The Nation Newspaper

Category: Money

  • AfDB’s assets in Nigeria hit $1.5b

    The African Development Bank (AfDB) has put the total value of its portfolios in Nigeria at about $1.5 billion. The bank is also adopting measures to channel more funds into infrastructural development in the country.

    The bank said the portfolios cover loans earmarked for core critical economic projects, direct investment by way of holding equities, and credit extended to financial institutions among others.

    Speaking to The Nation, the AfDB’s country representative in Nigeria, Dr Ousmane Dore, said the portfolios cover projects that have been approved in the private and public sector.

    Dore said disbursement of funds took effect from December last year to ensure speedy execution of the projects.

    He said efforts were on to provide funds for projects that are yet to receive the institution attention.

    The development, he said, is in line with the bank’s mandates to identify and execute projects that are of critical importance to the economy of member states of which Nigeria is one.

    There are specific and general projects to be financed in the country, depending on the rankings given to them, he said.

    Water supply, agriculture, health, education, roads among others are some of the public projects identified by the bank, he said, adding that the private sector projects border on technical assistance and infrastructure.

    Giving a breakdown of the projects, Dore said $634.6 million was earmarked for the private sector and public sector, $699.5 million.

    Dore said private sector projects include lines of credit (LOC) to financial institutions, direct investments by way of holding in equities, and public/private partnership (PPP) initiatives.

    The bank has extended lines of credits of $304.4 to financial institutions in Nigeria, direct investments of $32 million and $69.2 million for public/private partnership projects.

    He said $57 million was earmarked for various agricultural projects, $236.2 million for infrastructural projects such as water supply, sanitation programmes, economic and power sector initiatives. $30 million was also voted for skills acquisition and vocational education among other projects under public sector.

    Borno, Jigawa, Katsina, Kogi, Plateau, Kwara, Adamawa, Gombe, Niger, Edo, Ondo, Ekiti, Oyo, Osun, Taraba, Cross River and Rivers states, among others are beneficiaries of the bank’s funds.

    He said the bank is yet to determine whether about 10 states would be among the beneficiaries of the loans programme.

    On disbursement of funds, he said the states had not received the total loans earmarked for them.

    Dore said $82.1 million out of $493.4 million earmarked for projects have been disbursed, representing a difference of 16.7 per cent.

    The bank, he said, is shifting its operations to employment generation, adding that the lender intends to create jobs through the Small and Medium Scale Enterprises (SMEs).

    “We have set up loans for capacity building in many countries including Nigeria. We intend to provide loans for the SMEs, and we want to channel the loans through Bank of Industry and Nigerian Export Bank of Nigeria to ensure accessibility. This is one way of reducing unemployment and growing the economy,” he said.

  • EU experts to speak on cash-less policy

    Head of the European Union (EU) Central Bank Market Integration Division Wiebe Ruttenberg is expected to visit Nigeria next month to speak on the cash-less policy initiative of the Central Bank of Nigeria (CBN), at a conference in Lagos.

    A statement said the official would be speaking alongside other international experts at a conference being organised by De Novo (a strategy brand and media firm) and Legal Reach, a UK law firm.

    The two-day programme, sponsored mainly by the CBN, focuses on the move away from the dominance of the current cash-based system by adopting alternative payment channels. This is in line with the country’s Vision 2020:20 Strategy as well as the central bank’s ambition of enthroning a world-class payment system.

    Slated for October 8 and 9 at the Lagos Oriental Hotel, Lekki, Lagos, the conference is expected to bring together experts in the global payments industry, who would provide insight and present key developments from other jurisdictions, to benchmark the way forward.

    Experts, drawn from various relevant sectors of the economy such as banking, manufacturing, telecommunications, services, and even the informal sector, and from outside Nigeria, would be meeting and deliberating on the issues surrounding the cashless policy.

    Key speakers at the forum include Executive Governor of Lagos State, Babatunde Raji Fashola; Governor, CBN, Mallam Lamido Sanusi, Attorny General of the Federation and Minister of Justice, Mr. Mohammed Bello Adoke, SAN, Minister of Communication & Technology, Mrs. Mobola Johnson; and top relevant members of the National Assembly.

