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  • Banks’assets cross N36tr mark, says CBN

    The total assets and liabilities of commercial banks stood at N36.2 trillion at the end of August 2018, the Central Bank of Nigeria (CBN) economic report released yesterday has shown.

    The figure, which is for the third quarter, represented 0.8 per cent increase over the level at end-June 2018.

    The funds were sourced, largely, from mobilisaion of unclassified and foreign liabilities, and realisation of claims on the apex bank. The funds were used, mainly, for payment of matured demand deposits, accretion to reserves and extension of credit to the private sector.

    According to the report, the CBN also maintained a non-expansionary monetary policy stance in August 2018, aimed at further curbing inflationary pressure.

    It said broad money supply (M3), on quarter-on-quarter basis, fell by 2.4 per cent to N33,607.64 billion at end-August 2018, in contrast to the growth of  two per cent at end-June 2018. The development reflected, mainly, the 3.4 per cent decrease in domestic credit (net) of the banking  system.

    Over the level at end-December 2017, broad money supply, (M3), grew by 7.9 per cent, due to 18.6 per cent and 6.2 per cent increase in foreign assets (net) and other assets (net) of the banking system.

    On quarter-on-quarter basis, narrow money supply (M1), fell by 6.9 per cent, due, to 2.3 per cent and 7.7 per cent decrease in its currency outside banks and demand deposits components.

    Developments in banks’ deposit rates were mixed, while lending rates trended downwards in the review quarter.

    Further analysis of the report showed that with the exception of the one-month and 12-month deposit rates, which rose by 0.28 and 0.07 percentage point to 9.12 per cent and 10.07 per cent, respectively, all other deposit rates of various maturities fell from a range 3.75 – 10.67 per cent to 3.65 – 9.85 per cent at end-September 2018.

  • MTN and $8.1billion repatriated cash

    Perhaps, one of the major issues that dominated the telecoms sector last year was the face-off between the Central Bank of Nigeria (CBN) and telecoms giant, MTN Nigeria.

    The CBN had ordered MTN Nigeria to refund $8.1billion allegedly taken out of the country without recourse to laid down procedures, while the apex bank also imposed fines on four local lenders that facilitated the transaction. Specifically, Certificate of Capital Importation (CCI) in respect of the cash repatriation was at the centre of the disagreement between the telco and the financial services sector regulator.

    Coming on the heels of the $8.1billion saga, the Office of the Attorney General of the Federation issued demand notice of $2billion on the telco which, it alleged, reflected taxes unpaid over a period covering about one decade. This grew the total cash hanging on the frail neck of the telco to $10.1billion. The telco strongly rejected both allegations.

    What generated local and international interest in the face-off was that the telco was yet to complete the payment of N330billion fine imposed on it by the Nigerian Communications Commission (NCC) over subscriber identity module (SIM) card registration infraction.

    The reaction was, therefore, unexpected as some South African investors that visited Nigeria Stand at the last International Telecoms Union (ITU) World held in Durban, pointedly accused the Federal Government of trying to take over the telco. They accused the government of hardline regulation which, they argued, was a disincentive to foreign direct investment (FDI) inflow into the country.

    Executive Vice Chairman, NCC, Prof Garba Dambatta, and MTN Group CEO, Rob Shutter, calmed frayed nerves, assuring that the issue would be settled amicably.

    How it started About two years ago, a lawmaker, Senator Dino Melaye, had alerted the National Assembly on how MTN allegedly repatriated about $13 billion out of the country over a 10-year period.

    He accused the telco of ‘Unscrupulous Violation of the Foreign Exchange (Monitoring and Miscellaneous) Act’ by repatriating about $13.9billion from Nigeria to other countries over a 10-year period. The lawmaker said the amount moved by MTN was about half of the nation’s forex reserves.

    The motion generated reactions from every quarter because it was less than a year after the telco was slammed a record fine of $5.2 billion for failing to deactivate over five million unregistered SIMs on its network.  The allegation came during the period oil prices dipped culminating in an inevitable slip of the economy into its first recession in 25 years.

