The Nation Newspaper

Tag: inter-bank

  • Inter-bank rates stable on budget, mature T-Bills

    Inter-bank rates stable on budget, mature T-Bills

    The interbank rates were steady at six per cent on average yesterday, unchanged from last week’s. This followed an increase in cash flow to the banking system from budgetary allocations and retired Treasury Bills.

    Traders said about N284 billion was injected into the system from budgetary allocations to government agencies, while an additional N227 billion was paid out in matured government debt, boosting liquidity and keeping interest rates at a lower level.

    “The system was very liquid and many banks had sufficient cash to support their transactions this week,” one dealer told Reuters.

    Traders said though the Central Bank of Nigeria (CBN) made frantic efforts to mop up excess funds from the interbank market by selling about N828 billion worth of Treasury bills, the market remained sufficiently liquid to keep the interbank rate low.

    “We expect the system liquidity to open on Monday at around N600 billion,” another dealer said. The secured Open Buy Back (OBB) closed at six per cent, same level last week, same for overnight placement, traders said.

    Dealers said rates should remain unchanged next week, unless the central bank takes action by mopping up excess liquidity.

  • Inter-bank rate falls on T-Bills’ refund

    The inter-bank rate fell slightly, by 155 basis points, partly due to improved market liquidity from treasury bills (T-Bills) repayment and lower inter-bank funding pressure.

    As at yesterday, the call/overnight and seven-day money market rates were at 10.8 per cent and 11 per cent respectively. The three-month Nigeria Interbank Offered Rate (NIBOR) slowed to 11.8 per cent, though less activity was done on the tenor.

    The inter-bank secured lending (Open Buy Back) fell to 10.3 per cent. Meanwhile, the Central Bank of Nigeria (CBN) liquidity management remained active, supported by recent change to Cash Reserve Requirement (CRR), the circular issued on 1 August reviewing guidelines for how banks access its Standing Lending Facility |(SLF) window disclosed.

    The CBN had on December 4, sold N124 billion of 91-day, 182-day and 364-day TBs at stop rates of10.95 per cent, 11.2 per cent and 11.66 per cent respectively.

    Also, the liquidity management plan was supported by Wholesale Dutch Auction System (WDAS) foreign exchange auction and latest CBN’s Monetary Policy Committee (MPC) decision to hold rate unchanged at 12 per cent on November 19.

    The naira strengthened by 0.2 per cent against the dollar in the Inter-bank and has lost 1.5 per cent of its value year-to-date.

    The naira closed at N158.6 to a dollar after the initial volatility at the twice-weekly Retail Dutch Auction System (WDAS) ended, partly due to improved dollar supplies of $400 million per auction. The CBN sold $399.99 million on December 16 at N155.73.

  • Inter-bank rate steady on improved liquidity

    The inter-bank rate was steady last week, reflecting improved market liquidity from treasury bills (T-Bills) repayment. The stability was linked partly to slowdown in Central Bank of Nigeria’s (CBN’s) liquidity management exercise from June till date. In a special Open Market Operation (OMO) auction conducted last Thursday, the apex bank sold N92.46 billion of 210-day T-Bills. It offered N300 billion and sold N92.46 billion at 13.125 per cent.

    Last week’s rate showed that the call/overnight and seven-day money market rates were 10.3 per cent and 10.7 per cent respectively while the three-month Nigeria Inter-bank Offered Rate (NIBOR) also fell to 11.4 per cent although less activities are done on the tenor.

    The inter-bank secured lending (Open Buy Back) was steady on 10.25 per cent for commercial banks and discount houses respectively.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun, projected that due to improved market liquidity, inter-bank rate would likely remain steady on 10.5 per cent during the week. The naira weakened 0.6 per cent against the dollar in the Inter-bank and has lost 3.4 per cent of its value year to date reflecting strong dollar demand to support import. Ezun said the naira remains under pressure notwithstanding CBN’s interventions mainly because of sliding foreign reserves and rising petroleum imports.

     

    Financial inclusion

     

    The CBN policy on financial inclusion reduced the adult exclusion rate in the financial system from 46.3 per cent in 2010 to 39.7 per cent. CBN Acting Director, Consumer & Financial Protection, Mrs Dutse Umma Aminu, disclosed this at the media Finance Correspondents and Business Editors seminar in Umuahia, Abia State.