  • ‘Irregular power supply inimical to growth’

    Operators have advised the Federal Government to create an environment to facilitate the utilisation of the development funds released by the Central Bank of Nigeria (CBN).

    The Secretary, Association of Food, Beverage, and Tobacco Employees, (AFBTE), Mr Aderemi Adegboyega said the effective utilisation of the N200 billion Small and Medium Scale Enterprise (SMEs), N300 billiion Power and Aviation Intervention Fund (PAIF), among others, depend largely on the economic environment.

    He said government’s ability to create wealth and employment would help fast-track the economy’s growth.

    Adegboyega said the inability to meet the electricity needs of Nigerians was a major setback in growing the economy.

    He said irregular power supply remained an impediment to SMEs’ moderated industrialisation and economic growth.

    “There is the need to fast-track development in the power sector so that the loan to SME can impact positive on the economy,” he said.

    The former President, Association of National Accountant of Nigeira (ANAN), Dr Samuel said that the government should also address the current security challenges in the country.

    He said economic stability will not thrive without conducive environment that determines the success of private sector operators and inflow of foreign investors. He urged the CBN to work against improper disbursement and poor implementation of the scheme.

    A lecturer with Pan African University, Dr Austin Nweke said that the proposed credit would only promote economic activities in an environment with developed infrastructure.

    Nweke said that infrastructure development would attract investors and provide job opportunities for unemployed youths.

    “Serious monitoring and transparency in the distribution of the fund would also ensure the achievement of the loans objectives,” he said.

    Nweke said the loan innovation would, if properly managed assist in harnessing the potential of Nigerians and contribute to the growth of the national Gross Domestic Product (GDP).

    He also urged government to establish a monitoring team that would through the CBN facilitate the provision of loans to SMEs’ at single digit interest rate from commercial banks.

  • Access Bank’s half-year profit hits N30b

    Access Bank’s half-year profit hits N30b

    Access Bank Plc has announced an audited Profit Before Tax (PBT) of N30.07 billion for its half-year ended on June 30, 2012.

    A statement from the bank said its Profit After Tax (PAT) grew by a 225 per cent to N26.13 billion compared with the N8.08 billion recorded in the corresponding period in 2011.

    Similarly, the bank’s Profit Before Tax (PBT) rose from N12.37 billion recorded for half-year in 2011 to N30.07 billion in June, 2012, representing a 143 per cent growth over last year’s performance. Gross earnings rose by 103 per cent to N108.7 billion in relation to last year’s figure of N53.65 billion.

    The bank’s Group Managing Director/CEO Aigboje Aig-Imoukhuede, said the bank is now firmly established as a top tier Nigerian Bank. “Leveraging on our sustainability driven business philosophy, robust capital position and the quality of our workforce. I am confident that we will continue to deliver strong returns for our investors in 2012,” he said.

    Analysts have described the bank’s performance as a valid testament to its financial strength and capacity for sustainable growth.

    Analysis of the result has shown that Access Bank is already extracting value from its acquisition of Intercontinental Bank by leveraging scale and access to large retail deposit base evidenced by the Bank’s low cost of fund.

     

  • Shareholders approve FCMB, FinBank merger

    Shareholders approve FCMB, FinBank merger

    First City Monument Bank (FCMB) Plc would harness synergies from its merger with FinBank to compete effectively in the top tier of the Nigerian banking industry.

    This assurance came just as shareholders of FCMB and FinBank at the weekend approved the coalescing of the two banks. The vote for the business combination was nearly unanimous with 99.98 per cent of FCMB shareholders voting in favour of the merger resolutions. The business combination had earlier been approved by financial services regulators.

    With the shareholders’ approval, the entire share capital of FinBank has been cancelled and the bank dissolved without being wound up. Consequently, all assets and liabilities of FinBank, including its real properties and intellectual property rights, have been transferred to FCMB.

    In their joint address to shareholders, chairman, FCMB, Dr Jonathan Long and chairman, FinBank, Dr John Udofa said that the post-merger FCMB would increase its market reach and harness other operational synergies to achieve economies of scale and compete effectively in the top league of the banking sector.

    According to them, the business combination was driven by the need to achieve FCMB’s goal of becoming one of Nigeria’s top full service banks offering a comprehensive range of corporate, retail and consumer banking products.