    It was agreed that the Dino allegation be investigated. MTN Nigeria denied any wrongdoing, arguing that it only requested for CCIs for Foreign Capital that was imported into Nigeria, dividends were neither declared nor paid until the CCIs were issued and finalised.

    MTN Nigeria CEO, Ferdi Moolman, had explained that “the requirement to issue a CCI within 24 hours of conversion is an administrative requirement. As such, the CBN has the authority, and indeed we believe, approved the banks’ applications to issue CCIs outside the recommended time frame.”

    e-CCI

    The CBN in June 2016 introduced the Electronic Certificates of Capital Importation (e-CCI) to replace paper approval, for improved efficiency in line with its desire to use technology to drive its operations.

    CCI is a CBN certificate issued by banks for the importation of cash (foreign currency inflow) for investment as equity or loan, and also for the importation of machinery and equipment for investment as Equity or Loan.

    It is usually issued in the name of the investor between 24 and 48 hours of the inflow of the capital into the country. Its primary purpose is to guarantee access to the official foreign exchange (forex) market for repatriations of capital and returns on investment – dividend, interest, and capital on divestments. A copy of the CCI must be presented to the Nigerian bank to process a remittance by the requesting company.

    Senate’s sudden volte face

    The Senate, last year, exonerated the telecom giant and recommended  Stanbic IBTC to CBN for sanction “for improper documentation in respect of capital repatriation and loan repayments” on behalf of MTN.

    The report generated a lot of furore on the floor of the Senate as some senators did not understand why the report largely condemned the CBN and exonerated MTN, which was at the centre of the alleged shoddy deal, after the investigation.

    CBN wields big stick

    On conclusion of its investigation, the CBN ordered MTN Nigeria and the managements of four local lenders to immediately refund $8,134,312,397.63 illegally repatriated by the company to its coffers.

    CBN’s Director, Corporate Communications, Isaac Okorafor, in a statement in Abuja, said the actions of the apex bank became necessary following allegations of remittance of forex with irregular CCIs issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March this year.

    The four lenders that also came under the sledge hammer of the CBN for the violations of extant forex regulations are Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank.

    Figures obtained from the CBN indicate that the highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined the sum of N1,885,852,847.45. For its punishment, Citibank Nigeria was penalised in the sum of N1,265,541,562.31, just as Diamond Bank was directed to pay the sum of N250 million for violating extant rules.

    Okoroafor said the decision of CBN followed thorough investigations by it into the allegations of remittances by the four banks of forex with irregular certificates of CCIs issued on behalf of some offshore investors of MTN Nigeria Communications Limited.

    He said the investigations revealed that $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs. Similarly, $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively between 2007 and 2015. Accordingly, he said the CBN had directed the affected banks to immediately refund the respective sums to the CBN.

    The apex bank’s investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the telco.

    He said investigations by the CBN took a while in order to carry out thorough inquiry and give fair hearing to all parties involved. Okorafor advised all banks and multinational companies in the country to adhere strictly to the provisions of all extant laws and regulations of the country in their forex transactions. He warned that failure by the management of banks and companies to abide by existing guidelines would be appropriately sanctioned, which sanctions may include denial of access to local forex market.

    MTN rejects CBN’s $8.1b cash refund order

    MTN Nigeria rejected CBN demand to refund $8.1billion allegedly illegally repatriated from the country.

    The telco insisted that all the dividends it paid to its shareholders between 2007 and 2015 were approved by the apex bank.

    The telecom giant was reacting to the claim of the apex bank that it illegally converted shareholder loans to preference share and repatriated $8.1 billion as dividends during the period under scrutiny.

    MTN in a statement titled: “Central Bank of Nigeria (CBN) correspondence regarding Certificates of Capital Importation (CCIs) in Nigeria”, said it strongly refutes the allegations and claims.

    “MTN Nigeria Communications Limited (MTN Nigeria) received a letter on 29 August 2018 from CBN alleging that CCIs issued in respect of the conversion of shareholders’ loans in MTN Nigeria to preference shares in 2007 had been improperly issued. As a consequence they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1 billion need to be refunded to the CBN.

    “MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and with the approval of the CBN as required by law,” the telco said.

    MTN said the issues surrounding the CCIs have already been the subject of a thorough enquiry by the Senate.

