The Nation Newspaper

Category: Money

  • Heirs Holdings expands African investment

    Heirs Holdings has acquired significant stake in Seadrill Mobil Units (Nigeria) Limited, a West African affiliate of NY listed global offshore drilling company, Seadrill.

    In a statement, Heirs Holdings, owned by Tony Elumelu, said the investment is further evidence of Elumelu’s strategy of increasing African businesses participate across the oil and gas value chain, and complement existing interests in oil and gas production and exploration. Elumelu has been appointed as chairman of the Board of Seadrill Mobil Units.

    “Seadrill is a significant player in the oil and gas space, with a strong track record and one of the most respected names in the industry. The partnership makes strong commercial sense, bringing together a major global player and a leading African participant in the oil and gas industry,” he said.

    He explained that successful development of Nigeria’s deep water oil and gas fields is of strategic importance for our country. “This is an important part of our own approach of creating synergistic added value investment across the energy sector, from extraction to processing and perhaps most importantly for Nigeria, industrial production and power generation,” Elumelu said.

    Seadrill Mobil Units (Nigeria) Limited, Director Svend Anton Maier added: “The partnership with Heirs Holdings creates the right mix of global technical expertise, backed by operational excellence and sound financial management to the Nigerian market. It positions the company as a local industry leader and a truly indigenous player.”

     

  • Sterling Bank creates awareness for non-interest banking

    Sterling Bank Plc has begun enlightenment for the Muslim community on the need to embrace non-interest banking.

    Its Group Head, Non-Interest Banking, Basheer Oshodi said there is need to let Nigerians know about the opportunities that exist in that segment of the market.

    Oshodi, who spoke in Lagos at the weekend during a non-interest banking workshop organised by the bank, said the lender is committed to introducing the banking concept to everyone. He said the bank recently got the Central Bank of Nigeria’s (CBN’s) approval-in-principle to practice non-interest banking in the country.

    “What we are trying to do here today, is to introduce non-interest banking to everyone. We have gotten approval-in-principle from the Central Bank of Nigeria (CBN). What we are doing now is to get people to be aware of what non-interest banking is all about. We are trying to showcase the type of products we are going to come out with. Those products cover both risk assets and liabilities,” he said.

    According to him, research showed that 30.5 million adult Nigerians are willing to buy into non-interest banking products. Also, over 60 per cent of Nigeria’s adult population remains unbanked. Both scenarios, he said, are indications that the non-interest banking concept cannot fail in the country.

    Oshodi said, the bank will not only be focusing on the 30.5 per cent interested adults, but would also target the over 60 per cent unbanked population, when it finally begins operation.

    He said non-interest banks do not pay interest on deposits, but relies more on partnership and profit sharing, usually in a ratio of 70:30. The customer he said takes 70 per cent, while the bank takes 30 per cent from the profit, and also gives a portion to depositors.

    Chairman, Advisory Committee of Experts on Non-Interest Banking, Sterling Bank Plc, Sheik Abdulkader Thomas said Nigeria is a huge market for non-interest banking given its huge population base. He said the banking concept is a viable means of gathering huge deposits that banks can even use in financing infrastructure and other developmental projects.

     

  • CBN’s intervention rescues forex market

    The forex market which has been under pressure in the last three weeks recovered on Friday after the Central Bank of Nigeria (CBN) sold dollars directly to the market. This prompted an immediate naira rally, seen as the biggest in two years.

    The naira, which on Thursday declined 0.7 per cent to N163.35 per dollar, on Friday, jumped 2.4 per cent to N159.80 per dollar. It was the biggest increase since October, 2011 on a closing basis. The advance saw the naira rebound to a monthly gain of 0.6 per cent, according to data compiled by Bloomberg.

    “The CBN intervened on Friday to calm the market and signalled that it will protect the exchange rate. Additionally, there was also an Open Market Operations auction for the first time in several weeks to mop up excess liquidity,” Samir Gadio, a London-based emerging-markets strategist at Standard Bank, said.

    Before the rescue, the forex market was under intense pressure after over N1 trillion public sector funds were withdrawn from the financial system. The withdrawal was in line with the CBN policy which raised the Cash Reserve Ratio for public sector funds from 12 per cent to 50 per cent.

    The CRR is the portion expressed as a percentage of banks’ deposit balances, which they must have as reserve in cash with the CBN.

    The regulator’s plan was to mop up excess liquidity from the system, have less naira in circulation and get the currency strengthened. The Managing Director, Bluewall Bureau De Change Limited, Lucky Aiyedatiwa said before Friday’s intervention, the reverse had been the case.

    He said rather than the naira appreciating, the currency was declining in value. The naira on Thursday retreated for three consecutive days, after the CBN and oil companies failed to sale dollar.

    The currency declined 0.7 per cent to N163.35 per dollar, its worst level since June 2012 on a closing basis. The naira has fallen 4.4 per cent against the dollar this year.

    Aiyedatiwa said: “Forex market is not funded. There has been a serious reduction in dollar supply into the interbank and autonomous markets. The condition has put pressure on both markets.” However, he said the market position remains temporary, and will be corrected as soon as dollar inflows from the Nigeria national Petroleum Corporation (NNPC) and CBN improve.

    Debate among Federal Reserve officials over whether to reduce monetary stimulus has roiled financial markets since May. Oil companies in Nigeria, which sell the dollar mainly at the end of the month to pay domestic expenses, are the second-biggest suppliers of dollars after the CBN.

