The Nation Newspaper

Tag: bank

  • Bank-to-bank forex deals resume

    Bank-to-bank forex deals resume

    Banks can now directly sell foreign exchange (forex) to one another, without prior Central Bank of Nigeria (CBN) approval, The Nation has learnt.

    The policy shift became exigent following the improvement in forex supply to key segments of the market, a development that has shored up market confidence.

    A top manager in one of the Tier-1 lenders, who disclosed this at the weekend, said the CBN had in the heat of the forex scarcity stopped commercial banks from selling foreign exchange to one another, unless they had its approval.

    But the regulator has in the last few weeks reversed the policy. It now allows lenders to sell foreign exchange to one another. But there is a condition:  ”In bank-to-bank forex deals, the buying bank must not resell to another lender, except to end-users”.

    The source, who spoke anonymously because she was not supposed to disclose such development to the public, said: “The CBN has lifted restrictions on banks not to sell forex to one another except it is approved by the regulator. Today, banks can sell forex to one another, but the buying bank cannot resell to another lender, except to an end-user”.

    According to the source, the CBN has since January, spent over $7.7 billion to stablise the forex market. The Investors’ & Exporters’ FX Window currently records about $80 million daily turnover, with the CBN contributing about 15 per cent of the transactions.

    The Investors & Exporters Forex Window was introduced by the CBN on April 24. About $3.83 billion has been traded through the window since inception. The window has impacted positively on the naira. The window, where buyers and sellers are free to agree an exchange rate, was introduced to attract foreign investors and boost the supply of dollars.

    Traders said $407 million was traded last week as against $354.8 million in the previous week, indicating a gradual return in investors’ confidence in the forex market.

    There has been continuous improvement in dollar inflow into the market from offshore investors, a trend that has also reflected in the volume of transactions at the equity market. Before the window came on board, the CBN was the main supplier of hard currency on the interbank forex market, after foreign investors fled naira assets in the wake of an oil price slump in 2014.

    Aside establishing the Investors’ & Exporters’ FX Window, the CBN also opened a special forex window for SMEs. The window, which allocates $20,000 per business per quarter, helps the SMEs import “eligible finished and semi-finished items” needed for their businesses. The CBN said the bank’s special intervention was necessitated by its findings that many SMEs were being crowded out of the forex space by large firms.

    “The sum of $20,000 per SME customer per quarter can be done through telegraphic transfer, subject to completion of Form ‘M’ supported with a pro forma invoice and the importer’s Bank Verification Number (BVN),” it said.

    All the processing banks are to ensure that the importers submit shipping documents not later than 60 days from the date of the transfer.

  • Bank customers enlightened on budget, taxation

    The Lead Partner, Tax and Regulatory Services, Deloitte West Africa, Yomi Olugbenro has at a forum in Lagos, educated bank customers on the impact of budget, exchange rate and  lending rates on their businesses.

    The tax expert, who spoke on the theme: ‘’The Nigeria Budget & Fiscal Focus 2017:  “Overview of budget, economic recovery & growth  plan and National Tax Policy”, explained that the N7.44 trillion 2017 budget represents an increase of 23 per cent over that of the previous year in naira terms and explained that dearth of infrastructure and other micro-economic indicators have increasingly made it challenging for businesses to thrive compared to counterparts in similar economies.

    Speaking also on taxation, the ease of doing business, interest rate, foreign exchange market, government borrowing and lending rates, he advised for business owners to seek the right information as it relates to their  businesses while ensuring a clear understanding of policies and systems within the local economy to enable ease of transactions.

    Speaking on the budget, he said: ‘‘The budget is an integral part of the economic recovery and growth plan. While there’s noticeable alignment between the federal government budget and the economic recovery & growth plan, full implementation of capital project is critical to achieving desired developments and recovery.”

    He added that the 2017 budget is a catalyst for economic recovery and is expected to stimulate the economy, build infrastructure, deliver growth and dependent on non-oil revenue and borrowing. Allocations to works, Power & Housing and Transport show serious intention to develop infrastructure 25 per cent of capital expenditure.

