The Nation Newspaper

Category: Business

  • CBN to assess auditors, compliance officers

    •CBN Governor, Sanusi Lamido

    The Central Bank of Nigeria (CBN) has said there is need to assess skills, qualifications, experience and competencies of staff currently occupying controlled functions in banks.

    Auditors, compliance officers and other bank staff involved in ensuring that due process is followed in banking operations fall within this group.

    These were conained in a CBN circular tagged: ‘Assessment of competencies in the Nigerian banking industry’ signed by Y.B Duniya for Director, Financial Policy and Regulation.

    He said such exercise will enable Bankers’ Committee identify at the preliminary stages, gaps that would impede the effective implementation of the Competency Framework for the Nigeria Banking Industry being appraised by the apex bank.
    Duniya said that the list of controlled functions is not exhaustive as other important roles and responsibilities may be added.
    However, he said the apex bank has directed the banks to furnish the CBN with names of staff manning the controlled functions, academic and other relevant qualifications, number of years’ experience on the control function; post qualification and general banking experiences; other competencies that support the performance of the control functions. They are also expected to supply details of identified deficiencies in skills, qualifications, experience and competences as well as measures envisaged to remedy positions within 18 months of the approval of the framework.

    The CBN had earlier issued a competency framework that will guide banking operations in the country. The apex bank said the recent global financial crisis exposed the inadequacy of skills and dearth of executive capacity in the banking industry.
    The skill gap, it explained manifested in, among others the lack of in-depth knowledge of core banking functions and poor understanding of basic banking operations; poor understanding of banking regulations and poor risk management and corporate governance practices.
    The framework is expected to address the competency challenges in the banking industry, explore growth opportunities as well as critically facilitate improvement in the quality of the industry’s human capital. Under the framework, successful banks will be those that distinguish themselves by according high priority to continuous enhancement of human capital and lifelong learning.

    “With stability now restored to the Nigerian banking system following several measures and initiatives taken by the CBN under the on-going banking sector reforms, it is imperative that immediate steps be taken to consciously re-direct the banking industry towards the path of entrenching a sequenced competency development programme,” it said.

    The banking watchdog said the exercise is predicated on the need for banks to accord high priority to the continuous enhancement of human capital and lifelong learning. This is expected to instill banking professionals with the requisite skills and expertise not only at the strategic and management levels, but also at the technical and operational levels.

    The apex bank also said it will maintain a central database for approved persons and maintained at the CBN. By this directive, all banks as reporting institutions will update the database with details of approved persons and access it as part of their due diligence prior to the engagement and appointment of persons within the industry.

    The proposed framework leverages on the practices in other jurisdictions such as Singapore, Hong Kong, Malaysia and Dubai which provide a useful guide and template for the Nigerian banking industry. “To ensure that only fit and proper persons man the different job roles and control functions within the banking industry, all persons for the position of Assistant General Manager and above as well as critical operational positions shall be approved for appointment in line with the Assessment Criteria for Approved Persons Regime issued and reviewed from time to time by the CBN,” it said.

  • NIBSS, NIMC tackle e-payment frauds

    From left: Aladekomo; Executive Director, Business Development, Nigeria Inter-Bank Settlement System (NIBBS), Mrs Christabel Onyejekwe and Shonubi during Aladekomo’s visit to NIBBS headquaters in Lagos.

    The Nigerian Inter-Bank Settlement System (NIBSS) is poised to tackle electronic payment fraud, its Managing Director, Mr Ade Osinubi, has said.
    Osinubi said it was necessary to improve electronic payment transactions and engender growth in the economy.
    Speaking during a visit of the management of the Nigerian Computer Society (NCS) to NIBBS‘s head office in Lagos, Osinubi said efforts were being made among the stakeholders in the financial chains to rid the country of fraud in the electronic payment system and allied areas.

    He said partnerships are evolving to reduce the hiccups in the electronic modes of payments, and further reduce the cost of managing cash in the economy.

    Osinubi said electronic frauds hinder the growth of the financial sector and the economy, stressing that the only way to check the malaise is to fight it headlong.

