The Nation Newspaper

Tag: Banks

  • CBN resumes forex sales to banks

    CBN resumes forex sales to banks

    The Central Bank of Nigeria (CBN) said it would resume forex sales to commercial banks. The apex bank told the lenders to fund their naira accounts to be able to participate in a currency intervention on the interbank market slated for today.

    Although the CBN did not disclose how much it would sell, but one trader said the bank sold between $100 million and $150 million at its intervention last Thursday and this could be repeated tomorrow.

    Last month the bank banned dollar sales to retail bureaux de change outlets, sending the naira to record lows on the black market and later stopped daily sales to the interbank market, all to conserve foreign reserves which are down to an 11-year low.

    The local currency traded around a pegged rate of N198 to the dollar on the official interbank market on Tuesday, but was quoted at N305 on the black market.

    The CBN had imposed some currency control measures to save the naira. In June, it curbed access to the interbank currency market for importers bringing in a variety of goods. In an effort to conserve its dollar reserves, the bank said importers could no longer get hard currency to buy 41 items, ranging from toothpicks and rice to steel products and private jets.

    One of such measures –  the  total ban on the use of debit cards abroad, has caused panic in both the local and international markets with customers feeling the pangs of the policy, which was meant to conserve foreign reserves and protect the local currency.

  • Banks to axe 10,000 jobs

    Banks to axe 10,000 jobs

    Twenty-One Deposit Money Banks (DMBs) are expected to fire at least 10,000 out of an estimated 110,000 work force within the year, The Nation has learnt.

    Internal sources within the banks said the lenders are downsizing following rising difficult operating environment, cost of overheads and tough policies from regulators making it difficult for them to post huge profits as was the case few years back.

    The source said a large part of the workforce to be axed will come from Keystone Bank, one of the three bridged banks expected to be sold to new investors within the first half of this year.

    Already, First City Monument Bank Limited, which sacked over 200 of its workforce early last month, hinged the decision on tough operating environment. The massive workforce disengagement, which affected almost all cadres of its workforce, it was gathered, was due to policy shifts in the banking and operational environments, including tougher regulations.

    Regulatory pressures from the Central Bank of Nigeria (CBN) and other regulators have intensified pressure on banks’ profitability, cutting down their Return on Investments (RoI) as they gradually lose their traditional areas of income. This has led to massive workers disengagement in many lenders.

    For instance, 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 and high Cash Reserve Ratios (CRRs) are key policies depleting banks’ bottom lines.

    The 21 commercial banks are expected to lose over N100 billion yearly 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 N100 billion to the NDIC levy.

    Reacting to the development, FCMB’s Group Head, Corporate Communications and Brand Management, Diran Olojo, said: “As a result of the various policy changes that have affected banking adversely and macroeconomic challenges, volumes of business in various geographies and product areas have reduced significantly. These factors have resulted in the redundancy of various roles.

    “Regardless, we have continued to hire in various areas of the group, particularly those that will drive financial inclusion and provide support for the real sector.”

    Olojo said the lender was not able to redeploy the affected workers from some redundant roles to new ones, hence the action. “We have thus been compelled to effect a minor reduction in our staff strength. We will continue to create employment opportunities in the areas that align with our national economic priorities and the growth areas of the financial service industry,” he said.

    “We remain optimistic about the long term prospects for the industry and will be a net creator of jobs over the next few years as we expand our franchise to support national priorities such as financial inclusion, import substitution and non oil export promotion,” the bank’s spokesman added.

     

     

     

     

    But the FCMB Group Plc assured in a statement that its subsidiaries: First City Monument Bank (FCMB) Limited, FCMB Capital Markets Limited and CSL Stockbrokers Limited, will come out better this year.

    In a statement, the holding company said its subsidiaries would also deepen the financial services support they provide to customers and the nation at large with their array of products and bespoke solutions to further enhance customer experience in their respective target markets.

    Managing Director of FCMB Group Plc, Peter Obaseki, said, ‘’2016 will be characterised by continued growth in retail contribution, stabilisation of wholesale banking revenues and increased focus on cost efficiencies’’.

    He added that the retail banking business of the Group, which is driven by First City Monument Bank (FCMB) Limited, has continued to ‘’show greater resilience and earnings momentum over the years’’.

    He disclosed that FCMB Group Plc would in the fourth week of January this year announce the completion of the banking subsidiary’s interim audit, which should pave way for the release of the 3Q15 earnings results of FCMB Group Plc.

    He said third quarter 2015 earnings will fall below earnings for the same period in 2014, due to a spike in impairments particularly in the energy sector and the significant reduction in trade finance-related revenues due to foreign exchange illiquidity. This trend, he added, will continue December 2015 and largely emanated from wholesale banking activities’.

