The Nation Newspaper

Category: Money

  • Skye Bank supports Rail on trains

    Skye Bank supports Rail on trains

    Skye Bank Plc has lent its support to efforts aimed at transforming the operations of the Nigeria Railway Corporation (NRC) by providing funding support for the acquisition of two new sets of diesel multiple units passenger coaches for narrow guage track.

    Skye Bank financed the project for its client, Kintech Nigeria Limited, which executed the job for the Nigerian Railway Corporation.

    The Vice President, Namadi Sambo, who commissioned the two diesel passenger trains on Tuesday, said the event marked another watershed in the annals of the NRC as the government makes efforts to reposition it.

    Sambo said other on-going railway projects in the country would be fast-tracked so that cheap means of transportation would be made available to members of the public.

    He commended the bank for financing developmental projects and programmes and described it as a partner in national development.

    The Chief Executive Officer of Kintech Nigeria Limited, Chief Fola Kuforiji, described the project as a laudable and transformational development in the Nigerian rail system and transport infrastructure.

  • CBN orders return of excess COT charges

    CBN orders return of excess COT charges

    The Central Bank of Nigeria (CBN) has urged banks to follow the revised guide to bank charges issued last year to standardise charges for various products and services offerd by lenders.

    In circular signed by Frankline Ahonkhai for CBN Director, Financial Policy and Regulation, the apex bank accused some banks of charging Commission on Turnover at the rate of N3 per mille instead of N2 per mille agreed for 2013. It directed the affected banks to refund the excess COT charges to the customers within 30 days.

    He said some banks are charging fees without following the guide.”For instance, some banks offer accounts that are supposed to be COT-free, but impose a maintenance, or similar fee, stating that such banks should refund the money to the affected customers.

    Meanwhile the CBN has said that fraud in banks and corruption in public offices are committed by those entrusted with positions or in control of public funds.

    CBN Governor, Godwin Emefiele who disclosed this yesterday at this year’s Committee of Chief Compliance Officers of Banks in Nigeria (CCCOBIN), held in Lagos, said perpetrators often collude with officers of legitimate organisations and financial institutions to commit the crimes. He said they could also override controls to perpetrate the crimes.

    Emefiele explained that while fraud and corruption are international in coverage, the incidence has become predominant in third world countries, including Nigeria as a result of perverse incentives.

    Emefiele who was represented CBN Deputy Governor, Financial System Stability, Adebayo Adelabu said that to overcome this challenge, financial institutions are required to keep close check on transactions involving high risk customers such as Politically Exposed Persons (PEPs) and Financially Exposed Persons (FEPs).

    He said fraud  proceeds could be used in funding activities that are dangerous and injurious to society.

    He said it is because of these negative and adverse consequences of these crimes amongst others, that regulatory bodies, domestic and international, have set up standards and regulations to curb the menace.

    He said the rebasing of Nigeria’s Gross Domestic Product (GDP) will attract more Foreign Direct Investment (FDI) into the country, but that could also open up the country to international fraudsters.

    He said foreign investors see Nigeria as fraudster hub and that is affecting FDI flows.

    Emefiele said Nigeria has adequate legal and regulatory measures that should address breaches to 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.

  • Lagos inaugurates planning, budget committee

    Lagos inaugurates planning, budget committee

    The Lagos State Government yesterday inaugurated a Joint Planning and Budget Finance Management Committee to improve the synergy between the state and the local governments in the state.

    In a statement, the government said the action would help in the implementation of the Lagos State Development Plan (LSDP 2012 to 2025).

    At the inauguration, the Commissioner for Economic Planning and Budget, Ben Akabueze, noted that going forward the development plans of the various Local Governments (LGs) / Local Council Development Areas (LCDAs) would be designed in consonance with the State Development Plan as it affects them. This, it added, would remove the risk of working at cross – purposes or duplication of efforts on a project which often leads to waste of human and material resources  and sometimes conflict.

    He said that a development plan predicated on proper study of the genuine needs of the people will ensure value for money and make impact of government felt at the third tier of government that is closest to the masses.

    Akabueze said the terms of reference of the committee are to upscale planning reform process at the LGs/LGDAs;  ensure that development plans are in conformity with the State’s vision through the writing process that will be used by the LGs/LCDAs; formulate the structure and co-ordinate functions of the Local Government Planning Team (LGPTs) for each of the LGs/LGDAs;  ensure the Local Government Teams (LGPTs) are formed and functional in all the LGs/LGDAs and to provide technical support for the implementation and institutionalization of the planning reforms process.

