internally and communicated to client prior to implementation. In addition, we aim to offer competitive pricing and have an approved pricing framework within the bank. Specifically on financing, we have a proven track record of funding various initiatives and projects in different key sectors of the economy such as power, manufacturing and agriculture among others,” he said.

  • Africa’s corporate, sovereign bonds’ sale to cross $16.6b mark

    Africa’s corporate, sovereign bonds’ sale to cross $16.6b mark

    THE sale of African corporate and sovereign bonds this year is set to beat last year’s record amount of $16.6 billion, Standard Bank Group Ltd, the continent’s biggest lender has said.

    Its head of debt primary markets,Megan McDonald said: “There’s still a huge amount of interest and appetite. Issuance will no longer be dominated by sovereigns.” She told reporters in Johannesburg yesterday that this will happen as increased debt sales are expected from companies and state-owned corporations, according to Bloomberg.

    African issuers are tapping debt markets as borrowing costs from Nigeria to Rwanda drop to record lows. This year, yields on the continent’s debt retreated 89 basis points, or 0.89 percentage point, according to a JPMorgan Chase & Co. index.

    “We see continued growth in issuance of Eurobonds from sub-Saharan Africa and continued appetite from international investors for African risk,” McDonald said. While most of the continent’s sales this year have been government dollar bonds, that may be changing, she said.

    “We also see a diversification in terms of the dominance of the sovereign sector,” she said. There may be more sales from companies, financial institutions and state-owned entities across Africa, particularly from West and East Africa, according to McDonald.

    Sub-Saharan corporates have issued $4.13 billion of debt this year, compared with $6.95 billion for all of 2013, while sovereigns have sold $6.39 billion in 2014 from $9.7 billion last year, according to Standard Bank.

  • Fidelity Bank announces N9.4b half year profit

    Fidelity Bank announces N9.4b half year profit

    Fidelity Bank Plc’s Profit Before Tax (PBT) for the half year ended June 30, stood at N9.43 billion, its Chief Executive Officer, Nnamdi Okonkwo, has 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 the year 2013 to N63.3 billion in half year 2014.

    Its Net Interest Income grew by 32 per cent to N24.8 billion in half year 2014 compared to the N18.7 billion recorded in half year 2013. This was driven by a steady growth in the loan book and re-pricing of deposits and risk assets.

    Non-interest Income declined by 14 per cent to N13.0 billion from N15.1 billion recorded in half year 2013, basically driven by a reduction in foreign exchange earnings.

    Operating Expenses grew by 11 per cent to N26.3 billion in half year 2014 from N23.7 billion recorded in half year 2013.  This was driven by an increase in remuneration costs and regulatory related expenses while the growth in the other expense lines was significantly below the inflation rate.

    Profit Before Tax (PBT) was N9.4 billion for the Half year ended June 30, 2014, which represents a drop of 16% 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 2014.

    Total Customer Deposits declined by five per cent to N766 billion as at June 30, 2014 from N806 billion as at December 31, 2013 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.

  • AfDB seeks improved banking access for women

    AfDB seeks improved banking access for women

    African Development Bank (AfDB) has called for improved funding for women-owned businesses. The third African Women’s Economic Empowerment Summit, held in Lusaka, Zambia last week called on African governments to make more land available to women.

    Co-organised by New Faces, New Voices and the AfDB, this biennial event brings together key stakeholders in the financial sector throughout the continent, as well as influential global leaders, to look at how to put women at the centre of the African finance and economic development agenda to realise Africa’s potential.

    The theme of this year’s meeting was “African Women, Realising Africa’s Economic Potential”.

    Speaking during a session on land and property rights for women, Graça Machel, founder of New Faces, New Voices, said land is a key natural resource in unlocking the entrepreneurship among women.

    “We need to demand the right for women to own land so that they can contribute effectively to the development process of their countries’ economies,” she said.

    Machel regretted the practice of underestimating the role that women play in the economic development of their countries, arguing that without the active participation of women, African nations cannot fully develop economically.

    “Women have the potential to change their own economic status, as well as that of the communities and countries in which they live. Yet, more often than not, women’s economic contributions go un-recognised, their work undervalued and their promise unnourished,” she said.

    Earlier, Rose Mwebaza, Special Advisor to the African Union Chairperson on Women’s Economic Empowerment and Political Participation, called on African Governments to increase their budgetary allocation to programmes that will help women to own land.

    African Governments should come up with an effective strategy that will help support women economically as well as ensure that they own land, Mwebaza said. “Women must acquire land so that they can create wealth and help their families to come out of abject poverty.”

    Contributing on the same topic, Professor of Law at Jomo Kenyatta University, Jane Kamangu said giving land to women will inspire them to fully participate in the running of their countries’ economies.

  • CIBN praises CBN initiatives

    CIBN praises CBN initiatives

    The Chartered Institute of Bankers of Nigeria (CIBN) has commended the new initiatives and policies of the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, which it said are geared towards further improving banking practice and financial system stability.

    President/Chairman of Council of the Institute, ’Debola Osibogun, said at the Institute’s Presidential engagement with Emefiele that the initiatives of the apex bank were comparable with what obtained in the developed economies adding that the Nigeria banking industry was better positioned to support business and the economy.

    Osibogun observed that the new Code of Conduct in the Nigerian Banking industry approved by the Bankers Committee was an important strategic initiative, that would promote good banking practice and ethics while restoring public confidence in the system.

    She expressed satisfaction with the level of cooperation from  Banks’ Chief Executives as some of them have personally signed the Code of  Conduct form and mandated their staff to do the same.

    The CIBN boss stated that the objectives of the Code of Conduct include guiding every member of the Institute, both individual and corporate in meeting obligations to customers and other stakeholders by maintaining and improving standard of service, performance and quality of banking products; ensuring that all bank employees conduct their duties fairly and honestly; maintaining best banking practice and strong commitment to sound ethical and professional standards in the banking industry, among others.