The Nation Newspaper

Tag: banking

  • GTBank promotes alternative banking channels

    Guaranty Trust Bank (GTBank) has established its mobile money product as a preferred option for discerning users of alternative banking channels in the country. In a statement, the bank said its mobile money service has succeeded because of its penetration strategy and partnership with major telecoms companies.

    “The GTBank Mobile Money service is a convenient, secure and affordable way of sending money using a mobile phone. The service can be accessed by users of smart phones through the various app stores or by downloading the Mobile Money application which has been installed on the SIM card of all Etisalat subscribers irrespective of phone type,” it said.

    It said the product allows subscribers to send cash to recipients that do not have bank accounts, who then make withdrawals from any GTBank Automated Teller Machines (ATMs) nationwide. However, the recipient needs mobile phone to experience the service.

    The Managing Director of GTBank, Mr Segun Agbaje, said: “Counting on GTBank’s robust banking platform and advancement in the telecoms industry, the mobile money initiative has gone a step further in bringing banking services closer to the population – especially the unbanked who are more likely to have a mobile phone than a bank account.”

     

     

  • 200,000 agent banking jobs likely

    200,000 agent banking jobs likely

    The prayers of the unemployed may be answered in the New Year, which begins tomorrow, as the Central Bank of Nigeria (CBN) introduces agent banking. The initiative is expected to create 200,000 jobs as a way of boosting the economy. AKINOLA AJIBADE writes.

     

    THE New Year begins tomorrow, with a lot of hope for the unemployed. The Central Bank of Nigeria (CBN) is introducing tomorrowAgent Banking, a scheme which holds a lot of promise in job creation. About 200,000 jobs are expected to be created under the scheme. It is coming under the CBN’s Financial Inclusion Strategy (FIS).

    Launched in Abuja in October, the strategy comes with various concepts aimed at increasing banking penetration and growth.

    At the launch, CBN Governor Sanusi Lamido Sanusi said concepts under the strategy include mobile money and agent banking. Mobile money has since been introduced under the cash-less policy. It is now the turn of agent banking.

    Agent banking is a system whereby a postal outlet is contracted by a financial institution, or a mobile network operator, to process clients’transactions. Rather than a branch outlet, it is the owner or an employee of the retail outlet that conducts the transactions. The agent banker performs banking function. Clients can deposit, withdraw, transfer funds, pay their bills, inquire about their balances, receive government benefits, or a direct deposit from their employers at an agent banking outlet.

    It can be operated in supermarkets, petrol stations, gas stations, stores, laundry shops, post offices, cybercafes and eateries, among others. As such, people are employed to provide an array of services.

    Agent banking has helped to improve access to financial services, as well as create jobs for people in places, such as Kenya.

    In its framework, the CBN described agent banking as a catalyst for growth because it has the potential to provide jobs.

    The CBN said outlets would be created nationwide for agent banking operations. It said rural areas, perceived by the conventional banks as unprofitable, would benefit through employment creation.

    Experts lauded the idea, saying it has potential of providing jobs for the people. They said about 200,000 jobs would be created in the first two years of the scheme’s implementation. More jobs, they said, would be created, if things work according to plans. Noting that Nigeria has an estimated 50,000 villages, they said each village would have at least two or three agent banks to provide financial services for people. They said no fewer than four people are required to work in each bank, adding that the figure would increase as the system becomes acceptable.

    According to them, agent banks are equipped with a combination of Point-of-Sale (PoS) card reader, mobile phone, barcode scanner to scan bills for bill payment transactions, Personal Identification Number (PIN) pads, and sometimes personal computers that connect with the bank’s server using a personal dial-up or other data connection that may be required.

    The scheme, they said, has provided opportunities for people to work as back-office operators, system programmers, credit application, verification officers and security.

    Speaking during the second retail banking series of Enhancing Financial Innovation and Access (EFInA’s) in Lagos, the Chief Executive Officer, Top Image, Ms Jennifer Barassa, said agent banking enables delivery of financial services at affordable costs across a wide range of income segments of the society, and provide opportunities for employment generation.

