The Nation Newspaper

Tag: Banks

  • Banks seek N10,000 withdrawal limit

    Banks seek N10,000 withdrawal limit

    •Deposit declines by N1.029tr

    A proposal to limit the over the counter cash withdrawal by bank customers to N10,000 has been tabled before the Central Bank of Nigeria (CBN).

    The Sub-committee on Payments Systems and Infrastructure of the Bankers Committee last week sent the proposal to the CBN.

    The proposal was presented at the committee’s meeting but it is not clear whether it was considered.

    The CBN is expected to “give feedback on the request”.

    Deposits taken by banks declined by N1.029 trillion between April 2015 and April 2016, a Central Bank of Nigeria (CBN) report has said.

    Besides, more customers are finding their loans difficult to service, the report said.

    A report presented by CBN Deputy Governor (Economic Policy) Dr. Sarah Alade to last week’s Bankers’ Committee meeting in Abuja attributed the reduction in deposits to the Treasury Single Account (TSA).

    She said the poor loan servicing resulted in the increase of non- performing loans (NPLs) to a ratio of 10.1 per cent over and above the CBN prudential limit of five per cent as at end April.

    The CBN Deputy Governor also told members of the Committee that total deposits in the banks declined by N1.029 trillion from April 2015 to April 2016. According to her, ”the decrease in deposits were largely due to the introduction of the Treasury Single Account in the system.”

    According to Dr. Alade, “the sudden rise in NPLs was attributed to the outcome of the risk assets examination of Deposit Money Banks (DMBs) conducted in December 2015 and the sustained low price of crude oil, supply constraints at the FOREX market as well as other macroeconomic conditions impacted negatively on the quality of bank loans.”

    Her report to the Committee noted that the development had led to a decline in banks’ total assets; the volume of credits granted by them and even the degree of deposits generated by them, which in turn ultimately led to a decline in banks earnings as well as income from interest and non-interest investments.

    The TSA policy, which directed all Ministries Department and Agencies to move government funds to the CBN began in September, last year.

    Dr Alade had reported that “audited profit before tax for the period ended April 2016 decreased by 10.8 per cent or N24 billion from N222 billion for the period ended April 2015 to N198 billion in the period ended April 2016”.  “Also, the ROA and ROE were 2.17 per cent and 16.17 per cent in February 2016 compared with 2.42 per cent and 19.39 per cent in the corresponding period of 2015.”

    She added: “The decline was driven by a decrease in both interest and non interest income, which declined by 6 per cent or N50 billion and N54 per cent or N259 billion respectively. Industry total assets ( April’15) – N27.588 trillion,  ( April ’16)- N27.434 trillion, showing a decrease of N158 billion or 0.6per cent. Gross Credit (April 0.3 per cent  ’15) – N13.403 trillion; ( April ’16) – N13.362 trillion , showing a decrease of N41 billion or 0.3 per cent; Total deposits ( April ’15) – N18. 544 trillion, ( April’ 16)- N17.516 trillion  showing a decrease of N1.029 trillion or 5.5 per cent , decreases were due largely to TSA”

    Alade also reported that the economic downturn has impacted negatively on the foreign reserves management. The foreign reserve declined by more than $5 billion from $31.20 billion in July 2015 to $26.05 billion on May 19.

    On a bright note, however, the CBN Deputy Governor reported that the banks’ Capital Adequacy and Liquidity Ratios remained strong and far above prudential limits.

    According to her, “the Capital Adequacy Ratio (CAR) of the banking industry, which was still above the prudential minimum of 10 per cent and 15 per cent for banks with national and international authorisation respectively as at April 2016 stood at 16.5 per cent compared with 17.0 per cent as at April 2015. The CAR deteriorated between April 2015 and April 2016 due to decline in the total qualifying capital (caused by regulatory deductions, retirement of Tier 2 Capital, impairment etc) and increase in the total risk weighted assets.

    Dr. Alade added that “the trend of industry liquidity ratio shows that the industry operated far above the minimum requirement of 30 per cent”.  “As at April 2016, the industry liquidity ration stood at 46.3 per cent compared with 39.78 per cent as at April 2015.” The report reassured of the soundness of the banks.

    The Sub-committee of the Bankers’ Committee on Payments Systems and Infrastructure has also recommended to the Central Bank of Nigeria (CBN) for approval to limit across the counter withdrawals to N10,000. The CBN is expected to “give feedback on the request”.

    Also at the meeting, the CBN reported to the Committee “on the outcome of its meeting with the Nigerian Communications Commission (NCC) to address issues around reallocation of dormant phone numbers to other users”.

  • NECA faults Ngige over sanction on banks

    NECA faults Ngige over sanction on banks

    The Nigeria Employers’ Consultative Association (NECA) has faulted the Minister of Labour and Employment, Dr Chris Ngige over his threat to sanction banks that lay down its workers with licence withdrawal.