    Mrs Aminu, who was represented by CBN Head, Consumer Education, Khadijah Kasim, said the overall strategy of the policy is to reduce adult exclusion rate from 46.3 per cent in 2010 to 20 per cent in 2020 as such feat would support the empowerment of many Nigerians and promotion of economic growth.

    He said the CBN strategy defined clear objectives and sets specific targets across five primary products and services bothering on payments, credits, savings, pensions and insurance. He said the priority is on transforming the Know Your Customer (KYC) regulation into simplified risk-based tiered framework that allows individuals who do not meet formal identification requirements to enter the banking system.

    He said the CBN and banks have achieved rapid progress regarding the new KYC regulation already released to commercial banks. He explained that the CBN is also pursuing the development and implementation of regulatory framework for agent banking to enable financial institutions deliver services through agents such as post offices in locations that will otherwise be unprofitable to open physical branches.

    Eluhaiwe said the CBN has also developed and is implementing a National Financial Literacy Framework to guide delivery programmes that will increase the awareness and understanding of financial products and services with the ultimate goal of increasing sustainable users.

    The banking watchdog, he added is also implementing a comprehensive consumer protection framework to safeguard the interest of consumers of financial products and services and sustain confidence in the financial system.

     

    Govt earnings

     

    The Federal Government earned N805.91 billion in April, CBN Economic Report for the month showed. The report said the earning was below the provisional monthly budget estimate by 14.7 per cent, but exceeded the receipt in the preceding month by two per cent.

    At N620.97 billion, oil receipts (gross), which constituted 77.1 per cent of the total revenue was below the provisional monthly budget estimate by 3.7 per cent, but surpassed the level in the preceding month by 4.3 per cent. It said the decline relative to budget estimate was attributed largely, to the fall in receipts from crude oil and gas exports in the review period.

    The CBN said gross non-oil receipts stood at N184.94 billion, but was lower than both the monthly budget estimate and the level in the preceding month by 38.5 and five per cent.

    The decline relative to the monthly budget estimate, it said reflected, largely, the low receipts from corporate tax, customs and excise duties and independent revenue of the Federal Government.

    Federal Government estimated that retained revenue was N323.96 billion, while total estimated expenditure was N374.43 billion. It said the fiscal operations of the Federal Government resulted in an estimated deficit of N50.47 billion, compared with the estimated monthly budget deficit of N73.92 billion.

     

    Mobile payment

     

    The total value of mobile payment transactions from November 2011 when it was inaugurated to May, 2013 was put at N74.2 billion by the CBN.

    CBN Director, Banking and Payment System, Oladipupo Fatokun, said the figure rose from N9.99 billion in November 2011 to N74.26 billion in May 2013, while the number of agent banks grew from 4,031 to 51,095 during the same period.

    Fatokun, who was represented by the Manager, Payment Policy and Oversight Department, Mr Chai Gang, said the number of operators in the payment scheme was 18 in May 2013. According to him, some mobile payment users also stood at 5.73 million in May.

    He explained that agent banking and mobile payment deployments had demonstrated that effective agent network was key to the growth of any economy.

    Fatokun said that the CBN was working with stakeholders in solving some challenges affecting mobile payment transactions. He listed some of the challenges to include public enlightenment, epileptic power supply and poor telecommunication connectivity.

    He explained that mobile payments are payment services operated under financial regulation and performed from or via a mobile device. “It is a payments transaction where the mobile phone plays a key role in the initiation, authorisation and/or consummation of the transaction. Mobile payments are a substitute or a replacement for cash payments. Instead of paying with cash, check or credit cards, a consumer can use his mobile device to pay for a wide range of services and receive payments,” he said.

     

    Bonds

     

    Nigeria returned to the international bond market for the first time in two years with a $1 billion sale of Eurobonds, raising funds for power projects amid a sell-off in emerging-market debt.

    Blomberg report said Nigeria issued $500 million of five-year notes to yield 5.375 per cent and $500 million of 10-year securities at 6.625 per cent.

    In January 2011, the nation paid 6.75 per cent on dollar debt due 2021 in its first overseas offering and the yield on the securities surged a record 133 basis points in June to 6.02 percent. Yields on emerging-market bonds jumped 73 basis points to 5.80 per cent, JPMorgan Chase & Co. data show.