    He further stated that, ‘’we will increase focus on cost efficiencies (opex, funding and risk) in order to restore earnings levels”. FCMB Group, as a holding company, is one of the dominant players in the Nigerian financial landscape with subsidiaries that are market leaders in their niche segments.

     

     

  • Content Board, banks discuss long-term loans to oil, gas firms

    Content Board, banks discuss long-term loans to oil, gas firms

    The Nigerian Content Development and Monitoring Board (NCDMB), has started  engaging banks to find ways of providing long-term funding to oil and gas firms, the Executive Secretary,  Denzil Kentebe, has  said.

    Kentebe, who spoke on the sideline of the Load-Out and Sail-Away ceremony of Chevron’s Sonam Non-Associated Gas Wellhead Platform (Sonam NWP), built by Hyundai Heavy Industries and Nigerdock in Lagos at the weekend, said the discussion has become imperative to enable banks move away from the current short term facilities to oil and gas companies, as the oil industry projects are long tenured.

    He said the Board has been in discussion with banks on the issue. “Discussion with banks to ensure they (banks) don’t put pressure on oil firms is nothing new to us, because we have over time been engaging the bankers and that has been one of the areas we have been pushing them to make sure we have facilities that last for quite long and not just short term facilities.”

    He debunked allegations that the Nigerian Content Fund has remained idle while many players in the  industry couldn’t access funds to execute their jobs, or projects.

    Kentebe, who refused to be drawn as to the current value of the Fund, or the amount so far disbursed, said Nigerian companies are utilising the Fund, “therefore it is not idle,” he added.

    He said: “The Nigerian Content Fund is not idle. The Fund is being utilised by Nigerian companies. For instance, Ladol, which is in Lagos, is taking advantage of the facility, and a lot of other companies. We are doing all we can to make sure Nigerians are more aware of the Fund’s availability. We are also engaging the banks to ensure that the banks release information at their disposal that can help their clients on the standards of the facilities that can be tapped into.”

    He expressed concern over the job loss in the industry on account of low oil prices in the international market.

    The Nigerian Content Development Fund (NCDF) as at April last year, had about $540 million. The Fund was established by the Nigerian Oil and Gas Industry Content Act (NOGIC Act), 2010 to address financial and liquidity challenges of local companies that operate in the oil and gas industry.

    The Fund is built through contribution of one per cent from every contract awarded to any operator, contractor, subcontractor, alliance partner, or any other entity involved in any project, operation, activity or transaction in the upstream sector. It is deducted at source by contract awarding entities and paid into designated accounts which are kept with Custodian Banks under the programme

  • Banks to have solid minerals desks, says Minister

    Banks to have solid minerals desks, says Minister

    Minister of Solid Minerals development, Dr. Kayode Fayemi has disclosed that many Nigerian banks will be setting up solid mineral desks before the end of the year.

    Fayemi says that this is in response to the plans of the federal government to diversify the economy through solid minerals development.

    He made the disclosure during the week in Abuja, when council members of the Nigerian Mining and Geosciences Society (NMGS), led by its President, Prof Gbenga Okunlola, paid him courtesy.

    Special Adviser Media to the Minister, Olayinka Oyebode revealed in a press statement said that Fayemi stated that he got the assurances of the bank’s chief executives on the setting up solid minerals desks  during a recent meeting with them.

    He said that the banks’ solid minerals desks, when set up, would greatly assist the sector as investors would have access to funds and professional counselling and urged the NMGS leadership to avail the sector with expert and objective analysis of issues, said his ministry would work with them to move the sector forward.

    “It is no longer business as usual. We will implement the Nigerian Mining and Minerals Act (2007) to the letter”, he said, while urging the NNGS members to help in the strengthening of  institutions and capacity building.

    Earlier, Prof Okunlola had pledged the support of the NMGS towards the efforts of the ministry to realise President Muhammadu Buhari’s plan to diversify the economy and create jobs through solid minerals.

    The council members also congratulated the minister on his appointment, adding that they are convinced that he would bring the desired turn around to the sector based on his antecedence as a public servant with a knack for development.

    They also applauded the planned setting up of solid minerals desks in banks, just as they advocated the injection of more professionals into the technical agencies within the sector.

  • TSA: Water Board moves to delist uncooperative banks

    The Federal Capital Territory (FCT) Water Board has warned that it would replace banks which still had challenges with aligning with the Treasury Single Account (TSA) for its revenue collection.

    Mr Udu Bello, Director of the board, made this known in an interview with the News Agency of Nigeria on Tuesday in Abuja.