    He said there iwas the need to take security serious in the information and technology (IT)-driven society, adding that customers and financial institutions must be alert to reduce the fraud.

    NCS President Mr Demola Aladekomo said NIBBS has helped to implement the cheque truncation policy, among other measures put in place to enhance the quality of e-payment transactions.
    He said more needed to be done to make e-payment transactions free of fraud.

    Also, Chief Executive Officer, the National Identity Management Commission (NIMC), Mr Chris Onyemenan, a lawyer, said the agency would help in reducing fraudulent practices in the financial industry.

    Onyemenan told The Nation that the leadership of NIMC would develop a central national database, multi-factor authentication system and enrolment and card issuing services to identify all Nigerians and plug the loopholes through which fraud could perpetrated.
    Others, he said, are development of identification and verification processes in Nigeria to foster the growth of the country.
    He said the implementation of the unique identification number (UIM) project of the NIMC in particular was crucial to the success of the electronic payment system initiated by the Central Bank of Nigeria CBN).

     

  • Inactive mobile money firms hamper cash-less initiative

    The failure of some mobile money firms to roll out financial services is slowing down the cash-less policy of the Central Bank of Nigeria (CBN), The Nation has learnt.

    The 16 mobile money operators licensed last year by the CBN are expected to provide financial services and bridge the gap between the banked and the unbanked conservatively put at over 100 million.

    Many of the firms are yet to find their feet a year after their approval, impling that the industry has not fully complemented the cash-less initiative by bringing enough Nigerians into the mobile money transactions net.

    Industry watchers, who spoke to The Nation, said poor funding and technology have hindered the effective take-off of some of the firms.

    The Nation gathered that out of the 16 firms, only Stanbic IBTC, Pagatech, E-transact, United Bank for Africa (UBA), GTBank (in partnership with MTN and Fortis) have started operations by introducing products to galvanise the market.
    Managing Director and Chief Executive Officer, E-Transazt Mr Valentine Obi said infrastructure were a problem because mobile networks are just being developed amid low awareness of the benefits of mobile money transactions.

    The Chief Technical Officer, e-Transact, Mr Richard Omoniyi said poor awareness had slowed down the penetration rate, despite the huge investments already channeled into the mobile money ecosystem by operators. He said the issue has prevented the mobile money operators from complimenting the CBN’s cashless programmes as expected.

    He said: “One of the most significant aims of the mobile money scheme is to provide financial inclusion to the unbanked and under-banked in Nigeria. Getting more people to embrace mobile money depends on the level of awareness stakeholders create. The level of awareness is low and many people are yet to see the benefit of the system.

    It is thus important for the government to support other stakeholders to create massive public awareness for the public. In our own end, however we will do more of enlightenment campaigns and seminars to make sure that the service is really circulated.”

    A mobile money advocate, Emmanuel Okogwale said it would take time before mobile money companies can reduce the physical cash in circulation.

    He said while it is true MMOs have not been able to introduce enough financial services, Nigerians should not write off the ability of the sub-sector to help the growth of the cashless agenda.

    “With time, the 16 mobile money firms would help in reducing cash movement in the economy. By the time all the companies fully take off, they would impact strongly on the cashless project,” he said.

  • AfDB directors meet

    Donald Kaberuka

    The Board of Directors (BoD) of the African Development Bank (AfDB) has resumed meetings in Tunis after the summer holiday.
    President Donald Kaberuka, according to a statement, outlined four major projects the bank and the board will focus on in the last quarter of 2012.
    These are the African Development Fund Mid-Term Review to discuss the Fund’s 12th replenishment from September 12 to 14 in Praia, Cape Verde. The long-term strategy of the bank as it enters its final development phase. The roadmap for the bank’s return to its headquarters in Abidjan, Côte d’Ivoire, to be submitted to the Consultative Board of Governors in mid-October in Tokyo.
    Also to be discussed is the preparation of the triennial budget 2013 to 2015. “The President pointed out that in a very difficult international financial environment, the bank was able to maintain the viability of the institution, while continuing to support Regional Member Countries. It was a difficult task, he noted, but we arrived safely thanks to the efforts of all,” a statement from AfDB said.
    It added that the board also approved the 2012 Mid-Year Budget and Performance Report; the Country Strategy Paper 2012-2016 for Benin as well as two projects: Benin’s Economic and Financial Reform Support Programme (PAREF) and Rwanda’s Poverty Reduction Strategy Support Programme Phase V.