    Its Director-General, Mr Segun Oshinowo accused the minister of appropriating to himself the power which the state has not conferred on him.

    “His comment on withdrawal of licences at a global forum is an embarrassment to Nigeria. It is a comment that is unministerial and it has simply painted a very ugly picture of governance and government in Nigeria.

    “The Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) regulate the   banks   and  telecommunications  sector  respectively and   they   are   the   only   institutions   that   could determine who gets a licence and who should be denied. This, indeed, is a serious and a big decision-issue, consideration of which goes beyond labour administration,” he said.

    He advised the minister to focus on the bigger issue of working with his colleagues in the cabinet to reposition the economy so that the nation can return to growth and provide jobs for the youths roaming the streets.

     

  • Banks drive SMEs’ funding, entrepreneurship

    Banks drive SMEs’ funding, entrepreneurship

    Capital is the single most important factor needed to drive sustainable growth of Small and Medium Enterprises (SMEs). Such funds are needed for the government’s plans to create wealth through entrepreneurship development. Skye Bank, FirstBank, Fidelity Bank, Diamond Bank and Sterling Bank, among others, have so far identified with the Central Bank of Nigeria’s (CBN’s) drives for SMEs sector funding and development, writes COLLINS NWEZE.

    The economies of great nations thrive on the strength and capabilities of their Small and Medium Enterprises (SMEs). Banks play a big role in this as the level of funding the operators get from commercial banks determines to large extent, their success.

    Development patterns across the globe show the primacy and pre-eminence of the SMEs in resource mobilisation, deployment of resources for growth and development, and the emergence of an industrial economy. In Asia, Europe and North America, SMEs  play significant roles in the growth, development and industrialisation of such economies.

    However, Nigeria remains an exception as SMEs have largely performed below expectation as a result of a plethora of factors including lack of access to funds, managerial skills, poor accounting practice, among others. Also in the list of limiting factors to SMEs development in the country are poor infrastructure, policy somersault, multiple taxes, environmental factors, and marketing problems, among others.

    However, some far thinking banks have recognised the need to boost SMEs financing, giving priorities to projects and businesses that support the continued operation of small businesses.

    One of the Nigerian banks that has deployed its resources to the nurturing and development of the SME sector is the Skye Bank Plc. The lender has carved a niche for itself in the SMEs segment of the economy, helping budding Nigerian businessmen to realise their aspirations of wealth creation, and employment generation for the teeming unemployed people in the country.

    The Group Managing Director/CEO, Skye Bank Plc, Timothy Oguntayo, said his bank has not only provided the enabling environment for SMEs to thrive, but has been in the fore front of extending credit to the operators as well as real sector businesses.

    The bank chief said the lender has been involved in the process of optimising value and benefits from the agricultural value chain by extending credit facilities to operators in the agro allied industry, ranging from cocoa processing, flour production, and animal husbandry, among others.

    These projects, he said, are located in the six geo-political zones of the country. Some of these companies do not only produce for local consumption but also export to the rest of the world thereby earning foreign exchange.

    “The bank’s foot prints are also visible in the healthcare sector where several pharmaceutical companies have either been revamped through credit lines or assisted to expand their production capacity and improve their operational and logistic resources. The bank has also assisted many pharmaceutical firms to achieve certification by the World Health Organisation thereby placing some Nigerian drug makers among world-class drug companies that can bid for drug supplies globally,” the lender said in a statement.

    For instance, drug makers such as Evans, Chi and May & Baker are the latest companies to secure World Health Organisation (WHO) Good Manufacturing Practice certification, after SwissPharma, which received its certification earlier this year.

    The certification means products from the four drug makers—now adjudged to be world-class—became eligible to be assessed and granted WHO pre-qualification. Pre-qualification is a step toward enabling Nigeria’s local drug companies compete for drug supplies on an international scale.

     

    Consumer goods funding

    Skye Bank said it provided part-financing of one of the largest integrated plants in Sub-Saharan Africa for the production of flour, pasta, noodles and feed meal. The bank is the major financier in the development of one of the biggest confectionery companies in the West African sub region which produces one of the best cream crackers. The company is currently installing its fifth production line and discussions are on–going with the equipment manufacturers for the sixth line. The new line has increased the customer’s capacity to produce 30,250 metric tonnes annually.

    Such significant project financing by the bank, analysts said, will enable the consumer goods firm expand operations and increase market share while at the same time aiding it  to tap into the Nigeria’s large population and rising middle class that crave for consumption.

    According to a recent report by McKinsey and co., a global consumer and retail firm, annual sales in Nigeria’s consumer goods sector could more than triple to $1.4 trillion by 2030 from $388 billion currently.

    Other funding interventions of the bank are in the steel, fertiliser and power sectors where it has provided credit lines under syndicated loan arrangement.

    Skye bank alongside six other lenders participated in the funding of the acquisition and rehabilitation of the 500,000 MT Urea Plant in an asset purchase transaction.