    CBN Spokesman, Ugochukwu Okoroafor told The Nation on phone that there is nothing to worry. He said the naira should be allowed to find its feet, adding that what is happening is temporary. Okorofaor said the impact of the CRR hike on the naira will not be immediate, adding that over time, the naira will stabilise. The CBN auctions foreign exchange on Mondays and Wednesdays and had sold $563.5 million last week.

     

    Money laundering compliance

     

    The first round of mutual evaluation on money laundering conducted by the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) showed that many financial institutions, especially commercial banks, are not fully complying with anti-money laundering laws.

    GIABA Director-General, Shehu Abdullahi disclosed this at the regional training for financial and regulatory institutions on the revised Financial Action Task Force (FATF) recommendations.

    Abdullahi, who was represented by Head, Programs and Projects, Bruno Nduka said the outcome of the evaluation revealed an abysmal performance on the recommendations relating to the financial sector in the adoption and implementation of the FATF standards. This, he said, makes the sector one of the vulnerable in African economies.

    He said that critical issues relating to customer identification, AML/CFT supervision among others, are yet to be fully addressed. Also, he said, other new challenges have arisen as a result of the issuance of new standards by the FATF, which will require the continued implementation of, and, in some cases, further refinements to, the financial sector AML/CFT programme.

     

    Exams for bankers coming

     

    The Chartered Institute of Bankers of Nigeria (CIBN) is to introduce a common entry examination and certification for bankers, its President, Segun Aina, has said. Aina said the measure would address the dearth skilled manpower in the sector.

    The policy, he said, would ensure that for a graduate to secure a job, he/she would have taken and passed the entry exams, adding that it would reduce the cost on banks’ conduct of tests.

    “While allowing banks to concentrate on their core functions, standardisation will also be ensured. This service will be in line with the responsibility of the Institute to determine the standards of knowledge and skills to be attained by persons seeking to become members of the banking profession,” he said.

    He lamented the poor quality of workforce, saying it is a major challenge in the industry. The desire to address this anomaly, he said, prompted the Central Bank of Nigeria (CBN) to design a Competency Framework for the industry that is meant to ensure that priority is given to the continuous enhancement of human capital and lifelong learning in the industry. He said the institute had established the Centre for Financial Studies (CFS) to upgrade the competencies of practitioners.

     

    Infrastructure funding

     

    The Minister of National Planning, Dr Shamsudeen Usman said the government is working on a 30-year infrastructure master plan that will integrate key sectors of the economy.

    He spoke at the World Press Conference on the forthcoming 19th Nigeria Economic Summit Group (NESG) in Lagos. “We are drawing out a 30-year infrastructure plan that is in draft now and we are going round the six geopolitical zones to see how we can integrate sectors to work better together,” he said.

    He said there had been challenges in infrastructure. He noted in the past, Nigeria adopted a gas master plan, a road master plan, but that some of them failed because of integration, especially with Information Technology now.

    He said the agricultural sector has the largest potential to diversify the economy, create jobs, secure food supply, lower inflation and expand foreign exchange earnings for the country.

     

    ACCA

    The Global Chief Executive of Association of Chartered Certified Accountants (ACCA), Mrs Helen Brand has said the organisation will collaborate with PwC Nigeria on key initiatives, such as capacity building in International Financial Reporting Standards (IFRS), being adopted in Nigeria.

    Mrs Brand, who is on a visit to PricewaterhouseCoopers (PwC) Nigeria as part of a week-long event, said both ACCA and PwC are partnering to address the capacity deficit in the country’s accounting industry and to improve the quality of corporate reporting.

    “Both ACCA and PwC share common professional values, global presence, ethics and governance,” she said. “This perhaps explains the desire to collaborate on key initiatives such as capacity building in IFRS which are being adopted in Nigeria. Both firms plan to jointly organise a series of events on IFRS for SMEs in collaboration with the International Accounting Standards Board (IASB).”

     

    Interest rate

     

    Deposit Money Banks have hiked deposit rates by four per cent to augment the shortfall in deposits. The action became exigent after the CBN began implementation of 50 per cent CRR on public sector deposits.

    Analysts at Consolidated Discount Limited (CDL) said in an emailed report that many of the lenders, including those perceived as fairly liquid, are taking the step to safeguard existing deposits from being prised away. They said interest rates on deposits have been on the rise even as the deposit wars reminiscent of the pre-2009 banking reforms have resurfaced.

    The analysts said CBN may further raise the CRR on public sector deposits from 50 per cent to 100 per cent adding that the naira has not fared better despite the hike. They said stability of the naira is the most significant threat to the CRR figure.

     

    Union Homes restructures

     

    Union Homes Savings & Loans Limited Plc has said it is reorganising its operations for efficiency and improved results. Its Managing Director, Pearl Kanu said the mortgage firm is improving its processes, managing costs and increasing productivity.

    “Our goal is to be a more effective organisation, providing valued services to our customers and supported by a competent workforce,” he said.

    He regretted that the firm’s efforts to create a better organisation have been met with resistance by a very vocal and deliberate minority. “This minority has, regrettably, seized and exploited the opportunities available to it in an attempt to disrupt operations and somehow coerce the Company into adopting an ineffectual and impracticable state of existence,” he said.

    “The strategy adopted by this small group has included a continued, illegal strike action, the locking of the Company Head Office gates in order to prevent the peaceful ingress and egress of our committed, majority staff and valued customers, as well as the leveling of several falsehoods and deliberate misrepresentations against the company,” he added.

     

    World Bank

     

    The World Bank and the World Trade Organisation (WTO) have agreed to jointly develop and maintain a database on trade in services for Nigeria, and more than 100 other countries globally.