  • Bank chief praises holding structure

    Chairman, Stanbic/IBTC, Mr Atedo Peterside, has said the bank’s decision to adopt a holding structure, in compliance with the Central Bank of Nigeria (CBN) regulations on scope of banking activities and Ancilliary Matters No.3 will aid its growth.

    Addressing shareholders at the bank’s extra-ordinary general meeting in Lagos, Peterside said the bank would leverage on the holding structure to consolidate the strenghts of each of its business units.

    He said the development would enhance the entire group’s ability to drive growth in the future. He said the new structure would accrue significant benefits to shareholders, adding that customers will not be exposed to the risks associated with non-banking activities of the other businesses or the group.

    Peterside said the major reason for adopting the new structure is to consolidate on the bank’s goal of building Nigeria’s leading end-to-end financial services organisation, stressing that the issue would help the financial institution to leverage on its competitive advantage in its various business segments.

    He said the bank will grow well, considering the financial resources and global network of Stanbic/IBTC Group.

  • Govt, World Bank to fight hazards

    world-bank

    The Federal Government and World Bank have said they would spend $18.5 million to tackle hazards caused by Polychlorinated Biphenyl (PCB) to the environment.

    World Bank Country Director in Nigeria Ms Marie Francoise Nelly gave the hint in Abuja during the launch of the PCB project.
    She said the Global Environment Fund (GEF) has provided $6.3 million, while the Federal Government is to contribute the counterpart funding of $12.2 million for the elimination of environmental and health risks posed by PCBs.

    Nelly, who spoke through the World Bank’s Senior Operations Officer, Mr Badrul Hague, said the environmental and health risks come from the release of PCBs from the active and decommissioned electrical equipment in Power Holding Company of Nigeria (PHCN) facilities as well as from other industries that have PCB stocks, such as dip refineries, airports and textile mills.

    “Safe disposal of wastes reduces the environmental and health risks, and this is the objective of the PCBs project. In particular, the project will strengthen and harmonise hazardous chemical and waste management system, and facilities safe disposal of hazardous wastes.”

    “Through timely intervention of the PCB project, an environmental and health risks in Nigeria could be reduced substantially by safe disposal of the existing stockpiles and development of a management system for safe disposal of future toxic wastes,” she added.

  • Bank empowers Corps member

    Fidelity Bank

    Fidelity Bank Plc has donated N850,000 to a member of the National Youth Service Corps (NYSC), Miss Omonike Akinselure, under the bank’s ‘Helping Hands’ scheme. The amount, which was given to her at an event held in Lagos, was for her to undergo reconstructive surgery on her jaw.

    General Manager, Operations, Mr Sam Obijiaku, said the move was in line with the bank’s Corporate Social Responsibility (CSR) of lending support to the needy. According to Obijiaku, “Fidelity bank strives to impact on the lives of its customers and other people around it, by putting smiles on their faces.”

    While praising the bank’s staff for their commitment to the CSR project, he said it would go a long way to impact on many lives.
    “I praise the bank’s staff for what they have come up with. It is a reflection of what Fidelity Bank represents. It is not just about business and profit making. It is about lending hands to the needy. The passion of the staff toward the lending hand project is commendable,” he said.