    Ms. Barassa, a mobile money transfer expert, said the idea would provide opportunities for middle-income earners.

    Citing Kenya, she said the system is a tool for jobs creation because it has helped in providing employment for people in other places.

    Chief Executive Officer, Mobile Money Africa,Mr Emmanuel Okwogale, said the strategy comprises concepts that can easily create jobs and further grow the economy.

    He said: “Be it mobile money banking, microfinance banking, or agent banking system, there is no limit to their employment generation capacity. Research has shown that each concept has the ability to improve banking penetration, and generate employment opportunities. Given the size of the Nigerian population, the system is going to provide a lot of jobs for people.”

    He said mobile and agent banking systems have different structures, adding that they achieve common goals of reducing the number of the unbanked population.

    Okwogale said last year CBN implemented mobile banking frameworks by licensing 16 firms to provide the service, adding that at the moment it is developing the guidelines for the implementation of the banking system. He said more job opportunities would be created, when agent banking starts in 2013.

    Okwogale said: “Agent banking operates through different outlets, such as supermarkets, cybercafes, petrol stations, laundry shops, among others. These outlets are going to be run by people. This implies that people would be employed to work in these outlets. When you look at Nigeria from the geographical point of view, you would observe that the country is large. This shows that agent banking has a lot of prospect for the unemployed.

    “Given the right policies and implementation procedures, agent banking, among other concepts, introduced to drive the financial inclusion strategy would create jobs for Nigerians.”

    When people are equipped with the right skills, they would work in any aspect of the industry, he added.

    A financial market analyst, Mr Dayo Adeosun, advised CBN to implement the guidelines on agent banking well, arguing that many policies have become a flash in the pan in Nigeria.

    He agreed that the idea has prospect to create jobs, urging the apex bank to implement it.

     

  • Banking hall tales

    Have you been served? Or are you waiting to be served? Do you find it convenient waiting endlessly in line while the bank teller chats with colleagues, oblivious to your presence? Do you get quality face-time with the teller when it is your turn to be served? Can you recall the teller’s facial features? No. Do you know why?

    With about 20 customers waiting on her, the teller has no time to spare. She asks for your ID. She asks you to sign at the back of the cheques for verification, and bingo, she pays you. What else would you require from a teller? Give you a handshake, a hug,or take a bow? She is probably under intense pressure the moment she sees a long queue before her.

    Once she notices the long line, she instantly shifts into autopilot. That way, she becomes an auto-bot, doing things mechanically with little human touch. As such, she does not have the time or the presence of mind to relate with you properly. All she wants is a way to get you out of the banking hall as fast as possible. That is the only thing on her mind.

    So, with a scenario as this, would you say you are being served? If you think about it, your needs are not much, are they? However, are they being met? You do not know. Well, according to a global research, banks have been implored to start checking how the customers feel every day about their services. It is not a quarterly exercise. That is because banks do not grow quarterly. Banks grow daily. As such, banks should gauge their customers’ experiences daily.

    Why? Banks interact daily with loads of customers, and these customers have different needs, different ideologies, different self-esteem, and different product preferences. These moments of truth represent important opportunities for banks to assess their customer service capabilities and to ensure a proper alignment of investments with customer needs.

    These moments can allow a bank to understand how it should relate with the customer in order to meet the needs of a customer, just the way he wants to be served, not the way the bank perceived. For instance, there are several disgruntled customers in the banking hall every day. I am one of the bunch.

    However, who cares about the dissenting elements? A negative customer experience, say, unsolicited SMS alert and an unexpected charge, cannot translate into a positive experience by merely sending the same customer season greetings in December.