    Demand is waning after the Federal Reserve signaled in May and June plans to rein in $85 billion a month of assets purchases that drove borrowing costs to record lows and fueled demand for emerging-market assets. Dollar debt sales this year by developing nations including Honduras and Rwanda have lost as much as 14 per cent for investors.

     

    Cash-less

     

    Bank customers that fail to meet the deposit or withdrawal limits under phase two of the CBN cash-less policy will not pay default charges for the next three months. The CBN placed a three-month moratorium on all bank charges for customers in the Federal Capital Territory (Abuja), Abia, Anambra, Kano, Ogun and Rivers states which fall within the phase two implementation schedule of of the policy.

    Confirming this development, CBN Director of Communications, Ugochukwu Okoroafor, told The Nation that the apex bank took the decision to defer the charges until October 1, 2013 because it wants the policy to succeed. He said the apex bank considered the need to give people time to migrate to electronic channels and experience the infrastructure put in place by banks.

    The implementation of the policy began in the six states last Monday. The policy, which before now was only operational in Lagos State, is aimed at promoting the use of electronic-based transactions instead of cash for payments for goods, services, transfers among other services. The implementation of the ‘Cash-less Lagos’, as it is known, began on January 1, 2012 and falls under the phase one of the project.

     

    Agric scheme

     

    The CBN disbursed a total of N199.25 billion to 270 projects under its Commercial Agriculture Credit Scheme. The total fund available to the scheme is N200 billion.

    CBN Governor, Sanusi Lamido Sanusi, who disclosed this at a workshop on tomato value chain development in Nigeria in Abuja, said the amount covers 30 state government projects.

    Sanusi, who was represented by CBN Deputy Governor, Economic Policy, Mrs Sarah Alade, said: “The SME restructuring fund (SMERRF) has disbursed N235.00 billion to 535 projects.

    “The CBN intervened with programmes, such as the N200 billion Commercial Agricultural Credit Scheme and Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) to support the Federal Government.”

    NIRSAL, he added, was introduced to stimulate agricultural development in Nigeria through value chain financing and adopts a value chain approach to guaranteeing lending while banks will be free to choose which part of the chain they are interested in lending to.

    The intervention programmes the governor said, builds the capacity of banks to engage and deliver loans, reduce counter-part risk through an innovative crop insurance scheme, and rewards performance in agricultural lending.

     

    Bank-to-bank report

     

    The Board, Access Bank Plc has appointed Mr. Herbert Wigwe, 46, as the Chief Executive Officer (CEO) designate. He will succeed the Group Managing Director/ CEO of the bank, Aigboje Aig-Imoukhuede, at the end of this year when he retires. Wigwe is the Deputy Managing Director (DMD) of the bank.

    In a statement, the bank said Aig-Imoukhuede will be leaving the Group after 11 years and five months of service. Chairman, Access Bank Plc, Mr. Gbenga Oyebode said he appreciated Aigboje’s commitment to excellence and sustainable business practices, which have propelled bank to position of leadership in Nigeria and the sub-region. “His vision, integrity and enterprise have earned him local and international recognition,” he said.

    He said: “Having received the necessary regulatory approvals, I am pleased to announce that Mr. Herbert Wigwe, currently Group Deputy Managing Director has been appointed CEO designate and will succeed Aigboje Aig-Imoukhuede at the end of 2013.”

    Meanwhile, indicated interest in investing over $100 million on 110 new branches in Kenya, Ghana and, Nigeria Reuters report said.

    This will be done alongside five other core markets over the next three years, as well as making substantial hires across both the wholesale and consumer banking business, including over 900 sales staff in the consumer banking business.

    Standard Chartered’s CEO for Africa, Diana Layfield, set out her vision for the African franchise over the next five years against a backdrop of how far the business has travelled to date.

    The bank said investment spend will also be accelerated in mobile payments technology, physical infrastructure, staff hires, establishing new onshore presences and deepening existing ones.

    The bank currently covers 37 markets in the region – 15 on a full presence basis and 22 further markets on a transaction basis following its clients; providing extensive reach across the continent, thereby covering 92 per cent of sub-Saharan African Gross Domestic Product (GDP).

     

  • Inter-bank rate falls on N230b T-Bills, OMO refund NIBOR as at June 14, 2013

    The inter-bank rate last week fell by 516 basis points to 10.5 per cent, largely due to improved market liquidity from treasury bills (T-Bills) and Open Market Operation  (OMO) bills repayment worth N230 billion.