    “The ongoing reforms in the Nigerian banking sector has created a dynamic and competitive environment, in which market leaders are likely to be those banks which have the lowest cost of funds, together with the strongest liquidity and capital adequacy ratios,” they stated.

    They said the boards of the two banks believed that the business combination would lead to significant financial returns in the medium and long-term.

    Speaking after the meeting, group managing director, First City Monument Bank, Mr. Ladi Balogun said the approval was an important step in the evolution of FCMB.

    According to him, while the last six months have been challenging, the management of the bank is confident that with the transaction almost complete, it will fully realise the anticipated financial and strategic benefits and see value accretion in the coming months.

    “I am grateful to our shareholders who have been supportive and patient during the entire integration process. The 99.98 per cent support for the transaction is a strong validation of its benefits to all shareholders. I also appreciate the continued dedication and focus of my colleagues at both banks as this process evolved,” Balogun said.

    He noted that FCMB is one of Nigeria’s most enduring institutions with a solid reputation as a premier wholesale banking group and a well-run and rapidly growing retail banking franchise.

    “We look forward to building on this capability as a merged entity, with a greater focus on our customers,” Balogun added.

    He pointed out that with the shareholders’ approval, the next step for the bank is to file the shareholders’ resolution with the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN) and the Federal High Court.

    According to him, once the bank receives final approval, the final stage of the process is expected to be concluded in a matter of days at which point the two banks will begin to operate as a single entity.

  • Why finance houses’ reform is stalled, by operator

    Why finance houses’ reform is stalled, by operator

    Approval from the Board of Directors of the Central Bank of Nigeria (CBN) is delaying ongoing reforms in the finance houses subsector, The Nation has learnt.

    An insider at the Finance Houses Association of Nigeria (FHAN) said pending issues such as withdrawal of licences of 47 finance houses whose liquidity were called into question in May, and funding for the subsector will be decided after the CBN board’s assent.

    He said progress is being made now, unlike before when nothing was happening in the subsector. He said the reform is taking shape and may be concluded by year-end.

    However, he said the CBN may withdraw licences of 47 finance houses whose liquidity were called into question in May.

    The apex bank had, given a 30-day notice to 47 closed or inactive finance companies to submit evidence of their existence and/or operations, or lose their operating licences. The order had expired on Tuesday, April 18.

    The banking watchdog said that the affected finance companies had closed shop, ceased to operate, or abandoned finance company business.

    The source said the withdrawal of the institutions’ licences is certain because their conditions are beyond repair.

    He said the apex bank is also considering developing a regulatory framework that will govern finance lease practice, institutionalising a “funding pool” to stimulate lending activities in the sub-sector and structured programme to address the reputation and poor visibility challenges of the sub-sector.

    President of the association, Samuel Durojaye, had earlier said in a statement that the CBN reforms in the sector will transform, and reposition the finance company sub-sector to enable it play increasing role in Nigeria’s financing value chain.

    He acknowledged the apex bank’s continuing support to and engagement with the association on this project.

    He called on FHAN members to support the bank’s efforts at strengthening the regulatory environment by regular and timely rendering of all statutory returns and reports, as well as the renewal of their operating licences every year.

    Durojaye enjoined them to note that the apex bank is taking the issue of corporate governance practices very serious and, therefore, counselled members to identify structural weaknesses in their various organisations and take immediate remedial steps to rectify them.

  • ‘Certified bankers to work in other African countries’

    ‘Certified bankers to work in other African countries’

    The Chartered Institute of Bankers of Nigeria (CIBN) has said that certified bankers in the country are now qualified to work in other African countries.

    The institute said in a statement that a communique issued at the end of its Annual General Meeting called for an inter-country recognition and acceptance of qualifications and certificates of member countries.

    This it said, will encourage and promote mobility of labour as well as skills among banks in the continent.

    It stated that the alliance would periodically conduct professional examination moderation exercises to strengthen examination policies, regulations, curricula and practices with a view to ensuring that quality standards and improvement in candidates’ performance are maintained and adhered to, at all times.

