The Nation Newspaper

Category: Money

  • Ecobank deepens sub-Saharan Africa market

    Ecobank deepens sub-Saharan Africa market

    Sub-Saharan Africa is a place of great paradoxes.

    There is an admixture of crushing poverty and staggering wealth.

    No doubt, poverty is pervasive, human development is low, and growth has not been all-inclusive. The region faces an enormous infrastructure deficit, while the investment climate and regulatory environment are relatively poor. There are still weaknesses in governance and institutional capacity.

    The pervasive poverty index and infrastructure deficit notwithstanding, significant differences exist among individual countries, and those that have seized the  opportunity and implemented far reaching reforms are now harvesting better results.

    Arising from the reforms introduced in some countries, noticeable results are beginning to be felt across the continent, and the effects are being noticed. Over the last 10 years, real economic growth in the region has averaged five to seven per cent per year,  consistently above the world average. Some of the fastest growing countries in the world have been  from sub-Saharan Africa.

    Pundits say the difference between a hard place and paradise for Sub-Saharan Africa will be made by the quality of leadership, knowledge and financing available.

    Only 10 per cent of Sub-Saharan Africa’s population has access to financial services. Reliance on financial channels increases both the transaction costs and risks to low-income consumers.

    Seeing these challenges as an opportunity, Ecobank has developed innovative financial products targeted at Africa’s unbanked and  underbanked populations.

    Ecobank’s business model is focused on delivering commercial success, while at the same time contributing to economic development and financial integration. It has developed and implemented a common sustain-ability framework that focuses on driving economic transformation, promoting socially-responsible financing, attracting and retaining human capital, and protecting natural resources.

    Ecobank’s “One Bank” concept —with its uniform technology platform, universal branding, and common policies across branches, enables continued expansion into new  markets while providing all customers with a consistent, high level of service.

     

    Key impacts

    • Ecobank deepened financial access and grew its customer base to 9.1 million through its partnerships with 200 microfinance institutions, mobile banking platforms, and Rapidtransfer offering.

    The bank’s $11 million investment in employee training supports local talent development and helps achieve operational efficiency.

     

    Performance framework and growth

    By offering targeted products to the unbanked and underbanked populations of Middle Africa through alternative delivery channels, Ecobank expands its market share and customer base while increasing access to financial services. The bank provides innovative loan products to individuals, small and medium scale enterprises (SMEs), and underserved segments of the agriculture value chain through its relationships with development banks and nonprofits.

    Recognising that microfinance was an untapped market opportunity, Ecobank established a strategic partnership with five established microfinance institutions to build a regional platform that met the needs of the target market. In Ghana, Ecobank partnered with microfinance and microlending organisation Accion to provide 70,000 previously underserved customers with access to formal banking services through a system of seven branches, two satellite kiosks, 100 ATMs, and a team of 185 roving agents.

    Ecobank’s Rapidtransfer and Regional Card products are providing innovative solutions to Africa’s rural and diaspora populations. Rapidtransfer enables diaspora customers to quickly and safely transfer funds to relatives in their home countries. From 2010 to 2011, the new technology increased volumes by 106 per cent, from $385 to $794 million.

    Using Ecobank’s Regional Card, customers can affordably access their money at Ecobank branches across 32 countries of operation. Both products help to grow Ecobank’s customer base, while expanding access to financial services for historically-underbanked consumer segments.

    Through its commercial business, Ecobank helps drive business growth that indirectly provides jobs and improves livelihoods. For example, last year, it partnered NEXIM Bank to provide nearly $1 million in working capital loans to cashew processors in Nigeria.

    This enabled an increase in processing capacity from 8 to 20 tons daily and doubled the workforce.

    Through its investment banking arm, Ecobank achieves impact by strengthening the region’s banking sector. In 2011, it operated as the lead arranger for the issue of a $216 million, five-year, six-per cent-coupon sovereign bond on behalf of the Republic of Chad.