    A Technical Working Group (TWG) that will work on detailed strategies that will ensure a successful transformation of the planning process at the LGs/LGDAs level was also inaugurated. It is to be technically responsible for the implementation of writing the Local Government Development Plan (LGDP), The Medium Term Plans and develop the annual budget for each LGA/LCDA across the state.

  • Institute urges CBN to upgrade technology

    Institute urges CBN to upgrade technology

    The Surveillance Auditor of the British Standards Institute (BSI), Vikas Mulkutkar has called on the Management of the Central Bank of Nigeria (CBN) to consider upgrading the certification of its technology.

    He said the apex bank should upgrade from the ISO 27001: 2005 to the current version (ISO27001:2013) of the standard and also engage other system certifications like the Business Continuity Management (BCM) standard and Service Management Standard to ensure an all-round certification for the bank.

    Mulkutkar, who spoke during the closing ceremony of the ISO 27001 surveillance audit at the CBN’s headquarters in Abuja, said that 11 CBN departments audited showed high knowledge of information systems security controls and had complied with the ISO 27001 standard exhibiting minimal deviation.

    He however, commended the staff of the CBN for their work culture and commitment to the Information Security Management System, noting that the auditors checked all of the information security controls and found them to be in strict compliance and handled by very committed staff.

    In his response the CBN Governor, Mr. Godwin Emefiele, represented by the Deputy Governor (Operations), Dr. Kingsley Moghalu said the first surveillance audit, which was conducted in the between June 5 and 10, was to review the CBN Information Security Management System (ISMS) processes, procedures, documents and records.

    Continuing, he said sample departments were selected from the five directorates of the bank, where departmental processes and business areas were checked for compliance with the standard, including improvements to the CBN’s ISMS since the certification of CBN in July, 2013.

    Emefiele, urged CBN staff to work harder in order to achieve zero non-conformity standards.

  • Sterling Bank lends to Facebook, Twitter users

    Sterling Bank lends to Facebook, Twitter users

    Sterling Bank Plc yesterday launched a ‘Social Lender’ scheme that would enable it grant loans to its customers on Facebook.

    Speaking at the product launch, the bank’s Head, Social Media, Kelvin Steve-Igbodo said approval of the loan happens within 10 minutes, and that borrowers can make the request online and get their accounts credited with the fund.

    He said the bank is starting with N3,000 and will gradually raise the amount with time. He said the scheme is targeted at customers with urgent cash need.

    Steve-Igbodo said the bank is collaborating with BINCOM ICT to ensure that the product succeeds in the market. “Social Lender; the first in Nigeria is a modified peer to peer lending solution using the Social Media Platforms through which micro-credit will be offered to members of these communities. The scheme provides a platform for online fans, followers who are customers of Sterling Bank to obtain Micro-credit loan via social media channels starting with Facebook and Twitter,” he said.

    He said the application will integrate with existing financial structures of the bank such that users of the online platform can access small loans by normal methods of withdrawing cash without collateral. These funds are easy to access and are delivered via a convenient platform.

    Explaining how it works, he said: “Our friends on Facebook or Twitter can apply for Micro-credit by visiting the Social Lender site.  Users who request for the loans on the Social Lender platform are rated by the algorithm that calculates their social reputation using various criteria. Based on this, the loan is either granted or rejected by the back-end Social Credit Officer. Most importantly, the applicant must have an account with the bank”.

    He said the bank understands that one of the basic functions of a bank is to provide loan access for its customers, but we have also observed that the inconvenience of the processes often dissuades potential customers from applying for loans.

  • Ecobank launches ‘Go Team Africa’campaign

    Ecobank launches ‘Go Team Africa’campaign

    Ecobank Group has launched a new multi media campaign “Go Team Africa” in support of African teams participating in the 2014 World Cup.  The campaign encompasses television commercial, press and radio advertisement amongst others, expresses the Ecobank’s mode of sharing pan-African passion.

    Ecobank is the official broadcast sponsor of Optima Sports’ coverage of 2014 FIFA World Cup in Nigeria and official broadcast sponsor of Octagon in the rest of Africa.

    The Head, Marketing & Communication of Ecobank Nigeria Adetola Oshomah said “the launch of this campaign is in line with our pan African vision.  We are again showing our commitment to the African continent and we are highly optimistic that the teams representing Africa will do the continent proud in Brazil”.  According to Mrs. Oshomah every arrangement is in place to ensure maximum support for the participating African teams in the tournament, stating that apart from the campaign, the bank is also sponsoring some customers in an all-expense paid trip to Brazil to lend their support to the teams during live matches.

