The Nation Newspaper

Category: Business

  • NAICOM to float unit against money laundering

    NAICOM to float unit against money laundering

    The National Insurance Commission (NAICOM) is to establish a unit with the sole responsibility of fighting money laundering.

    The Nation gathered that the unit which would help monitor the transactions of insurance firms is near completion.

    The project , which has been in the works for about three years now, was conceived to help check fraudulent activities, especially, money laundering.

    Financial institutions, the source at the Financial Action Task Force (FATF) revealed, are at the forefront of the fight against financially motivated crimes.

    He said: “As criminals seek to disguise the true ownership and movement of their illegal proceeds, the insurance sector is ultimately vulnerable to abuse for the purposes of laundering the proceeds from crime. This is why it is imperative to build capacity within the Insurance sector to prevent money laundering and deny wrong doers the benefits of their misconduct.”

    Also, Acting Director, Inspectorate Directorate, NAICOM, Farinu Olusegun, has called on stakeholders to support the government and the commission in the fight against money laundering, adding that the government alone cannot successfully prevent and control the menace without the support of the civil society, especially the private sector.

    He said those who developed the standards against money laundering recognised the role of the insurance industry and therefore included specific obligations and responsibilities for the sector.

    He said NAICOM would continue to forge partnerships with all stakeholders, especially, insurance institutions that should be the vanguard of the crusade against money laundering and terrorist financing, adding that the commission shall sustain cooperation with other organisations at home and abroad to share best practices and promote greater cooperation in their collective efforts.

    Director-General Nigerian Insurers Association (NIA), Sunday Thomas, said insurers have been charged to preserve their customers’ information for not less than 10 years after the end of any transaction.

    Thomas said the move is in line with the industry’s bid to have detailed information of customers. He said companies are to display in their offices the notice stating the corporate responsibility for disclosure of information in respect of transactions above specified threshold.

    He said insurers are also to identify the nature and scope of the business to be transacted, the duty to obtain evidence of identification, keep customers information up to date and review customers’ information at every point of transaction.

    He noted that insurers are to report to the NAICOM observations detrimental to the their operations, adding that they have to also receive and vet suspicious transaction reports from staff; rendering “nil” reports with the Nigeria Financial Intelligence Unit (NFIU), where necessary.

    Thomas urged the operators to develop robust risk management systems, including procedures, internal control and audit systems, perform the necessary Customer Due Diligence (CDD) on their customers, beneficial owners and beneficiaries.

    According to him, operators are also to effectively monitor unusual transactions, take enhanced measures in respect of higher risk customers, keep adequate records of transactions and promptly respond to enquiries by the NFIU in respect of any transaction with any individual, entity, or organisation named in the request.

    He noted that there should also be protection of the security and confidentiality of such requests, create high level awareness and training among the staff, ensuring that all branches and subsidiaries observe appropriate AML measures.

  • Billionaire debtors: CBN to involve law enforcement agents

    Billionaire debtors: CBN to involve law enforcement agents

    Billionaire debtors whose firms, directors and shareholders were barred from securing further loans from local banks are in for bigger troubles.

    The Central Bank of Nigeria (CBN) at the weekend, said the debtors, amongst whom are Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, former Power Minister, Prof. Barth Nnaji, Mrs Elizabeth Ebi and Dr. Wale Babalakin, including their firms would be handed over to law enforcement agents, should they fail to repay their loans.

    A total of 113 companies and 419 directors/shareholders, were affected based on report published in one of the national dailies last week.

    CBN Spokesman, Ugochukwu Okoroafor, told The Nation that should they fail to repay their loans, the apex bank will involve the law enforcement agents to achieve full recovery, to ensure financial stability, and instil discipline in the banking sector. “We are a bank, not law enforcement agent. Should these debtors fail to repay their loans, law enforcement agents will take care of it for us,” he said.

    A top CBN official, who pleaded anonymity, also explained that the regulator had to bar the debtors from further credit, to enable them honour their obligations, adding that the apex bank decided to use ‘naming and shaming’ because according to him, that’s the only way the debtors will be compelled to honour their obligations.

    Managing Director, Asset Management Corporation of Nigeria (AMCON), Mustafa Chike-Obi, declined to comment on the matter further, saying it was a CBN affair.

