The Nation Newspaper

Category: Money

  • ‘Private sector ahead on pension fund contributions’

    The private sector is well ahead of the public sector in pension fund contributions, FBN Capital report has revealed.

    The report indicated that the private sector contributes about 60 per cent of the N3.4 trillion pension assets under the management of Pension Fund Administrators (PFAs).

    The research firm said data released by the National Pension Commission (PenCom) showed that as at end of March 2013 (when pension assets were N3 trillion), the private sector contributed N1.8 trillion to the scheme. Also, the public sector’s contribution from ministries, departments and agencies (MDAs) of the federal and some state governments, was N1.2 trillion. This, it said, is a marked change from its composition in 2004 when the Act kicked off.

    FBN Capital said the increase to N3.4 trillion as at the end of May 2013 was largely due to the filing in of 12 states into the contributory pension scheme, although only six states had collected and remitted contributions in compliance with the provisions of the Pension Reform Act (PRA) 2004.

    It said the number of registered contributors has grown to 5.5 million with an average monthly contribution of N30 billion.

    “Given that only seven per cent of the nation’s 80 million workforce has joined the scheme, there exists a huge potential for growth in the coming years,” it said.

  • Skye Bank to train exporters, importers

    Skye Bank Plc will periodically organise capacity building workshops and other training programmes for its international trade customers.

    The training, according to a statement from the lender, is on how traders can conduct their businesses and ensure proper documentation of trade requirements.

    Head of International Operations of the bank, Mr Ade Busari, who disclosed this, said in addition to organising periodic workshops for the businessmen, the bank would continue to train all account officers in the various branch locations on trends in foreign trade requirements for onward transmission to the exporters and importers.

    He said the bank, which has would continue to ensure that its customers’ ‘Forms M’ are not rejected by inspection agents, which has the implication of delaying transactions.

    “We will continue to ensure that our customers know what they need at every stage and what they are supposed to do to make their business easy, convenient and fast,”he said.

    Busari said the bank had organised a forum each in Lagos and Ibadan for importers and exporters to explain trade issues, documentation requirements, as well as providing solutions to some of their perceived misgivings and uncertainties concerning international trade.

    He advised the customers to always come to the bank to make enquiries on issues that they are not conversant with, noting that the bank would always avail them of all necessary information they require to succeed in their business.

  • Portuguese firm eyes cash-less market

    In furtherance of cash-less banking, a Portuguese firm, SIBS International, has begun technology transfer to the Nigeria Inter-Bank Settlement System (NIBSS).

    The firm’s Managing Director, Pedro Hipolito, said with transactions worth $6 billion yearly in Portugal, SIBS is committed to expanding its operations in Nigeria to enable banks and other financial institutions to fully integrate their processes into the e-payment system.

    The firm, he said, was in partnership with many of the local banks to strengthen their Information Technology (IT) operations to enable them to achieve a seamless e-payment operations.

    His firm, he said, had been working in Nigeria to improve its payment system since the last three years, expressing support for the Central Bank of Nigeria (CBN) moderated cashless banking.

    “We have been collaborating with NIBSS and CBN on the cash-less banking initiative,” he said.

    Nigeria, he said, was making progress on e-payment, noting that connectivity remains a big challenge to cash-less as far as Point of Service (PoS) is concerned. He said although there were over 150,000 PoS in Lagos, it is not all about number but workability of the platforms.

    There was need, he said, to ensure that Automated Teller Machines (ATMs) and PoS were in good conditions, because this would help in building confidence in e-payment in the country. He said his firm was working on bringing in ATMs that are multifunctional, with ability to receive tax remittances and biometrics that can cater for the blind within the population among other roles. He said such improved services would make life easier for the people.

    Hipolito said though ATMs were developed as just cash dispensers, they have evolved into many other bank-related functions. In some countries, especially those, which benefit from a fully integrated cross-bank ATM network, ATMs include many functions, which are not directly related to the management of one’s own bank account.

    These include deposit currency recognition, acceptance, recycling, paying routine bills, fees, and taxes, printing bank statements, pre-paid cell phone/mobile phone credit among others. He said that his firm is committed to ensuring that Nigerians get the full benefits associated with ATMs usage.

     

  • Experts back CBN directives on off-shore branches

    The decision of the Central Bank of Nigeria (CBN) to re-strain banks from using local funds to finance their off-shore subsidiaries will help in protecting depositors, experts have said.