    Africa is being represented in the sports fiesta by Nigeria, Ghana, Cameroon, Algeria and Côte d’Ivoire. The World Cup is among the world’s most widely viewed sporting events; an estimated 715.1 million people watched the final match of the 2006 FIFA World Cup held in Germany.

  • ‘Africa undergoing economic change’

    ‘Africa undergoing economic change’

    Africa Development Bank (AfDB) President Donald Kaberuka has said Africa is undergoing “a combination of fast demographics, economic rerorms, fast absorption of technological change, mixed with rapid urbanisation and coupled with a wealth of its natural resources”. These developments, he said, are the foundation of a fundamental and important change on the African continent today.

    He spoke at the 12th Session of the Co-ordination Committee comprising representatives from the African Union Commission (AUC), Regional Economic Communities, (RECs), the UN Economic Commission for Africa (ECA) and the African Development Bank (AfDB) at the weekend  in Addis Ababa ahead of the upcoming African Union Summit to be held in Malabo, Equatorial Guinea.

    The AfDB President called for a concrete and effective outcome in the form of a precise set of recommendations to galvanise Africans. Such precision and clarity, he said, “would enable leaders and all involved in the preparations for the Malabo Summit to know exactly what they want to achieve”. He stressed the need to focus and condense the issues into a smaller manifesto that could be acted upon by leaders and ministers in their respective capacities.

    He said discussions at the conference also stressed the need to accelerate cross-border transit across the continent by way of implementation of a high-speed train network and called for the creation of a continental free-trade area.

    In tackling these issues, the speakers proposed a roadmap for realizing these projects and stressed the need for a ‘paradigm shift’ as a fundamental step towards the implementation of the projects, as well as the broader Agenda 2063.

    The need for countries to commit to financing the continent’s development and the issue of debt was also discussed. President Kaberuka reflected on the hard lessons that he said must be learnt from the high price paid by Africa throughout the 1980s, with the ill-fated initiatives of borrowing widely for consumption.

    “If governments and individuals borrow for investment, then this is not only advantageous, it must be supported,” he asserted. He added that the commercial window of the AfDB had just re-opened, giving the opportunity for all to “borrow wisely, spend and invest wisely, and build debt management capacity in their respective countries.”

    Access to capital markets was also put forward as important bedrock for developing countries across the continent, but it was noted that this access has to be fused with domestic debt management capacity and political and economic discipline.

  • Mainstreet Bank bags payment standard certificate

    Mainstreet Bank bags payment standard certificate

    Mainstreet Bank Limited has been awarded Payment Card Industry Data Security Standard certification (PCIDSS). The PCI DSS is a set of requirements designed to ensure companies that process, store or transmit credit/debit card information maintain a secure environment to manage the fast evolving Payment Card Industry (PCI) security standards.

    The PCI DSS is administered and managed by the PCI Security Standards Council, an independent body that was created by the major payment card brands (Visa, MasterCard, American Express, Discover and JCB).

    Mainstreet Bank has by this recognition earned the level 1 PCI certification which is the highest rank available from the major credit card providers (Visa, MasterCard, American Express, Discover and JCB). level 1 PCI certification is only given to third-party providers who meet the Council’s stringent and audited – credit/debit card transaction security protocols to protect customers’ personal transaction data.

    Level 1 requires an external audit for approval, which is more rigorous than lower level compliance. The process further attests to the security of the bank’s network, applications, hardware and business processes.

    The audit was performed by the Qualified Security Assessor from Phillips Consulting, the first indigenous QSA in Nigeria.

    Speaking on the certification, Faith Tuedor-Matthews, Group Managing Director/Chief Executive, Mainstreet Bank noted that ‘’attaining the highest level in PCIDSS is a significant milestone for the bank being a key regulatory requirement for major electronic payment providers.  PCIDSS will further boost our customers’ confidence in the safety and protection of their electronic data and e- payment services’’.

  • Creating synergy through offshore banking

    Creating synergy through offshore banking

    Banks with a capital base above N100 billion are exploring opportunities within and outside Africa by opening offshore units to not only add value to their customers but shareholders. FirstBank of Nigeria, GTBank, Access Bank and Diamond Bank, among others, have opened foreign subsidiaries, which come with varied benefits, writes COLLINS NWEZE.

    Banks with eye in the future are taking advantages of benefits that come with offshore banking to expand their operations to other countries. From opportunity to run multicurrency accounts to the convenience that comes with it, most bank customers want banks that provide same efficient and seamless services across all their locations, globally.