    Bello said that some designated banks had been turning back customers due to challenges with the TSA.

    “There are some banks that have problems with aligning with the TSA and we have been holding meetings with the banks.

    “They are expected to sweep the remittances to the CBN everyday and it is no longer lucrative for them.

    “Moreso, when there is a penalty for banks who comply, so they have been turning back our customers.

    “We urge our customers to ignore banks like Bank UBA, Aso Savings, Mainstreet Bank and First Bank and pay their bills at Unity Bank, Zenith Bank, Fidelity Bank, Diamond Bank, GTB, FCMB,’’ he said.

    He advised residents to improve their cooperation with the board by always paying their bills or risk disconnection.

    “Some residents of high brow areas like Asokoro and Maitama are usually reluctant to pay their charges.

    “Some claim that they are using boreholes, whereas they are using our services.
    “Henceforth, we will remove our infrastructure from any location where residents claim to be using borehole,’’ he said.

     

  • Banks to lose N100b revenue as zero COT begins

    Banks to lose N100b revenue as zero COT begins

    Banks’ revenues will drop by about N100 bilion this year, with the implementation of the zero Commission On Transactions (COT) policy.

    It is the last phase of the “Guide to Bank Charges” policy initiated by the Central Bank of Nigeria (CBN).

    A former Executive Director of Keystone Bank, Richard Obire, explained that of the annual N550 billion average  revenue for the 21 banks, about N100 billion is raked from COT.

    Obire explained that bank’s revenues are made up of interests on loans, which constitute 70 per cent of the total revenue. Fees and commission make up the remaining 30 per cent. Fees and commission covers 30 per cent of the total revenues.  COT constituting 60 per cent of income within the segment.

    Obire said banks should be moving towards income diversification to shore up their revenue base. He said lenders should be creative and think of how to diversify to support activities that generate foreign exchange from local industries. He said aside the COT-free banking, the lenders will face pressure arising from interest revenues on loans.

    The “Guide to Bank Charges” implementation, which started in March 2013, has seen the COT gradually drop to N3 per mille in 2013; N2 per mille in 2014; and N1 per mille in 2015 to Zero COT per mille started on January 1.

    The “Guide to Bank Charges” is an initiative of the Central Bank of Nigeria (CBN) to reduce charges widely seen by bank customers

    In a circular titled: “Implementation of Revised Guide to Bank Charges –Commission on Turnover,” posted on CBN’s website and signed by its Deputy Director, Financial Policy and Regulation Department, Franklin Ahonhai, the regulator said there was no going back on the policy implementation.

    It mandated banks that charged excess COT since the effective date to refund same to the affected customers or be sanctioned.

    According to the CBN, the policy is expected to have implications for both banks and their customers as it is expected to give the regulator more power to deal with banks reluctant to lower service fees considered ‘as the highest in the world’.

    The apex bank said the “Guide to Bank Charges” would make it more difficult for banks to set high fees and charges without having reasons acceptable to regulators. The regulator said banks’ drive to make inroads into the legions of this country’s unbanked, financially illiterate and those isolated from traditional banking services through distance and hard terrain will be hampered by excessive charges.

    It said the guideline was meant to address complaints arising from bank tariffs and other miscellaneous fees charged by banks on their customers’ accounts. The policy is also expected to ensure greater competition in retail banking and achieve real benefits for customers through lower costs, better service and greater access of financial services to poor communities whilst at the same time preserving the stability of the banking system.

    Afrinvest West Africa Plc Managing Director Ike Chioke said banking was confronted with the reality of declining fee incomes, mobile money and dollar denominated capital sourcing.

    In a report titled: “Nigerian Banking League – The fate of small players” Chioke predicted that the era of “real banking” appears to be gradually re-emerging as traditional sources of high income/profitability continue to come under threat from increased competition and tighter regulation.

    He predicted that in the next five years, outlook on yields and fee income remains downwards, necessitating the need for banks to focus on lending to the real sector. Also, banks are expected to develop and grow the depth of their core retail banking businesses to retain and amplify cheap deposits.

  • Banks, DFIs, deepen CBN’s sustainable banking agenda

    Banks, DFIs, deepen CBN’s sustainable banking agenda

    Commercial banks, Discount Houses and Development Finance Institutions (DFIs) have reiterated their commitment to Central Bank of Nigeria (CBN’s) directive on the implementation of the Nigerian Sustainable Banking Principles (NSBP).

    The apex bank had two years ago, rolled out guidelines on the NSBP with the aim of integrating environmental and social policies into decision-making processes in commercial banks, discount houses and DFIs.