    “In September 2016, the Senate mandated the Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others. In its report issued in November 2017, the findings evidenced that MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria.

    “MTN Nigeria, as a law-abiding citizen of Nigeria, is committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria. The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy.

    “We will engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available,” the telco said in the statement.

    ALTON reacts

    The Chairman, Association of Licensed Telecoms Companies of Nigeria (ALTON), Gbenga Adebayo, had said the development was worrisome as it is capable of hurting the health of the telco.

    He said: “The development and situation as we are reading in the news is worrisome, but we are hoping that parties will discuss and resolve in the best way because of the huge investment they have made and the significant contribution of MTN to our socio-economic development. We, however, expect that all the critical stakeholders will discuss in good faith and find a good way around this situation.”

    He said compelling the telco to refund that huge cash would have significant impact on future investment, warning that wrong signals should not be sent out to willing investors.

    He urged the NCC to intervene in the best interest of the industry and because of the possible impact of this on the entire industry.

    On the implication of the development on the corporate image of the telco, he said MTN had said due process was followed and the burden of prove is on the CBN.

    “Our members have very high principles of corporate governance and this report as made is of concern, but we are certain that it will be resolved in the best interest of our member and that of the larger industry,” Adebayo said.

    His counterpart in the Association of Telecoms Companies of Nigeria (ATCON), Olusola Teniola, had accused the CBN of interlopping.

    He said: “It is very important to note that the figure referred to has almost been fully paid by MTN and that the $8.1billion doesn’t belong to CBN but belongs to MTN. So on this basis, it is hard to understand exactly what CBN seeks by its demands on MTN that it doesn’t have regulatory oversight over. I fully believe MTN will continue to engage with the relevant authorities to resolve this latest setback. “

    He believes clarity, transparency and continued dialogue from both CBN, the banks and MTN to amicably resolve this matter in the interest of the wider stakeholder community, especially, potential investors closely watching developments on this issue. At the moment processing of CCIs is shrouded in confusion in what should be a relatively straight forward process in between the banks and CBN their regulator.

    Teniola said a refund is very unlikely.  He said: “The size of the demand and timing is unreasonable and not in the interest of the country. After all, the Naira equivalent will have to be returned to MTN Nigeria. It is then an interesting situation that this seeks to redress events that occurred when CBN had full oversight and approved the transactions. How do they intend to do that?”

    He believes the matter should be between the banks and CBN and not the client of the banks which is MTN.  “NCC may decide to intervene if events unfold that threaten the survival of MTN and the telecom industry that they regulate. For now it is too early to see which way this will take,” he said.

    CSL Stockbrokers

    CSL Stockbrokers described the development as another regulatory impasse.

    The stockbroking firm had reacted in a series of tweets shared on its official Twitter handle, at the weekend.

    It said the N5.9 billion fine will largely be immaterial; at least for its clients Diamond Bank and Stanbic IBTC. This is because “this amount is not large enough to pose as a threat to their financial stability and/or near-term profitability”.

    @CSLStockbroking

    The CBN has also ordered that MTN refunds US$8.1bn that was alleged to have been “illegally repatriated”.

    “This appears impossible given that the funds have long been distributed to shareholders and lenders over time, and cannot be practically raised by MTN itself without major disruptions to its business…

    “We believe the regulator may resort to imposing a fine on MTN (which will materially impact profitability), or restrict future repatriation of funds by MTN, with the attendant effect on its foreign lenders and shareholders.

    “For MTN, the market is not taking the CBN’s directive lightly. Panic sales appear to have been triggered with MTN Group’s share price (as of time of writing) taking a 31 per cent nosedive since the news broke.

    Impact on IPO

    Part of the settlement terms for the N330billion fine MTN reached with the NCC is listing on the Nigerian Stock Exchange (NSE).

    CSL Stockbrokers, however, said the new development may threaten the ability of the telco to fulfil this important aspect of the agreement the NCC CEO, Prof Garba Dambatta, said was signed, sealed and delivered between MTN and the Federal Government.

