The Nation Newspaper

Category: Money

  • FirstBank organises sustainability workshop

    FirstBank organises sustainability workshop

    FirstBank of Nigeria Limited has reiterated its commitment to supporting businesses that address social and environmental concerns in the society. Director, First Bank Sustainability Centre and head of Strategy and Entrepreneurship, Lagos Business School (LBS), Dr Chris Ogbechie, said  at the workshop attended by Non-governmental Organisations (NGOs) and other stakeholders at LBS that such would help build sustainability in business.

    He said the workshop was also meant to create an enabling relationship between the NGOs and private corporations to enable both parties harness areas of mutual importance.

    Ogbechie said business owners and NGOs have to realize that it is no longer business as usual, as customers and the media want them to address social and environmental concerns in the course of conducting their businesses.

    Ogbechie said:  “Private companies realised that they must develop strategies to meet these new needs while remaining profitable. NGO’s awareness that they can achieve widespread and lasting change through the partnership is also important in sustaining the partnership”.

    He said the shift in NGO’s/private corporations’ relationship creates an exciting opportunities for them to collaborate, increase capacity, sustainability and deliver service to the community.

    He said companies in the country must learn to do things the right way to enable them sustain long term success. Sustainability, he added, goes beyond leaving a better environment, but also involves how a business can sustain itself, make profit and eradicate poverty in the country, as that is a malaise affecting the country.

    A staff of the Corporate Responsibility Unit of FirstBank, Mrs Obianuju Akanbi said sustainability is now global trend. She added that the bank set up the centre to provide

  • Auditors kick against dominance by KPMG, Deloitte, others

    Auditors kick against dominance by KPMG, Deloitte, others

    Indigenous auditors are concerned about the rising level of control enjoyed by  KPMG,  Pricewaterhouse Coopers, Accenture, Deloitte and Ernst & Young  commonly referred to as the “big five” professional services firms.

    The Chairman, SIAO, an indigenous auditing firm, Robert Ade-Odiachi said the “big five” have corned top jobs from government parastatals, banks and other leading firms in the country.

    He said the relevance being given to the firms runs contrary to the Local Content Act, 2010, which stipulated that key jobs from government be done by local auditors, in partnership with international operators.

    Ade-Odiachi said the “big five” are parading themselves as indigenous Nigerian firms when what they are at best are franchises of foreign professional firms. “What we are witnessing presently, in the business sector of this country, is a blatant disregard for the provisions of the Nigerian Local Content Act, 2010. The “big five” professional services firms are parading themselves as indigenous Nigerian firms when what they are at best are franchises of foreign professional firms, he said.

    Continuing, he said the firms service all banks, most if not all most public quoted companies and Ministries, Departments and Agencies (MDAs), multinationals and other public interest companies to the utmost total exclusion of indigenous formed and owned firm.

    Managing Partner, SIAO, Itua Ighodalo said the “big five” have managed to do this because of the negligence and in very many cases, the support of government agencies. He said the local Content Act, 2010 is clear in its provisions and intent.

    He said the purpose of enacting the Local Content Act is to develop local skills, facilitate technology transfer, ensure optimum use of local manpower and local manufacturing in the Nigerian Oil and Gas sector.

    Ighodalo argued that even if foreign companies are registered in Nigeria, and can qualify as Nigerian firms, they are most certainly not indigenous or wholly Nigerian.

    “It is needless to state that the Local Content Act was enacted to cater for and provide protection for Nigerian indigenous companies that are in competition with foreign companies and foreign companies with subsidiaries in Nigeria,” he said.

  • AfDB’s lifeline for ‘low income’ countries

    AfDB’s lifeline for ‘low income’ countries

    The African Development  Bank Group (AfDB) has said low income countries are now eligible to secure loans from its sovereign loan window.

    In a statement, it said the decision followed a review of its credit policy which has been approved by its Board of Directors.

    It said the policy underscores the bank group’s recognition of the strong economic progress of African countries during the last decade, and its mandate to help sustain inclusive growth in its Regional Member Countries (RMCs) or African countries, including Nigeria, Ghana, Togo, among others.

    “The proposal reconciles the need to address the demand for resources to speed up the structural transformation of low-income African countries in a sustainable manner, RMCs’ debt sustainability, as well as the bank’s financial stability,” the statement said.

    About 37 countries or nearly 70 per cent of the RMCs fall under the low-income countries category that is eligible only to concessionary resources from the African Development Fund (ADF).

    However, the report argues that diminishing scarce concessionary resources would be inadequate to finance and sustain the current high rates of growth and transform the structure of Africa’s economies to generate much-needed employment. This view is bolstered by the fact that many African countries borrow non-concessionary funds in the capital markets at rates that are significantly higher than what they could obtain from the bank.