    The former director, Banking Supervision, CBN, Mr Titus Okunronmu, said the apex bank stopped banks against taking such funds abroad for investments to protect depositors.

    He said depositors had lost huge funds to the liquidation of banks, arguing that the apex bank does not want a recurrence. He said the ideal thing is for banks to make money where they are operating and not to repatriate funds generated locally to international markets.

    The moment Nigerian banks start complying with the corporate governance issues of their host countries, they would survive offshore, he said.

    According to him, depositors are crucial to the growth of the industry and any attempt to gamble with their money would have dire consequences.

    He said it would amount to uncalculated risks if banks use local funds to finance foreign subsidiaries, stressing that CBN has taken a good decision. He said banks have demonstrated capacity to succeed by taking some proactive measures, adding that such efforts would improve the economy.

    Former President, Association of National Accountants of Nigeria (ANAN) Dr Samuel Nzekwe cautioned banks against flouting rules relating to raising funds at the international market.

    He said if banks got cheap funds, the tendency to mismanage the cash would be, adding that depositors’ fund are cheap money because banks do not pay special interest on them. He advised them to raise money for investments in countries where they operate subsidiaries.

    Chief Executive Officer, Dunn Loren Merrifield, Mr Sonnie Ayere, said the CBN directive was to prevent banks from using local funds to fund offshore operations.

    “While we cannot blame CBN for warning banks against using the local funds to finance offshore subsidiaries, it is pertinent that the apex bank monitor the banks well to avoid crises,” he said.

    He added: “What CBN is saying is that banks should CBN raise the money in international markets to finance their subsidiaries. Raising capital is a task in the country. If for instance, bank A or B has taken most of its capital abroad, this implies that the bank must raise fresh capital to make its balance sheets look good. To avoid immediate and future problem, CBN has directly puts a safety valve on depositor’s money by issuing the directive.”

     

  • UBA recognised for agric financing

    United Bank for Africa (UBA) Plc has been named the best bank in support of agriculture in the country.

    In a statement, the bank said it got the recognition following its contribution to the growth of Nigeria’s agricultural sector and value addition to the economy.

    UBA clinched the award at the maiden edition of BusinessDay Annual Banking Awards, which held recently in Lagos. The lender said : “The bank beat three other banks that were nominated after a critical assessment by organisers of the awards.

    “According to statistics, UBA tops the Central Bank’s   list of lenders to the agricultural sector. By   2012 financial year end, UBA had channeled seven per cent of its N687 billion loan book to agriculture. This   is the highest exposure of any bank in Nigeria and invariably places the bank as one of   the   strongest supporters of agriculture in Nigeria.”

    Divisional Head, Consumer Banking, UBA Plc, Mr. Ilesanmi Owoeye, received   the award   on behalf of the bank.

  • S’Africa agrees to repatriate Libya’ funds hidden in country

    South Africa said it will track and repatriate Libyan funds and assets that were hidden in the country during the rule of dictator Muammar Qaddafi.

    Finance Minister Pravin Gordhan reached the agreement after talks with Libyan officials, including Usama al Abid, minister in the office of Libyan Prime Minister Ali Zaidan, on June 4, according to a statement from the South African finance ministry. The repatriation will be done under United Nations protocols.

    Libya, which ousted Qaddafi last year, is seeking the return of overseas assets after the value of its sovereign wealth fund dropped. The Libyan Investment Authority’s assets are about $57 billion, down from about $61 billion in 2008, outgoing sovereign wealth head Mohsen Derregia said in March.

    The country is also examining losses on derivative contracts it entered into with Societe Generale SA and Goldman Sachs Group that contributed to the declines, he said.

     

  • Inter-bank rate falls on N230b T-Bills, OMO refund NIBOR as at June 14, 2013

    The inter-bank rate last week fell by 516 basis points to 10.5 per cent, largely due to improved market liquidity from treasury bills (T-Bills) and Open Market Operation  (OMO) bills repayment worth N230 billion.

    The call and seven-day money market rates fell to 10.54 per cent and 10.94 per cent respectively while the three-month Nigeria Interbank Offered Rate (NIBOR) also fell to 11.7 per cent.

    The inter-bank secured lending fell to 10.3 per cent for commercial banks and 10.5 per cent for discount houses. The naira depreciated 0.7 per cent against the dollar in the Inter-bank on 13 June. The depreciation partly reflected strong corporate demand for dollar, and to a lesser extent upward trending bond yields that signals likely foreign divestment out of the bond market.