    Since the transaction was consummated, it has continued to support the Onne based plant to ensure it remains the biggest producer of fertiliser in Nigeria and the West coast.

    The bank is also a development partner to many other SME firms across the length and breadth of the country, supporting their growth aspirations and taking them from infancy to the level where they are currently big players in the Nigerian economy.

    The potentials and opportunities for SMEs in Nigeria to rebound and play the crucial role of engine of growth, development and industrialisation, wealth creation, poverty reduction and employment creation are enormous. To achieve these lofty objectives, however, requires pragmatic steps towards solving the problems enunciated above.

     

    Banks, other stakeholders speak

    Managing Director/CEO, M&E Limited, Michael Stephens-Obi, said that while SME operators need to change their attitude and habits relating to entrepreneurship development, the local, state and Federal governments need to involve them in policy formulation and execution for maximum impact.

    He said there is also the dire need to introduce entrepreneurial studies in the universities in addition to emphasising science, practical and technological studies at all levels of our educational system.

    “Through financial intermediation, banks play a crucial role in mobilising deposit from surplus zones to areas of deficit, thereby creating jobs, reducing poverty and bringing about economic growth and development in the country,” he said.

    “Many industry experts and economists say that for any developing country to grow and develop economically, greater attention and emphasis must be paid to the SME sector. The SME sector is a viable and crucial channel of utilising locally available resources to produce for local consumption and export trade”.

    Stephens-Obi said small and medium enterprises in the agricultural sector constitute growth drivers and strong guarantees for sustainable food production, enhanced employment generation and for combating food shortage in developing countries.

    Head, SME Banking, Stanbic IBTC Bank, Obinna Ukachukwu, said without capital, it would be difficult for any business to attract finance or investment.

    He defined capital as the value of and the history behind a business. According to him, if a promoter of a business does not know the value of the business, it is very unlikely that any investor or financier will be comfortable committing their money because the equity or debt investor is bringing in money in exchange for value.

    “If you don’t know the value of your business then you do not expect a debt investor to put in his money,” Ukachukwu said.

    He, however, assured that Stanbic IBTC Bank continues to work with operators in the SME sector, particularly through capacity building and information sharing, to ensure they build capital. He explained that the value of a business can be determined if the proper structures, such as proper book keeping, annual reports, tax returns, auditor’s report, and record of banking transactions, which form the history of the business, have been put in place.

     

    The CBN on SMEs funding

    The Central Bank of Nigeria (CBN) set up the N220 billion Micro Small and Medium Enterprises fund as part of its developmental role and mandate of promoting a sound financial system. This was in recognition of the significant contributions of the Micro, Small and Medium Enterprises (MSME) sub-sector to the economy. It said the sub-sector is characterised by huge financing gap which hinders the development of MSMEs.

    “To fulfill the provisions of Section 4.2 (iv) of the policy, which stipulates that women’s access to financial services to increase by at least 15 per cent annually to eliminate gender disparity, 60 per cent of the Fund has been earmarked for providing financial services to women,” it said.

    “This informed the decision of the Central Bank of Nigeria to establish the Micro, Small and Medium Enterprises Development Fund (MSMEDF). The Fund prescribes 50:50 ratio for on-lending to micro enterprises and SMEs respectively by Participating Financial Institutions (PFIs)”.

    It explained that two per cent of the wholesale component of the Fund shall go to economically active persons living with disabilities (PLWD) and 10 per cent provided for start-up businesses.

    “The broad objective of the fund is to channel low interest funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services; increase productivity and output of microenterprises; create jobs; and engender inclusive growth,” it said.

    Deputy Managing Director, First Bank of Nigeria Limited, Gbenga Shobo said fund was launched by the CBN as part of its developmental role and mandate of promoting a sound financial system. This was in recognition of the significant contributions of the MSME sub-sector to the economy. It said the sub-sector is characterised by huge financing gap which hinders the development of MSMEs.

    Shobo, who spoke at the 2016 Entrepreneurship Development Centre/FirstBank SME Breakfast Series tagged: The Economy and You!, urged SMEs’ operators not to be discouraged by ongoing economic challenges facing the country. He advised the operators to identify key sectors of the economy where opportunities for businesses are available.

    He said FirstBank will continue to support the SMEs because of the critical role they play in creating jobs and economic development for the country.

    He disclosed that the level of non-performing loans in the banking industry is also a disincentive for new lending. “As banks explain the bad loans in their books, they will be less ready to give out new loans,’’he said.

     

  • FG and the banks

    Gale of sacks in the financial sector is worrisome; but threats of licence withdrawal is wrong

    It was perhaps expected that the Federal Government will react sternly to the gale of job shedding in the financial services sector. With banks spurning its directive to halt the on-going industry-wide staff rationalisation, it threatened to revoke the licence of any bank that violated the order. In a note that sounded desperate, Minister of Labour, Chris Ngige, warned: “the Federal Government gave the licences to the banks to operate and if its directives are not adhered to, the licences will be withdrawn if the need arises”.