    The forum was organised by Standard Chartered Bank Nigeria for select clients of the bank to provide insight on aspects of the budget and its impact to businesses within the Nigerian economy.

    Explaining objectives of the forum, Head, Retail Banking, Standard Chartered Bank, Ebehijie Momoh,  said the primary objective was to add value to clients of the bank.

  • Lagos, bank recommend new book to public

    Lagos State Government and a commercial bank have recommended a new children book series, the ‘Amazing Adventures of Izi and Larry The Dinosaur’ written by Olusegun Akande, to the general public.

    At the official launch of the new children’s book series, held in Lagos, the Lagos State Deputy Governor, Dr Oluranti Adebule has commended the author, Olusegun Akande for his contribution towards children’s educational development as well as the way he is affecting lives with his knowledge, talent and service to humanity.

    The launch of the new book series titled the ‘Amazing Adventures of Izi and Larry The Dinosaur’ published by Quramo Publishing under its Mango Books imprint took place at the Quintessence, Parkview Estate, Ikoyi.

    The Deputy Governor who was represented by a Director General at the office of Quality Assurance, Ministry of Education, Mrs Ronke Soyombo in her recommendation to parents and general public, said “the book will serve as a good resource for children, parents, guardians, professionals, teachers, principals, students, Librarians and school authorities”. She further encouraged parents and guardians to get copies for their children.

    The author, Olusegun Akande said “the Amazing Adventures of Izi and Larry The Dinosaur tells the story of two very good friends, eight-year-old Izi and magical, flying dinosaur, Larry – who lives in a zoo. Together, they go on wonderful adventures in which Larry teaches Izi about different ethnic groups and cultures; they see the world as a kaleidoscope of many customs and practices held together by tolerance, kindness, and understanding. This unique series comes in a box set of five intriguing stories”.

    Also speaking at the book launch, the Chief Executive of Standard Chartered Bank, Mrs. Bola Adesola said “this is an encouragement to children and a welcome development, because many Nigerian children are being taken abroad at early stages without the knowledge about their country”. Mrs. Adesola said further “schools no longer teach history, but books like these help to teach Nigerian culture, as it is easy to read , fun to understand, and helps children to connect with their culture.

    Segun has done a fantastic job in coming up with this master piece of a book and he should put it on social media such as Amazon, I-books so that children can enjoy the graphics therein”.

  • Court adjourns ex-worker’s suit against bank

    The National Industrial Court of Nigeria (NICN) in Lagos has adjourned till June 28 for adoption of addresses in a suit by a former banker, Mrs Pauline Nsa.

    She is seeking N13.885million as outstanding terminal benefits from her former employer.

    Justice Kenneth Amadi adjourned after Nsa was led in evidence by her lawyer Nnabuike Edechime and was cross-examined by the respondents’ counsel, Mr Ben Anachebe (SAN).

    Anachebe said his clients will file a civil no-case submission rather than calling a witness.

    Among documents tendered by the plaintiff include her offer of employment letter, confirmation of appointment, letter of secondment, compensation package, transfer of service, review of compensation package, request for redeployment, letter complaining about short payment, letter of demand, the bank’s response, among others.

    The claimant said First Bank of Nigeria Ltd employed her as an Assistant General Manager on an initial salary of N12.7million per annum with effect from March 10, 2008 after leaving UBA as a Principal Manager.

    According to her, she was seconded to a subsidiary company, FBN Microfinance Bank Ltd, as the pioneer Managing Director/Chief Executive Officer with effect from September 10, 2007, with a reviewed compensation package of N26.7million per annum.

    Nsa said following a restructuring, her services were transferred to FBN Holdings Plc, which later divested from FBN Microfinance Bank, following its acquisition by Letshego Holdings of Botswana.

    The claimant said before the divestment, she took the company from an initial capital of N1billion in 2009 to N3.8billion when it was sold, adding that she returned to FBN Holdings and requested for redeployment.

    “The first defendant (FBN Holdings) failed to redeploy me as requested but rather advised me to apply for voluntary early retirement so that I could be paid all my entitlements.

    “Consequent upon the inducement of the first defendant, I had no choice than to apply for voluntary early retirement. The first defendant thereafter paid me N20,468,807.33.