    “Of particular concern, the CBN’s refund directive given to MTN could potentially impact its Initial Public Offering (IPO) in Nigeria – which was expected to have commenced this month – and heightens the risk of an IPO undersubscription,” the firm said.

    Like the ATCON chief, CLS Stockbrokers said it will be impossible for the telco to refund the cash because “the funds have long been distributed to shareholders and lenders over time, and cannot be practically raised by MTN itself without major disruptions to its business.”

    Resolution, withdrawal of case from court

    The CBN said it had reached an agreement with MTN over the matter.

    Earlier, MTN had said the matter was resolved and it agreed to make a $53 million payment. CBN did not refer to a figure but said the sides decided that the agreement would lead to an amicable disposal of the pending legal suit between the parties and final resolution of the matter.”

    The CBN had ordered MTN and its lenders to bring back a total of $8.1 billion it alleged the company had illegally repatriated using improperly issued paperwork between 2007 and 2008.

    “The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders,” MTN said in a statement. However, the CBN has found that a 2008 private placement remittance worth around $1 billion was based on certificates that did not have final approval.

  • CBN introduces Consumer Complaint Management System to banks

    The Central Bank Of Nigeria (CBN) has announced the deployment of its Consumer Complaint Management System (CCMS) to ease the process of addressing issues.

    The bank made the disclosure in a circular on its Website on Friday, saying the automated system would help to ease complaint management.

    It said the CCMS would ultimately boost Nigerians’ confidence in the banking sector.

    The bank also said the move was part of the apex bank’s job to ensure that the banking and finance sector was stable and conducive for all.

    “The Central Bank of Nigeria (CBN) in furtherance of its mandate to promote stable financial system, embarked on the development of a Consumer Complaint Management System (CCMS).

    “This is an automated system aimed at easing complaints management to engender public confidence in the financial system.

    “In view of this development, the CBN has made it compulsory for banks and other financial institutions to abide by three important guidelines,” it said.

    The regulator said that the banks would have to to assign a tracking to every complaint received from their respective customers.

    It said the banks also needed to acknowledge receipt of every complaint through an e-mailed response.

    This, it noted, would also include the tracking number that has been assigned to commence the uploading of all complaints on the CCMS.

    The CBN advised banks and other financial services operators to ensure that they adhered to those stipulations which would start on Jan. 2, 2019.

    It added, “Failure to do this will attract sanctions in line with the Banks and Other Financial Institutions Act (BOFIA), Cap B3, LFN 2004.” (NAN)

  • Truce in $8.1b dispute with CBN lifts MTN’s shares

    Shares in South African telecoms giant MTN jumped eight per cent yesterday after it settled a row with the Central Bank of Nigeria (CBN) over the $8.1 billion it allegedly illegally repatriated from the country.

    MTN had announced on Monday that it would pay just $52.6 million to end the dispute in Nigeria, its biggest and most lucrative market.

    The case had dogged MTN for four months, dragging its share price down 20 per cent to hover around its lowest level since 2009 while also sparking pessimism around the ease of doing business in Nigeria.

    It centred on allegations that dividends paid by the firm between 2007 and 2015 were based on improperly issued certificates.

    The apex bank had initially ordered MTN and its lenders to bring back $8.1 billion it alleged the telco had illegally repatriated to South Africa during that time.

    But after MTN provided additional documents, the  CBN concluded only one 2008 private placement, worth around $1 billion, was irregular. MTN agreed to pay $52.6 million as a “notional reversal” of this transaction.

    “MTN Nigeria will pay the notional reversal amount without admission of liability,” it said in a statement announcing the settlement.

    The CBN’s initial order threatened to wipe out more than half of MTN’s market capitalisation at the time it was issued in August, and spooked investors just as the telco was trying to reassure them of its frontier market-focused strategy after a series of costly legal problems.

    MTN shares were up 4.34 per cent to 89.21 rand yesterday, after rising more than eight per cent to highs of 93 rand in the first trading session since the settlement was announced.

    MTN is Nigeria’s biggest operator with 52.3 million users in 2017, and the country accounts for one third of the firm’s annual core profits. But it has also proven problematic.

    While the settlement marks a turning point in MTN’s fortunes in the country, the telecoms heavyweight still has to fight a $2 billion tax bill from Nigeria’s attorney general.