    We consider the threat as not only unwarranted but smacks of an overkill.

    Was the Federal Government right to be alarmed? The answer is, yes. What is debatable is whether it can claim such powers, particularly under a democracy whose bedrock is the rule of law, without being accused – rightly in our view – of acting arbitrarily.

    That is not to suggest that the gale of retrenchment is nothing to worry about. Barely a month ago, it was First Bank which, through its parent company, FBN Holdings, announced that it planned to reduce the number of its workers by 1,000 to cut costs. Three other banks have since followed in quick succession: Diamond Bank – 200; Ecobank – 1,040; and Skye Bank 175 – all of these within the month. The common factor in all of the retrenchment is the claim of poor profitability and harsh economic situation.

    The poor shape of the economy is of course beyond deniability. The point here is that the management of the banks, being private entities, are answerable to their shareholders and perhaps to a lesser degree, to the regulatory authorities. With their primary consideration being the bottom-line, it is expected that they will do anything – including sacrificing the workers – for a healthy bottom-line. Their case unfortunately finds some merit in the increasingly harsh operating environment and declining profitability recorded in the preceding year.

    We must however not fail to point out another side to the argument. The first stems from their social responsibility as financial operators who derive their sustenance from the society. This requirement should ordinarily impose the burden on the banks to be socially sensitive and responsible – a burden which unfortunately, they have neither learnt nor shown disposition to bear. This obviously explains why the hapless workers are the first to go at the onset of the threat to the bottom-line; nothing about the fat and sometimes outsized compensations to their executives which, they are able to creatively hide from the prying eyes of tax authorities. Time in our view for the bank executives to do some soul-searching.

    Of course, we know for a fact that most, if not all of these banks are not unionised, not to their own choosing but simply because their management would have none of it. As a consequence, the workers are not only rendered powerless but easy targets of arbitrary actions of the management. It seems to us about time the workers assert their right to have a say in the affairs of their institutions, in so far as it affects them.

    No doubt, the government as the guarantor of the public good cannot be expected to keep mum in the face of the one-sided action of the banks’ management. This is even more so when many of these banks would have long gone under without government patronage. We expect the Bankers Committee to step in to stop the gale of sacks. At this time, it is the least it can do to halt a possible social cataclysm.

  • NECA backs banks on retrenchment

    NECA backs banks on retrenchment

    •’Ngige’s directive uninformed, populist’

    The Nigeria Employers’ Consultative Association (NECA) has backed banks on workers’retrenchment, accusing the government of meddling in the matter.

    It disagreed with  the Minister of Labour and Employment, Dr. Chris Ngige, on his directive to banks and financial institutions to suspend the exercise.

    NECA Director-General  Olusegun Oshinowo said labour laws did not empower the minister to issue such a directive, which he described as “uninformed and populist”.

    He added that the laws had envisaged redundancy, which was why provisions were made in Section 20 of the Labour Act to guide the actions of parties in the event of retrenchment or redundancy.  Oshinowo said the minister seemed not to have understood the fundamentals of industrial relations and labour laws in Nigeria and, thus, acted ultra vires.

    His words: “NECA affirms that no employer will take pleasure in declaring redundant employees which it has invested significant resources in developing over the years. Usually, redundancy exercise is foisted on employers on account of an unhealthy economy and the dynamics of the business, which often demands staff rationalisation”. Oshinowo said it was part of the inalienable right of an employer to determine the optimal staff level it requires to sustain its operations, adding that employers have rights, which include the right to hire and fire within the rules governing such employment contract.

    “Employers’ rights are employers’ prerogatives, which are not subject to ministerial directives.

    ”Where an employer has found it necessary to carry out retrenchment, it would respect the laws of the land and the laid down procedures for redundancy.

    ”Employers’ expectation from the Minister of Labour and Employment is that he will work hand in hand with other government ministries in the establishment of the desired enabling environment to ensure business sustainability, competitiveness and job creation,” he said.

    Oshinowo said the Ministry of Labour and Employment runs on the principle of tri-partism, which entails regular interactions with trade “unions as represented by NLC/TUC, the employers as represented by NECA, and government as represented by the Federal Ministry of Labour and Employment. The ministry is expected to respect the rights and interests of employers and workers alike on issues that relate to labour and industrial relations,” he said.

    Meanwhile, NECA has written to its members to ignore what it described as the “illegal directive from the minister.”  

  • Banks leverage on CBN’s backing to create millionaires

    Banks leverage on CBN’s backing to create millionaires

    With the support of the Central Bank of Nigeria (CBN), deposit money banks (DMBs) are wooing customers with cash prizes, foreign trips, and gift items via promos that are fast defining the next level of competition. From Skye Bank, First City Monument Bank (FCMB), United Bank for Africa and Fidelity Bank to Diamond Bank, lenders are turning customers to millionaires and home owners, writes COLLINS NWEZE. 