    However on Friday, the local currency fell for a fourth day against the dollar, extending its worst weekly performance in 18 months. The naira fell 0.8 per cent to N162.60 a dollar taking its weekly decline to 1.8 per cent. It’s the worst performance since the five days through December 23, 2011 based on data compiled by Bloomberg.

     

    Credit bureau

     

    The Central Bank of Nigeria (CBN) has been advised to fully enforce its policy mandating financial institutions to obtain credit report from at least two credit bureaux operators before giving out loans.

    This was part of the resolutions reached at the credit reporting forum held in Lagos. Considering the critical role that a Credit Reporting system plays as an enabler in developing a stable and inclusive financial system, especially in emerging markets, the Federal Government was also advised by participants drawn from different sectors of the economy to take the development of the Credit Reporting system in the country as a national project.

    This, participants said, should boost usage by financial institutions and ensure an inclusive system. Over 180 delegates representing key drivers of the nation’s financial system including the CBN, credit bureau operators, deposit money banks, microfinance banks, insurance, pension administration, payment systems, financial training institutions, discount houses, trading and finance companies, industry associations among others attended the conference.

    It also registered representations from the Bank of Tanzania and credit bureau operators from South Africa and Tanzania, while the International Finance Corporation (IFC) also attended and made presentations.

     

    Inflation

     

    Analysts at Financial Derivatives Company (FDC) Limited have forecast May inflation to decline to 8.98 per cent from 9.1 per cent recorded in April. They also see the Monetary Policy Committee (MPC) retaining the benchmark interest rate at 12 per cent when the committee members meet in July.

    The Managing Director of FDC, Bismark Rewane, said in a report that the May projection is supported by the slight moderation in the food index of the  firm’s Lagos urban inflation and associated high prices in the base period of May 2012.

    He explained that FDC’s Lagos urban price index moderated for the third consecutive month by 0.46 per cent to 10.83 per cent, from 11.29 per cent in April.

    Also, the urban index eased as a result of the decline in both the food and non-food indexes while prices of items such as rice, guinea corn, wheat, salt, cereals, and vegetable leaves declined leading to a 0.08 per cent moderation in food index.

     

    ICAN/NDIC

     

    The Institute of Chartered Accountants of Nigeria (ICAN), Abuja District Society has acknowledged roles played by the Nigeria Deposit Insurance Corporation (NDIC) in bringing sanity to the Nigeria financial system especially in the course of the ongoing banking reforms.

    ICAN Chairman, Abuja District, Shehu Usman Aladire, said NDIC’s role in the reforms inspired depositors’ confidence in the nation’s banking system. Aladire spoke at a gala night held in Abuja to honour the Managing Director/ Chief Executive Officer, NDIC, Umaru Ibrahim.

    The ICAN chairman cited the increase of deposit insurance coverage levels from N50,000 to N200,000 per depositor of deposit money banks (DMBs) and the extension of insurance coverage to depositors of microfinance banks (MfBs) and primary mortgage banks (PMBs) at N100,000 per depositor of the MfBs and PMBs and the second upward review to N500,000 and N200,000 per depositor of DMBs and MfBs/PMBs. This, he said, had met the current economic realities and promoted public confidence in the financial system.

     

    Foreign inflows

     

    The foreign exchange reserves, which was $48.4 billion a month ago, comprised $12 billion portfolio flows, about a quarter of the reserves, FBN Capital has said.

    The investment and research firm said the tapering off of quantitative easing in the United States and other advanced economies could result in the exit of offshore funds as other emerging markets have experienced recently, and further pressure on the naira.

    A reduction in demand for Nigerian crude by the United States following its increased production of shale oil has resulted in a minus seven per cent year to date softening in the price of the Bonny Light, Nigeria’s benchmark crude.

    Consequently, the research firm hinted that easing of the Central Bank of Nigeria’s (CBN’s) tight monetary stance is likely to be pushed out that bit further given conditions in the external environment and the apex bank’s determination to hold the line on the exchange rate. “We see an exchange rate of N159 to a dollar by year end 2013,” it said.

    Data from the CBN shows that forex sales at the Bank’s bi-weekly foreign exchange auction increased from an average of $162 million per session in the first quarter to $285 million from April to date.

    However, the slight weakening of the naira in recent weeks would suggest that forex demand has increased, and a reduction in dollar sales by the multinational oil companies. Although increased dollar sales by the CBN have kept the naira trading within the plus or minus three per cent of N155 band, external sector developments are testing the limit of that band.