    The CBN had last week, barred banks from extending further credit to the affected persons and their companies. This became exigent due to difficulties the AMCON is having with the debtors, after it took over bad loans worth over N3.4 trillion from the banks.

    The apex bank, in a circular dated September 17, confirmed that the restriction would apply to individuals, organisations, companies, as well as principal shareholders and directors of companies where the outstanding value of loans purchased by AMCON amounted to N5 billion or above as at the day of purchase, without regard to the actual amount paid by AMCON.

    The circular, signed by CBN’s Director, Banking Supervision, Mrs. A. O. Martins,said: “It has become necessary to stop debtors who failed to repay their loans to banks and had these loans subsequently transferred to AMCON, from further enjoying credit facilities from Deposit Money Banks (DMBs), until they fully repay agreed outstanding to AMCON.”

    The CBN also stated that any bank that flouts the guidelines would be made to make an immediate provision of 100 per cent of total principal and interest outstanding in the account of the customer and related parties, in addition to whatever regulatory penalties the CBN may decide to impose.

    According to the report, the list of debtors showed that Zenon Petroleum, owned by Otedola, is indebted to banks to the tune of N192.4 billion; MRS Holdings Limited, which belongs to Dantata, owed N119.98 billion; Seawolf Limited – N98.32 billion; Arik Air Limited, belonging to Arumemi-Ikhide – N85.481 billion; NITEL Plc/M-Tel – N71.547 billion; and Capital Oil and Gas Limited, which belongs to Ifeanyi Ubah – N48.014 billion.

    The banking watchdog equally directed banks to shun further credit to Cross River and Zamfara States because of the failure of the Tinapa Business Resort and Accountant General, Ministry of Finance, Zamfara to pay back loans collected respectively.

     

     

     

     

     

  • CIIN spends N200 million on college

    The Chartered Insurance Institute of Nigeria (CIIN), may have spent over N200 million on the college of Insurance and Financial Management (CIFM) project. The Director General, Mr Adesoji Adepegba, disclosed this while reviewing the achievement of the institute in the last 10 years.

    Adepegba told jouralists in Lagos, last week that the institute was able to mobilise the amount which it has spent on the first phase of the project, saying academic work would start very soon.

    He said the programme will include a two-year certificate in insurance after which graduates would go for a one year industrial attachment and return for another two years Advanced Certificate in Insurance.

    He said the certificates would be equivalent to the Ordinary National Diploma (OND) and the Higher National Diploma (HND), which are handled by the National Board for Technical Education (NBTE).

    The HND certificate is equivalent to a degree, he said, adding that at this stage, the HND insurance graduate of the college will have one or two papers to write to become an insurance professional. He said the effect in the long run will be such that when five people gather, at least one of them would be an insurance professional.

    Adepegba said the objectives of the college include: to provide qualitative education and training for persons engaged in the practice of insurance and allied services throughout Nigeria; to provide consultancy services in the fields of insurance and financial services for the insurance industry in particular and the financial sector of the economy in general and to undertake research in all aspects of insurance and allied subjects relevant to the economic development of the nation. Other objectives of the college according to the Director- General include: to collect relevant data on the insurance industry, maintain a database and provide information on all aspects of insurance for public use; to constitute a research platform for determining the industry’s manpower needs from time to time and to benchmark international standards in insurance and financial management education with a view to making the College a Centre of Educational Excellence globally.

     

  • 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.

     

  • Royal Exchange Group records N2.37b growth, pays dividends

    Royal Exchange Group has reported 59 per cent growth, equivalent of N2.37 billion for the 2011 business year.

    The Chairman, Kenneth Ezenwani Odogwu, disclosed this to shareholders during its 43th Annual General Meeting (AGM) in Lagos, last week.

    He said despite the uncertainty that characterised the global economy for most part of 2011 and the slow growth rate experienced in key industrial countries, the economy was able to record moderate growth as a result of some well ‘thought-out’ policies of government.

    This, he said, enabled some sectors of the economy to record some level of growth. “ The rise in the money market rate which is attributed to the monetary tightening policies of the Central Bank of Nigeria (CBN), led to the increase in the Monetary Policy Rate (MPR) and this resulted to the sharp increases in the Cash Reserve Ratio (CRR), four per cent in September to eight per cent in October 2011”.

    Odogwu said Royal Exchange Plc and the insurance industry generally, took advantage of the development as their businesses depend on available investments income, adding that this is already having positive impact on the industry.