     

    Value chain

    Ecobank has more than 23,000 employees who collectively support over 100,000 people across 32 countries. Prioritising workforce development, Ecobank invested over $11 million in training and development, ensuring that all employees receive a minimum of  40 hours of training per year. In addition, leadership programs develop local talent to fill senior management positions within the bank. Such programs contribute to employee effectiveness and loyalty, and enhance operational efficiency.

     

    Corporate Governance

    Ecobank strengthens the local business environment and facilitates growth by promoting high standards of transparency and accountability through its Group Corporate Governance Charter and sustainability framework.

    The bank has a significant multiplier effect across its large geographic footprint. In 2011, it redistributed $295 million to customers through interest paid on savings and other deposit accounts, and a further $1.01 billion through taxes, salaries, and payments to suppliers, generating local economic growth and benefitingthe bank by increasing customer deposits and loans.

     

    Supporting busineses

    Since 1993, Ecobank has maintained a strategic partnership with the International Finance Corporation (IFC) that leverages both organisations’infrastructure and capital resources to increase the region’s access to finance, support small business growth, and, indirectly, strengthen Africa’s banking sector. Last year, IFC invested a further $100 million in Ecobank to help the company scale up in key markets, strengthen its capital base, and expand its operations across Africa.

     

  • PoS transactions hit N34b

    The Shared Services Project (SSP) initiated by the Central Bank of Nigeria (CBN), in collaboration with the Bankers Committee two years ago, has pushed the value of Point of Sale (PoS) transactions to N34 billion in 1.7 million deals, The Nation has learnt.

    The CBN in a statement, said the implementation of the Cash-less Policy, under the payments transformation programme was the dominant activity in the SSP.

    The CBN has also issued PoS guidelines with 113,206 units deployed and connected to the Central Terminal Management System (CTMS).

    The banking watchdog also created the Nigeria Electronic Fraud Forum (NeFF) to manage e-fraud attempts and limit losses.

    It said the SSP was meant to reduce the operating cost of Deposit Money Banks (DMBs), promote financial inclusion, facilitate integration of financial services into the economy and encourage banks to outsource non-core functions.

    “The principle was to get banks to share services and thereby enjoy economy of scale in the belief that the attendant reduction in their operational cost would ultimately be passed on to their customers, through lower costs and increased efficiency in service delivery,” it said.

    It added that the target was to reduce the industry–cost –to-serve by at least 30 per cent through effective cash management, retail payments transformation, Information Technology Infrastructure and Services, IT standards definition and back office operations were being implemented.

     

  • UBA’s liquidity ratio hits 60%

    UBA’s liquidity ratio hits 60%

    United Bank for Africa (UBA) Plc third quarter 2013 results shows that it maintains a liquidity ratio of approximately 60 per cent even as its loans to power, oil and gas and telecom sectors of the economy are rising.

    The bank’s Chief Executive Officer (CEO) Phillips Oduoza said during the lender’s quarterly Investor Conference call with analysts that the loan growth was in line with strategic positioning in power, upstream oil and gas and telecoms sectors of the economy adding that the exercise would translate to improved earnings.

    “We firmly believe that the effect of the asset creation decisions we have taken this quarter will have a sustained impact on our revenue growth,” he explained.

    UBA, which is one of the Systematically Important Banks (SIBs) as named by the Central Bank of Nigeria (CBN), is also a net placer of funds in the interbank market.

    In a statement the bank said it is already seeing some of the benefits of its positioning with a significant 28.5 per cent increase in total comprehensive income for the period to N48.74 billion, compared with N37.92 billion in the same period of last year.

    The bank’s September showed a significant 12.5 per cent increase in gross earnings to N188 billion from N167.1 billion in the same period of last year while riding on the back of the expansion in loan book, to increase interest income by 18.8 per cent to N133 billion from N112 billion.

    The nine months results put the bank’s new loan portfolio position at N870.4 billion as at September 2013, representing a 26.7 per cent increase on N687.4 billion on the bank’s loan portfolio for full year of 2012.