    The call and seven-day money market rates fell to 10.54 per cent and 10.94 per cent respectively while the three-month Nigeria Interbank Offered Rate (NIBOR) also fell to 11.7 per cent.

    The inter-bank secured lending fell to 10.3 per cent for commercial banks and 10.5 per cent for discount houses. The naira depreciated 0.7 per cent against the dollar in the Inter-bank on 13 June. The depreciation partly reflected strong corporate demand for dollar, and to a lesser extent upward trending bond yields that signals likely foreign divestment out of the bond market.

    However on Friday, the local currency fell for a fourth day against the dollar, extending its worst weekly performance in 18 months. The naira fell 0.8 per cent to N162.60 a dollar taking its weekly decline to 1.8 per cent. It’s the worst performance since the five days through December 23, 2011 based on data compiled by Bloomberg.

     

    Credit bureau

     

    The Central Bank of Nigeria (CBN) has been advised to fully enforce its policy mandating financial institutions to obtain credit report from at least two credit bureaux operators before giving out loans.

    This was part of the resolutions reached at the credit reporting forum held in Lagos. Considering the critical role that a Credit Reporting system plays as an enabler in developing a stable and inclusive financial system, especially in emerging markets, the Federal Government was also advised by participants drawn from different sectors of the economy to take the development of the Credit Reporting system in the country as a national project.

    This, participants said, should boost usage by financial institutions and ensure an inclusive system. Over 180 delegates representing key drivers of the nation’s financial system including the CBN, credit bureau operators, deposit money banks, microfinance banks, insurance, pension administration, payment systems, financial training institutions, discount houses, trading and finance companies, industry associations among others attended the conference.

    It also registered representations from the Bank of Tanzania and credit bureau operators from South Africa and Tanzania, while the International Finance Corporation (IFC) also attended and made presentations.

     

    Inflation

     

    Analysts at Financial Derivatives Company (FDC) Limited have forecast May inflation to decline to 8.98 per cent from 9.1 per cent recorded in April. They also see the Monetary Policy Committee (MPC) retaining the benchmark interest rate at 12 per cent when the committee members meet in July.

    The Managing Director of FDC, Bismark Rewane, said in a report that the May projection is supported by the slight moderation in the food index of the  firm’s Lagos urban inflation and associated high prices in the base period of May 2012.

    He explained that FDC’s Lagos urban price index moderated for the third consecutive month by 0.46 per cent to 10.83 per cent, from 11.29 per cent in April.

    Also, the urban index eased as a result of the decline in both the food and non-food indexes while prices of items such as rice, guinea corn, wheat, salt, cereals, and vegetable leaves declined leading to a 0.08 per cent moderation in food index.

     

    ICAN/NDIC

     

    The Institute of Chartered Accountants of Nigeria (ICAN), Abuja District Society has acknowledged roles played by the Nigeria Deposit Insurance Corporation (NDIC) in bringing sanity to the Nigeria financial system especially in the course of the ongoing banking reforms.

    ICAN Chairman, Abuja District, Shehu Usman Aladire, said NDIC’s role in the reforms inspired depositors’ confidence in the nation’s banking system. Aladire spoke at a gala night held in Abuja to honour the Managing Director/ Chief Executive Officer, NDIC, Umaru Ibrahim.

    The ICAN chairman cited the increase of deposit insurance coverage levels from N50,000 to N200,000 per depositor of deposit money banks (DMBs) and the extension of insurance coverage to depositors of microfinance banks (MfBs) and primary mortgage banks (PMBs) at N100,000 per depositor of the MfBs and PMBs and the second upward review to N500,000 and N200,000 per depositor of DMBs and MfBs/PMBs. This, he said, had met the current economic realities and promoted public confidence in the financial system.

     

    Foreign inflows

     

    The foreign exchange reserves, which was $48.4 billion a month ago, comprised $12 billion portfolio flows, about a quarter of the reserves, FBN Capital has said.

    The investment and research firm said the tapering off of quantitative easing in the United States and other advanced economies could result in the exit of offshore funds as other emerging markets have experienced recently, and further pressure on the naira.

    A reduction in demand for Nigerian crude by the United States following its increased production of shale oil has resulted in a minus seven per cent year to date softening in the price of the Bonny Light, Nigeria’s benchmark crude.