    A statement from the global lender said the joint database covers various sectors such as financial, transportation, tourism, retail, telecommunications, and business services, including law and accounting.

    It said the database is an area that is becoming increasingly important and yet for which little information is publicly available.

    It said the data will be presented in four modules covering: members’ commitments under the WTO’s General Agreement on Trade in Services (GATS); commitments on trade in services in regional trade agreements; members’ applied measures affecting trade in services; and services statistics.

    The first version of the database has just been launched, as part of the WTO’s Integrated Trade Intelligence Portal (I-TIP) Services portal.

    Policy makers, researchers, trade negotiators, and the general public can access the database for free. Policy transparency is a public good and a shared objective of both institutions. The World Bank makes trade data publicly available under the Open Data Initiative, as does the WTO with the I-TIP.

    Transparency is particularly important in the dynamic area of trade in services because the regulatory framework is complex and little information is publicly available. Cross-border trade in services makes up one-fifth of all world trade, even without considering international transactions through foreign affiliates and the temporary movement of people.

     

    Western Union

     

    The Western Union Company has reiterated its commitment to mobile money services. The firm also has partnered eTranzact International Plc, a multi-application and multi-channel electronic payment processing company, have announced the launch of a new mobile money transfer service.

    The firms said in a statement that consumers in Nigeria who use the eTranzact Mobile Money platform now have the option of receiving a Western Union Money Transfer transaction on their mobile phones.

    The facility allows consumers can receive funds from money transfer transactions initiated at Western Union transactional websites in 23 countries, or Western Union Agent locations around the world.

    “Western Union continues to introduce new service offerings to complement our multi-product, multi-channel strategy,” said Aida Diarra, Western Union Regional Vice President for North, Central and West Africa.

     

  • NDIC report: Experts score regulators low

    NDIC report: Experts score regulators low

    Mixed reactions have greeted the Nigeria Deposit Insurance Corporation (NDIC) last year’s Annual Report & Statement of Accounts, which ranked 10 banks sound, nine satisfactory and one marginal. While some analysts see it as an indication of a poor performance despite the huge funds committed to the reforms in the sector, others see it as a clarion call on regulators to be alive to their responsibilites, writes COLLINS NWEZE.

    The disclosure by the Nigeria Deposit Insurance Corporation (NDIC) in its last year’s Annual Report & Statement of Accounts, that only 10 out of 20 Deposit Money Banks (DMBs) in the country are sound shows that regulators of the financial system have failed, analysts have said.

    They said given the amount of money sunk into the reforms by the Federal Government and the ongoing contributions from banks to the Asset Management Corporation of Nigeria (AMCON), having only sound 10 banks, is a poor outing. The result represents a 50 per cent score. The regulators were adjudged as having performed poorly considering the volume of money committed to the reforms. The report, however, gave nine banks satisfactory rating while one lender was rated as marginal.

    The Central Bank of Nigeria (CBN) had in 2009 injected N620 billion into eight banks to keep them afloat. In August 2011, AMCON spent N679 billion to acquire the bridged banks- former Afribank (Mainstreet Bank), Bank PHB (Keystone Bank) and Springbank (Enterprise Bank).

    The capital provided by AMCON through shares subscription was meant to strengthen the banks’ liquidity to enable them to carry on business and meet all their obligations. The fund was to enable them to meet the minimum capital base of N25 billion and the minimum capital adequacy ratio of 15 per cent.

    Former Executive Director, Bank PHB, Richard Obire, said the fact that only 50 per cent of the banks are sound means that Nigerians have not got value for their money.

    He said any performance that is below 80 per cent is unacceptable, and should be improved on by both the CBN and NDIC.

    “Nigerians should demand 80 per cent result because of the huge sums of money spent on the reforms. Tax payers’ money went into the funding of the AMCON and banks are still funding the corporation,” he said.

    He further said many thought that AMCON would be a quick resolution mechanism, but has been foot dragging with banks contributing 0.5 per cent of their total assets into its operation, which is also indirectly passed to banks’customers as fees. “Remember that whatever the banks are contributing to AMCON is also passed to their customers as fees. So, in all, the banking public are not getting value for their money,” he said.

     

    Banking assets Vs loans

    According to the NDIC report, the total industry’s assets of N24.58 trillion, out of which total loans and advances of N8.15 trillion, represent over 33 per cent (or one-third).

    The report further noted that of the industry’s total loans, N4.48 trillion or 54.97 per cent was extended to the real sector of the economy in 2012 compared to N3.88 trillion or 53.37 per cent and N3.51 trillion or 48.95 per cent in 2011 and 2010.

    Obire said 33 per cent loan advances is poor. Noting that the primary responsibility of a bank is to offer loans to the real sector of the economy, the banks should strive to achieve between 60 and 70 per cent of their assets as loans. He advised banks to strengthen their risk management to enable them to lend more to customers. “Banks should be able to deploy loans to those who need them at the right time,” he said.

    But the NDIC said the report gave it a pat in the discharge of its mandate in payment guarantee, supervision, failure resolution and liquidation. “The achievements attained in 2012 were due to many factors, which include the deployment of a robust performance management system, enhancement of the enterprise risk management system as well as enhanced capacity building in risk-based supervision (RBS) and other areas of operations, among others,” it said.

    Also, the Managing Director, Financial Nigeria International Jide Akintunde said the reforms have not performed badly, given that the 10 sound banks may hold 70 per cent of the sector’s assets.