    A profit of N43.4 billion was achieved for the period, representing an increase of 2.8 per cent over the N42.2 billion recorded in the corresponding period of last year.

    The lender also saw a significant increase in other key performance indicators with total assets plus contingents rising by 13.5 per cent to N3.03 trillion from N2.67 trillion while total equity rose 17.2 per cent to N225.6 billion from N192.5 billion.

    “Our bank remains resilient and our focus is on delivering a set of full year results that will be able to adequately reward our shareholders. We are already reaping the benefits of operating an African strategy that is anchored on our in-depth knowledge of every market we operate in,” Oduoza said, adding that these financial indicators mean that UBA has been very effective in balancing financial performance and profitability with long term stability.

    Also, United States-based investment bank, JP Morgan, in its latest report on the Nigerian banking industry, recommended the bank’s shares to investors, stating: “UBA offers an attractive 45 per cent upside potential over 12 months, among the highest in Central Eastern Europe Middle East & Africa (CEEMEA) banks.”

    The report cited UBA’s “significant balance sheet liquidity”as one of the strengths of the bank, noting that the bank’s loan to deposit ratio of 37 per cent as at half year 2013 was the lowest among CEEMEA banks covered by the investment bank.

    “UBA’s valuation is an opportunity to buy into what may be the most attractive risk-reward in CEEMEA banks” the JP Morgan report states.

    The bank’s pan-African presence is also seen as a strength in the bank’s operations. JP Morgan notes that UBA has the highest number of subsidiaries in Africa among the top-tier Nigerian banks with positions in 18 African countries outside Nigeria and potential to drive future revenues on rising intra-Africa trade.

    “This pan-African presence and valuation discount increases the attractiveness of UBA as a potential take-out story, in our view, given our understanding on larger regional banks (e.g. South African banks) for pan-African franchises such as UBA’s,” JP Morgan added.

  • Reserves drop to $44.9b on rising oil, food imports

    Nigeria’s foreign reserves have declined to $44.9 billion as oil and food imports soar. The reserves, which stood at $45.4 billion on September 30, have maintained steady fall in recent months until the drop on November 14.

    With over 50 per cent of foreign exchange utilised for the importation of fuel and food, the Central Bank of Nigeria (CBN) said policy should focus on a comprehensive backward integration production strategy, while fast-tracking the repair of the refineries.

    By October 10, the reserves were $45.3 billion, as against $46 billion on September 19, and $47 billion on August 19.

    Data obtained from the Central Bank of Nigeria (CBN) website over the weekend, showed that the reserves were $47.7 billion on July 1, and dropped to $47 billion on July 15. They also entered August 1 at $47 billion. The foreign currency reserves had five years ago, in August 2008, peaked at $68 billion before the global financial crises impacted negatively on it.

    Chief Operating Officer, Citi Bank Nigeria, Akin Dawodu, said the reserves are assets held by the CBN and monetary authorities, mostly in dollar to back their liabilities, such as the naira.

    He explained that manipulating the reserves levels can enable CBN intervene against the volatile fluctuations in the currency by affecting the exchange rate and increasing the demand for the naira. “Reserves act as shock absorber against factors that can negatively affect a country’s exchange rates and, therefore the CBN uses the reserves to maintain a steady rate,” he explained during training for financial journalists in Lagos.

    Analysis of foreign exchange utilised by sectors revealed that $7.83 billion was expended on the importation of visible goods into the country in the second quarter as against $6.63 billion and $7.74 billion in first quarter and second quarter of last year.

    Also, large part of the reserves were utilized in the importation of oil, industrial, food and manufactured products in the ratio of 30.3, 28, 20.4 and 13.3 per cent of the total.

    Further analysis revealed that a total of $8.70 billion or 52.6 per cent of total foreign exchange was used for services as against $3.78 billion in first quarter. Of this amount, financial services (banking and other financial services, asset management and money transmission) constituted the bulk, $7.78 billion or 89.3 per cent of total, while the balance was accounted for by transportation, communications, business and other services.