    Access to the AfDB’s sovereign resources by low-income countries would be available to low or moderate risk of debt distress countries and subject to International Monetary Fund’s Debt Sustainability Assessment (DSA), sustainable macroeconomic position as well as stringent oversight by the Bank’s Credit Risk Committee, among other safeguards.

    In approving the policy, the Board underscored the fact that policy responds to the drive to channel more resources to the low-income countries in line with its client assessment and the bank’s 10-year strategy. It would also enable the bank to broaden its base of potential clients; enhance its delivery capacity by improving the role of its non-concessional envelope in supporting the development agenda of the continent through sovereign instruments.

  • Akwa Ibom leads in SWF contribution

    Akwa Ibom State was the highest contributor to the Sovereign Wealth Fund (SWF) last year, Managing Director/Chief Executive of the Nigerian Sovereign Wealth Investment Authority (NSIA) Uche Orji has said.

    He spoke when his team visited Governor Godswill Akpabio in Uyo, the state capital.

    Orji said Akwa Ibom contributed the highest to the fund, particularly counterpart funding.

    He said they were in the state to partner the state government and invest in the state as well as be a part of the ongoing transformation in the state, adding that the authority invests in real estate, agriculture, power and seaport, among others.

    Akpabio said: “Investors are welcomed to the state to invest in any areas of their choice because Akwa Ibom state has an available perimeter of investments for investors. We have made remarkable achievements in the last seven years of my administration and we have reaped the dividends of democracy”.

    According to the Governor, the state had to invest not only on infrastructure but to also on human capacity building, we did that through our free and compulsory education policy, where every Nigerian child resident in the state goes to school free. He said the state has also built about 3,000 classroom blocks and equipped schools with adequate facilities.

    “We also constructed quality road network in the state; we are already building 2,000 units of housing; we are already building a four-point by Sheraton Hotel in Ikot Ekpene; we have finished the Ibom power plant, which would be commissioned soon.

    “We would soon take off the construction of Ibaka deep seaport and in total we have about 14 industries in the state, among others. So, the NSIA is welcome to invest in any areas of their choice in the state and we would be willing to partner with them,” the Governor revealed.

  • CJ: NDIC, judiciary cooperation paying off

    The cooperation between the Nigeria Deposit Insurance  Corporation (NDIC) and the judiciary is yielding result, Chief Judge of the Federal High Court, Justice Ibrahim Auta has said.

    The exclusive designation of judges to handle NDIC cases has resulted in timely dispensation of judgments and sustained the competence and specialisation of designated courts, he said.

    Speaking at a sensitisation seminar for Federal High Court Judges organised by NDIC in Abuja, Justice Auta said judges had been exclusively designated to handle NDIC cases.

    He pointed out the seminar had enlightened the bench on the mandate and activities of the corporation which, according to him, had resulted to more proactive and accurate adjudication of insolvency disputes.

    Also speaking during the conference, NDIC Chief Executive Officer, Umaru Ibrahim said the corporation will continue to collaborate with the judiciary in the discharge of its mandate to enhance financial system stability, , has said.

    In his keynote address with the theme: “The challenge to deposit insurance law and practice”, Ibrahim said NDIC observed that the public had a wrong perception of its statutory mandate.

    Hence, he said, time and valuable resources were invested to reverse the trend through effective and continuous public awareness and close collaboration with key stakeholders.

    Ibrahim recalled the corporation’s sponsorship of a similar seminar last year where about 53 judges of the Federal High Court participated.

    He said the corporation was not oblivious of the fact that some judges that benefited from the last seminar had been elevated to the Court of Appeal or had retired and new ones appointed.

    He said the second run of the seminar was organised by the corporation to consolidate on the gains of the previous edition and to strengthen its relationship with the courts in the interest of bank depositors and Nigeria’s financial system.

    Justice Auta added that the exclusive designation of judges to handle the NDIC cases had resulted in timely dispensation of judgments and sustained the competence and specialisation of designated courts.

  • Recapitalisation:MfBs urged to consider merger, acquisition

    Recapitalisation:MfBs urged to consider merger, acquisition

    Microfinance banks  (MfBs) yet to recapitalise  in line with the Central Bank of Nigeria (CBN) directive have been urged to seek local or international funding or go into mergers and acquisition.

    The National President of Nigeria Association of Microfinance Banks (NAMB), Valentine Whensu, told The Nation that the MfBs have been advised to merge or ask their directors for fresh funds.

    According to the CBN, MfBs are supposed to recapitalise into state and national categories. Those which are unable to recapitalise are to remain as units. To recapitalise, a unit MFB needs N20 million, state MfB, N100 million and national MfB, N2 billion.