    Therefore, what gives? How the banks resolve customer problems is crucial. Banks must re-examine their broader service-recovery processes if they are to address the lapses that turn disgruntled customers into former ones. Some of these challenges have shut the door of banking on the faces of millions of potential bank customers. It is not about to end. Nevertheless, before we go further, let us share some banking hall tales:

     

    In the bulk room

     

    There were eight counting machines, indicating eight service points. Meanwhile, only two machines were active. The other six machines were idle. Other employees were chatting. The floor was strewn with used currency wrapper, unending length of twain, dirt, and loud music was blaring from a surround speaker.

    With the music so loud, you wondered how the men could hear each other. One man came in with a bag, obviously full of cash. He did his business. Then, it hit you. This room should not have been called bulk room. It should be called recycle room. For, what goes on here is currency recycling.

    As you handed over your cash, it was counted, wrapped, stamped, tied and stashed away. From there, the teller accepted it and used it as a payout. What would you call that? Is it currency-lifecycle or currency recycle?

     

    Friend is valuable than a customer

     

    The customer executive ignored your friendliness, and focused her attention on her old friend who sauntered into the banking hall at about that time. She did not even exchange eye contact with you. Do you matter? You were just another bank customer who was there to disturb her and deny her the pleasure of exchanging pleasantry with her course-mate from God-knows-where.

    Meanwhile she was supposed to serve you, attend to your needs and ensure you are served. However, did she care? She did not care. She had elevated friendship above business relationship. Meaning: the bond of friendship is thicker than the value a customer addsto the business. As such, the business place was turned into a chat room at the expense of the customer. That is banking made in Nigeria.

     

    Alone in the john

     

    While it is a quiet place to relax and catch your breath, it serves another purpose. You would not expect the water closet [WC] of a bank to be this awful, would you? On the other hand, is it that the cleaning girls and boys did not make their rounds that afternoon? Did that explain why the water tap was dry? Or was it the bank’s culture to keep the place that way? Since you were alone in the john, these thoughts flooded your mind. No one was around to provide an answer to your questions. It was just a thought…

     

    Where is the value chain?

     

    Your preferred bank has a plasma TV screen in the banking hall. It has water dispenser and disposable cups, too, so that you would not come to the banking hall with a mug. It has calming and welcoming ambience. It has bright lights. So what is the meaning of these? You do not know. However, whatever these aesthetics may be, they do not add value, or do they? What you need is not these “nice-to-have-feelings”.

    You need a set of activities that create and add value, so that your banking hall experience could lead to something better, bigger and broader, giving you an involvement that would transport your business from mereexistence to flourishing state. This is lacking in the delivery of banking services in Nigeria. Meanwhile, there are opportunities to increase profits by maximizing cross-sell opportunities.

    Bank customers are demanding improved access to personal advisors, not plasma TV. Bank customers do not need more bank branches. They need more courteous service delivery. Bank customer need improve access and communications, using remote channels in order to increase customer awareness. Banks say one thing in their external communications but actually deliver another. Where is the value chain?Promoter

     

    Who is bad?

     

    A bank does not have to be the first to be the best. It does not have to have orange colour to be delicious. It does not have to have access to the presidency before it provides smooth service. It does not have to be in the union before it could blend courteous customer relations with prompt delivery service. However, a bank does not need to be the last to be bad. Which bank brand is bad? Look in the mirror and answer the question. Is your bank serving you?

  • Market recovery: Firms revive fund raising plans

    Market recovery: Firms revive fund raising plans

    Many companies that had shelved earlier plans to raise new capital from the capital market due to the lingering recession have restarted discussions about prospects of accessing new equity funds from the market.

    Investment banking sources said there were indications of renewed interests in the new issue market following sustained recovery in the stock market, which has seen considerable restoration of equities’ values and investors’ confidence in recent period.

    They indicated that ongoing discussions could lead to debut of early new issues in the market around the first quarter of 2013 if the market sustained its ongoing recovery.

    Market sources said although the talks were still not definitive, the discussions pointed to imminent rebound of the new issue market.