    Read also: $8.1b remittance: CBN, MTN Nigeria reach truce

    It also comes two years after the firm paid $1 billion for missing the deadline to cut off unregistered SIM cards – a fine that prompted its first ever annual loss.

    MTN was also previously accused of illegally repatriating $14 billion to its parent company, but was cleared of the allegations.

    The latest dispute cemented concerns about firms’ ability to effectively operate in Nigeria, where a sluggish economy, strained public finances and upcoming elections have also left some questioning the motives behind such cases.

    “Why did it take the CBN several years to ‘discover’ this and confront MTN?” said Dobek Pater, a director at consultancy Africa Analysis, adding this at least suggests negligence or a lack of competence at the central bank.

    “Sometimes the government (government organisations’) interpretation of the law/regulations can be speculative to suit their ends,”

  • $8.1b remittance: CBN, MTN Nigeria reach truce

    The Central Bank of Nigeria (CBN) and MTN Nigeria Communications have resolved issues relating to the $8.1 billion foreign exchange remittances by the telecom giant, the apex bank announced yesterday.

    In a statement, the CBN, however, identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular, having been based on Certificate of Capital Importation (CCIs) that were issued without the final approval of CBN.

    “The CBN and MTNN have mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations,” the CBN said.

    In August, last year, the apex bank directed MTNN to reverse repatriations valued at $8.1 billion done on its behalf by four commercial banks between 2007 and 2015 on the basis of CCIs irregularly issued to MTNN.

    The apex bank said that following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN committed to engage further with MTNN with a view to achieving an equitable resolution.

    “Consequent upon the above, MTNN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the bank, satisfactorily clarifying its remittances.

    Read also: CBN gets kudos for suspension of forex on fertiliser import

    “Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.

    “The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.

    “The CBN assures foreign investors that the integrity of the CCIs issued by authorized dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”

  • CBN directs BDCs to publish forex purchases, sales

    The Central Bank of Nigeria (CBN) yesterday directed all licensed bureaux de change (BDCs) to publish all foreign exchange purchases through the apex bank and autonomous sources in their financial statements.

    CBN Director, Other Financial institutions Supervision department, Mrs. Tokunbo Martins, said the operators are also to submit total forex sold and commissions earned within the year. She noted that appropriate sanctions will apply to operators that fail to comply with the directive.

    According the apex bank, Section 13 of the Revised Operational Guidelines for the BDCs in Nigeria issued in November 2015 provides that every licensed BDC shall submit its audited financial statements to Director, Other Financial Institutions Supervision Department of the CBN for approval, not later than three months after the end of its accounting year.

    It also provides no BDC shall publish its audited accounts in a newspaper without the prior approval in writing of the CBN.

    The CBN said it has however, observed that many BDCs have not been submitting their annual audited accounts contrary to the above regulatory requirement.

    “We also observed that in some instances, the accounts were incomplete and inaccurate and that some of the accounts were not endorsed or stamped by the external auditors, thus casting doubts on their integrity and reliability.

    The audited financial statements to be submitted to the CBN shall be prepared in accordance with applicable accounting standards and shall comprise of directors’s statement, auditors’ report, statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity and statement of cash flows,” it said.

    Consequently, all BDCs are hereby reminded to strictly comply with the above requirement by submitting complete and accurate annual audited accounts duly stamped by and bearing the professional seal of qualified audit firm and signed by directors as required.

  • CBN gets kudos for suspension of forex on fertiliser import

    A group, the Federation of Agricultural Commodity Association of Nigeria (FACAN), has lauded the decision of the Central Bank of Nigeria (CBN) to cut foreign exchange (forex) access for all fertiliser imports.

    Its National President, Dr. Victor Iyama,   said the decision wiould boost the industry.

    Speaking with The Nation, he said it would help the local blending plants to produce enough fertiliser for farmers.

    Finished imported NPK products are affected by the CBN’s decision to cut foreign currency access for all fertiliser imports. The apex bank issued a circular on December 10 stating that all fertilisers will be added to its existing list of 41 imported items from December 7.