    Call it rewarding loyal customers, or new form of wooing customers, banks have now found a new ground to bring more customers into their deposit net. The reward schemes, coming in the form of promos, are equally turning lucky and loyal customers to instant millionaires.

    Skye Bank, First City Monument Bank (FCMB), United Bank for Africa (UBA), Fidelity Bank and  Diamond Bank are many of the lenders that are giving out hundreds of millions of naira, houses, and other gift prizes to their lucky customers.

    The Central Bank of Nigeria (CBN) which backs the exercise, said there is nothing wrong with such exercises provided the lenders follow set guidelines that are based on transparency and integrity of the reward schemes.

    Speaking on the rising spate of promos in the industry, CBN Deputy Director, Corporate Communications, Isaac Okorafor, said such promos are allowed, and remain ease way to woo customers into the financial sector.

    He said such reward schemes can also promote the CBN’s financial inclusion drive and make banking more interesting for customers.

    For instance, 10 lucky customers of the UBA have won a three-day all expenses paid trip to Kenya as part of its MoneyGram/ Western Union Awoof promo while 40 other customers of the bank have also won various consolation prices like LG Home theatres, Dstv decoders with one year subscription among other items at the raffle draw of the second edition of the promo held in Lagos.

    The winners emerged from customers that sent and received MoneyGram and Western Union money transfers through the bank within from January 25 to April 30.

    Group Head, Consumer and Digital Banking, UBA, Anant Rao said the promo was to reward their customers and appreciate them for using the banks services. He said the lender wants to connect more with their customers, simplify consumer experiences using technology to make banking easier to their customers.

    Equally, when FCMB set-out to execute its 30th anniversary promo, the bank did not fully appreciate the social responsibility value the exercise would present as a life-saving and changing opportunity. What an observer described as an intervention has directly provided a platform which ministered timely aid to Nigerians, including the underprivileged beyond gender, religious and geographical location and limitation.

    Even after several weeks of taking delivery, the newly married, Oluyomi Victor Temidayo is yet to come to grips with the fact that he has now become the proud owner of a brand new Hyundai ix35, full option jeep, courtesy of FCMB Promo

    He was just going about his business when a call came through to his telephone line.  Reluctantly, he picked only to be intimated by the voice on the other end, that he had won a brand new jeep courtesy of a customers’ promo conducted nationwide by the FCMB.

    Like most of the other winners, Oluyomi’s initial reaction was one of doubt and suspicion. Somehow, he followed up on the call and reported at an FCMB branch as directed. The long and short of it all, is he truly emerged as one of the winners of the series of mouth-watering prizes put up by the bank to reward loyal customers. So today, he cruises around in the SUV.

    “Any time I am driving round in this vehicle now, people always stop to admire me. Some people wonder whether it is real, I tell them yes, it is real,’’ he said.Temidayo who operates in the oil and gas sector of the Nigerian economy, described the process which saw him and five others, winning SUVs for their decision to bank with FCMB as very transparent, urging FCMB to sustain the promo and its generally good ethical banking practices. Other beneficiaries include Dangero Adamu from Kebbi, Udo-Afa Gabriel Udoh in Calabar;  Ajitena Saidat Mojirike, in Ibadan; Unuarhe Onovughe Francis in Warri as well as Abubakar Adamu from Gombe.

    Udo-Afa Gabriel Udoh, another winner of an SUV in the FCMB Millionaire promo, had only been an FCMB customer for three years, but has been running his account consistently.

    “I think they are a very good bank to rely on. I saw sincerity in the process, even when I was not there, I was called from Calabar to pick the car in Port Harcourt.”.

    Incidentally, Udoh is a lecturer at the University of Calabar, and he added that the possession of the car, has no doubt further enhanced his social status, and for this, he thanks the management of First City Monument Bank (FCMB).

    If today, you were to wake Williams Onyemaechi  Onwubuike, who resides in the Abuloma area of Port Harcourt in Rivers State from a deep sleep, he would not waste time before declaring to you that any day, FCMB is a bank of first reckoning, in terms of general banking services and also in view of the level of the transparency surrounding the bank’s promo which has made him a millionaire.

    Onwubiko said, “if I should award them marks in terms of transparency, I should say 101 per cent. I was not even there during the promo; not even aware that a promo was taking place. They only called to alert me that I had won. And lo and behold, it was true, and my money was instantly given to me with ease”.

    The promo held across the 26 Zones and three Regions of the bank nationwide.  The draws were executed through electronic selection of winners. Three lucky customers of the bank were rewarded with N1 million at the Regional draws, while five others went home with other fantastic gifts such as generating sets, LCD television sets, DVD players and consolation prizes at the zonal draws.