    This does not suggest that the banking reforms have not worked, urging the regulators to be alert to ensure that any anomaly on the part of banks is corrected.

    He said the 33 per cent loans by banks is not a bad for the lenders, adding that majority of them are being more careful in advancing credits. “The 33 per cent loan position is not a bad outing. But many of them are looking at environmental factors and are also being more careful to avoid repeat of past mistakes when they created bad loans,” he said.

    Akintunde also said banks are still conservative; in some cases, they lack the expertise to handle some specialised loans.

     

    Microfinance banks

    Last year, the NDIC conducted routine examination of 246 microfinance banks (MfBs); six were found to have closed shop. It also conducted risk-based exam of 40 primary mortgage banks (PMBs); three were found to have voluntarily closed shop.

    A total of 302 MfBs had capital adequacy ratio of more than 10 per cent. The remaining 555 did not render returns and this has continued to be a source of concern to NDIC as it was impossible to assess their financial condition and performance on continuously during review.

    An operator in the MfB sector, who asked not to be named, said though the CBN is planning to launch the Microfinance Development Fund (MDF) next month, it is even coming too late. He said the fund would have been provided four years ago, to enable operators to use it in enhancing their operations. The MDF is expected to provide funding for the sector.

    The source said many of the MfBs lack working capital, adding that there is no way such operators could lend to the economy. He added that it is only MfBs with foreign financial bulwark that are doing well.

    Also, Managing Director, CRC Credit Bureau Limited, Tunde Popoola said the MfB subsector, is agging behind and that less than 10 per cent of them has access to credit bureau services. He said many of the MfBs lack the infrastructure to key into some services.

    Popoola said many of the MfBs do not have software that can take information like date of birth and sex of the customer, making it difficult for them to make progress.

    According to Afrinvest West Africa, DMB’s last year’s profitability report showed that all Tier-1 banks recorded gross earnings in excess of N200 billion compared to Tier-2 banks’ N102 billion average. The Tier-1 banks are First Bank of Nigeria Limited, GT Bank, Zenith Bank, United Bank for Africa and Access Bank.

    It said last year, banks’ management tried to beat high earnings expectations, causing them to focus on fixed income securities like treasury bills because of their high yield capabilities. The report projected that the “treasury focused” investment strategy would moderate in the year as outlook on yields and fee income decline.

    The report listed key pillars of the reforms to include enhancing the quality of banks, establishing financial stability, enabling healthy financial sector evolution and ensuring the financial sector contributes to the real economy.

    The Afrinvest report said the future of the banking space will rest on ancillary banking services such as merchant banking and primary mortgage institutions. There are also renewed hopes in retail banking and Small and Medium Scale Enterprises (SMEs) banking. The industry, it claimed, is confronted with the reality of declining fee incomes, mobile money and dollar denominated capital sourcing.

    It predicted that in the next five years, outlook on yields and fee income will remain downwards, necessitating the need for banks to focus on lending to the real sector. Also, banks are expected to develop and grow the depth of their core retail banking businesses to retain and amplify cheap deposits.

     

    Banks-in-liquidation

    The NDIC continued to pay depositors of banks-in-liquidation during the review. It paid N6.82 billion to 528,212 insured depositors of closed banks by December 31, last year as against N6.68 billion paid to 527,942 insured depositors the previous year. That feat was achieved in spite of the long closure of the banks and the unwillingness of many depositors to file for their claims.

     

    Risk-based-examination

    The report said NDIC, in collaboration with the CBN, conducted Risk-Based Examination of 16 deposit money banks (DMBs) during the year. The NDIC led the examination of six of the banks while the CBN led in 10. Beside, the two institutions conducted a maiden examination of Keystone Bank, Mainstreet Bank and Enterprise Bank during the year.

    While the CBN led the examination of Mainstreet Bank and Enterprise Bank, NDIC led the examination of Keystone Bank. The corporation in collaboration with the CBN also conducted the maiden examination of Jaiz Bank Plc and the Stanbic-IBTC Non-Interest window during the year under review.

     

    Capital adequacy ratio

    Furthermore, the banking industry was adequately capitalised in the year with capital adequacy ratio of 18.07 per cent compared to 17.71 per cent recorded in 2011. All the DMBs also met the minimum liquidity threshold of 30 per cent.

    The asset quality improved during the year as the ratio of non-performing loans to total loans decreased from 4.95 per cent in 2011 to 3.51 per cent last year. The improvement in the industry’s asset quality was because of the purchase of the non-performing loans of DMBs by AMCON and the enhanced credit risk management by DMBs.

     

    Fraud

    The DMBs reported 3,380 fraud cases involving N17.97 billion with expected/contingent loss of about N4.52 billion. The expected/contingent loss had increased by N455 million about 10.9 per cent, as against N4.072 billion reported in 2011.

    Notwithstanding the 43.7 per cent increase in the number of reported fraud cases from 2,352 in 2011 to 3,380 last year, it decreased by 36.4 per cent from N28.40 billion in 2011 to N18.04 billion in 2012.

     

    PMBs

    The licences of 24 PMBs, which closed shop and were unable to meet obligations to their depositors and creditors were revoked by the CBN and NDIC was subsequently appointed as liquidator.

    As at December last year, 310 out of the 323 MFBs that rendered returns had met the minimum paid-up capital of N20 million.

  • AfDB, others advocate coordination on global devt

    THE African Development Bank (AfDB), European Bank for Reconstruction and Development, Inter-American Development Bank, International Monetary Fund, and the World Bank Group, have pledged collaboration for growth in the sector.