    He believes the move will go a long way in stemming the importation of poor quality NPK fertiliser blends, boost local capacity and protect the soil from toxic fertilisers imported by unscrupulous business people.

    The Fertiliser Producers and Suppliers Association of Nigeria (FEPSAN) praised the Federal Government for the total ban placed on the importation of all blends of nitrogen, phosphorous and potassium (NPK) fertilisers.  FEPSAN President, Thomas Etuh, said with the move alone, the government was already on the verge of saving more than $500 million a year in foreign exchange as well as thousands of jobs. Etuh said NPK fertiliser blends from Nigeria are produced with specific soil composition in mind, a situation that preserves and adds value to soil nutrients.

    “Fertiliser blending plants in Nigeria are growing and have demonstrated capacity to produce exactly what Nigerian farmers need to enrich Nigerian soil for improved food production. We have demonstrated this and have attestations from farmers to support this claim and when I say we have the capacity, I mean we have such capacity in quantitative and qualitative terms,” he said.

    The FEPSAN president said his members already have grown capacities at more than 20 blending plants spread across the country to produce up to 4 million tons of high quality NPK fertiliser blends.

    He said: “We are aware that a lot more Nigerians are adopting agriculture as a business, especially in response to the Federal Government’s drive for food security. FEPSAN, in heeding the patriotic call for food security has placed itself in a position to ensure Nigerian farmers have all the best quality fertiliser they need. This also places us in a strong position to export to other countries in West and Central Africa, especially since we have capacity to produce more than what Nigerian farmers will need in the foreseeable future.”

  • Union Bank reacts to EFCC $2.8M confiscated at Enugu Airport

    The Management of Union Bank has reacted to the arrest of two men by the operatives of the Economic and Financial Crimes Commission (EFCC) at the Enugu Airport.

    The EFCC had on Friday paraded two men, alleged by the commission to be fraudsters caught with $2. 8 million.

    The bank in a series of tweets posted on its official twitter handle said the operation was licensed by the Central Bank of Nigeria (CBN).

    “Movement of cash across states is routine for all banks. Bankers Warehouse is licensed by CBN to provide Cash-in-Transit services” the bank said.

    “We are surprised by the release of a news bulletin prior to the completion of @officialefcc investigation. This is a legitimate and routine operation consistent with banking”.

    Also, Bankers Warehouse, a company licensed by CBN to carry out both Cash Management (CM) and Cash-In-Transit (C-I-T) in a letter to the bank regulator said it was on a legitimate business.

    Bankers warehouse head operations, Lawrence Ijebor, said EFCC still detained it employees despite providing identification.

    The letter reads, “When questioned, they presented their identity cards identifying themselves as bankers warehouse employees on official CIT movementaand also provided the letter of authority provided by the bank covering that movement”.

    “Despite the information provided, the EFCC insisted on detaining our employees, taking possession of our goods and threatening to confiscate the currency, without making themselves available to our senior managers or other agencies familiar with our movements”.

    “We seek your intervention as our regulator, to address this issue of constant harassment of our staff, by security agencies.”

  • CBN okays Access, Diamond merger

    THE Central Bank of Nigeria (CBN) has given a “No Objection” nod to the merger plans of Access Bank Plc and Diamond Bank Plc, the boards of both banks said yesterday.

    The deal is expected to be completed in the first half of 2019. Transaction completion is subject to Access Bank and Diamond Bank obtaining shareholder and regulatory approvals (CBN, the Securities and Exchange Commission (SEC), the Federal High Court (FHC) and the National Pension Commission (PenCom).

    Following the signing of the Memorandum of Agreement and announcement of headline terms, which valued Diamond Bank at approximately N72.5 billion (about $200 million) and will see Diamond Bank shareholders receive N3.13 per share in cash and shares, Access Bank and Diamond Bank are announcing further details, including the rationale and benefits of the deal, the estimated cost synergies, the capital management plan and the timetable.

    The merger will form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million clients.

    It will bring also together treasury, risk management and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments.

    The transaction will be concluded via Scheme of Merger following Access Bank and Diamond Bank Court Ordered Meetings billed for March 2019 to approve terms. Subject to shareholder approvals, final approvals by SEC, CBN and PenCom regulatory and FHC sanction are expected before the end of first half of next year.