    FirstBank of Nigeria Ltd (FirstBank), a subsidiary of FBN Holdings Plc., has confirmed the acquisition of International Commercial Bank (ICB) West African operations with the acquisition of ICB Senegal. This development completes the acquisition of the West African asset and operations of International Commercial Bank Financial Group Holdings AG (ICBFGH).

    With this acquisition, the lender is now providing full banking services in four additional countries – Ghana, Gambia, Guinea and Sierra Leone. The bank has equally promised to continue to upscale its reach in existing and new markets, through organic expansion and targeted acquisitions, helping it to maintain its leading market position.

    FirstBank had last November, acquired a 100 per cent equity interest in ICB Ghana, ICB Sierra Leone, ICB Guinea and ICB Gambia from ICBFGH.

    As a result of the acquisition, Chief Executive Officer of FirstBank, Bisi Onasanya, said the lender will consolidate its position as one of the largest corporate and retail banking financial institutions in sub-Saharan Africa (excluding South Africa).

    He said the transaction delivers against the lender’s stated ambition to win significant market share, expand its pan-African footprint and diversify earnings while delivering value to shareholders.

    He said the transaction has considerable strategic benefits directly aligned with the lender’s growth plans and provides a very strong platform for regional growth as the Bank expands its operations to take advantage of opportunities across the wider continent.

    Expansion offers a range of benefits, including new growth options, a diversified and broader geographic earnings profile, reduced country specific risk and enhanced customer benefits. By establishing a footprint in carefully selected African countries, the Bank expects to improve its ability to effectively serve an increasingly international profile of corporate and institutional customers.

    “The acquisition of ICBGFH assets in Senegal is in line with FirstBank’s stated international expansion plans and offers considerable strategic benefits with ICB offering FirstBank entry into multiple markets under one franchise. In addition, it further emphasises FirstBank’s focus on building a stronger regional and multi-local institution across Africa; providing new growth options, diversified geographic earnings profile and wider customer benefits,” Onasanya said.

    He said entry into Senegal presents an automatic banking license into other countries in the West African Economic and Monetary Union (WAEMU) region and the country’s low banking penetration, strong prospects for economic growth and political stability makes it an attractive market.

    He explained that due to its congeniality for investors, businesses and tourists, Senegal offers one of the safest and more conducive environments for business as represented by the flow of foreign investments channelled through the economy in the last ten years in telecoms, banking, insurance, tourism, transportation, agriculture among other things.

     

    Retooling business strategy

    United Bank for Nigeria (UBA) Plc has equally announced a major shift in its business model and strategy meant to improve its earnings in Nigeria and African subsidiaries.  The Group Managing Director/CEO, UBA Plc, Phillips Oduoza said the Group has split its operations into two broad directorates, UBA Africa and UBA Nigeria, both under UBA Plc.

    The Nigeria division will intensify the bank’s focus on the Nigerian market, with the aim of expanding its market share, while deepening the lender’s wallet share of existing businesses.

    Oduoza said both the Nigeria and Africa directorates are expected to generate 50 per cent each of the bank’s total revenue target. He said African subsidiaries contributed 20 per cent of the banks profit before tax in 2013 against 11 per cent in 2012. He said that the target of 50 per cent earnings for both directorates will be achieved in the next three years.

    He said the plan is in line with the lender’s ‘Project Alpha’ initiative, a three-year road map of key transformation initiatives, designed to reinforce the Group’s strategic positioning and leverage its huge Africa presence to fully exploit the opportunities in Africa ’s economic renaissance.

    According to him, the UBA Africa Division will be made up of the 18 African country subsidiaries of the UBA Group outside Nigeria. He said the UBA Africa will have a CEO supported by two Deputies along the bank’s two core product lines: Wholesale Banking (comprising, Corporate Bank, Institutional Bank and Public Sector) and Retail Banking (comprising, Personal Banking and Small and Medium Enterprises Banking).

    Oduoza said “the newly created UBA Africa Division will grow and deepen the bank’s presence in member countries, optimise the synergies within the network, deepen service delivery excellence, and promote cultural integration and a high level of motivation among its staff in the different countries.

    He said that for time, the bank has been investing and now is time to drive the business. He said the bank completed the first phase of its expansion plans in 2011 and is now trying to develop the business. He said the bank is currently focusing on aggressive acquisition of customers adding that the full benefits of the bank’s investment in Africa will start coming back.

    He said the African and Nigerian directorates will be supported by a common technology and will benefit from shared services. He said completion between the two directorates will be positive and will 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.

    He said the bank is not restructuring, but is redeploying its resources in a very optimal manner to achieve its business objectives and improve earnings.