    “I contend that I was short paid by the sum of N13,885,726.32 which is still outstanding and unpaid by the first defendant,” the claimant said.

    Nsa said based on the defendants’ employee handbook, she was supposed to retire at 60 or after 35 years of service, but was “compelled” to retire at 56.

    She is, therefore, claiming N139,014,632, which she said is the remuneration for the four years she would have worked before retirement, and N10million as general damages for “cutting short her banking career, subjecting her to severe embarrassment and indignities, and for emotional trauma”.

    Under cross examination by defence counsel, Nsa said she retired as a staff of FBN Holdings.

    Anachebe asked her: “The N35million severance package paid to you, was it paid to you as Managing Director of FBN Microfinance Bank or as Assistant General Manager of FBN Holdings?”

    Nsa said: “It was directors’ severance allowance paid to all directors of FBN Microfinance Bank. I received it as a director.”

    The SAN asked: “Having received benefits from FBN Microfinance, do you admit that you were a staff of FBN Microfinance Bank during the period of your secondment?”

    Nsa responded: “I’ve never been a staff of FBN Microfinance Bank.”

    Anechebe further asked: “Do you have a handbook saying that you are entitled to payment of salaries for the unexhausted year?” Nsa said: “I don’t have any such handbook.”

    When the SAN suggested to the plaintiff that her retirement was “voluntary”, Nsa said: “I was compelled to retire,” adding that she wrote two letters to FBN Holdings seeking to return after it divested from the Microfinance Bank.

    The defendants claim Nsa was paid all her entitlements and urged the court to dismiss the suit.

     

  • Furore over new bank charges

    Furore over new bank charges

    There are mixed feelings over the new bank charges on cash deposits and withdrawals by the apex bank with many lauding the policy regime as appropriate and others arguing that it may further discourage financial inclusion. Bukola Aroloye in this report examines the pros and cons

    Bank customers who are used to hauling cash around had better have a rethink as they are bound to pay so much to enjoy that luxury.

    That’s exactly the import of the directive issued to banks by the Central Bank of Nigeria (CBN) last February, whose implementation began effectively on April 1,2017, precisely over three weeks ago.

    Memo announcing the new mandate

    TThe CBN had on February 23rd, 2017, announced the reintroduction of charges on cash deposits and withdrawals in banks, which would take effect at different dates in different parts of the country.

    In a circular announcing the charges, Mr. Dipo Fatokun, Director, Banking and Payment System Department, CBN said: “Charges for cash deposit by individuals are as follows: Less than N500,000, zero charge; from N500,000 to N1 million, 1.5 per cent; from N1 million to N5 million, two per cent charge; above N5million, 3 per cent charge.

    “Charges for cash withdrawal by individuals are as follows: Less than N500,000, zero charge; From N500,000 to N1 million, two per cent; from N1 million to N5 million, 3 per cent charge; above N5 million, 7.5 per cent charge.

    “Charges for corporate cash deposit are as follow: Less than N3 million, zero charge; from N3 million to N10 million, two per cent; from N10 million to N40 million, three per cent; above N40 million, five per cent.

    “Charges for corporate cash withdrawal are as follows: Less than N3 million, zero charge; from N3 million to N10 million, five per cent; from N10 million to N40 million, 7.5 per cent; above N40 million, 10 per cent.

    “The new charges would take effect from April 1 2017, in the existing cashless states (Lagos, Ogun, Kano, Abia, Anambra, Rivers and the FCT).

    “The policy shall be implemented with the charges taking effect on May 1, 2017 in the following states: Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau. “The policy shall be implemented with the charges taking effect on August 1, 2017 in the following states: Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa Ibom, Ebonyi, Taraba and Nasarawa.

    “The policy shall be implemented with the charges taking effect on October 1, 2017 in the following states: Borno, Benue, Ekiti, Cross River, Kebbi, Kogi, Kwara, Yobe, Sokoto and Zamfara.

    According to the CBN, income generated from the processing fees charges above the allowable cash transaction limits shall be shared between the apex bank and “the banks in the ratio of 40:60.”