    Also, aggregate demand for foreign exchange by authorised dealers under the Wholesale Dutch Auction System (WDAS), and Bureau De Change (BDC) operators in the first quarter stood at $8.13 billion.

    A total amount of $8.42 billion was supplied as against $4.56 billion and $7.05 billion in first quarter and second quarter 2012, respectively. Of the total amount supplied, $7.12 billion was allotted to the WDAS while the remaining $1.30 billion was to the Bureau De Change (BDC) operators.

     

  • KPMG to banks: focus on customer service, financial stability

    African banking customers have been fairly clear about what they expect from their banks, and what they are not yet getting, KPMG report on the sector, has said.

    A customer satisfaction survey conducted by the auditing firm in Angola, Botswana, Cameroon, Chad, Côte d’Ivoire, Ghana, Kenya, Nigeria, Senegal, Sierra Leone, Tanzania, Uganda, Zambia and Zimbabwe, showed that banks in Africa will need to focus on maintaining their financial stability, while also sharpening their customer service capabilities if they hope to capture and grow their markets.

    The survey conducted in October, explained that while more than one in five respondents said their top criteria for selecting a bank is their ability to remain stable, it was attention to customer service that seemed to separate the leaders from the rest of the pack.

    It said customer care factors were seen as being among the most important indicators for many respondents, leading to 43 per cent to say that they would change their banks as a result of poor service quality.

    “Not surprisingly, therefore, customers were also quick to call for improvements in this area; around 16 per cent said they wanted to see friendlier staff while 14 per cent said they would like faster and more effective complaints resolution from their banks,” it said.

    The survey also highlights a number of other key areas where African banks could make improvements to gain market advantage. One in five respondents prioritised a reduction in wait times for transaction processing and requests as their top area for improvement while 17 per cent said they wanted to see improvements in the way services are delivered through channels.

    It said alternate banking channels are starting to gain a foothold in many markets, creating another opportunity for banks to differentiate themselves and build loyalty among customers.

    Already, more than six per cent of respondents said they would switch banks if they offered more innovative products and services versus eight per cent who said they would switch because of the proximity of branches.

    It said 94 per cent of banks’ customers voted ‘staff friendliness’ as the most important factor influencing their satisfaction with their bank. Yet, while eight in 10 expressed satisfaction with this element, only three in 10 customers said they were very satisfied with their bank staff’s knowledge of banking products and only 10 per cent indicated that they were extremely satisfied that their complaints were being promptly addressed.

    When it comes to value for money, almost one in five of Africa’s banking customers expressed dissatisfaction with the cost of maintaining their accounts while 15 per cent said they were indifferent. Respondents also said they would like their banks to be more proactive in notifying them of changes in interest rates, tariffs and terms and conditions.

    However, interest rates seemed to be the biggest pricing frustration for respondents in 12 of the 14 countries surveyed who said they were least satisfied with the rates they were offered for deposits and investments.

     

  • Strengthening the DFIs to deliver on the Transformation Agenda

    Strengthening the DFIs to deliver on the Transformation Agenda

    A structural change has occurred in finance since 2008. At global level, we have seen development financing assume a more critical role.

    In this period, the World Bank’s concessional lending resource – International Development Association (IDA) – has been replenished to record levels, as a number of countries in the developing world needed to access funds from external sources to make up for income shortfalls when the prices of commodities practically collapsed in the international market in the wake of the global financial market crisis. Our very own, The Coordinating Minister of the Economy (CME) and Honourable Minister of Finance, Dr. Ngozi Okonjo-Iweala, then as Managing Director at the World Bank, led the IDA 16 replenishment to $49.3 billion, significantly higher than the level the Fund had ever attained in previous replenishment efforts.

    It is far more than the circumstantial reason of the financial crisis that the global development finance institutions (DFIs) have had to step up interventions in critical areas of poverty alleviation, climate change mitigation, infrastructure financing and more, in the developing countries. It is generally known that the World Bank is resourced with people of diverse and great technical knowledge of development programming and funding.