  • New pension guidelines to boost equities with N400b

     

    President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun

    The proposed amendments to the pension funds’ investment guidelines may see inflow of more than N400 billion into quoted equities as key stakeholders canvass higher minimum equity investment benchmark for pension fund administrators.
    Total pension asset under administration is around N2.6 trillion, according to recent checks with the National Pension Commission (Pencom). Equity investment by pension fund administrators is estimated at about 11 per cent of total assets under management.
    New amendments being pushed by the National Assembly, stockbrokers, capital market regulators, fund managers and some other interested parties seek to set a minimum equity investment benchmark of between 15 and 25 per cent for pension funds managers.
    The House of Representatives has already adopted a report calling on the PenCom to reverse the current limit for equity investment and replace it with a minimum benchmark of 25 per cent.
    Resolution 28 of the Report of the House of Representatives Ad Hoc Committee on Capital Market, which was recently adopted, recommended that: in order to deepen the equity market, that Pension Commission should reverse the policy that restricts PFAs from investing a maximum of 25 per cent of their portfolios in equities; that Pension Commission should formulate a policy that Pension Funds Administrators should invest a minimum of 25 per cent of their portfolio holdings in viable equities.
    The report of the Ad Hoc Committee has been forwarded to the Presidency upon request by President Goodluck Jonathan.
    Industry sources said PenCom was already favourably disposed to setting a minimum benchmark of about 10 per cent for equity investment, a move that will mandate many pension fund managers who had taken advantage of absence of a minimum benchmark to hold lesser interests in equities to rebalance their portfolios.
    Stockbrokers have canvassed graduated minimum investment scale that would ensure up to 25 per cent of pension funds are compulsorily invested in equities.
    President, Chartered Institute of Stockbrokers (CIS), Mr Ariyo Olushekun, said pension fund administrators should be mandated to invest minimum of up to 25 per cent in equities contrary to minimum of 10 per cent being considered by PenCom.
    He also advocated a higher maximum limit of 50 per cent, which would give flexibility to aggressive fund managers to play in the equities market without violating any rule.
    According to him, aggressively managed funds should be able to invest minimum of 25 per cent in equities while medium and short-term funds should be mandated to invest at least 15 per cent and 10 per cent respectively.
    He noted that pension funds as collective assets of the Nigerian people should be used as catalyst for the Nigerian capital market, which would in turn impact on the nation’s economic development.
    Olushekun added that Nigeria’s sovereign funds should be invested in the Nigerian capital market, noting that such funds could serve as stabilizer for the market.
    “It does not make sense for Nigeria to take funds out of its economy and invest in other economies, thus helping other economies to grow. We should invest our funds to develop our own economy,” Olushekun said.
    He outlined the need for government to implement a market-focused recovery plan that would reduce debt overhang, increase liquidity and encourage quoted companies.
    He added that government should reduce tax payable by quoted companies to encourage companies to list their shares, pointing out that taxes such as stamp duty, value added tax (VAT) and contract stamp should be removed.

  • Expert advocates livestock insurance

    The widely reported deaths of cattle has highlighted the need for livestock insurance cover for farmers, an  expert, Professor  Abiodun Adeloye   has said.
    Adeloye, who is of the Department of Animal Production, University of Ilorin, said   farmers need to think about the protection their insurance gives them.
    According to him, accidents are “standard perils”, which should be covered by farm insurance.
    Such losses, he noted, highlighted significant problems for farmers with commercial livestock, sheep and cattle. Considering how commonplace these events are, Adeloye said farmers need livestock insurance to feel better protected.
    The idea with the livestock insurance, he said is to help farmers who lose their animals to severe drought conditions as they often do, to receive monetary compensation to either allow them to restock faster, invest in other productive activities or even purchase food and other items of necessity.
    He said livestock insurance aims to help protect pastoralists against the full impact of drought-related losses. As livestock are both a principal asset and source of income for farmers, he  advised  the  government  to  provide  data on livestock mortality to allow insurance contracts to be appropriately  designed.

    According  to him, the   insurance  programme  will  focus on reducing the vulnerability farmers   face. Such programmes, he explained encourage productivity and returns from livestock-based livelihoods.

    Climate extremities,Adeloye  noted  pose the greatest risks to agricultural production,  harming  and killing  livestock.