    A unit MfB bank is authorised to operate in one location without branches/cash centres, while that of a state is allowed to open branches in the same state or the Federal Capital Territory (FCT). But a national MfB can operate in more than one state, including the FCT. It is allowed to open branches in the states and the FCT, though subject to the approval of the CBN.

    Whensu, who is also the Managing Director and Chief Executive Officer of Global Initiative Microfinance Bank, said: “So far, so good; we have advised our members who cannot meet up with the CBN directive to merge with other microfinance banks, or ask the directors to inject fresh funds. And again, they also need to look properly at their books, to see exactly what they needed to do to meet up the recapitalisation move.”

    The banker said by severally shifting the recapitalisation deadline, the CBN has shown that it is committed to the success of the subsector.

    “The CBN has been so kind with us. I just appeal to our members to meet up with these conditions,” he said.

    The bank chief said the association can only help in terms of capacity building, so as to enable operators improve their businesses.

    “A lot of us are here to ensure that operators in the MfB subsector do things right, since we don’t have funds for giving them. But I advise them to embrace international funding, where available,” he said.

    The CBN said many MfBs were deficient in their understanding of the microfinance concept. It said poor corporate governance and a high level of non-performing loans, among others, are also key challenges facing the subsector.

    According to CBN’s operational guidelines for the establishment of MfBs, they are not expected to engage in excessive spending.

    The CBN had shifted the recapitalisation deadline for the subsector by one year to December 31, 2013.

    In a circular to banks before the new deadline, CBN Director, Other Financial Institutions, O.A. Fabamwo, said it was exigent to remind directors and shareholders of MfBs that the deadline is sacrosanct.

    He, however, advised the banks to conduct due diligence and seek legal and financial advice. He reminded directors and shareholders of MfBs on the deadline for compliance with the Revised Microfinance Policy Framework, particularly on the capital requirements for each category of MfBs and branches/cash centres.

    He said henceforth, ‘customer interaction centres’, ‘meeting points’ and ‘customer service centres’, or similar outlets, located outside the registered business premises of a unit MfB shall be regarded as unauthorised/unapproved branches/cash centres if the deadline is not met.

    Besides, previous approvals for such outlets for unit MfBs have become null and void from the date of approval of the Revised Policy Framework by the Board of Directors of the CBN.

    “Also, insider-related loans shall not exceed five per cent of the shareholders’ funds unimpaired by losses. For this purpose, loans under a staff scheme shall not be taken into account. State and local government’s equity participation in MfBs is allowed under the revised guidelines to facilitate financial inclusion. However, all such investments must be gradually divested to private-sector investors within a maximum of five years.

    “In addition to the Head Office, Unit MfBs are allowed to have not more than one branch within the Local Government Area approved for their operation. This is subject to the availability of free funds (shareholders’ funds unimpaired by losses, less fixed assets and long term investments) of at least N20 million and maintenance of the prescribed minimum prudential requirements,” the CBN said in  new guidelines for the subsector.

    Many of the MfBs liquidated by the Nigeria Deposit Insurance Corporation (NDIC) ran into trouble when their debtors refused to pay back their loans, over 80 per cent of which were unsecured. Besides, some of the MfBs were taking excessive risks, and branching out too quickly without considering resources at their disposal and whether utilised funds were short or long term obligations.

  • CBN extends Basel Adoption deadline to October

    CBN extends Basel Adoption deadline to October

    Headline for banks to adopt the parallel run of Basel II/III has been extended to October from June, 2014, the Central Bank of Nigeria (CBN) has said.

    CBN Director, Banking Supervision, Mrs Tokunbo Martins who disclosed this at the weekend, said the initial challenges observed in the parallel run have necessitated for an extension, as it concerns requirements of reporting capital charge for credit, market and operational risks.

    The Basel Accord is a financial analysis principle expected to give Nigerian banks’ financials better credibility.

    She said in a circular to banks and discount houses that the lenders have been directed to continue the parallel run for an additional period of three months while the full adoption will commence on October 1, 2014.

    Martins said banks are required to use this period to re-assess their current capital levels with a view of complying at full adoption, with the minimum capital requirements.

    She explained that the policies specify approaches for quantifying the risk weighted assets for credit risk, market risk and operational risk for the purpose of determining regulatory capital.

    According to her, the computations are consistent with the requirements of Pillar I of Basel II which is expected to ensure that banks have sufficient high quality capital to support their risk taking activities. The lenders are also expected to establish effective risk management systems commensurate with their level of operations.

    She said all banks and banking institutions are expected to adopt the basic approaches for the computation of capital requirements for credit risk, market risk and operational risk.

    “Within the first two years of the adoption of these approaches under Pillar I; it is hoped that an effective rating system would have developed in Nigeria. Banks and banking groups are projected to have gathered more reliable data and gained more experience that would prepare them to consider the adoption of more sophisticated approaches,” she said.