    From a whooping N1.3 trillion in 2007, the recession that started in 2008 had withered enthusiasms for new issues, especially equities, as new issues dropped to about N86 billion in 2009. It has since declined consecutively with the few new equity issues in recent years – largely rights issues motivated by large core investors seeking to recapitalize their companies.

    Companies were however, said to be considering that the positive sentiments from the secondary market recovery would impact on new equity issues.

    Reports by boards of directors of several companies had indicated that companies were constrained by their inability to source new equity capital due to the meltdown at the capital market while recourse to high-interest bank loans depressed probable returns to shareholders.

    Reports by quoted companies highlighted the twin-problem of high cost of fund and liquidity squeeze on corporate earnings.

    Several companies had earlier indicated plans for supplementary equity issues and initial public offering (IPO) but suspended the plans due to what they described as unfavourable situation at the primary market.

    Not less than 11 companies had earlier indicated interests in raising new equity funds. These included companies such as Cement Company of Northern Nigeria (CCNN), May and Baker Nigeria, Fidson Healthcare, RT Briscoe, DN Meyer, Nigerian Aviation Handling Company (Nahco), Lafarge Wapco Cement Nigeria Plc and UACN Property Development Company (UPDC) Plc. Two prospective new listings- Promasidor Nigeria Limited and Notore Chemical Industries Limited had also mulled plans to float IPOs.

    Many banks were said to be considering proactive fund-raising plans to boost their lending capacity and forestall adverse impact from global and domestic regulatory changes.

    Many banks have subsisting shareholders’ resolutions to raise new funds through equity and debt issues.

    Most of the companies had already intimated shareholders of the necessity of accessing new funds while many have started and completed some key steps in the new issue process. Already, CCNN had secured shareholders’ approval to raise N45 billion. The company had gotten approval to raise N15 billion each through rights issue, public offer and a rights-based secured convertible debenture issue.

    This implied that the company would be seeking to raise up to N30 billion from existing shareholders while new investors and existing shareholders would contribute N15 billion. A secured convertible debenture would give opportunity to debenture holders to choose to convert their holdings to ordinary shares at a later date.

    While some of the companies plan to use net proceeds of their offers for business expansion, most of the companies would use the funds to restructure their balance sheets by reducing bank loans and providing additional working capital to support long-term growth.

    CCNN was planning to raise funds to finance expansion while Promasidor and Notore plan to use net proceeds of their IPOs to partly finance its new factory.

    Notore plans to raise more than N160 billion. The net proceeds from the IPO would be used to finance a brand new fertilizer plant, with a conservative estimated cost of $1 billion. The new fertilizer plant was part of the company’s expansion programme, which aimed to build new capacity to support the current attainable capacity of the existing plant of 750,000 metric tonnes.

  • Banking stocks gain N717billion

    banking stocks have added N717 billion in new capital gains this year, nearly half of the total capital gains by the stock market.

    Banking stocks opened this week with a market capitalisation of N2.553 trillion, an increase of 39 per cent on total sectoral value of N1.836 trillion recorded at the start of the year.

    Aggregate market value of all equities indicated total gains of N1.533 trillion at the start of trading this week as equities’ secondary values rose from 2012’s opening value of N6.533 trillion to open this week at N8.066 trillion.

    However, number of quoted banks reduced during the period from 16 to 15 following the absorption of Ecobank Nigeria Plc by its bank-holding parent company- Ecobank Transnational Incorporated (ETI) Plc.

    Capital gains analysis of banking stocks so far showed that First Bank of Nigeria (FBN) Plc has made the highest recovery in terms of value while Union Bank of Nigeria led in terms of percentage of growth. Guaranty Trust Bank (GTB) meanwhile remained the most capitalised banking stock. Access Bank made the most dramatic upshot to the top-five bracket.

    But five banks including First City Monument Bank (FCMB), Skye Bank, Stanbic IBTC Bank, Unity Bank and Wema Bank Plc are still on the negative with losses within the range of N897 million and N25 billion.