    According to the alliance, “a smooth implementation of the Staff exchange programme (SEP), which is aimed at, among other things, to enhance cross fertilisation of skills, bonding, mentoring among member Institutes’ personnel would be vigorously pursued”.

    It stressed the need for the AAIOB member institutions to participate actively in the establishment, programmes and activities of the Global Banking Education Standards Board (GBEStB), which is expected to be launched at the World Conference of Banking Institutes (WCBI) scheduled to hold in Nairobi, Kenya in June, 2013.

  • Nestle Nigeria hits N604 per share

    Nestle Nigeria hits N604 per share

    Nestle Nigeria Plc yesterday set another historic stock market and personal record as it rose by nearly the maximum allowable daily price change to hit a new high of N604 per share.

    The company showed a stronger-than-average momentum with a gain of N26.50 per share, representing about 4.6 per cent increase out of the maximum five per cent price change band.

    The benchmark index for the market, the All Share Index (ASI), recorded a modest increase of 0.32 per cent to close at 25,456.01 points as against its opening index of 25,373.83 points. Aggregate market capitalisation of all equities also gained N27 billion to close at N8.104 trillion compared with its opening value of N8.077 trillion.

    With the soft nudge yesterday, average year-to-date return at the Nigerian stock market rose to 22.79 per cent.

    The new high further cemented Nestle Nigeria’s historic performance as the highest-priced, most resilient and stable stock at the market. The food and beverages stock has consistently delivered positive full-year returns over the years, even in the throes of the recession.

    As the recession shook the market in 2009, Nestle Nigeria more than doubled its share price from a low of N104.50 to a high of N247.72 and eventually closed at N239.50. The closing price for 2009 became the lowest price for 2010 as the company’s share price rose to a high of N401 and eventually closed the year at N368.

    In 2011, as the market stumbled with a negative year-to-date return of 19.5 per cent, Nestle Nigeria posted a positive return of 20.92 per cent, setting a new high of N470 per share. The company’s share price closed at N445.66.

    Besides setting new highs, Nestle Nigeria has also continuously set a higher low, indicating strong resilience that reassures on the share price. Lowest market value per share rose from N104.50 in 2009 to N239.50 and N367.83 in 2010 and 2011 respectively. It has maintained a down limit of N400 so far this year.

    Meanwhile, Lafarge Wapco Cement Nigeria recorded the second highest gain yesterday with addition of N2.60 to close at N52.60.

    International Breweries placed third with a gain of N1.42 to close at N15.70. UAC of Nigeria rallied 50 kobo to close at N41. Union Bank of Nigeria gathered 37 kobo to close at N7.90. PZ Cussons Nigeria gained 29 kobo to close at N24.45 while National Salt Company of Nigeria added 27 kobo to close at N5.74.

    However, Nigerian Breweries led the slackers with a loss of N2.50 to close at N135. Julius Berger Nigeria lost 51 kobo to close at N27.50. Presco dropped by 28 kobo to N15. Zenith Bank lost 23 kobo to close at N16.09 while Ecobank Transnational Incorporated dropped by 20 kobo to close at N11.21 per share.

    Total turnover stood at 517.96 million shares valued at N3.07 billion in 5,172 deals.

  • RenCap forecasts drop in Nigeria’s growth

    RenCap forecasts drop in Nigeria’s growth

    Nigeria’s economy is expected to grow at a slower rate of 6.3 per cent in 2012, compared with 7.4 per cent year-on-year in 2011, Renaissance Capital (RenCap), an investment and finance firm has forecast.

    According to the firm, slower growth is positive for inflation, but it argued that there was no need for rate reduction yet.

    In an emailed report, tagged: ‘Nigeria: 2012 GDP growth – Soft growth, moderating inflation, but no cuts yet,’ RenCap said pressure on the consumer is evident from the significant slowdown of the wholesale and retail sector in the first half of 2012.

    This, it said, remained a fair indicator of consumer demand and would lead to a decline in demand-driven inflationary pressures, this year.

    The investment firm, said the slowdown in consumer demand was countered by increased cost pressures, partly due to the partial removal of the petrol subsidy, and to a lesser extent, the June electricity tariff hikes.