    Consequently, the research firm hinted that easing of the Central Bank of Nigeria’s (CBN’s) tight monetary stance is likely to be pushed out that bit further given conditions in the external environment and the apex bank’s determination to hold the line on the exchange rate. “We see an exchange rate of N159 to a dollar by year end 2013,” it said.

    Data from the CBN shows that forex sales at the Bank’s bi-weekly foreign exchange auction increased from an average of $162 million per session in the first quarter to $285 million from April to date.

    However, the slight weakening of the naira in recent weeks would suggest that forex demand has increased, and a reduction in dollar sales by the multinational oil companies. Although increased dollar sales by the CBN have kept the naira trading within the plus or minus three per cent of N155 band, external sector developments are testing the limit of that band.

     

    BoI

     

    The Bank of Industry (BoI) said it had disbursed a combined N437.39 billion out of the N535 billion funds it secured from the Federal Government for financing projects in the power and manufacturing sectors of the economy as at March this year.

    Speaking during the media workshop organised by the bank in Lagos, its General Manager, Operations, Joseph Babatunde disclosed that the managed funds comprise of CBN’s N235 billion Refinancing/Restructuring Fund (RRF) of commercial banks loans to the manufacturing sector and N300 billion Power and Aviation Fund (PAIF). Both funds were approved in 2011.

    He said of the RRF, N229.18 billion had been disbursed as at March and is targeted at refinancing commercial banks’ loans to Small and Medium Scale Enterprises (SMEs) in the manufacturing sector. The fund, he explained, is expected to enhance the liquidity of commercial banks and facilitate more credits to the real sector.

     

    Reserves

     

    The Nigerian foreign reserves have stabilised in the past two months after $12 billion inflows over eight months to $48.6 billion, FBN Capital research has shown. The rally ended at the end of March, this year.

    It explained in an emailed report that the increase can be traced directly to the tightening measures taken by the Monetary Policy Committee (MPC) in July 2012 and the announcement the following month by JP Morgan that it was to include Nigeria in its indices of local currency government bonds.

    “The level of reserves, which are reported by the CBN as 30-day moving averages, has stabilised not because the offshore investors have rushed for the exit but because of drawings on the excess crude account (ECA),” it hinted.

    The balance in the ECA, which forms part of the reserves, has declined this year by $4 billion, to about $5 billion, as a result of withdrawals announced by the Federation Account Allocation Committee (FAAC).

     

    MfB

     

    Lovonus Microfinance Bank Limited has launched salary advance scheme for employees of small to medium size companies to ease financial difficulties often faced before the monthly remuneration is due for payment by the employer.

    The scheme provides salary advance or instant loan to the employee, with a flexible repayment plan of one to three months, Usman Onoja, chief executive of the Lagos-based microfinance bank (MfB) said.

    He explained that to ensure the convenience of the employee, the salary advance is processed within 48 hours from the application or documentation, with delivery almost immediately, stressing that interest rate on the product is negotiable.

    To further deepen its customer service, the microfinance bank launched three new products recently, branded lovflex, lovflexplus and lovflexpremium. According to Onoja, lovflex is targeted at micro traders in need of N5,000 to N30,000. He said that interest rate on the facility was cut to seven per cent per month for a maximum four months tenure while the repayment plan could be by daily or weekly contributions.

    “Lovflexplus is for traders in need of N40,000 to N70,000 credit, for a four-month tenor with interest rate of seven per cent, while Lovflexpremium is for 80,000 to 100,000 loan, on four months maximum tenure, with interest rate of seven per cent monthly and repayment scheduled daily or weekly,” said Onoja.

     

    Bank to bank report

     

    Unity Bank Plc has been rewarded with a Special Recognition award for its unwavering “Excellence in banking” and unmatched commitment to the economic development of Nigeria, particularly Northern states.

    The bank received the award from Business Day newspaper at the just concluded Maiden BusinessDay Banking Awards.

    A statement from the bank said the awards were instituted to “…recognise Nigerian banks that have been outstanding in supporting economic growth in Nigeria. They have been instituted as a credible way of rewarding banks that are supporting economic growth in Nigeria without putting at risk the financial system.”

    Diamond Bank will today break its new campaign to, undoubtedly, claim its position as one of the leading financial institutions in Nigeria- providing customers with tangible financial solutions tailored specifically to suit their lifestyle.