    In a statement, the institutions said there is need for efforts to achieve the Millennium Development Goals (MDGs) by 2015, aimed at ending poverty and hunger, increase access to education and health care, improve gender equality, and ensure environmental sustainability.

    They said nothing could be more important than ensuring that young people got the right start in life.

    The lenders pledged support for and collaboration with the United Nations-led process of defining the Post-2015 Development Framework. They supported an approach that integrates concepts of economic, social and environmental sustainability.

    Noting that gains in social indicators are at risk in the absence of a long term financing plan, leaders pledged to work together to develop options for long term investment to strengthen the foundations of growth.

    They called for a renewed focus on financing for development – with greater leveraging of official development assistance and private sector investment and better domestic resource mobilisation and management and stronger institutions.

    They pledged cooperation to build the capacity of governments, to enable its policies, to be deployed in monitoring poverty and inequality, and factoring natural wealth accounting into decision making.

    “We are at a critical time where working together, we can bend the arc of history – eliminating absolute poverty, boosting shared prosperity, and defining a pattern of growth that demonstrates that we care for our planet and all its people,” Jim Yong Kim, President of the World Bank Group said.

    “In these tough economic times, we’ll only reach our goals by pulling together. We will work with a wide variety of partners to reach our goals, thoughtfully and creatively. Civil society, business, and government need to think and work together. Our institutions aim to create an atmosphere for open dialogue and imaginative solutions to emerge” Luis Alberto Moreno, President of the Inter-American Development Bank added.

     

  • Institute to conduct common exam for bankers

    THE Chartered Institute of Bankers of Nigeria (CIBN) is to introduce a common entry examination and certification for bankers, its President, Segun Aina, has said.

    Aina said the measure would address the dearth skilled manpower in the sector.

    The policy, he said, would ensure that for a graduate to secure a job, he/she would have taken and passed the entry exams, adding that it would reduce the cost on banks’ conduct of tests.

    “While allowing banks to concentrate on their core functions, standardisation will also be ensured. This service will be in line with the responsibility of the Institute to determine the standards of knowledge and skills to be attained by persons seeking to become members of the banking profession,” he said.

    He lamented the poor quality of workforce, saying it is a major challenge in the industry.

    The desire to address this anomaly, he said, prompted the Central Bank of Nigeria (CBN) to design a Competency Framework for the industry that is meant to ensure that priority is given to the continuous enhancement of human capital and lifelong learning in the industry.

    He said the institute had established the Centre for Financial Studies (CFS) to upgrade the competencies of practitioners.

    The institute, he said, had also been appointed the sole accreditation and certification agency under the Competency Framework project, adding that it is working on attracting top talents to Nigeria’s financial services industry and develop qualified professionals to meet the Financial Sector Strategy (FSS) 2020 defined standards.

    CIBN Registrar Dr Uju Ogubunka said the objective of the Banking and Finance Industry Competency Framework (BFICF) established in 2007 is to ensure that there is clarity and standards in the understanding and use of competency to build world class talents to support the banking industry.

    He said one of the primary objectives towards building and implementing the industry’s competency framework was to support the variety of career pathways for banking professionals.

    “A strong and vibrant pathway is important towards the development of a strong talent management which is an essential part of the banking supply chain. This is necessary to ensure that right skills are put in place and also to ensure public trust – a key success factor towards building business confidence,” he said.

    He said in today’s fast changing world, driven by rapid change in business models, consumer demands, and increased regulation, the industry is not spared from the need to change and align to business realities.

    Individuals seeking to succeed in the world of banking and finance, he said, must be re-skilled to remain relevant to clients and consistently deliver their value propositions successfully.

    “The industry is one that is diverse and requires different skill sets, aptitudes and competencies. It is also important that bank professionals leverage on their core competencies and clearly define the service lines across a variety of core competencies they feel they will do best in, be it in credit, operations, sales, risk, compliance, internal audit, or support services,” he said.

    He said the the BFICF WAs now being used as a tool and resource to provide guidance for those seeking to pursue a career in public practice as well as help bank professionals already in this business arena to keep pace with the developments.

    “The development of a flourishing banking sector must also be underpinned by a robust professional qualification and training and this guide demonstrates how the banking qualification provides a sound framework that ensures our members are not only fit for business but are also fit for the future,” he said.

     

    Chief Executive Officer of the Institute of Bankers, Malaysia Mr Tay Kay Luan said the CIBN should, going forward, describe the skills, knowledge and to some degree the behaviours needed by practitioners in their line of work as done in Malaysia.

  • Fed Govt mulls 30-year infrastructure plan

    Fed Govt mulls 30-year infrastructure plan

    The Minister of National Planning Dr Shamsudeen Usman has said his government is working on a 30-year infrastructure master plan that will integrate key sectors of the economy.

    He spoke at the World Press Conference on the forthcoming 19th Nigeria Economic Summit Group (NESG) in Lagos.

    “We are drawing out a 30-year infrastructure plan that is in draft now and we are going round the six geopolitical zones to see how we can integrate sectors to work better together,” he said.

    He said there had been challenges in infrastructure.

    He noted in the past, Nigeria adopted a gas master plan, a road master plan, but that some of them failed because of integration, especially with Information Technology now.

    He said the agricultural sector has the largest potential to diversify the economy, create jobs, secure food supply, lower inflation and expand foreign exchange earnings for the country.

    The sector contributed an average of 40 per cent to the Gross Domestic Product (GDP) between 2011 and last year. “With an average GDP growth rate of seven percent in 2011 and 2012 and 6.56 percent in the first quarter of this year, the prospects for Nigeria are huge, in the immediate and near term,” he said.