    The regulator said trends in international business reporting takes account of the impact of business on the environment and the social and economic risks that affect business concerns. It says sustainability reporting allows organisations measure, understand and communicate their environmental, social and governance performances.

    Although the new reporting system has gained currency and acceptance globally, only a few local banks and organisations are promoting sustainability practices in their reports.

    For Skye Bank Plc, sustainable banking practice is a policy that should be promoted by all lenders. Skye Bank Plc has continuously implemented the sustainable banking principles and partnered with the Global Reporting Initiative (GRI) to promote efficient reporting since 2013.

    Speaking at the GRI seminar for this year, Skye Bank’s Group Managing Director/Chief Executive Officer,  Timothy Oguntayo said the lender was determined to take full advantage of all sustainability opportunities both locally and globally. He promises to ensure that the bank’s actions and decisions support the future generations to meet their needs.  He said over 40 delegates from different institutions, including banks and regulatory authorities attended the GRI programme.

    Skye Bank reassured that its partnership with GRI will equip all its customers adequately for the foreseeable future.

    The bank recently hosted a stakeholder conference on sustainability which was attended by representatives of other banks and companies where current trends and ideas relating to the sustainability were shared.

    Oguntayo explained that the lender had earlier held a capacity building programme on sustainability reporting for the bank’s board members. It focused on the environmental, economic and social risk impact that financing has on the economy. It equally provided a guide on how to achieve sustainable development for businesses.

    The bank chief explained that his bank commenced the implementation of sustainability in February 2013 with the establishment of a sustainability department.

    The unit has the mandate to integrate sustainability in the bank’s  policies and implement the NSBP project.

    “The path of sustainability has become a business strategy and opportunity for future growth as the bank is convinced on the need to extend its sustainability focus beyond industry regulations,” he said.

    According to him, over the last 29 months, the bank’s sustainability team has been able to lay the foundation for sound sustainable banking framework. The team has engaged in continuous capacity building sessions for both the internal and external stakeholders at all levels including the bank’s board of directors. The exercise, he says,  is still ongoing.

    Besides, Skye Bank’s Small and Medium Enterprises (SMEs’) Business seminar series,  customer interactive fora, focused group sessions especially in the retail segment are some of the steps taken by the team.

    The bank has promoted e-channels choices to promote improved banking access while the number of wheelchair accessed branches for handicapped customers have also increased.

    On the environment, the lender ensures that its activities do not negatively impact the environment, and helps reduce global warming and climate change. This, it does by supporting activities that cut the level of carbon emissions and carbon footprint control.

    Skye Bank has also adhered strictly to the letter and spirit of the CBN’s Code of Corporate Governance for Banks in Nigeria 2006 and the Securities and Exchange Commission Code of Corporate Governance 2011. As an international lender, it also imbibes international best practices and adapts them to local circumstances.

    In ensuring utmost adherence to the code, the bank has put in place a competent and efficient board, sets up various board committees to make the board effective and appointed independent directors for corporate accountability.

    As a forward looking organisation with short, medium and long term objectives, the bank has also instituted a succession planning policy both for board and management to mitigate the impact of sudden and unplanned exits.

    “In line with governance practices, the annual evaluation of the performance of the board  is conducted  by an independent consultant, which covers the board composition, committees, responsibilities, process, among others. The board members are also regularly trained under the continuing professional education and development programme designed to enhance their competence and knowledge,” Oguntayo said.

    He explained that in compliance with the Code of Corporate Governance, the bank has on its board, two independent non- executive directors namely: Victor Odozi, a former CBN Deputy Governor and Mrs. Amuna Lawan-Ali.

    “The board adopts a formal, transparent and rigorous board appointment process ensuring continuity and orderly change on the board. Regular training programmes are organized for the board members to keep them abreast of developments in the financial industry as well as to familiarize them with the bank’s operations, objectives, business environment, among others,” he said.

    Above all, there is no conflict of interests among the board members as the disclosure rules are strictly enforced and adhered to.

    The bank’s Executive Director, Legal and Corporate Services, Mrs. Abimbola Izu said the board chooses to go on the training to further enhance its knowledge of sustainability reporting to promote sustainability finance. “We have just embarked on comprehensive sustainability training for our board members base on our commitment to the implementation of the Nigerian Sustainable Banking Principle. We continue to take all necessary steps to manage the impact of its business on the environment and society while creating value for the communities,” she said.

    She said corporate governance improves long-term shareholder value by enhancing performance and accountability, while taking into account the interest of other stakeholders. She said the bank was leading the national campaign for corporate organisations to embrace sustainability reporting.