    Even in the best of times, private sector credit is often too expensive to finance long term projects, including infrastructure which are necessary to create jobs in the immediate term, while providing the basis for economic growth over the long-term. Moreover, with deployment strategies more policy-driven, the World Bank, although a very large institution, is able to quickly channel funding assistance to where it is best needed.

    This point helped in no small measure in shoring up the credibility of the Bretton Woods institution after its policy booboos, together with those of its twin institution, the International Monetary Fund (IMF), earned opprobrium in the developing countries in the 1980s and 1990s.

    At regional level, we have also seen a rise in the capacity to deploy financial assistance and policy advice by the African Development Bank (AfDB) and Asian Development Bank (ADB). Apart from its funding role in the development of infrastructure in Africa, the AfDB is the leading African institution that integrates the continent with international funding for climate change mitigation and adaptation.

    Europe boasts of multilateral DFIs including European Bank for Reconstruction and Development, European Investment Bank and The Council of Europe Development Bank, which prides itself as “The Social development bank of Europe”. These institutions are meeting needs that are beyond the scope and interests of the private banks. They are also fostering regional integration by lending to regional and sub-regional projects.

     

    DFI transformation in Nigeria

     

    The Administration of President Goodluck Jonathan has performed creditably well in strengthening the national DFIs in Nigeria, in line with global trends that recognise that additional financial frameworks are needed to serve the project markets that commercial banks may term too risky to lend to. Also, certain industries, which are at very early stages of development, require knowledge beyond the areas of business as usual for the commercial banks, who charge high interest rates for the credit they give.

    The DFIs become very relevant in this area, because as agents of the government, they are obligated to invest in knowledge development and provide early-stage financing to take specific industries off the ground, and prepare them to such a stage when they can begin to attract and able to afford commercial lending.

    With the banking sector significantly depressed by the financial market turmoil of 2008 and 2009, the government had to step in strongly to protect existing jobs, encourage creation of new ones and even stimulate nascent and moribund industries so as to sustain economic growth.

    The Nigerian Export-Import Bank (NEXIM Bank) has been in the frame of this development, and has received a lot of support under this Administration to deliver its mandate. As Nollywood’s profile steadily rose in the domestic and international environments, there was a need to support the industry to strengthen technically, and provide important infrastructure for the growth of the entertainment sector value chain.

    This was the key objective of the plan to launch an Entertainment Industry Fund as announced by President Jonathan in 2011. The promise has since been kept by Mr. President. NEXIM Bank is the institution that manages the Fund. This is in line with its mandate to support businesses, including the creative and entertainment sector, which have capacities to create jobs and earn foreign exchange for the country. Through its management of the Nigerian Creative and Entertainment Industry Stimulation Loan Scheme, NEXIM Bank has helped in raising the international profile of Nollywood. “Dr. Bello,” an international film financed with the Fund was premiered in Washington DC at the Kennedy Centre last year.

    Similar interventional funds have been supported by the Administration, including the Small and Medium Scale Enterprises (SMEs) industry fund, which is managed by the Bank of Industry. The DFI also manages the textile industry intervention fund. The Fund is aimed at restoring the textile industry to its former glory, when it employed more than 25,000 Nigerians and attracted significant foreign investment from India and some other Asian countries.

    Today, the Nigerian project landscape is dotted with projects funded by the DFIs. To reinvigorate the institutional framework for improved performance, Nigerian Agricultural Cooperative and Rural Development Bank was restructured and rebranded as Bank of Agriculture, to increase lending to the agricultural sector. Similarly, Urban Development Bank of Nigeria Plc was transformed to Infrastructure Bank, with renewed focus on infrastructural investment. The Federal Mortgage Bank of Nigeria is also being reformed and backed by the government to raise its capacity for intervention and support government’s programme for the provision of affordable housing to Nigerians in formal and informal occupations.