    In a statement, the bank said the launch follows a successful brand refresh in November 2012 where the brand saw changes in its colours moving away from the monosyllabic greys and dark tones to more vibrant colours. The motive according to the bank, was to make the brand more approachable in line with its’ positioning as a leading retail bank in Nigeria.

    For more than 20 years, Diamond Bank said it has built equity as a strong reliable salient bank.

    Union Bank of Nigeria Plc’s first quarter pre-tax profit rose 40.33 per cent to N7.69 billion compared with N5.48 billion in the same period last year. The lender, which gave the detail to Reuters did not give any reason for the rise.

    However, its gross earnings dropped marginally to N29.79 billion from N29.84 billion the same period last year, the bank said in a statement.

    Also, Guaranty Trust Bank (GTBank) disclosed that it expected its pretax profit for the third quarter to hit N20.7 billion, compared with N21.9 billion in the same period last year. The lender said gross earnings will be N41.25 billion in the three-months to September 2013, down 42 per cent from N70.52 billion in the same period a year ago, it said in a filing with the Nigerian Stock Exchange (NSE). GT Bank also did not give reasons for the falls earnings and profit.

  • Inter-bank rate bullish on CBN’s liquidity control measures

    The inter-bank rate, last week, rose by 333 basis points to 14.5 per cent. This was largely due to Central Bank of Nigeria (CBN’s) liquidity management efforts. The CBN had mopped up over N200 billion via treasury bills on June 5 to support government liquidity needs.

    The overnight and seven-day money market rates rose to 14.45 per cent and 14.79 per cent respectively while three-month Nigeria Inter-bank Offered Rate (NIBOR) also rose to 15.4 per cent, though less activities are done on the tenor.

    The inter-bank secured lending (Open Buy Back) rose to 14.16 per cent for commercial banks and discount houses respectively even as the CBN liquidity management remained active within the week.

    It was also supported by the circular issued on 1 August reviewing its guidelines for how banks access its Standing Lending Facility (SLF).

    However, Currency analyst at Ecobank Nigeria, Ezun Olakunle hinted that the inflows of about N200 billion matured treasury bills and Open Market Operation bills on 6 June might gradually reduce rates by 200 basis points to about 12 per cent this week.

    At the Wholesale Dutch Auction System (WDAS), the apex bank offered and sold $300 million on June 5 at N155.74 to a dollar against $350 million sold on June 3 at N155.74. Over the short term, the naira is expected to continue to trade on the inter-bank market within the CBN’s three per cent band either side of N155 to a dollar.

    On Friday, the naira dropped by 0.4 per cent before trading 0.3 per cent lower at 159.35 per dollar. The decline extended its weekly decline to 0.7 per cent, the biggest fall since the five days through June 8, 2012.

     

    Banks’ stocks

     

    Oil and gas as well as power projects financing have been tipped to soar returns on banks’ stocks to 42 per cent by this year end, Vetiva Capital Management Ltd, an investment and research firm told Bloomberg.

    The Bloomberg NSE Banking Index, which tracks Nigeria’s 10 biggest banks by market value, is trading at a price-to-book ratio of 0.8 times, less than the 1.4 times book value of assets for lenders in the MSCI Emerging Market Banks Index.

    It said the gauge for Nigerian banks has gained 34 per cent this year compared with a 0.5 per cent drop in MSCI EM Banks Index. Nigeria’s all-share index has rallied 37 per cent this year, Africa’s best performer after Ghana’s benchmark equities measure.

    “What matters to us is the valuation of the banks, their move to create risk assets and how well they manage those risk assets. We’ve seen emerging market banks with similar risk profile with Nigerian banks, yet trading at higher multiples,” Pabina Yinkere, an equity analyst at Lagos-based Vetiva said.

     

    Mobile money

     

    The Central Bank of Nigeria (CBN) has explained why it is unable to adopt a telco-led approach in the execution of mobile money services.

    CBN Governor Sanusi Lamido Sanusi said regulation of the telecoms sector was not within the bank’s control, making it difficult to guide mobile money operations under the telco-led model being advocated by telecoms operators.

    Sanusi, who spoke at the risk management conference in Lagos, said the risks in mobile money operations were high, regulation has to be implemented.

    He said the banking watchdog does not control what the telcos are doing, unlike in the bank-led model where there are guidelines.

    Telecoms companies have been calling on the CBN to allow them to participate in the regulation of the mobile money subsector, one of the services provided by banks in support of the cashless banking initiative.