    He said Royal Exchange Plc achieved a gross premium of N5.24 billion, as against N3.29 billion recorded in 2010. This translated to N2.37 billion as net income before overhead expenses, compared to N1.85 billion in 2010, resulting in an increase of 28 per cent.

    Hr said despite theincrease, the investment income of the company stood marginally at N280.42 million, from N254.36 million in 2010. He attributed this to the slow recovery of the capital market and the relatively low rates that prevail in the money market.

    Analysis of the statement of account revealed that management expenses recorded an increase of 3.8 per cent, fromN1.79 billion in 2010 to N1.86 billion in the review period. The chairman said the increase was kept low as a result of the stringent cost control measures aimed at minimising operating cost without impacting negatively on productivity.

    The group achieved a profit before tax and exceptional item of N105.64 million from its operations, while an exceptional item of N855.84 million increased the profit before tax to N961.48 million.

    On the subsidiaries, the group chairman stated that Royal Exchange Prudential Life Plc, posted a loss of N240 million. He reported that remedial measures have been taken to turn the company around. He announced a dividend of 4 kobo for every 50 kobo ordinary share to shareholders for the year ended December 31, 2011.

  • 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.

  • Telecos base stations to hit 25,000, says RenCap

    Telecos base stations to hit 25,000, says RenCap

    Renaissance Capital has predicted a rise in the Base Transreceiver Stations (TBS) of Nigerian telecom operators from 22,000 to 25,000 by December 2012.

    In a report conducted by Renaissance Capital and titled: ‘Halfway through 2012: Time to reflect,’ the firm said the annual cost of buying diesel for running the base stations of the telecom operators would increase from its current N178billion when the telecom operators create an additional 3,000 base stations by December.

    It said: “Recent publications have made references to the N178billion spent on diesel annually by the Mobile Network Operators (MNOs) in Nigeria.

    We believe such a figure is too high if the reference is to diesel costs only, although we agree with reference to the N22, 400 required to maintain a diesel generator per site on a daily basis, which implies that $4,200 per base transreciever stations per month.

    The report indicated that the telecom companies would spend more money in maintaining the base stations, giving the current price of diesel and the increase in the number of base stations, adding that the telecom operators have stepped up investment levels in order to address problems such as network congestion and poor service quality.

    “ We are aware of major investment plans by all three GSM competitors ( for now we ignore M-Tel), and we expect the number of base transceiver stations to approach 25,000 by the end of 2012. We believe Glo will roll out over 2,000 BTS over the next year or so. In December 2011, Airtel announced its investment of more than N93billion ($600million) on the expansion of network capacity and the improvement of quality of service during 2011, in Nigeria.

    “ The MNO constructed more than 500 sites in 2011, and planned to finish 1,000 sites by March, 2012 when the total investment was due to reach $1billion,” it added.

    According to the report, Etisalat will increase its base stations to 5,000 in 2013 to boost its operations.

    “ Based on our analysis, Etisalat has 3,000 base stations by the end of 2011. As part of its strategy to boost its operations, Etisalat plans to build 1,000 more base stations in 2012 and another 1,000 in 2013. This will bring its total number of base stations to about 5,000 by the end of 2013,” the report added.

  • ‘Why banks are denied ISO certification’

    ‘Why banks are denied ISO certification’

    The British Standard Institute (BSI) has said poor security and information management system are hindering many Nigerian banks from getting the ISO 27001 certification.

    ISO 27001 certification, an initiative of the British Standard Institute, is awarded to companies or financial institutions that have complied with the all known information and security management standards globally.

    First Bank of Nigeria Plc, Fidelity Bank Plc, and a few others, have so far received the certification.

    The Strategic Business Manager, Middle East and Africa Region, BSI, Omar Rashid, told The Nation that many banks were denied the certification because their security management processes were not complete. Omar, who was on a short visit to Nigeria, said many banks have not documented their security management programmes to meet the BSI’s requirements.

    He said: “It is not that the local banks are not putting the information and security management processes in place, but their inability to document the processes in a way that would meet the requirements of the institute is the issue. I think that is one of the challenges facing the banks.

    Once the banks have been able to do the proper things in this area, they are sure of getting the certification. We have received a massive amount of interests for certification and training services.”

    He said banks need to do what is called “top-down commitments” on the issue of security management, arguing that the development would help them in winning the confidence of many globally acceptable rating agencies.