    For instance, the bank’s board is headed by Tunde Ayeni, a lawyer and businessman, while Oguntayo, leads the team of executive management. The other members are of the board are also seasoned professionals in various fields with rich experiences, providing leadership and direction for the lender.

  • ‘Infrastructure financing beyond banks’

    ‘Infrastructure financing beyond banks’

    The Managing Director FBN Capital Limited, Kayode Akinkugbe, has said the commercial banking community alone cannot meet the requirements for Nigeria’s infrastructure financing.

    He spoke at a discussion panel on ‘The Nigerian Capital Market: A Catalyst for Change,’ during the 2015 Business Luncheon of the Capital Market Solicitors Association (CMSA) held in Lagos.

    Akinkugbe said Nigeria is at a point in its development where the issue of infrastructure has become extremely critical.

    “Our infrastructure deficit requires us to invest around 30 billion dollars a year for the next decade to catch up. The financing requirements are far much more than what the commercial banks can cope with. There is therefore a clear gap, and the right segment of the financial market to fill the gap is the capital market,” he said.

    He explained however that strengthening liquidity in the capital market is very crucial, especially for confidence. “If we have counter parties that have strong capital, there will be much more activity in the capital market. Currently, we really don’t have a lot of well capitalized institutions. Being well capitalized means you can make investments in distribution,” he said.

    He submitted that to make the investments that are required, properly capitalized institutions are needed.

    Head Legal and Regulations, Nigerian Stock Exchange, Ms Tinu Awe, expressed that there are three paradigm adjustments that needs to be made within the Capital Market industry. Firstly, operators need to collaborate together to challenge the status quo of the financial market.

  • Africa U- 23 Cup of Nations final: Siasia banks on GOD

    Africa U- 23 Cup of Nations final: Siasia banks on GOD

    • Happy Team Captain is back
    • Says Dream Team VI really suffered

    The Chief Coach of Dream Team VI,Samson Siasia has told Sportinglife that he and his team will continue to rely on God’s favour and assistance to beat Algeria in today’s final of the Africa U- 23 Cup of Nations and to eventually win the trophy at stake.

    Siasia, who confessed that the team suffered a great deal as regards welfare  during the tournament but with God on the side of the team and the players’ patriotism flowing in their blood they were able to qualify for the 2016 Olympics and also zoom to today’s final.

    “We cannot come this far and lose the trophy, no God forbid. Our ultimate ambition is to come back home with the trophy and by the grace of God and our dint of hard work we will beat Algeria tomorrow (today) to win the Cup. That is the only way God can and will definitely crown our efforts because we have really suffered in this tournament. We were like orphans un-catered for throughout the competition.

    “I am also happy that my captain, Azubuike Ikechukwu is back from card suspension. We felt his absence in the game against Senegal. His inclusion will further strengthen the team against Algeria”, the former Super Eagles coach disclosed.

    He also emphasised on God’s assistance to the team. “In our match against the host Senegal we had 12 players on the field of play and the 12th player was God Almighty. Senegal even had a penalty which they couldn’t convert. So if it is not God who then? Our goalkeeper Emmanuel Daniel was spectacular in goal too. He saved us from embarrassment. He was my man of the match in the game”, Siasia also told Sportinglife from Senegal yesterday.

    Siasia also hailed the impact of Golden Eaglets star Victor Osimhen in his team. “Victor  has done well so far, especially when he came in for the Senegal match. His future is really very bright and he should continue to work harder and be humble and also ready to learn like he is doing right now.

    Saisia was however elated that he would be leading the team to their second Olympics and hope this time around he would be able to win the gold medal of the Olympic Football Tournament in Rio, Brazil next year.

    “Qualifying for the Olympic Games for the second time as a coach makes me feel good and satisfied but I pray that I should lead this team to win the Olympics. That would then be my ultimate ambition. I am happy that I have not failed Nigerians who believed in me as a coach and who have always supported me and my team any time I was saddled with the job. They should continue to pray for us. By the special grace of God we won’t disappoint them,”he said.

     

  • Banks to partner Akwa Ibom on sanitation

    Banks operating in Akwa Ibom State have pledged to partner the Akwa Ibom State government in her efforts to keep the state clean.

    The state Commissioner for Environment, Dr Iniobong Essien, disclosed this yesterday while briefing newsmen at the end of the monthly exercise which took place across the state.

    The commissioner warned the market authorities at the Itam market that the government will take drastic steps against anyone who fails to take active part in the monthly clean-up exercise from next month.

    He advised the management of the market to advice traders who bring in goods from other states to also comply with the directive as they would face the wrath of the law once they flout the order.