    “Aside from the July increase in import tariffs on grains, which has increased the input costs of some agro-processers, we expect cost pressures to soften in the second half of 2012. We think the strengthening of the naira over the past two months to N157.60, from N160.75 at end of July, will soften input costs, which is positive for inflation,” it said.

    Last month’s slowdown in inflation to 11.7 per cent, from 12.8 per cent year-on-year, it said, partly reflected the decline in cost pressures.

    The firm, said it was too early for Nigeria’s monetary Policy Committee (MPC) to cut the monetary policy rate, partly because core inflation remains high at 14.7 per cent.

    “We believe cutting rates now may undermine the recovery and stability of the naira, on the back of improved forex reserves. Moreover, recent comments from the CBN suggest that it believes monetary policy needs to remain tight, despite the recent respite on inflation, owing to accommodative fiscal policy and structural constraints,” it said.

    RenCap said the slowdown in the rate of the oil and gas sector’s decline reflects an increase in oil production to an average of 2.38 million barrels per day (mb/d) in second quarter of 2012, from 2.32 mb/d in first quarter of 2012, according to data provided by Nigerian National Petroleum Corporation to the National Bureau of Statistics (NBS).

    The slowdown in the rate of the oil and gas sector’s decline, it said, was timely, as such development, helped counter the softening of the non-oil sector’s growth to 7.5 per cent in second quarter, from 7.9 per cent in the previous quarter.

    “As the oil and gas sector continues to be undermined by oil theft, in particular, we expect the sector’s performance to remain subpar in second quarter of 2012,” it said.

    The firm explained that softer agriculture growth resulted in slowdown in non-oil sector growth, adding that with Nigeria’s agriculture sector producing 40 per cent of the Gross Domestic Product (GDP), the sector’s performance has a material impact on economic growth.

     

     

    explained the non-oil sector’s growth slowdown during the period.

    “The lean harvest season, typically in second quarter, partly explains the agriculture growth softening. This was exacerbated by an increase in insecurity, which has undermined agricultural activities, as well as flooding in some parts of the country that displaced people and damaged farmland. We expect agriculture sector growth to strengthen in fourth quarter, on the upcoming main harvest,” it said.

    It said that the building and construction sector, has been growing at double-digit rates for more than three years, and is one non-oil sector that did not experience a growth slowdown in first half of 2012, compared to a year earlier.

    “We believe this strong growth reflects robust fixed investment. Building and construction’s solid growth is mirrored in the sector that supplies a significant building material, cement. The cement sector’s growth strengthened to 11.7 per cent first quarter, from 10.4 per cent in first quarter and 10.6 per cent a year earlier,” it said. Manufacturing, it said, picked up in second quarter, owing to improved power supply. The manufacturing sector’s growth strengthened to 7.3 per cent in second quarter, from 4.2 per cent in first quarter.

  • Govt urges support for non-interest banking

    Govt urges support for non-interest banking

    The Federal Government is committed to making sure that the non-interest banking system takes strong root in the country as well as provide Nigerians with good alternatives.

    Minister of State for Finance, Dr Yerima Lawan Ngama, who spoke yesterday in Abuja at a seminar on ‘Developing Islamic Financial Institutions in Nigeria,’ organised by Mutual Benefits Assurance plc, denied insinuations that non-interest banking was a religious system.

    He urged Nigerians to take advantage of the non-interest financial system, adding that the benefits of the Islamic financing system helps to bridge the gap between the rich and the poor.

    He said: “In Islamic banking system, there is compassion and transparency in the process, just as secrecy is not allowed from any of the parties,” adding that in the Islamic financing system, everybody is his brother’s keepers.

    He noted that some of the unethical practices that endangers people’s monies in conventional banks are not present in Islamic banking system.

    He however lamented the dearth of knowledge on the Islamic banking concept, urging stakeholders to do more in the area of capacity building and publicity.

    Speaking earlier, the Managing Director of Jaiz Bank, Mohammed Mustapha Bintube, said, Nigeria was ripe for an alternative source of banking, considering the fact that the global credit crunch didn’t affect Islamic banks, while it affected the conventional banks seriously.

    He said his group intended to make Nigeria the financial hub of Africa, adding that the country has no reason to be the second largest business destination in Africa behind South Africa.