    “By top-down commitments, I mean the interest in information and security management programmes, must come from the management to the least workers in the banks. It should not be at the level of the managements or the boards of the financial institutions only.” he added.

    He said the issue of information security is beyond putting technology in place, adding that it is a major governance issue that can directly or indirectly affect any organisation’s reputation and its survival.

    He said ISO certification demonstrates to stakeholders that the banks are run effectively, improve performance, profitability, corporate governance, widen market opportunities, and improve staff responsibility and commitment.

  • Nigerian Content Fund gets $100m from oil firms

    Nigerian Content Fund gets $100m from oil firms

    •Onne Port $2b Phase 4 jetty ready in 2014

     

    Oil companies have already contributed about $100 million towards the

    Nigerian Content Support Fund (NCSF) to be launched in October. The fund represents one per cent of oil firms’ profit.

    Speaking at the Nigeria oil and gas Trade and Investment Forum, in Onne, Rivers State, the Executive Secretary, Nigerian Content Development and Monitoring Board ( NCDMB), Ernest Nwapa, said: “The designated accounts for NCDF and procedure for payment of one per cent sum has been set up. The structure for NCDF has been developed and approval secured for award to Financial Advisors.

    “The new fund would be used as a pool to attract and facilitate venture capital. Professionals will run the NCDF, which closes all the identified gaps in the old fund.”

    Nwapa said the structure of the new arrangement would insulate the operations of the fund from the NCDMB, but added that the board still has overall responsibility for the fund.

    He said industry cooperation would be required to succeed in using funds for targeted capacity, and attributed the growth of the Nigerian Content from five per cent in 2004 to 35 per cent in 2010.

    The implementation of the provisions of the Act, which was signed into law by President Goodluck Jonathan on April 22, 2010, is envisaged to ensure the retention of about $40 billion in the Nigerian economy within the next four years at an average of $10 billion yearly.

    According to statistics, the Nigerian economy currently retains only $4 billion out of the yearly oil and gas expenditure, estimated at $20 billion.

    The new legislation also has a capacity to create over 30,000 direct employment and training opportunities; as well as enhance the establishment of three to four new pipe mills to service the demands of the industry and develop one or two dockyards.

    Also, the $2billion Phase 4 jetty under construction in Onne Oil and Gas Free Zone, Port Harcourt, would be completed in 2014,.

    The Head, Commercial, Intels Nigeria Limited, Iuri Tarmulus, who stated this during a tour of Onne Port, last week, said over 30 million cubic meters of sandfilling has been done, while about $500m has been invested.

     

  • Onosode heads investors’ protection fund

    Onosode heads investors’ protection fund

    THE Nigerian Stock Exchange (NSE) at the weekend inaugurated the Board of Trustees for the Investors Protection Funds (IPF) as part of efforts to enhance investor’ confidence in the Nigerian stock market.

    Gamaliel Onosode chairs the nin-man board which included Oscar Onyema, Misan Kofi-Senaya, Kyari Bukar, Chief Sola Abodurin, Fubara Anga, Edosa Kennedy Aigbekaen, Sam Onukwe and Umaru Modibo. IPF currently has about N625 million.

    Chief Executive Officer, Nigerian Stock Exchange (NSE), Oscar, Onyema said investors now have a statutorily backed avenue for reducing the losses suffered as a result of the bankruptcy, insolvency, negligence or wrong doing of dealing members.

    He noted that board would need to work to justify the confidence reposed in them stressing that the investing public is watching the performance of the board.

    He tasked the board to look for ways to modernize the IPF in line with global best practices, enhance the quantum of funds available in the IPF, and create clear guidelines for compensating legitimate claimants from the fund.

    In his remarks, Chairman, board of IPF, Mr Gamaliel Onosode expressed extreme humility at been called upon to chair the board of the IPF, thanking the other members of the board for the confidence reposed in him.

    Describing the membership of the BOT as a combination of the ancient and the modern day market operators, he promised to be on the side of ensuring the best for investors at all times.

    Onosode promised to be guided by facts and figures at every time, noting that by virtue of being the oldest stockbroker, “I am likely to be sympathetic with the processes, procedures and all the regulations that quoted companies have to confirm with.”

    In accepting the membership of the BOT, the chairman said that the role of the IPF by his understanding “is expected to moderate loses by investors.”