    Speaking at a seminar in Lagos, Tunde Kuponiyi, Globacom’s Director, Telebanking Unit, said the regime of mobile money regulation, which is bank-driven, is not friendly to telecoms companies, which provide the mobile payment platform. He said though there was a lot that telecoms companies could contribute in a cash-less economy, their mandate was limited.

    Kuponiyi explained that since the mobile payments business is 90 per cent dependent on the mobile industry, it was unfair that the mobile networks are prevented from advertising their various mobile payment products, which are the foundation on which the bank products operate.

     

    Nigeria, Canada

     

    The Nigeria, Canada trade volume will double to $6 billion from current $3 billion by 2015, the Canadian Minister of International Trade, Ed Fast has said.

    He disclosed this in the Oxford Business Group (OBG) report which indicated that Canada is working closely with the Federal government to address issues relating to security.

    The report titled: ‘Nigeria -2013 Report on Economic Reforms’, the firm said rolling out of wide-ranging reforms across the Nigeria’s economy is prompting investors to take a “fresh look” at the country.

    Also, Fast said Nigerian government’s privatisation and anti-corruption reforms will create better opportunities for investors.

     

    VISA

     

    The VISA Incorporated has re-iterated the need to focusmore on getting people in remote parts of the country involved in banking.

    The Country Director, sub-Saharan Africa, VISA Incorporated, Mr Ade Ashaye, said a lot of money in circulation is outside the banking system and the CBN cash-less policy is only targeted at encouraging people to make payments electronically rather than cash.

    He said financial inclusion is being widely pursued because there has always been a problem on how to reach people that is far away from banks. This, he said will involve banks opening more branches and getting their customers into embracing e-payment services.

     

    IFC

     

    The International Finance Corporation (IFC), an agency of the World Bank, is assisting local banks to boost lending to Small and Medium Scale Enterprise (SMEs) in the country. Speaking at the SME Toolkit Global Partner conference in Lagos, IFC, Nigeria Country Manager, Solomon Quaynor, said the corporation found that banks do not want the high risk transactions associated with lending to SMEs.

    Quaynor said the SME Toolkit would enable the entrepreneurs to manage their businesses. IFC, he said, stepped in to de-risk such loans by providing financial infrastructure and developing collateral registry that will assist banks in lending to the subsector. “We are working on getting the SMEs to use toolkit, so that banks can be more comfortable lending to the subsector. Our focus is not about giving money to the banks to lend to SMEs. It is about building their confidence in the SMEs so that the subsector can easily obtain loans from lenders,” he said.

     

     

    ICAN

     

    The newly elected and re-elected members of the Institute of Chartered Accountants of Nigeria (ICAN) have been sworn in. They are Mrs. Comfort Olujumoke Eyitayo, Mrs. Uchenna Ifesinachi Erobu, Mr. Nnamdi Anthony Okwuadigbo, Alhaji Ismaila Muhammadu Zakari, Deacon Titus Alao Soetan, Mr. Sunday Abayomi Bammeke, Mr. Hart Wahab Odafen Ozoya, Mrs. Joy Onome Olaolu and Chief Oye Clement Olugbenga Akinsulire.

    A statement from the Director, Corporate Affairs, Claudia Binitie said the election which was conducted through e-balloting was in two categories: ‘Members-in-Practice’ and ‘Members-not-in- Practice’. In the first category, 18 members contested, out of which seven were elected to fill the existing vacancies.

    In the second category, seven members contested and two were elected to fill the two existing vacancies. They will serve for three years before offering themselves for re-election. The ICAN President, Kabir Mohammed, welcomed Mr. Hart Ozoya and Mr. Oye Akinsulire, to their first Council meeting and encouraged them to contribute positively to deliberations on Council issues.

     

    Bank to bank report

    Fidelity Bank Plc has concluded its 25th Anniversary Cars and Cash Savings promo during which it gave out N25 million and 25 cars to its customers.

    Speaking at the cars and cash presentation in Lagos, the bank’s Chief Executive Officer, Reginald Ihejiahi said the bank gave out the cars to assure everyone that it keeps its promises. He said the bank is gender sensitive and has taken steps to empower women entrepreneurs, many of whom won some of the prizes.