    Cost of synergies conservatively estimated at N30 billion per annum, pre-tax, to be fully realised within three years post-completion.

    Further revenue and balance sheet synergies are to be evaluated by joint implementation committee.

    The pro-forma capital position of the merged bank will be in full compliance with regulatory requirements for significant financial institutions with an international banking presence.

    However, in order to meet international standards of best practice and ensure a robust capital buffer, both banks expect to achieve a post-completion Capital Adequacy Ratio (“CAR”) of 20 per cent at the bank level and 22 per cent at the group level.

    The key elements are – Diamond Bank to take further impairments in line with IFRS9, to be reflected in year end 2018 results.

    Access Bank has finalised terms and obtained regulatory approvals for a Tier II capital issuance, which will raise $250 million, available for drawdown in January 2019.

    Commenting on the proposed merger, Access Bank’s Chief Executive Officer (CEO) Herbert Wigwe said: “I am delighted to announce that we have received the necessary regulatory approvals to pursue a merger with Diamond Bank, one of Nigeria’s foremost digital and retail banks, subject to final regulatory and shareholder approvals.

    “The combination of our two businesses will create the largest retail bank in Africa by customer base and a very significant player in the Nigerian market.  This is a huge step towards the delivery of our goal to bring the power of banking to millions of people across Nigeria and an exciting transaction for Access Bank and Diamond Bank’s customers, staff and shareholders.

    “We have a clear plan to maintain our capital strength and are announcing today decisive steps by both banks to ensure their financial stability throughout the process.

    “The overall outcome will be a stable institution with an extremely strong capital adequacy ratio of more than 20 per cent following completion of the merger, which will be a leading competitor in all the markets in which it operates.”

    Diamond Bank’s CEO Uzoma Dozie said: “The merger is positive for all of Diamond Bank stakeholders, including customers, employees and shareholders. In particular, customers will benefit significantly through the unrivalled combination of the best of Diamond Bank’s retail and digital leadership with the size of Access Bank’s balance sheet, corporate names and geographical reach.

    “In reaching this decision, the shared passion for leveraging Nigeria’s youthful and entrepreneurial talent, and a commitment to better outcomes through financial inclusion have convinced us that this is the right combination.

  • CBN, NDIC to banks: look beyond profitability

    Banking thrives when lenders promote activities that make life better for the people. The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) insist that banking should go beyond the profit motive, with lenders ensuring that the people and the environment where the business is done have something to cheer, writes COLLINS NWEZE.

    Banking is not all about profitability. It should be done with human face and recognition that the communities where the business is conducted should benefit from the profit that comes from it.

    The Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation and Deposit Money Banks (DMBs) agree that banking can only thrive in an environment where Corporate Social Responsibility (CSR) and commitment to the communities where the business is done, are given a priority.

    The CBN has, therefore, encouraged the adoption of sustainable banking practice by banks, given that environmental and social responsibility support business success and long-term growth.

    According to the CBN and Nigeria Deposit Insurance Corporation (NDIC), sustainability reporting allows organisations measure, understand and communicate their environmental, social and governance performances.  Although the reporting system has gained currency and acceptance globally, only a few local banks and organisations encourage sustainability practices in their reports.

    To further involve corporate organisations, the Central Bank Governor, Godwin Emefiele and the NDIC Managing Director,  Umaru Ibrahim said the regulators will continue to renew its commitment towards the implementation of the NSBP, the achievements of the United Nation’s Sustainable Development Goals (SDGs) and the Paris Climate Change Agreement and reduce global poverty rate.

    For instance, two years ago, about 28 per cent of the African population was found to be severely food insecure, rising about three per cent from 2014. The continent is also found to have the highest prevalence of undernourishment – at about 20 per cent. This can basically be traced to conflict, lack of investment in agriculture, environmental challenges, but with poverty as a primary factor. Those living in poverty often cannot afford food of sufficient quality or quantity to live a healthy life.