    The CBN has always argued that the cash policy was introduced for a number of key reasons, including: To drive development and modernisation of the country’s payment system in line with its vision 2020 goal of being amongst the top 20 economies by the year 2020.

    The latest announcement comes despite the directive for immediate stoppage of all charges on deposits by the CBN Governor, Mr. Godwin Emefiele, in June, 2014.

    Review of cashless policy

    The cashless policy was introduced by the CBN in 2012 to reduce the amount of cash circulating in the economy, and encourage more electronic-based transactions.

    Features of the policy include N500, 000 cash deposit and withdrawal limit  for individual bank customers, with three per cent charge on transactions above the limit; N3million deposit and withdrawal limit for corporate bank customers, with five per cent for cash transactions above the limit.

    Resounding support for policy

    Speaking with a cross-section of economic and financial experts who understand the workings of the policy they argued that the initiative was ideal for the nation, especially considering the propensity of some unscrupulous individuals to abuse the system.

    In the view of Johnson Chukwu, Managing Director /CEO, Cowry Asset Management Limited, “The imposition of penalties on cash withdrawals and deposits above N500,000.00 are meant to discourage people for continuing to transact their businesses with cash.”

    Giving further insight, he said: “The discrimination in the penal charge where deposits above N500,000.00 attract only 1.5% charge while withdrawals of amounts exceeding N500,000.00 is penalised by a charge of 7.5% must have be designed with the intention not to deter completely depositing of such funds so that they are not left outside the banking industry.”

    Expatiating, he said: “I believe that without either sanctions or incentives it will be difficult to persuade Nigerians to change their habit of transactions businesses with cash hence the imposition of penalties on cash withdrawals and deposits. Nevertheless, I will also suggest that the approach to encouraging the adoption of the cashless policy should include incentives (carrots) and not just sanctions (sticks). That way, the Central Bank will be able to attract more willing adopters of the policy.”

    The imposition of penalties on withdrawals and deposits, he further reiterated, will certainly compel people to start using alternative means of payment such as cheques, POS terminals, on-lines, etc.

    All these alternatives, he maintained, are part of the cashless policy initiatives of the CBN.

    To him, “Any policy that compels people to use banking facilities such as the penalties imposed on cash withdrawals and deposits is certainly to the advantage of financial inclusion as it will encourage more people to open and operate bank accounts. Secondly, the policy will help to improve the effectiveness of monetary policies as it will reduce the amount of cash outside the banking system.”

    Echoing similar sentiments, Sola Oni, Managing Director. Sofunix Investment and Communications Limited, said: “The question of justification of the charges rolled out as penalties for exceeding cash withdrawal limit by the Central Bank of Nigeria (CBN) is relative. If the charges are lower, they still constitute penalties. The philosophy is to discourage mass cash transaction and leverage on the use of credit or electronic card.”

    The policy, he stressed, will encourage the use of digital transfer of money and thereby boost cashless model of transaction nationwide.

    He was however quick to admit that: “Against the backdrop that many Nigerians are not computer literate, it may pose a threat to financial inclusion as digital money transfer and its allied methods require a fair knowledge of computer.

    In the short run, it may discourage financial inclusion but in the long run it would enhance it.”

    Waxing philosophical, Oni said: “There is no policy that can favour everyone. The key issue is the benefits to the overall economy.”

    While making allusion to the early days of the introduction of mobile phone, he said: “Today, many people that are not used to mobile phone by virtue of lack of education are now embracing it as a means of communication. Cashless economy reduces crime, it is faster and quite convenient. But It also has its drawbacks such as  identity theft among others.”

    Welter of criticism against the policy

    Not a few people are convinced that the new policy regime by the CBN is a well thought out initiative.

    One of those who have expressed serious misgivings against the policy is the president of the National Association of Nigerian Traders, Barrister Ken Ukaoha.

    Raising some posers, he queried: “What has changed between the last time the CBN suspended this move and now.”

    Ukaoha pointed out that banks traditionally charge commissions on transactions (COTs) on lodgments into and withdrawals from current accounts.

    Nigerian banks, he said, have with CBN’s tacit approval, been imposing on their customers similar COTs for withdrawals from savings accounts, “cash handling charges” for withdrawals of N1m and above, and other inexplicable and unjust charges.