    First Bank has gained N182.74 billion to lead the banking stocks. GTB followed with a gain of N145.69 billion. Zenith Bank placed third with total capital gains of about N130 billion. Access Bank trailed with about N126 billion. Union Bank gained about N95 billion while UBA added N70.3 billion.

    Others with sustained capital gains included Diamond Bank, N19.54 billion; ETI, N15.7 billion; Fidelity Bank, N9.56 billion and Sterling Bank, which has added N5.65 billion to investors’ value.

    On the other hand, market value of Stanbic IBTC Bank showed a depreciation of N25.13 billion. FCMB followed with a loss of N13.75 billion. Shareholders in Skye Bank were down by N10.6 billion while Unity Bank and Wema Bank struggled with losses of N1.7 billion and N897 million respectively.

    In terms of percentage growth, Union Bank quadrupled its market value with an increase of 353 per cent. Access Bank followed with 146.6 per cent. UBA returned about 84 per cent while Diamond Bank and First Bank indicated 70 per cent and 63 per cent respectively.

    Most analysts still hold that banking stocks generally remain relatively below their fair values.

    Analysts said there were still possibilities that the sector could witness further gains given the comparable fundamentals and market considerations of Nigerian banks and their peers in other markets.

    However, several analysts were wary of what they described as regulatory somersaults that often lead to dramatic changes in the outlook for the banking sector.

    Managing Director, Financial Derivatives Company (FDC), Mr. Bismarck Rewane, said there were greater growth prospects for Nigerian banks compared with the developed economies and other frontier markets.

     

  • Banking sector credit drops to N13tr

    The aggregate banking system credit to the domestic economy stood at N13.09 trillion in July 31, the Central Bank of Nigeria (CBN) Economic Report has showed.
    The data depicted a decline of 1.6 per cent , on month-on-month basis, in contrast to the increase of 0.5 per cent at the end of the preceding month.

    Also, banking system’s credit to the Federal Government, on month-on-month basis, fell by 26.5 per cent to negative N1.7 trillion, compared with the decline of 13.1 per cent at the end of the preceding month. The development was attributed, largely, to the decline in banking system’s holding of Federal Government securities.

    As at December 2011, aggregate banking system’s claims on the Federal Government fell significantly by 251.5 per cent. The Federal Government, however, remained a net lender to the banking system at the end of the review month.

    The report said banking system’s credit to the private sector rose by 1.0 per cent to N14.8 trillion, compared with 1.5 per cent recorded at the end of the preceding month, but in contrast with a decline of 0.2 in the corresponding period of 2011.

    The report said the banking system’s claims on the core private sector rose by one per cent to N14.2 trillion, above the level in the preceding month, compared with the growth of 1.5 per cent at the end of the preceding month. The development reflected, largely, the 1.9 per cent rise in DMBs’ claims on the sector. Relative to the level at end to December 2011, banking system’s credit to the private sector rose by 4.7 per cent.

    At N7.8 trillion, foreign assets of the banking system rose by 3.9 per cent at end to July 2012, in contrast to the decline of 5.8 per cent at the end of the preceding month. The development was attributed to the 4.5 and 1.1 per cent increase in the CBN and banks’ holdings, respectively.

    Also relative to the level at end of December 2011, foreign assets of the banking system grew by 9.5 per cent, reflecting largely, the 15.1 per cent increase in banks’ holdings.
    At end of July 2012, quasi-money rose by 1.5 per cent, to N6.9 trillion, as against the decline of 2.6 per cent in the preceding month.

    When compared with the level in the corresponding period of 2011, it showed an increase of seven per cent. The development was attributed to the increase in savings and time deposits components.

    Other assets of the banking system, on a month-on-month basis, fell by 2.3 per cent to negative N7.5 trillion, in contrast to the 3.6 per cent increase at the end of the preceding month. The decline reflected, largely, the fall in unclassified assets of the CBN.