    NESG Chairman Mr Foluso Philips said the summit would not only focus on the agricultural sector, but also address how the sector would be improved upon.

    Former NESG Chairman, Dr. Frank Nweke said Nigeria has a great opportunity to improve its earnings and create jobs through agriculture.

    “With unemployment rates as high as 23.9 per cent as at 2011 and a high food import bill of approximately $8 billion in 2012, our country has opportunity to reduce unemployment through investment in the agricultural sector and conserve valuable foreign exchange,” he said.

    He disclosed that the summit would include a presidential dialogue with President Goodluck Jonathan and other African presidents, eminent local and global private sector leaders, captains of the agribusiness industry and several Pan-African economic institutions.

  • Interbank rate falls over N320b T-Bills’ refund

    Interbank rate falls over N320b T-Bills’ refund

    The interbank rate last week fell by 570 basis points to 13 per cent. This was caused by improved market liquidity from treasury bills (T-Bills) and bonds repayments worth N320 billion.

    The rate had risen following Central Bank of Nigeria’s hike of Cash Reserve Requirement (CRR) on public sector deposit from per 12 per cent to 50 per cent. The policy had quarantined banks’N520 billion with the CBN, which constitutes about 38 per cent of estimated N2.6 trillion public sector deposits in the system.

    The fall in call/overnight and seven-day money market rates, which stood at 13 per cent and 13.2 per cent respectively, supports the development. The three-month Nigeria Interbank Offered Rate (NIBOR) also traded on 14.58 per cent.

    The interbank secured lending (Open Buy Back) equally fell by 521 basis points to 12.6 per cent for commercial banks and 13.4 per cent for discount houses.

    The rate decline also impacted negatively on the naira, as it weakened 0.3 per cent against the dollar in the Inter-bank and has lost 3.6 per cent of its value year-to-date. The naira closed the week at N161.75 to a dollar. In addition to strong dollar demand, investors’ growing concerns on short term outlook continue to adversely affect the performance of the naira.

    Currency Analyst at Ecobank Nigeria, Olakunle Ezun, said though the naira remains under pressure due to structural imbalance between dollar supply and demand, the CBN’s liquidity management efforts and robust foreign exchange reserves of $46.9 billion will continue to support the currency.

    Money laundering compliance

    THE Committee of Chief Compliance Officers in Nigeria (CCCOBIN) has asked banks to provide adequate resources and empowerment for Chief Compliance Officers (CCOs) involved in money laundering control. This, they said, will ensure that Nigeria’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks are well managed.

    CCCOBIN Chairman Pattison Boleigha said during a meeting in Lagos that bank officers involved in driving the implementation of the money laundering laws and regulations need to be protected. He said there should be penalties against non-compliant staff.

    He said banks are already showing commitment to ensuring that the sector received positive response from Financial Action Task Force (FATF) during their next review on the country. Boleigha said there is need for banks to strengthen their processes and ensure that issues identified by FATF are addressed by their management and staff.

     

    NDIC seeks help for women

     

    The Nigeria Deposit Insurance Corporation (NDIC) called for improved roles for women in the workplace. NDIC Chief Executive Officer Umaru Ibrahim disclosed this at the corporation’s first management parley with its female staff.

    The interaction which has as theme: “It is Possible,” was held at the National Centre for Women Development, Abuja.

    Ibrahim said contemporary organisations and governments across the world are beginning to situate the importance of women in the achievement of their set objectives. He said that the era of seeing women as home-makers was fast giving way globally to the appreciation of their contributions and top positions being occupied by them in critical sectors of the economy both locally and internationally.

    He acknowledged the critical roles of its female staff in the achievement of NDIC’s objective as a risk minimiser with broad mandate of deposit guarantee, bank supervision distress resolution and bank liquidation.

     

    D-8

    THE Secretariat of Developing Eight countries (D8), has commended the efforts of the Central Bank of Nigeria Governor, Sanusi Lamido Sanusi, for his efforts in promoting the group. They said Sanusi, who received an award from the group, has ensured that members share and benefit from the experiences of respective countries.

    Presenting the award, the Secretary General of the D8 Dr. Sayed Ali Mohammad Mousavi noted that such efforts have assisted member countries in harnessing financial and economic opportunities, which is the objective of the cooperation among the Central Banks.

    At the ceremony were Nigeria’s Permanent Representative at the D8 Mission in Istanbul, Turkey, Ambassador Ibukun Olatidoye; Director, Multilateral Economic Affairs Division, Ministry of Foreign Affairs, Ambassador Hussein Abdullahi; Director, Monetary Policy Department of the CBN, Mr. Moses Tule, among others.

     

    Pension

     

    STANBIC IBTC Pension Managers, a member of Stanbic IBTC Holdings deployed an innovative mobile office to serve its existing and prospective customers. At the launch of the Stanbic IBTC Pension mobile office in Lagos, the firm said the move is in line with its commitment to ensure that clients experience excellent and convenient service at all times.

    The mobile office sited on a bus, has been deployed in Lagos and will be subsequently deployed in other cities, and will enhance access to customers. Head of Service, Lagos State Civil Service Commission, Mr. Adesegun Ogunlewe, represented by Executive Director, Technical, Lagos State Pension Commission, Mrs. Folashade Onanuga performed the unveiling ceremony.

    Chief Executive Officer Stanbic IBTC Pension Managers Dr. Demola Sogunle said the growing visibility will demystify the pensions subject and encourage more Nigerians to subscribe to the contributory pension scheme, thereby enhancing financial inclusion.