    The CBN Director said the adoption of the Standardised Approach for Operational Risk and other sophisticated approaches will however be subject to the approval of the CBN. “The guidance notes are applicable to all banks and banking groups licenced to operate in Nigeria and should be applied on a solo as well as a consolidated basis. The minimum capital requirement is retained at 10 per cent and 15 per cent respectively for local and internationally active banks,” she said.

    She said that in line with Basel II Pillar two, banks are reminded of the importance of comprehensive risk management policies and processes that effectively identify, measure, monitor and control their risk exposures in addition to having appropriate board and senior management oversight.

     

  • Nihilent backs banks’ drive for improved IT Standards

    Nihilent backs banks’ drive for improved IT Standards

    Nihilent Nigeria, a global consulting and solutions Integration Company has expressed its commitment in assisting banks to improve their Information Technology (IT) infrastructure.

    Its Chairman, Oti Ikomi told participants during a forum on optimising IT standards implementation about Nihilent’s operations and services offerings.

    He said the event which took place in Lagos was to support firms’ compliance to Central Bank of Nigeria’s (CBN’s) IT requirements for banks and other operators in the economy.

    A statement from the firm said the event witnessed participation from most of the leading banks in Nigeria as well as non-banking financial institutions, payments, insurance and IT companies, and few conglomerates.

    “Banks and financial institutions are looking for a solution that not only addresses regulatory compliance but also improve operational efficiency, install a robust regulatory information management system, and follow effective risk management practices.

    “The seminar focused on providing a brief on mandatory frameworks, commonalities and differences, and the adoption of an integrated approach to optimise efforts, reduce cost and meet CBN timelines,” it said.

    Also, Vice President, Quality and Processes at Nihilent, Ashok Sontakke said adopting the standards would involve massive change of management affecting people, processes and technology. He also said that many of the prescribed standards have commonality and overlapping requirements.

    “So it is essential to identify the same at the beginning of this improvement journey and build optimised Quality Management System. This can result in significant effort and cost saving and also help in meeting CBN timeline,” he added.

    CBN Principal Manager, Shared Services, Aaron Yaduma, commended the Nihilent for organising the event to educate the industry.

     

  • Diamond Bank CEO reiterates commitment to CSR

    Diamond Bank CEO reiterates commitment to CSR

    The Managing Director, Diamond Bank Plc, Dr. Alex Otti has said the lender will continue in its corporate social responsibility (CSR) roles in supporting the community where it does business.

    Speaking during the renovation and renovation of office new building to the Nigerian Immigration Service (NIS) at the Ikoyi Passport Office, Lagos, he said the bank does things that impact positively on the society.

    The bank chief said the lender will continue to give back to the society where it operates adding that bank will also install Automated Teller Machine (ATM) within the premise to provide financial services to the people.

    “In Diamond Bank, we invest in people through our support for the Micro Small and Medium Enterprise  We have instituted a programme called Building Entrepreneurs Today (BET) where people with ideas are trained to become business owners and employers of labour. We also believe in helping government to make lives meaningful for the citizens,” he said.

    The former Secretary General of The Commonwealth, Chief Emeka Anyaoku and the Minister of Interior, Comrade Patrick Abba-Moro who commission the buildings commended the philanthropic gesture of the bank.

    Anyaoku applauded the bank’s gesture, adding that this has further cemented the reputation of the bank as a leading socially responsible corporate citizen.

     

    He said: “I am not surprised at the wonderful work that Diamond Bank is doing particularly in the area of community intervention.”

    The Minister of Interior, Comrade Patrick Abba-Moro, said Diamond Bank has demonstrated that the Public-Private-Partnership (PPP) Initiative which is part of the transformation agenda of the Federal Government is succeeding.

  • GTBank appoints executive director

    GTBank appoints executive director

    Guaranty Trust Bank plc has announced the appointment of Hezekiah Sola Oyinlola as a non- Executive Director.

    In a statement, the lender described Oyinlola as a seasoned professional with over 30 years of experience in the oil and gas industry, having worked at Schlumberger Group since 1984.

    He has held multiple senior roles on the management team and was the first Nigerian Managing Director of Schlumberger Group in Nigeria. In 2011 he was appointed to his current position as Chairman of Africa Schlumberger Group.

    The bank’s Managing Director, Segun Agbaje said: “We are pleased to have appointed Mr. Oyinlola; a seasoned professional with a proven track record to this position. All of us at Guaranty Trust Bank wish him the very best in his new position.”

    He said Oyinlola’s appointment has been approved by the Central Bank of Nigeria (CBN) in compliance with the highest level of corporate governance standards.