     

    BoI

     

    The Bank of Industry (BoI) said it had disbursed a combined N437.39 billion out of the N535 billion funds it secured from the Federal Government for financing projects in the power and manufacturing sectors of the economy as at March this year.

    Speaking during the media workshop organised by the bank in Lagos, its General Manager, Operations, Joseph Babatunde disclosed that the managed funds comprise of CBN’s N235 billion Refinancing/Restructuring Fund (RRF) of commercial banks loans to the manufacturing sector and N300 billion Power and Aviation Fund (PAIF). Both funds were approved in 2011.

    He said of the RRF, N229.18 billion had been disbursed as at March and is targeted at refinancing commercial banks’ loans to Small and Medium Scale Enterprises (SMEs) in the manufacturing sector. The fund, he explained, is expected to enhance the liquidity of commercial banks and facilitate more credits to the real sector.

     

    Reserves

     

    The Nigerian foreign reserves have stabilised in the past two months after $12 billion inflows over eight months to $48.6 billion, FBN Capital research has shown. The rally ended at the end of March, this year.

    It explained in an emailed report that the increase can be traced directly to the tightening measures taken by the Monetary Policy Committee (MPC) in July 2012 and the announcement the following month by JP Morgan that it was to include Nigeria in its indices of local currency government bonds.

    “The level of reserves, which are reported by the CBN as 30-day moving averages, has stabilised not because the offshore investors have rushed for the exit but because of drawings on the excess crude account (ECA),” it hinted.

    The balance in the ECA, which forms part of the reserves, has declined this year by $4 billion, to about $5 billion, as a result of withdrawals announced by the Federation Account Allocation Committee (FAAC).

     

    MfB

     

    Lovonus Microfinance Bank Limited has launched salary advance scheme for employees of small to medium size companies to ease financial difficulties often faced before the monthly remuneration is due for payment by the employer.

    The scheme provides salary advance or instant loan to the employee, with a flexible repayment plan of one to three months, Usman Onoja, chief executive of the Lagos-based microfinance bank (MfB) said.

    He explained that to ensure the convenience of the employee, the salary advance is processed within 48 hours from the application or documentation, with delivery almost immediately, stressing that interest rate on the product is negotiable.

    To further deepen its customer service, the microfinance bank launched three new products recently, branded lovflex, lovflexplus and lovflexpremium. According to Onoja, lovflex is targeted at micro traders in need of N5,000 to N30,000. He said that interest rate on the facility was cut to seven per cent per month for a maximum four months tenure while the repayment plan could be by daily or weekly contributions.

    “Lovflexplus is for traders in need of N40,000 to N70,000 credit, for a four-month tenor with interest rate of seven per cent, while Lovflexpremium is for 80,000 to 100,000 loan, on four months maximum tenure, with interest rate of seven per cent monthly and repayment scheduled daily or weekly,” said Onoja.

     

    Bank to bank report

     

    Unity Bank Plc has been rewarded with a Special Recognition award for its unwavering “Excellence in banking” and unmatched commitment to the economic development of Nigeria, particularly Northern states.

    The bank received the award from Business Day newspaper at the just concluded Maiden BusinessDay Banking Awards.

    A statement from the bank said the awards were instituted to “…recognise Nigerian banks that have been outstanding in supporting economic growth in Nigeria. They have been instituted as a credible way of rewarding banks that are supporting economic growth in Nigeria without putting at risk the financial system.”

    Diamond Bank will today break its new campaign to, undoubtedly, claim its position as one of the leading financial institutions in Nigeria- providing customers with tangible financial solutions tailored specifically to suit their lifestyle.

    In a statement, the bank said the launch follows a successful brand refresh in November 2012 where the brand saw changes in its colours moving away from the monosyllabic greys and dark tones to more vibrant colours. The motive according to the bank, was to make the brand more approachable in line with its’ positioning as a leading retail bank in Nigeria.

    For more than 20 years, Diamond Bank said it has built equity as a strong reliable salient bank.

    Union Bank of Nigeria Plc’s first quarter pre-tax profit rose 40.33 per cent to N7.69 billion compared with N5.48 billion in the same period last year. The lender, which gave the detail to Reuters did not give any reason for the rise.

    However, its gross earnings dropped marginally to N29.79 billion from N29.84 billion the same period last year, the bank said in a statement.