    “We believe that this initiative which speaks of convenience and accessibility is one of our key steps towards building a legacy of exceptional service delivery where the customer is the focal point of all our activities. This initiative will bring pension service to the doorsteps of our customers and prospective customers alike,” he said.

    MasterCard

    THE Central Bank of Nigeria (CBN) moderated cashless banking initiative will be boosted by planned issuance of 13 million cards by MasterCard, for the nation’s e-payment market.

    Ann Cairns, President of international markets for MasterCard told Bloomberg that the firm is working with Nigerian government on the issuance of the cards, which will also act as identity documents.

    Already, MasterCard, the second-biggest United States payments network, has distributed 10 million South African debit cards that replace cash for social grant recipients as it boosts market share across Africa’s fastest-growing economies.

    The company is also expanding in Angola and Mozambique and working with local partners such as Kenya’s Equity Bank Limited for growth, she said. MasterCard is counting on the continent’s expansion and rising levels of wealth to help it distribute financial products to the more than 200 million people in Africa still without access to banking services, according to McKinsey & Co.

     

    Bank to bank report

     

    Wema Bank Plc, which recently raised N40 billion ($247.4 million) for expansion across the country, said it is seeking an additional $200 million over the next two years to fund its loan book.

    “The sum of $100 million is planned to be raised in the first quarter of next year and the balance by 2015, when we would have improved on our return on equity. We’re looking at several options including bond, loan and debenture for funds,” Chief Financial Officer Tunde Mabawonku said.

    Wema Bank, which operates mainly in western Nigeria and the capital, Abuja, plans to seek regulatory approval for a national banking licence this year allowing it to operate in Nigeria’s six regions, he said.

    The lender plans to open an additional 20 branches in Africa’s second biggest economy to increase the number to 149, Mabawonku said. ‘Our loan book is planned to increase by 20 per cent this year and 60 per cent in 2014,” he said.

    Group Managing Director/ Chief Executive Officer, First Bank of Nigeria Limited Bisi Onasanya reiterated the lender’s commitment to promoting youth empowerment and building capacity for Nigeria Leadership Initiative (NLI) Fellows and emerging leaders.

    Speaking at the NLI Forum in Lagos, he said the initiative was meant to bridge the knowledge gap between NLI Fellows and the young associates of the Future Leaders programme. He said the forum is also meant to buttress a core focus area of FirstBank’s corporate responsibility programme, namely, youth empowerment.

    Guaranty Trust Bank Plc released its audited financial results for the half year ended June 30, this year, which saw its Profit Before Tax (PBT) soar to N57.36 billion. In a report to the Nigerian and London Stock Exchanges, the bank said the result is an improvement from N53.64 billion recorded in June last year. The lender also reported a 2013 half-year Profit After Tax (PAT) of N49.01 billion as against N45.55 billion reported in June, last year.

    Gross earnings stood at N124.20 billion, an increase of N10.68 billion from the N113.53 billion reported in the corresponding period last year.

    The lender’s total assets and contingents stood at N2.50 trillion, customer deposits was N1.25 trillion and shareholders’ funds N296.95 billion. The bank’s non-performing loans remained low at 3.32 per cent.

    The appointment of Citigroup and Vetiva Capital Management Limited as financial advisers in the sale of Enterprise Bank Limited will be beneficial to all stakeholders, Managing Director, Enterprise Bank Limited, Ahmed Kuru, has said. The financial advisers were appointed by the Asset Management Corporation of Nigeria (AMCON).

    Speaking in Lagos, Kuru, said he was happy leaving behind a better Enterprise Bank and a happier workforce. He added that he was convinced that customers will have the best deal at the conclusion of the process. “I am convinced our customers expect the best deal at the end of the day. So their expectation should be high,” he said.

    Commenting further on the appointment of financial and legal advisers for the sale by AMCON on August 5, 2013, Kuru said: “in line with the plan of AMCON, this is obviously the last lap of the entire process”.

    Union Bank of Nigeria Plc has partnered with Samsung Electronics West Africa, to develop a ‘Bank of The Future’ prototype. The project is aimed at providing superior experience in financial services to both existing and potential customers of the bank.

    In a statement, the bank said the initiative called ‘UnionBank’ is a prototype e-branch that would completely re-design the banking hall as it is today, transforming it into a 100 per cent self-service, electronic branch. The ‘Bank of The Future’ initiative fits into the bank’s strategy to retain existing customers and attract new ones, especially the young and technologically savvy. It is being test-run at the bank’s Silverbird Galleria branch, Victoria Island, Lagos.

    At the unveiling of the initiative, Group Managing Director of Union Bank Mr Emeka Emuwa re-affirmed that the focus of the lender was to serve its teeming customers well, and added that it would seek to leverage on the Samsung technology platforms to deliver consistent and reliable service to its customers.

     

  • Banking stocks trail market’s bottom

    Banking stocks recorded the least returns at the stock market as mid-year earnings failed to rekindle investors’ optimism on future outlook of the subsector.

    The Nigerian Stock Exchange (NSE) Banking Index opens today with the least year-to-date return among the eight indices that track equities at the NSE. Besides, the banking index is the only indicator with successive negative returns weekly, monthly, or quarterly.

    A review of year-to-date returns of groups of tracked equities on the NSE showed the banking index with the least return of 17.78 per cent. Banking stocks last week recorded average decline of 1.28 per cent, which built up a month-to-date return of -1.37 per cent and quarter-to-date return of -0.57 per cent.