    The main drive of the promo was to encourage a savings culture and drive financial inclusion through the provision of rewards and prizes. At the end of the first phase of the promo, a total of 402 customers won prizes such as three Hyundai IX35 Sport Utility Vehicles (SUVs), cash and other gifts.

    According to the bank, three lucky customers of the bank were each rewarded with the star prize of N5 million, while three others won N1 million each at the regional draws held in Lagos, Uyo (Akwa Ibom state) and Abuja. A total of 640 other account holders of FCMB went home with LED televisions, generating sets, decoders, tablets, smart phones and other consolation prizes at the zonal draws held in different parts of the country. The winners emerged at the electronic selection exercise which took place across the three regions and 26 zones of the bank nationwide.

    At the Abuja/North draw, Adamu Oseni received N5 million for emerging as the star prize winner, just as Dorcas Terfa received N1 million. But the winners at the South-East/South-South draw were Mr. Peters Emmanuel who won N5million and Oke Owhubetine who smiled home with N1million. In all a total of 1,932 winners emerged during this particular FCMB Millionaire Promo through the three draws in the season.

    The Senior Vice President/Divisional Head of Retail, FCMB, Olu Akanmu said: “We are excited to once again reward our customers for their patronage and loyalty’’. Our customers are the reason why FCMB exists and as a Bank that is committed to continuously satisfy their needs, this promo is to further show appreciation to existing and potential ones by expanding the reward opportunities that the promo offers them’’.

    FCMB promos have resulted in increased customer engagement largely due to the simplicity built into the participation logistics and the level of transparency that has always characterized the exercise.

    One Okafor won the star prize of N5 million at the Lagos/South-West Regional draw which took place at Matori in Lagos, while Odulawa Tolulope received N1 million. At the Abuja/North Regional draw held in Abuja, Umaru Augustine emerged as the star prize winner of N5 million, just as Aikay and Franscisca Oduoza (a joint account) smiled home with N1 million. In the same vein, Eke Michael won N5 million at the South-East/South-South draw held in Enugu and Stella Taribi was rewarded with N1 million.

    The bank has said that beyond the various prizes that it provides winners, the promo also presents an opportunity to encourage savings culture, financial inclusion and ultimately empower customers.

    “We have more positive offerings in various developmental stages for our customers. We therefore urge the general public to seize the opportunity of the current promotion to commence a relationship with us so as to benefit from our various rewarding and empowering initiatives,” Mr. Olu Akanmu who drives the Retail Division at FCMB reiterated.

    With the first draws of FCMB Millionaire Promo Season 3, around the corner, the Bank’s customers are excited as many look forward to emerging winners. This season which runs till November, 2016, is open to customers to non-customers of FCMB and members of the general public who can open accounts with the bank with specified amount saved. They are all to open accounts with the 33 year old financial institution that has endured. This deliberate corporate social responsibility exercise, as informed by an official of the Bank is one of the many ways FCMB adds to the nation’s socio-economic development.

    For the current promo, individuals would need to increase their savings account balance by N50,000 and maintain it for 30 days to stand a chance of becoming one of the four customers to go home with N2 million each at the grand draws. Or  customers can increasing their savings accounts by N10,000 and maintain it for 30 days to stand a chance of becoming one of the 12 customers to go home with N1million each or any of the consolation prizes at the regional draws.

    During the sixth and last draw for the Fidelity Bank Save-4-Shelter promo draw held in Lagos, the bank’s Deputy Managing Director, Alhaji Mohammed Lawal Balarabe said savings is the hallmark on which great economies are built and urged bank customers to embrace savings culture.

    The bank chief, who phoned and congratulated the star prize winner, Ibedu Clara Ego, who won a duplex in Lekki, Lagos, under the Save-4-Shelter promo, said the redemption of the prize shows that the lender keeps its words.

    “The Save-4-Shelter promo was conducted with high level of integrity. As a bank, we always keep our word. Our promos always focus on things that add value to the lives of people and the society,” Balarabe said. He disclosed that the lender will soon unveil another new promo that would equally benefit its customers and create wealth for beneficiaries.

    Deputy Director of the Consumer Protection Council, Joshua Nggada, praised the banks for conducting the promo and the draws, with integrity and transparency.