     

    Raising the Performance Profile

     

    There is no doubt that there is much more scope for the DFIs to continue to help deliver on the Transformation Agenda of Mr. President. NEXIM Bank is working on four focal sectors, namely Manufacturing, Agro-processing, Solid Minerals and Services. These sectors form the “Mass Agenda” of the bank. More recently, there has been strong consideration for increasing our intervention in solid mineral mining. To this effect, we have been working with key stakeholders in the sector. However, the need to increase funding intervention capacity, especially low cost, early-stage, long-term funding for the industry, has been identified. Support for this agenda has come in the form of a mandate for NEXIM Bank to widen its partnership for accessing low-cost fund from other international DFIs, and consideration of an industry fund.

    The trend in development financing is that interventions are scaled up in the areas where results have been achieved. While financial results are not the primary objective of setting up the DFIs, they have to be financially sustainable. Therefore, it is not incongruent to their mandate that commercial viability of projects is ascertained to guarantee moderate financial return on the lending portfolios of the DFIs. This orientation is important for prospective project owners and the DFIs. Inadequate consideration of this factor had generated certain misgivings that the Entertainment Industry Fund was supposed to be operated as a grant, whereas it is a revolving loan fund.

    This is an important point because there is the need to create separate prudential guidelines for the DFIs. In certain quarters, the portfolios of DFIs are evaluated with the same yardsticks the credit assets of commercial banks are assessed for performance. This contradicts the very basis for setting up DFIs. It becomes necessary to establish DFIs as a result of the unwillingness of commercial banks to take some funding risks which DFIs are in fact mandated to take because of the development outcomes generated by the projects they fund. For this reason, Malaysia has a model which has a separate set of prudential guidelines for its DFIs; distinct from that which commercial banks have.

     

    Social Returns

     

    The social essence of development finance institutions is perhaps the more affirmed justification of their existence. DFIs are set up with the mandate of promoting social equilibrium in one way or another. It is important to support middle market institutions as well as grassroots businesses, and not just entirely focus support on the big businesses, although they could become multinationals and flagship businesses that symbolise the national economic stature. SMEs are very important for the spread of industry and prosperity around the country.

    Funding support for women entrepreneurship is another area of intervention to help society maintain social balance. Studies around the world have shown that women are not lagging behind in business formation. But orthodoxy in financial market operations denies women entrepreneurs access to funding. Discrimination against women in terms of financial access is of the scale that requires an intervention; thus we have begun to see positive policy responses as well as supportive products from the private sector to create needed leverage for women entrepreneurship.

    The social goals sit better with development finance institutions. They understand the importance of poverty alleviation and rural development. DFIs are leading providers of vital social statistics to assist policymakers and the larger market to understand the social milieu. All of these are geared toward giving citizens in all segments of society the sense of belonging to play their roles in ensuring social stability. This agenda has been strongly supported by President Goodluck Jonathan, and it is to his credit that policies of inclusiveness are being implemented by this Administration like never before.

     

    Environmental Stewardship

     

    Some of the most environmentally conscious financial institutions in the word are the DFIs. Environmental sustainability is one of other important development issues that moderate the pursuit of financial bottom line by DFIs. Because of the governmental relations that are involved in the funding operations of global and regional DFIs, consideration of environmental impacts of the projects they fund becomes even more important and vital for mitigating political risk. I don’t think national DFIs have any reason not to pursue environmental sustainability best practices. In any case, the Equator Principles have set codes of environmental sustainability practices for project finance which are voluntarily subscribed to by financial institutions of various hues.

    A lot of awareness on this is needed in the country, coupled with investment in regulatory capacity and project development re-orientation. This is one area the DFIs can jointly adapt international frameworks to suit the local context.

    NEXIM Bank has been investing in knowledge acquisition, and is seeking for technical collaboration with other development agencies to help develop carbon finance and climate change mitigation in the country.

    Although hope of a global agreement for trading carbon credit from emission cuts will probably not crystalise, experts believe that funding framework at bilateral level, as well as regional funding for climate change mitigation and adaptation, will continue to flourish.