    “So, what ‘cost of cash management’ does the CBN refer to?” he asked.

    He said the CBN’s drive to make the Nigerian economy cashless must be considered within the prism  of what foundations exist in Nigeria.

    “What is the level of literacy and acquaintance with information communication technology (ICT) among Nigerians? How many Nigerians can use electronic banking services? How many Igbo traders, Fulani herdsmen, market women, farmers, etc are knowledgeable in ICT?”

    Mrs. Uju Ogubunka, a financial and management consultant is also on the same page with Ukuoha.

    She faulted the CBN for approving the new charges for deposit money banks, saying they were not set up to impose such charges on their customers.

    “Some of us feel strongly that it is not right for banks to charge their customers,” Mrs. Ogubunka, who is also the President, Bank Customers Association of Nigeria, BCAN, said.

    She added that it is wrong to charge bank customers on deposits or withdrawals, especially with CBN drive to achieve financial inclusion.

    The BCAN boss, who is a former Registrar, Chartered Institute of Bankers of Nigeria, CIBN, said charging customers for deposits or withdrawals would actually encourage more customers not to embrace the banking culture.

    “With multiple charges, bank customers would prefer to withdraw their money and keep at home for other activities,” she said.

    Ade Olumide,  a businessman in Lagos said the timing of the policy was wrong considering the economic situation in the country.

    “The new policy is uncalled for with the present economy of the country. We are doing the right thing at the wrong time. I am a businessman and my type of business is SME and we borrow huge money from banks to carry out our  activities, this policy will have adverse effect on us,” Olumide lamented.

    Also speaking on the development, Mrs Ebere Oluchi said it would discourage customers from seeking bank facilities.

    “Personally, I believe those charges are not right, especially when CBN is talking about financial inclusion and financial literacy.

    “The importance of finance inclusion is to bring more customers into the saving culture; with reintroduction of charges, it might discourage depositors and those seeking other banking facilities,” she said.

    “It will be easy to control illicit funds that go to kidnappers, especially. To me, it is a good development,” she said.

    Amodu Adeyemi in Ikorodu said the policy was a welcome development, adding that it would reduce movement of cash.

    “It will help to check unnecessary withdrawals, people will only withdraw money when it is necessary.”

    Mrs Yemi Adenuga ex banker the reintroduction of cashless charges, which commenced April 1, 2017, in Lagos and six states including the Federal Capital Territory (FCT) is coming too early in the life of the policy.

    “The time frame to adjust to the change is too short. Awareness should be made highlighting the benefits of the policy,”she said.

    CBN makes volte face on policy

    In a related development, the CBN at the weekend suspended its earlier directive on the implementation of cashless policy.

    In a circular released by the apex bank, it instructed banks to revert to old charges and refund customers who had been debited.

    The circular signed by Dipo Fatokun, director, banking and payments system department, CBN said the existing policy before the announcement of the new policy shall remain in place in Lagos, Ogun, Kano, Abia, Anambra, Rivers and Abuja.

    “You will recall that a directive was issued on the nationwide implementation of the cashless policy vide our circulars with reference numbers BPS/DIR/GEN/CIR/04/001 dated February 21 and BPS/DIR/GEN/CIR/04/002 dated March 16,” the circular read.

    “Please note that the new withdrawal and deposit processing fee charges above the threshold, as contained in the circulars referenced above, are hereby suspended until further notice. The position of the policy shall now revert to the status quo ante.”

    “The new policy already applied effective April 1, 2017 as contained in the circulars in reference above should be reversed and the old charges be applied. All necessary refunds should be made accordingly.”

  • Bayelsa firm battles bank over alleged missing N151m

    A firm, Godsidi Investment Limited, owned by a popular politician in Bayelsa State, Mr. Godwin Sidi is engaged in a legal warfare with the Access Bank Plc over an allegation that N151million disappeared from its account.

    The matter is before Justice Young Ogola of the state High Court. The court has already started hearing the case. It has fixed March 13 for further hearing. The firm is determined to prove that the bank inherited the money as part of its liability when it acquired the defunct Intercontinental Bank Plc in 2012.