  • Federal Govt threatens banks for sacking workers

    Federal Govt threatens banks for sacking workers

    Banks yesterday got a marching order from the Federal Government to pull the brakes on the retrenchment of workers or face sanctions.
    Minister of Labour and Employment Chris Ngige said the government will no longer tolerate banks flouting its directive not to sack workers.
    As reports of sack of workers by banks hit town last week Ngige urged them to roll back the action. But some banks went ahead to lay off workers.
    Speaking in Geneva, Switzerland where he attended an International Labour Congress (ILO) meeting, Dr. Ngige said no worker should be treated like a slave in his own country and thrown out of job by employers of labour without following the due process.
    The Nigeria Employers Consultative Association (NECA) had said the power to hire and fire does not rest with the government,  but Ngige said if the banks failed to comply with the directive to maintain the status quo, the government knowing what to do. He added: “Afterall, the banks have licences that are issued by the government.”
    The minister said apart from the banks, telecommunication companies were breaching the labour laws by denying their workers the opportunity to unionise.
    The minister said banks laying off workers were not following the due process and that the government had evidence that they failed to comply with the principle of collective bargaining.
    He vowed to protect workers, saying: “We want them to maintain the status quo because they are not the only ones suffering the economic downturn in the country. But everything must be done with a human face. As far as I’m Minister of Labour, I will protect Nigerian workers.”
    In a statement he released before his trip, Ngige also said: “NECA as representatives of organised private sector is protecting the interest of their members. They are one leg of the tripod and nothing stops them from having their own opinion. They are the section that protects the private investors. They are also employers, but the people I am talking to are also employers. The bank chairmen, managing directors and boards and I also talk to unions.
    “In that particular government order, I ask the unions also not to picket the banks because they had mobilised to do that. It is the job of government to ensure a peaceful milieu on both sides and that is why I gave the directive.
    “From our investigation and from preliminary reports available to us, the banks, insurance companies and other financial institutions are all laying off workers.
    “Any bank worker you remove from work has about 10 family members to take care of and we will not allow them to put them into the pool of the unemployed. It must be negotiated. We did that in the oil industry and we succeeded.
    “In the oil industry, there is collective agreement continuously. Even if you want to lay off workers, there is a procedure for declaring redundancy. You must follow the process. Section 20 of the labour says it.
    “You must call the unions and discuss with them. You don’t just wake up and treat them as if they are slaves in their own country, throw them into the unemployment market and expect government to keep quiet. We will know what to do if they continue like that. After all, the banks have licences given by government.”
    At least three banks have laid off close to 1.500 employees in the last one week. Some other banks are believed to be warming up
    Those that have sacked employees are Skye bank (175), Diamond Bank (200) and Ecobank 1(040).

  • Trade deficit: More job loss likely in banks

    Trade deficit: More job loss likely in banks

    Twenty Deposit Money Banks (DMBs) are expected to fire at least 10,000 out of their estimated 110,000 workers before the year-ends, The Nation has learnt.

    This becomes exigent as the impact of trade balance deficit recorded in the first quarter of this year begins to hurt the economy.

    The National Bureau of Statistics (NBS) said foreign trade statistics for the first quarter showed that merchandise trade, the sum of visible import and export goods, plunged by 38 per cent year-on-year from N4.4 trillion last year to N2.7 trillion.

    The figure represents the latest in the series of negative economic indicators published by the Bureau in recent time. Total trade declined by N793.5 billion or 22.6 per cent on a quarter on quarter (Q-o-Q) basis compared to N3.5 trillion in December last year as import and export for the period touched the lowest in 13 quarters.

    Internal sources within the banks said the lenders are downsizing, following rising difficult operating environment, decline in operational output of most companies, which has led to the decline in their transaction turnover, rising cost of overheads and tough policies from regulators.

    The source said a large part of the workforce to be axed will come mid-tier lenders, which have been badly hit by the tough regulatory polices of the Central Bank of Nigeria (CBN) and losses incurred by overexposure to oil and gas loans.

    Already, Ecobank Nigeria Limited, last week fired 1,040 out of its over 9,000 workers over poor performance. First City Monument Bank Limited (FCMB) Limited and Diamond Bank Plc had earlier sacked combined 400 workers even as more banks are expected to follow suit in the coming weeks, or months. The massive workforce disengagement affected almost all cadres of the three lenders’ workforce.

    Regulatory pressures from the Central Bank of Nigeria (CBN) including the ongoing implementation of the zero Commission on Turnover (CoT) fees, increase in contribution to the Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) levies as well as high Cash Reserve Ratios (CRRs) are key policies depleting banks’ revenue bases.

    The 20 commercial banks are expected to lose over N100 billion annually to the zero COT policy; N140 billion to the AMCON levy, which has been increased from 0.3 per cent of banks’ total assets to 0.5 per cent and nearly N50 billion to the NDIC levy.

    Report from Afrinvest West Africa said more disturbing is the fact that the economy recorded the first negative trade balance since 2013 as crude oil export with average of  75.6 per cent contribution to total exports in the last three years slowed to 64.7 per cent. Oil export tumbled 50.9 per cent Y-o-Y and 46.6 e Q-o-Q to N821.9 billion in March this year. The weakening external sector performance as indicated in the numbers above is consistent with March 2016 Gross Domestic Product (GDP) growth and unemployment figures published by the NBS recently, indicating that the economy contracted by 0.4 per cent while unemployment rate increased to 12.1 per cent in the same period.