    Also, Guaranty Trust Bank (GTBank) disclosed that it expected its pretax profit for the third quarter to hit N20.7 billion, compared with N21.9 billion in the same period last year. The lender said gross earnings will be N41.25 billion in the three-months to September 2013, down 42 per cent from N70.52 billion in the same period a year ago, it said in a filing with the Nigerian Stock Exchange (NSE). GT Bank also did not give reasons for the falls earnings and profit.

  • Vision 20:2020 for cash-less feasible, says NIBSS

    The vision of Nigeria to be among the top 20 economies in the world providing efficient e-payment services by the year 2020 will be achieved, the Nigeria Inter-Bank Settlement System (NIBSS) has said.

    NIBSS Executive Director, Business Development, Chritabel Onyejekwe disclosed this at the weekend during the 13th Card, ATM & Mobile Expo held in Lagos. She said the cash-less banking initiative has recorded huge success and has been able to drastically reduce banks’ operational costs significantly.

    She said NIBSS in collaboration with the Central Bank of Nigeria (CBN), banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots.

    She said SIBS International – a Portuguese firm has been supporting NIBSS in achieving the cash-less objective.

    Speaking at a press conference during the card expo, Managing Director, SIBS International, Pedro Hipolito, pledged the firm’s support towards the success of the cash-less policy initiative in the country.

    He explained that SIBS International, which is a global payment processors, provides flexible and innovative payment services through Automated Teller Machine (ATM) and Point of Sale (PoS) terminal services, network management, full issuing and acquiring transaction processing for clients.

    Hipolito said his firm was opening an office in Lagos in order to play a long-term proximity role in bringing the cash-less policy to fruition. He said the firm has been partnership with NIBSS since 2011.

    He said the firm’s intent in moving into Nigeria was to enable it assist the country in achieving a cash-less economy: “We are going to deepen our presence in Nigeria by opening an office here. This move signals our commitment towards supporting Nigeria’s quest for cash-less payment system. We will ensure that we have people on the ground to cultivate relationships and meaningful exchange of knowledge and also provide cutting edge technology towards that goal”, he said.

     

  • Investment summit holds Saturday`

    Investment summit holds Saturday`

    The city of Ago-Iwoye is set to receive people from different parts of Nigeria and other parts of the world who are expected to participate in the first Economic Summit scheduled to hold this Saturday.

    Speaking ahead of the summit, Chairman, Organising Committee, Seye Awojobi, said the event with the theme: Unlocking the economic opportunities and potentials for development is being put together by the Egbe Gbobaniyi Ago-Iwoye and will hold at the Ago-Iwoye City Hall.

    He said the summit is part of the efforts to make Ago-Iwoye a modern and economically stable city that can achieve sustainable economic growth and prosperity among the comity of societies.

    Special Guest of Honour will be Senator Ibikunle Amosun, among other dignitaries.

     

    He said the objectives of the summit include to provide a platform for top-level public private dialogue on specific Economic issues; establish a consensus on Policy options aimed at transforming the city of Ago-Iwoye and its constituents into an economically viable entity; harness the abundant human and natural resources of the city for its economic development and attract local and international private investors. He said the summit will focus on how to provide and make social amenities to the city and its people.

     

  • MfBs urged to comply with IFRS

    MfBs urged to comply with IFRS

    The National Association of Microfinance Banks (NAMBs), Southwest Chapter has advised its members to keep to this year’s deadline for the adoption of the International Financial Reporting Standards.

    The body, in a statement, said failure of the operators to adopt IFRS promptly means that they would be able to integrate into the global best practices in financial reporting and disclosure.

    According to its Chairman, Mr Olufemi Babjajide, operators will get more recognition when they fully comply with the standards.

    He said: “We would ensure that our members adopt IFRS. We have told our members to do everything possible to comply with IFRS. We said as from 2013, it would not be good enough if they fail to use the internationally acceptable standards.”

    Babajide said the motive was to enhance market discipline and preparation of accounting statements that would be internationally compatible.

    He said the apex bank had given microfinance banks up till last March to comply with the standard and that the association would begin to sensitise operators from April.

    The chairman said many operators initially thought that the adoption of IFRS was meant for only quoted companies,

    “But now, microfinance banks have been directed to comply by 2013 as no sector will be exempted,’’ he said.

    He said IFRS would be a major change for the banks because it would lead to major changes in internal systems, business processes, performance management, and external communications.