    Besides, investments in environmental sustainability can generate enough returns in preservation of the natural environment and endangered species, apart from slowing down global warming and reducing environmental pollution.

    •Orya is Managing Director/Chief Executive Officer, Nigerian Export-Import Bank

  • More winners emerge in Ecobank’s promo

    More winners emerged in the Ecobank Giant Giveaway Promo, as part of efforts by the bank to reward customer loyalty.

    In a statement, the bank said the second draw took place in the city of Port Harcourt and seven lucky winners emerged. The winner were Akangbou Amamah, Aghedo Patience, Emeka Udeogu, Onyedikachi Geoffery, Obiakoizu Placid, Onyeiwu Pauline, and Madubuko Jane. They won air conditioner, Blackberry phone, deep freezer, Gen set, home theatre, LED TV and washing machine respectively.

    Regional Head, South South Ecobank Nigeria, Mr Chinedu Ibe, said the lender is committed to the African dream. “We integrate, support the economic growth of Africa, we started in West Africa, then spread to the east and now we are in 33 countries and still counting,” he said

    The promo, launched in September, has produced winners in the first draw and is meant to reward existing and new customers who actively operate their Ecobank current and savings accounts.

    The winners were Kelani Taofik, Okonkwo Francesca, Sikiru Alamu, Chigozie Onyeagusi, Yusuf Sileola, Mbachu Chukwuka, and Thompson Mojirade Oladele; they won air conditioner, Blackberry phone, deep freezer, LED TV, washing machine and home theatre respectively

    The Head Domestic Product, Ecobank Nigeria, Mrs Adeola Dare noted that customers are only required to deposit at least N30,000 into his/her current or savings account. Maintaining such deposit for at least three months qualifies the customer for the grand draw.

    “The promo gives participating customers the opportunity to own a Honda CRV SUV and loads of other prizes to be won at monthly draws through to the end of December,” she said.

  • FirstBank, others fail in bid to quash charges

    FirstBank Plc and two others lost yesterday in their bid to quash a charge brought against them by the Inspector General of Police (IGP).

    Justice Abdulkadir Abdulkafarati of the Federal High Court, Abuja refused to hear an application they filed seeking to quash the charge for being defective.

    The judge turned down the application on the ground that the accuseds, who have refused to submit themselves to the court for arraignment, could not be heard.

    He adjourned to January 20 for the accused to be produced for arraignment.

    Charged with the bank are Olakunle Jegede (its official) and an external consultant to the bank, Mike Ejekie Edith. They have not been arraigned since the charge was filed in 2012.

    In the four-count charge, marked: FHC/ABJ/CR/158/2012, the bank and others are accused of conspiracy and forgery. They are alleged to have forged a tripartite legal mortgage between First Bank, a customer, Poco Petroleum Limited (PPL)and Chief Patrick Onwochei Chukwueloe Ozeih by replacing Chief Ozeih with Poco Enterprises Nigeria Limited (PENL) on the document.

    The tripartite mortgage on a property at No: 46 Ogunlana Drive, Plot 452 Surulere, Lagos owned by Poco Petroleum was executed in relation to a loan obtained by Poco Petroleum from First Bank, and in which Chief Ozeih signed as surety.

    Count one accused them of conspiracy to commit forgery.

    Count two accused them of altering the tripartite mortgage “by superimposing Poco Enterprises Nigeria Limited on Chief Patrick Onwochei Chukwueloe Ozeih to make it look as if the legal mortgage was made between PPL, PENL and First Bank to enable First Bank take possession of the property on 46 Ogunlana Drive.”

     

     

     

     

     

     

  • Fidelity, Sterling, StanChart, Ecobank in race for Enterprise Bank

    The race to acquire Enterprise Bank is on. Fidelity Bank, Sterling Bank, Standard Chartered Bank and Ecobank Transnational Incorporated (ETI), are among the bidders that have indicated interest in acquiring the bank after the Asset Management Corporation of Nigeria (AMCON) offered it for sale since September, report by Afrinvest West Africa Plc has shown.