    He said livestock insurance was of one of the ways to manage weather-related agricultural risks and that insurance products represent a promising and exciting market-based option for managing climate-related risks faced by poor and remote populations.
    Farmers ,who use  money  to purchase livestock face two risks at once: losing them due to disease and failure of investment. According  to him, they  would like to reduce the uncertainty. For  watchers, the  problems that  will  plague  suppliers of livestock  insurance  service  will be  limited availability and low reliability of data concerning livestock mortality. Thus, all investigated schemes calculated their premiums on very limited data. This leaves the insurer with a great risk of setting the premiums too low and thus endangering its financial sustainability.

  • Cornerstone, Linkage others mull merger option

    • Director, Corporate Relations, Guinness Nigeria Plc, Mr Sesan Sobowale; Managing Director, Mr Seni Adetu; Chief Economic Adviser to the President, Dr Nwanze Okidegbe, and Special Assistant to Chief Economic Adviser, Dr Ogho Okiti, during a courtesy visit by the Managing-Director to the Economic Adviser in Abuja.

    About six insurance firms are engrossed in merger talks to boost their performance, The Nation has learnt.

    Last week, the
    (NSE) said it received a proposed merger plan between Cornerstone Insurance Plc and Linkage Insurance Plc.

    Mr Wole Tokede, the spokesperson, in the weekly activity summary, said the institutions had notified The Exchange of their proposal to merge into one.
    The Exchange said the merger would result in the transfer of assets, liabilities and undertakings, including real property and intellectual property rights of Linkage Insurance Plc to Cornerstone; and the cancellation of the issued shares of Linkage.
    The Exchange said: “The application for the merger which is under consideration will however result in the transfer of all assets, liabilities and undertakings, as well as real property and intellectual property rights of Linkage Insurance Plc to Cornerstone Insurance Plc, the shareholders of the Scheme Shares of Linkage Insurance Plc so cancelled will be entitled to 30 per cent shareholding (approximately 74 percent of the current shareholding in Linkage) of Post-Merger Cornerstone Insurance Plc.
    Commissioner for Insurance Fola Daniel, who confirmed the merger plans, said several firms were fine-tuning theirs. He said the new twist by operators aligned with the National Insurance Commission (NAICOM) transformation programme.
    He noted that the commission over the years has been striving to grow companies that can compete favourably in the global sphere.
    He lauded the merger plans of Cornerstone Insurance Plc and Linkage Assurance Plc.
    Daniel said: “We want bigger companies; we want bigger players’ not faint firms.
    The merger plans between Cornerstone Insurance Plc and Linkage Assurance Plc is in line with our reforms programme.
    “There are several companies that are looking at merger, at least there are half a dozen that are doing so presently.”
    He urged policy holders and other stakeholders to look forward to a more vibrant industry that would be made up of companies with adequate strength and consumer friendliness.
    President, Chartered Insurance Institute of Nigeria (CIIN), Dr Wole Adetimehin, said the move is to build mega companies, adding that companies have realised that they cannot harness more of the opportunities in the industry with solo effort. He noted that reforms initiated by the government and NAICOM have opened up more businesses for the industry.
    “Presently, there are some silent moves where some people are planning to merge to become mega companies,” he said.
    Director-General, Nigerian Insurers Association (NIA) Sunday Thomas, said NAICOM has put in place structures to enable companies have the required capital that can underwrite the type of risk they cover, adding that some companies have begun consultations on how to raise their capital to enable them key into the opportunities provided by the Local Content Act, especially in the oil and gas insurance business.
    “The capital base may not be adequate, but I am aware that companies that want to operate within the Local Content are making efforts to shore-up their capital. Also, NAICOM is working very hard to put in place risk-based supervision. And one of the fundamentals of risk-based supervision is risk-based recapitalisation.
    “Risk-based recapitalisation measures the type of business in relation to the capital to back-up the business. Some companies may not be there now, but they would not be allowed to operate beyond their capacity.
    I think NAICOM is doing a good job in that direction. For the industry, efforts are being made to shore-up capital and of course, there have been discussions about mergers and how companies can be bigger, because companies have realised that there is beauty in being big. If they are big, they will be able to increase their capacity to retain more businesses and that will impact the economy through job creation,” he added.