    The All Share Index (ASI), the common value-based index that tracks prices of all equities, carries a year-to-date return of 30.27 per cent, far ahead of returns in several subsectors including banking, insurance, consumer goods and oil and gas subsectors.

    Unlike the ASI, which includes all equities, the banking index is a representative index and comprises of 10 banking stocks including Access Bank, Diamond Bank, Ecobank Transnational Incorporated (ETI), Fidelity Bank, Guaranty Trust Bank (GTBank), Skye Bank, Sterling Bank, United Bank for Africa, Union Bank of Nigeria and Zenith Bank.

    However, half-year reports by several banks including Zenith Bank, GTBank, Access Bank, ETI and Stanbic IBTC Bank have failed to stimulate the pricing trend in the subgroup. The subgroup fell below market’s average last week in spite of subsisting interim dividends and earnings reports. The ASI closed last week with a weekly loss of 1.11 per cent.

    The NSE Industrial Goods Index indicates the highest year-to-date return of 55.26 per cent. The ethic-based NSE Lotus Islamic Index, which comprises of 15 equities that meet the Islam’s standards, trails with the second highest return of 42.86 per cent. The NSE 30 Index, which tracks 30 most capitalised stocks on the NSE, opens with a return-on-board of 28.33 per cent. The NSE Oil and Gas Index still retains a substantial year-to-date return of 25.18 per cent in spite of the highest loss of 4.24 per cent recorded last week.

    The NSE Consumer Goods Index, which tracks fastest moving consumer goods companies, has a return of 22.72 per cent while the NSE Insurance Index is two points ahead of the banking subsector with a year-to-date return of 19.94 per cent. The NSE Insurance Index was the contrarian index in the pervasive downtrend at the stock market last week with a weekly return of 1.91 per cent.

    Interim earnings reports by banks have largely showed muted growths across key fundamentals, which analysts said highlighted the constraints imposed by new banking rules on cost structure and mandatory reserves for public deposits. Interim report and accounts of Zenith Bank for the period ended June 30, 2013 showed that profit before tax rose to N54.1 billion in first half of 2013 as against N50.2billion recorded in the corresponding period of 2012. The report indicated that profit after tax rose from N42.41 billion to N45.419 billion. Gross earnings grew by 13 per cent to N171 billion compared with N151 billion recorded in the comparable period of 2012.

    Also, key extracts of the interim report and accounts of Access Bank showed top-down declines in key performance indicators with profits before and after tax dropping by 14 per cent and 20.2 per cent respectively. Gross earnings had declined by 5.3 per cent. The bank however announced interim dividend of 25 kobo, same rate declared earlier by GTBank. Access Bank’s gross earnings dropped from N109.96 billion in first half 2012 to N104.13 billion in first half 2013. Profit before tax was lower at N26.09 billion as against N30.21 billion recorded in comparable period of 2012. Profit after tax slipped from N26.4 billion to N21.1 billion.

    Meanwhile, aggregate market capitalisation of all equities dropped by N129 billion last week to close at N11.584 trillion as against its week’s opening value of N11.713 trillion. There were nearly two decliners for every advancer with 52 losers against 28 gainers. The ASI, which opened at 36,986.94 points, closed the week down at 36,577.28 points.

    Total turnover stood at 1.12 billion shares worth N12.94 billion in 24, 489 deals. The financial services sector contributed about 65 per cent of total turnover with 724.39 million shares valued at N6.29 billion in 13,418 deals. The conglomerates sector followed with a turnover volume of 129.62 million shares valued at N223.10 million in 961 deals.

     

  • ACCA partners PwC on IFRS

    THE Global Chief Executive of Association of Chartered Certified Accountants (ACCA), Mrs Helen Brand has said the organisation will collaborate with PwC Nigeria on key initiatives such as capacity building in International Financial Reporting Standards (IFRS), being adopted in Nigeria.

    Mrs Brand, who is on a visit to PricewaterhouseCoopers (PwC) Nigeria as part of a week-long event, said both ACCA and PwC are partnering to address the capacity deficit in the country’s accounting industry and to improve the quality of corporate reporting.

    “Both ACCA and PwC share common professional values, global presence, ethics and governance,” she said. “This perhaps explains the desire to collaborate on key initiatives such as capacity building in IFRS which are being adopted in Nigeria. Both firms plan to jointly organise a series of events on IFRS for SMEs in collaboration with the International Accounting Standards Board (IASB).”

    Responding on behalf of PwC Nigeria, Taiwo Oyedele, a member of the ACCA Global Governing Council and Partner in charge of Tax and Corporate Advisory Services at PwC Nigeria, said an effective and full adoption of IFRS in Nigeria would increase investment inflow into the country; adding that it was vital that both global firms partner on creating the much needed capacity building in that regard.

    “In addition to removing some of the subjectivity from financial reporting, IFRS provides more consistent platform for recognition, measurement and disclosure of transactions and events in financial statements, leading to greater transparency,” he said.

    “This in turn, will lead to increased investment in Nigeria,” he added.

    deadline for their submission of IFRS-complaint financial records for the year ended 2012 as mandated by the Financial Reporting Council and harped on the need for increased capacity in the accounting practice in Nigeria.

     

    ACCA is the global body for professional accountants offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

     

    PwC is the leading global professional services firm providing advisory, audit and assurance and tax services. PwC is structured as a network of member firms, owned and operating locally in more than158 countries and 776 locations around the world with over 180,000 staff and partners connected to share knowledge, skills and resources.