    The report titled: ‘Nigerian banking league- The fate of small players,’ said that Enterprise Bank sale presents the tier-2 banks with the opportunity to compete more effectively.

    Enterprise Bank, which was described as one of the cleanest banks, has received huge interests from a lot of bidders.

    The report said the bid process is expected to be completed in first quarter of next year, and appears to be a highly competitive auction to watch. “We expect Mainstreet and Keystone to follow in quick successions by 2015,” it added.

    It said the era of double digits earnings growth in the Nigerian banking industry has gradually begun to thin-out adding that the numerous liquidity tightening policies introduced by the Central Bank of Nigeria (CBN) has constantly exerted pressure on the banks’ profitability within the last few months.

    A review of the banking industry’s last nine months Profit before Tax (PBT) revealed an average nine per cent decline across the tier 1 (big banks), and a 6.3 per cent growth within the tier-2 (smaller banks).

    “This highlights the difficult operating environment in 2013 compared to 2012. The analysis also revealed that tier-1 banks accounted for 82 per cent of the total income in the banking industry; with GTBank and Zenith Bank leading with a nine-month PAT of N69.2 billion and N69.8 billion respectively in 2013,” it said.

    According to the report, the constant liquidity tightening rhetoric as reflected in the CBN’s policy stance has had a significant impact across Nigerian banks’ tier-1 and tier-2. “The hawkish policy designed in 2013, targeted at price and exchange rate stability, have consistently squeezed the earnings of the banks, particularly the 50 per cent Cash Reserve Ratio, which effectively removed approximately N1 trillion from the financial system,” it said.

    Also, AMCON yesterday told Bloomberg that the three bridged banks’ liabilities surged last year to N3.2 trillion ($20 billion).

    Net liabilities rose from N2.4 trillion a year earlier, Kayode Lambo, spokesman for the Lagos-based bad bank said in an e-mailed statement, without giving a reason for the increase.

  • CIBN, CAC urge on financial sector growth

    The Chartered Institute of Bankers of Nigeria (CIBN) and the Corporate Affairs Commission (CAC) have charged bankers on the need to deploy their services to enhance the growth of the financial sector.

    CIBN President Segun Aina, who spoke at the weekend after the institute issued practice licences and seal to 27 members, said the instruments confer credibility on the receivers, and serve as an indication of dedication, integrity and assurance of high competence. He said the certificates would make practising licensee more attractive to the clients, which would ultimately impact positively on their businesses and income.

    He explained that getting the licemce, requires that such applicants would have worked for five years post Associate of the Chartered Institute of Bankers (ACIB) qualification, passed the qualifying professional examinations and fulfilled other procedures set by the agency, adding that the banking industry offers a variety and unique career patterns that provide opportunities, advancements and challenging assignments for practitioners.

    “In approving the introduction of the Practice Licence, the Governing Council has taken the initiative to further empower the Licensees to practice what they know best using their cognate experiences. We are confident that they will provide invaluable services to a broad spectrum of individuals and organisations in a professional and ethical manner. I therefore take the liberty of this occasion to call on the public and private sector organisations, as well as individuals to give the licensees the opportunity to be of service to them,” Aina said.

    It said the licencing aligns with the CIBN Act No.5 of 2007 which gives the Institute mandate, to among others; determine the standards of knowledge and skill to be attained by persons seeking to become members of the profession. Section 16 of the Act also stipulates that a person other than a corporate member shall be deemed to practice as a member of the banking profession if, he engages himself in the practice of banking, or holds himself out to the public as a member of the banking profession.

    Registrar/Chief Executive of CAC, Bello Mahmud, said the corporation has beefed up its Information Technology connections for easier assessment of processing certificate for company’s registration.

    Mahmud, who was represented by Aliyu Muhammed, stated that CAC has attained a giant stride of issuing certificates with 24 hours, which is facilitated by the aid of ICT.