    In a writ of summon, the firm said it became suspicious when Access Bank  denied it access to the account. It said the bank stopped it from withdrawing the money. The company argued that the bank’s explanations for non-withdrawal was untenable.

    It said: “The explanation tendered on the reasons for non-withdrawal from the account was not convincing and the demand for a statement of account was turned down. The claimant demanded for a statement of account through the Festus Keyamo Chambers.

    “On 5th Febuary, 2010, the bank came up? with a doctored statement of account showing irregularities and unrealistic transaction claims.

    “The claimant consequently reported the matter to the Consumer Protection Council (CPC), which reffered the matter to the Economic and Financial Crimes Commission (EFCC) which in turn responded by arresting agents of the defendant, who were later released on bail.

    “Since then the defendant has done nothing to restore the claimants money in his account despite several demands.? The claimant’s complain of fraudulent manipulation of its account, dated February, 2010 is hereby pleaded.

    The firm asked the court to issue an order directing the defendant to restore claimant’s initial lodgement and balance of the sum of N151million?.

    It also asked the court for an order granting the sum of N3billion only to the claimant as damages for unlawful detention of its money from 2009 till date.

    But Access Bank is also determine to floor the firm, owned by a chieftain of the All Progressives Congress (APC). In the bank’s statement of defence?, it described the allegations and claims by the firm as false and baseless.

    It said it was  a surreptitious attempt by the company to reopen the matter against Intercontinental Bank already investigated by the Central Bank of Nigeria (CBN), the Consumer Protection Council and the EFCC.

    The bank said the firm failed to substantiate its claims when the relevant government agencies investigated the matter.

    It said: “All the investigations conducted revealed that the account of the claimant was credited with various sums of money by claimant’s account officer at the time without any document to support the lodgement.

    “The defendant was not in any position to have restored the money allegedly belonging to the the claimant as the claimant never had any such money in the possession of Intercontinental Bank Plc”,

    The bank said prior to the acquisition of Intercontinental Bank, there was no report, findings or memo indicting the defunct bank by the CBN, CPC and EFCC in respect of the claims.

    It asked the court to dismiss the claims in its entirety with substantial costs because of its frivolity. The court will further head the matter on March 13.

  • Union Bank wins most efficient Bank in e-reference operations award

    Union Bank wins most efficient Bank in e-reference operations award

    Union Bank has been awarded the most effective bank in e-reference operations. This was announced at the recently concluded 2017 CBN/NIBSS Electronic Payment Incentive Scheme Awards, organised by the Central Bank of Nigeria and the Nigeria Inter-bank Settlement System.

    The e-reference operations refer to one of the activities carried out in Central Processing Centre (CPC) under the Account Opening/Documentation Unit. Contested by all the banks in Nigeria, Union Bank, Fidelity Bank, and First City Monument Bank (FCMB) were shortlisted, with Union Bank recognised as the most efficient bank in ensuring reference requests are processed within minutes of receipt on the platform, a measure which is considered commendable compared with the turnaround time of other banks in the industry.

    Coming off a successful transformation initiative, the new award is the latest in a string of accolades for Union Bank, as it was recently recognised the “Most Improved Retail Bank” at the BusinessDay Banking Awards, the CBN award as the ‘Best bank in Agricultural Credit Guarantee Scheme Fund in Nigeria’.

    The lender also won two international awards for ‘Best Brand Development to Reflect Changed Mission/Vision/Positioning’ and the ‘Best Visual Identity from the Financial Services Sector’.

    Speaking after the announcement, the Head of Operations and Technology, Union Bank, Lucky Jayaratne, shared the bank’s commitment to improving customers’ lifestyles by massively investing in providing a safer, simpler and smarter way of banking.

    “The improvement in our banking operations is clearly evidenced by the growth in the daily transactions on our online banking channels. Union Bank also has the fastest-growing online banking platforms in Nigeria, so we are very delighted to receive this award. We promise to continue building on our achievements and to ensure that our customers enjoy a simpler and smarter banking system,” he said.