    In 2018, the World Bank reported that extreme poverty has rapidly declined globally, with estimates showing that the number of extremely poor people—those who live on $1.90 a day or less—has fallen from 1.9 billion in 1990 to about 736 million in 2015. However, the number of people living in extreme poverty keeps increasing in Sub-Saharan Africa, actually peaking in 2018 with 437 million people, and then slowly decline again to reach 416 million in 2030.

    This year, most Nigerians were disturbed by the World Bank data referring to the most populous black country on the planet as the ‘poverty capital of the world’, with 86.9 million Nigerians still living in extreme poverty.

    The country is faced with numerous challenges, most of which are captured in the Sustainable Development Goals (SDGs) –  poverty eradication, hunger and food security, adequate provision of good health, education, advancing gender equality and women empowerment, developing infrastructure, provision of water and sanitation, provision of clean and affordable energy and taking effective action on climate change.

    In order to address these, leading financial institution, Access Bank facilitated the birth of the Nigerian Sustainability Business Principles (NSBP), by bringing together stakeholders in the financial sector with the aim of securing buy-in for the development of the nine principles . These include environment and social risk management, environment and social footprints, human rights, women’s economic empowerment, financial inclusion, environment and social governance, capacity building, collaborative partnerships, and reporting. Today, the principles are adopted by all banks in Nigeria including the CBN. This year  marks the fifth anniversary of the implementation of the NSBP in the Nigerian financial sector.

    Since 2008, the bank has successfully built a sustainability strategy driven by Sustainable Financial Services  developing innovative services that enhance the lives of customers and enables them reduce environmental and social impacts. The lender is helping in building sustainable economies – facilitating and financing sustainable economic growth through financial inclusion and education.Also, sustainable societies – supporting vibrant and successful communities in every market among others.

    Specifically, Access Bank recognises the importance of climate action, supporting people, businesses and communities in building sustainable enterprises, all of which has led to several awards both locally and internationally. Recently, it also received top honours at the 2018 Karlsruhe Sustainable Finance Awards in Germany, emerging as the winner in two categories and the Euromoney Awards for Excellence as ‘Africa’s Best Bank for Corporate Social Responsibility’ in London last July.

    During the bank’s 2018  Sustainability Awareness Week, Access Bank Group Managing Director/CEO , Herbert Wigwe, expressed the lender’s determination to create meaningful impact around the world and its subsidiaries by increasing awareness of best sustainable practices that can be implemented within its operational areas.

    He also listed profit, planet, and people as the pillars in which corporate sustainability are entrenched, stating that “this comes with a vision to be the most sustainable and respected bank in Africa, financing and facilitating brighter futures for all of our stakeholders through innovative services and best in class operations”.

    Sustainability,  Enterprise and Responsibility Awards (SERAs) CSR highlight different factors for improvement and national development, especially in working with different organisations to eradicate poverty and engender transformative change that guarantees a safe, equitable and sustainable world for both the current and future generations.

    The SERAs award is an annual project which aims to promote as well as raise awareness about the roles organisations play with an emphasis on their responsibility towards stakeholders and the social development of Africa.

    The 12th edition of the award was recently held on Saturday, December 1,  in Lagos. The event attracted several dignitaries and executives from diverse sectors. There were 22 categories open for contention, four of them were won by Access Bank including the Best Company in Partnership for Development, Best Corporate Communication Team, Sustainability Practitioner of the Year – received by Omobolanle Victor-Laniyan, Group Head of Sustainability Access Bank and the Most Responsible Business in Africa, both of which were the biggest awards of the night and for Access Bank, a back-to-back success.

    For Access Bank Plc., banking also includes empowering the people and giving their lives a positive meaning. That explains why it has continued to take steps that promote the common good. For instance, the Operations Unit of Access Bank Plc recently handed over two blocks of classrooms it renovated to the Keke  Nursery and Primary School, Agege, Lagos. The Bank did not only strengthen the dilapidated buildings and fortified them with iron formations, it also changed the roofs, windows and painted the classrooms to give them new looks.

    Speaking on the gesture,  Victor-Laniyan, said: “The fact is that in every environment we operate, we must make the people better, the environment better while trying to drive profit. So, we are not just focused on making money – it is just one aspect of the things we are keen on.”