     

    Stakeholders speak

    Managing Director, Financial Nigeria International, Jide Akintunde said offshore banking comes with certain benefits such as its opening up of the banking industry to national and pan-regional players.

    He predicts that despite the pressure from the CBN on the banks, competition in the operating environment enhances local banks’ commitment to providing relevant banking products and strong local service.

    He said offshore banks are known to offer global payments, trade and cash management services to the increasing number of international and regional clients which include governments, financial institutions, and high net-worth investors with business interests across the world.

    Economic Analyst, Sunday Bayo, said some offshore banks may operate with a lower cost base and can provide higher interest rates than the legal rate in the home country due to lower overheads and a lack of government intervention.

    He said offshore finance is one of the few industries, along with tourism, in which geographically remote island nations can competitively engage. It can help developing countries source investment and create growth in their economies, and can help redistribute world finance from the developed to the developing world.

     

    Capital requirement

    Ghana and Zambia central banks had raised their minimum capital requirement for banks, saying that the measure would help mobilise additional resources for their economies and enable banks participate effectively in their national economic growth as well as provide more funds for flow of credit.

    In the case of Ghana, whose financial market had been undergoing some restructuring since the discovery of oil in the country, the Bank of Ghana has directed all banks to recapitalise to the tune of GH¢60 million ($31.7 million), from the $5.28 million it used to be.

    Similarly, the Zambian government recently hiked its minimum capital requirements for foreign commercial banks to K520 billion ($98.52 million), from $2.27 million, while that of local commercial banks was raised to $19.69 million within same period.

    The Central Bank of Nigeria (CBN) Director, Banking Supervisions, Mrs. Agnes Martins said the increases reflect efforts to strengthen the banking sectors in those countries even as global banks have also been seeking ways to boost capital adequacy ratios in their home countries to meet increased capital requirements under Basel III, and one option they have explored has been the disposal of international subsidiaries.

    She said that these capital demands are not in tandem with the level of growth in business activities in these lenders adding that it would not allow banks to continue funding their subsidiaries from parent companies but would encourage them to consider mergers and acquisitions with other local or foreign banks in host country.

  • CBN may leave interest rate at 12% till October

    Those expecting an immediate cut in the Monetary Policy Rate (MPR), may be disappointed.

    Findings by The Nation indicated that although the new Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, promised rate cut, it may not take effect until about October.

    Currencies analyst at Ecobank Nigeria Olakunle Ezun said in an emailed report that the Governor’s forward guidance to a low interest rate environment showed a clear departure from his predecessor’s era of a significantly tight policy stance.

    He argued that assuming no significant change to key indicators, the MPR would likely be held at 12 per cent through September before any cuts are made. He said this was because of reasonably strong liquidity growth, fiscal expansion prior to the February 2015 elections, and the potential risks to Nigeria arising from the normalisation in US monetary policy.

    The MPR is the benchmark rate by which the CBN determines interest rate.

    Emefiele had said the CBN under his leadership, would pursue a gradual reduction in interest rates. He said a comparison of selected macroeconomic aggregates from some emerging market countries including South Africa, Brazil, India, China, Turkey, and Malaysia showed that Nigeria has one of the highest T-bill rates.

    “Such high rates create a perverse incentive for commercial banks to simply buy virtually risk-free government bonds rather than lend to the real sector,” he said.

    The CBN boss said that to enhance financial access and reduce borrower cost of credit, the lender would pursue policies targeted at making Nigeria’s T-bill rates more comparable with other emerging markets and by extension, pursue a reduction in both deposit and lending rates.

    “While a reduction in deposit rates would encourage investment attitudes in savers, a reduction in lending rates would make credit cheaper for potential investors,” he said.

    Emefiele said since 2012, the CBN has maintained a tight regime of monetary policy, with the MPR and the Cash Reserve Requirement (CRR) mostly remaining unchanged at 12 per cent. The CRR on public sector deposits was however raised to 50 per cent in July, 2013 and subsequently to 75 per cent in March 2014 when the CRR on private sector deposits was also adjusted upwards to 15 per cent.

    He said this is meant to address the liquidity effects of the Federation Account Allocation Committee’s (FAAC) statutory allocations to the three tiers of government and the redemption of the Asset Management Corporation of Nigeria (AMCON) bonds towards the end of 2013, the effects of which lingered into this year.

    “The CBN would also begin to include the unemployment rate as one of the key variables considered for its Monetary Policy decisions. In the interim, we would continue to maintain a monetary policy stance, reflecting the liquidity conditions in the economy as well as the potential fiscal expansion in the run-up to the 2015 general elections,” he said.