  • Zenith declares N129.65bn profit after tax in 2016

    Zenith declares N129.65bn profit after tax in 2016

    Zenith International Bank Plc has declared a profit after tax of N129.65 billion and a final dividend of N1.77 per share for the financial year ended December. 31, 2016.

    This is contained in the company’s audited result report released by the Nigerian Stock Exchange (NSE) on Monday in Lagos.

    The News Agency of Nigeria  (NAN) reports that this was in contrast with N105.66 billion posted in the preceding period of 2015.

    The profit represented an increase of 22.7 per cent when compared with figures for 2015.

    Its profit before tax stood at N156.75 against the N125.63 billion declared in 2015.

    The bank’s gross earnings grew by 17.4 per cent to N507. 99 billion compared with N432.54 billion recorded in 2015.

    Its non-interest income increased by 45.9 per cent to N25.59 billion due to an 809 per cent  increase in foreign exchange revaluation gains of N25.6 billion, this however, declined by 10 per cent  from the N8.2 billion reported in nine months of 2016.

    The impairment loss on financial assets rose significantly by 106.4 per cent to N32.35 billion in 2016 and 34.6 per cent  based on quarter-on-quarter to N10.2 billion in the fourth quarter of 2016.

    NAN reports that the board of directors proposed a final dividend of N1.77 per share to all its investors against a final dividend of N1.55 per share paid in 2015.

    The bank had earlier in 2016 paid a sum of 25k as interim dividend, bringing the total dividend in 2016 to N2.02 per share against N1.80 per share declared in 2015.

    NAN  also reports that Zenith Bank is the first bank to declare its 2016 audited result. (NAN)

  • Bank directors owe N740b, says NDIC chief

    Bank directors owe N740b, says NDIC chief

    Bank directors owe commercial banks N740 billion, representing 40 per cent of N18.3 trillion non-performing loans in the banking industry, NDIC Managing Director/Chief Executive Umaru Ibrahim has said.

    He said the debt constituted insider/directors related loans and was far above regulatory threshold of five per cent for commercial banks.

    The NDIC boss raised alarm over what it called rising tide of Non Performing Loans in Nigeria’s banking industry. He spoke when members of the House of Representatives Committee on Insurance and Actuarial Matters visited the Corporation as part of its oversight function in Abuja.

    The NDIC boss stressed that “while the banking industry indicated strong fundamentals in regulatory assessment and rating, regulators were concerned about the rising tide of non performing loans (NPLs) in the banking system.

    He informed the legislators that as at December 2016, the 25 Deposit Money Banks (DMBs) had total loans portfolio of N18.53 trillion out of which N1.85 trillion or 10 per cent were NPLs.

    In other banking subsectors like the microfinance banks, (MFBs), Ibrahim noted that “there were 978 MFBs in existence as at December, 2016 with total deposits liabilities of N158 billion and total loans and advances amounting to N195 billion out of which N87.75 billion or 45 per cent were NPLs where N68.25 billion or 35 per cent constituted Insider related/Directors loans.”

    The NPLs he said “indicated a classic case of over-lending, accumulated interests charges and poor corporate governance.”

    By extension, the existing 42 primary mortgage banks (PMBs) Ibrahim said “had total deposits liabilities of N69 billion but with total loans portfolio of N94 billion, which indicated another case of over-lending, accumulated interests, poor corporate governance and high ratio of NPLs which stood at N51.7 billion or 55 per cent out of which N42.3 billion or 45 per cent were Insider related/Directors loans.”

    The resultant effects of this negative trend the NDIC boss warned “would be poor earnings and erosion of shareholders fund.

    The NDIC boss observed that this development had posed serious issues bordering on corporate governance which were capable of eroding public confidence in the banking system.

    He advocated for strict compliance with the existing code of ethics for bank directors and a review of the existing laws and regulations to proffer stiffer sanctions for Directors who exploit their positions and default in the payment of their credit facilities while still occupying directorship positions in the banks.

    He called the attention of the legislators to the delay in the approval of 2016 budget which he said “contributed to the modest execution of the budget.

    He restated the Corporations commitment to performance based budgeting system (PBBS) the essence of which is to ensure efficient allocation of resources to enable the Corporation achieve its strategic mandate.