    Despite the government’s determination to diversify the revenue base of the economy, crude oil export continued to account for over 70 per cent of total merchandise export in the last 12 months.

    Within the first quarter, petroleum and oil related items accounted for 82.8 per cent of total export, followed by raw cocoa and cocoa related items with 3.6 per cent while other item accounted for 13.6 per cent.

  • Accenture charts new path for banks in multi-channel digital age

    Accenture charts new path for banks in multi-channel digital age

    Nigerian banks need to undertake a revision of their business model in order to align their operations with their core business ideas in a sustainable way that delivers competitive returns to stakeholders even as changes in technologies and customer behaviours redefine operating milieu.

    Accenture Nigeria, in a newly defined paradigm for banking in its recent publication ‘Banking 2016 – Next Generation Banking’, notes that each bank must have a clearly articulated business model in the light of its history, market, positioning and aspirations among others, which would be the foundation for winning the battle for the customer and growth in an increasingly competitive industry with the commoditization of transaction fulfilment and service delivery.

    According to the report, while some banks may fix the situation and excel by simply improving on the basics including “smart sizing” their distribution networks, others need new business and operating models to compete and grow going forward.

    As most banks struggle with a daunting array of market, regulatory, customer, cost and operational challenges, Accenture Nigeria outlined three critical battles that must be won by the banks in order to excel.

    Speaking on the need for paradigm shift in banking sector, managing director, financial services, Accenture Nigeria, Mrs. Toluleke Adenmosun, said the critical issues were the struggle for customer trust and engagement; protecting payment business and revenues from progressive disintermediation by new non-bank players, distinctive and differentiated offerings to avoid commoditization of products and services.

    She explained that the initial typical multi-channel approach leverages six core channels, which include online and internet, telephony, branch, mobile, ATM, POS channels but nonetheless investments in emerging channels, are failing to deliver fully on the promise of adoption by customers.

    Adenmosun cited a recent article posted by the Central Bank of Nigeria (CBN) which indicates that bank branches remain the predominant channel for bank customers, as other aforementioned channels are nearly ineffective or failing in different ways.

    She explained that an average bank customer would prefer going to his branch to make withdrawals or deposits when there are other channels like the ATM and mobile channels, or rather make payments with cash on daily basis when there are POS terminals and on-line and internet channels available.

    She noted that some bank customers would go all the way to the banks to make complaints or enquiries when there is telephony and contact centre.

    “Clearly, branches remain relevant and are important assets to banks, but branches carry higher running costs than emerging channels.  On average, branches comprise 50  to 60 per cent of the bank’s operating costs and in most banks around 30 per cent of branches destroy value generated by the rest of the network,” Adenmosun said.

    She outlined that Accenture has postulated three business models that banks should consider when defining their own model.

    The first model is the one that builds on enhanced multichannel experiences to engage customers and meet their financial needs efficiently which simply means taking customer interaction beyond the basic cash in and cash out transactions to deliver a distinctive value proposition. In other words, “My bank knows and understands me and effectively engages with me about my real financial needs”, that is, strategic application of analytics is at the core of the “Intelligent Multichannel” Bank Model.

    Another model is one which leverages social media interactions to increase customer intimacy. This means being present, connecting and engaging with customers where they spend their time such as on social media, based on personal interests and by leveraging influencers. In other words, the concept is that of “My bank engages with me where I spend time” as a “Socially Engaging Bank”.

    The last model places the bank as trust center with an extended proposition of financial and non-financial services. In other words, the concept is built around “My bank gives answers to my needs, providing easy access” leveraging in particular the power of mobile technology to be the “Financial and Non-Financial Digital Ecosystem Bank”

    Adenmosun said the implementation of the new business models can accelerate revenue growth while reducing cost to serve adding that bank governance and operating models must evolve; giving proper weight to customer experience and metrics in the key areas of reputation, brand perception, commercial performance, sales performance and the capabilities required to support them.

  • $1b recovered loot to be kept in banks

    $1b recovered loot to be kept in banks

    The Panic Alert Security System, (PASS) engaged by the Attorney General of the Federation to help government recover monies looted from the country has opened four accounts for the recovery of government funds in various funds known as PASS/Asset Recovery Accounts.

    The accounts are in Naira, United States Dollars, British Pounds and Euros to warehouse recovered funds traced during the pendency of PASS engagement by the Attorney General of the Federation and Federal Government of Nigeria.

    PASS CEO, George Uboh yesterday said these government funds which were warehoused in some banks are N75.7 billion, 3.5 million pounds and $648.5 million aggregating to over one billion dollars.

    Uboh said he has written President Muhammadu Buhari and the Attorney General of the Federal, Abubakar Malami of his decision to recover and warehouse traced funds with some Nigerian banks.

    He said the decision to open new accounts followed the AGF’s answer to President Buhari’s  query that the underlying letter of engagement empowered PASS to trace, recover and remit to the government.