    Some of the winners who were presented with their prizes are Abimbola Oluwaseun and Nnenna Edeh who won a brand new Hyundai car each. Also, Adewunmi Mary Ladi won N100,000; Janiat Jamiu won N100,000; Nwamba Chinyere won N250,000 while Chigere Chibuzor won N500,000.

    First Bank of Nigeria Limited has partnered with LEGO, the world’s fourth largest manufacturer of children’s toys to introduce KidsFirst, one of the bank’s children products to the market.

    At an exclusive cinema screenings to mark this year’s Children’s Day, the bank unveiled a comprehensive programme that includes three new products, exciting content partnerships, a dynamic new website and Corporate Social Responsibility (CSR).

    Speaking on the programme, FirstBank’s spokesperson, Folake Ani-Mumuney said the partnership with LEGO represents the bank’s quest to create a platform for Nigerian children to express themselves and instill the culture of financial discipline in them.

    Unity Bank Plc has received the Payment Card Industry Data Security Standard certification, the global information security standard that helps prevent card-related fraud, the lender said in a statement.

    Presenting the certificate to Unity Bank, Mrs. Adedoyin Odunfa, Managing Director of Digital Jewels, a consulting firm on the project, said Unity Bank – which currently issues MasterCard and Interswitch Verve cards to its customers – had demonstrated leadership in the industry, being the fifth bank to receive the certification in the country.

    Mrs. Odunfa said: “After achieving the ISO270001 last year, Unity Bank has shown that it is one of the banks at the forefront of good security and compliance by now attaining the PCIDSS certification. You are the second bank in the country to have attained both of those certifications. That is quite a formidable feat given that there are several other banks who may claim to be more technological advanced than Unity Bank.”

     

  • FAAC allocations, T-Bills’ sales reduce inter-bank rate

    FAAC allocations, T-Bills’ sales reduce inter-bank rate

    Inter-bank rate declined by 104 basis points last week due to increased market liquidity from the monthly Federation Accounts and Allocation Committee (FAAC) injection and treasury bills (T-Bills) repayment. About N217.98 billion treasury bills were repaid last Thursday, in addition to over N200 billion monthly statutory funds injected the previous day, bringing total inflow to the market to N417 billion.

    Olakunle Ezun, Currencies Analyst, Ecobank Nigeria, said the call and overnight and seven -day money market rates fell to 10.3 per cent and 10.7 per cent. The three-month Nigeria Inter-Bank Offered Rate (NIBOR) fell to 11.5 per cent, though less activities were done on the tenor. The interbank secured lending (Open Buy Back) also fell to 10.25 per cent for banks and discount houses.

    Meanwhile, the Central Bank of Nigeria (CBN) liquidity management remained active and supported by the circular issued last August reviewing its guidelines for how banks access its Standing Lending Facility window and Wholesale Dutch Auction System (WDAS) foreign exchange auction and CBN’s Monetary Policy Committee (MPC) decision to hold the rate unchanged at 12 per cent on March 19, 2013. With market liquidity of about N191 billion last Friday, CBN might continue its liquidity management to ensure price stability.

     

    NDIC

     

    The Nigeria Deposit Insurance Corporation (NDIC) has called for the establishment of an investor protection scheme to protect the interest of small investors in the capital market and to boost public confidence among the investing public.

    NDIC Managing Director, Umaru Ibrahim, spoke when he hosted the Executive Council of Chartered Institute of Stockbrokers (CIS) in his office in Abuja.

    He said the scheme is imperative to the development of a stable capital market, adding that the corporation has been advocating a framework for the Investor and Small Insurance Policy Holder Protection Schemes in collaboration with the International Association of Deposit Insurers (IADI) study group.

    The NDIC Chief Executive also lamented the over-concentration of stock-broking firms in certain parts of the country, saying this does not augur well for financial inclusion. He therefore advised the institute to mobilise resources for securing licences to spread such opportunities to other parts of the country. He further suggested that in line with Agent Banking model by the CBN, the institute could engage the services of some agents in various parts of the country to reach out to small investors.

    He also reiterated the need for partnership with the Institute in capacity building, particularly with the corporation’s bank examiners to acquire more skills in capital market operations which would assist them in conducting consolidated risk-based supervision.

     

    FBN Fund

     

    The FBN Money Market Fund, managed by FBN Capital Asset Management, has been assigned “Aa(f)” rating by Nigeria’s foremost research, credit rating and risk management company, Agusto & Co in its first quarter rating result.

    In the report published on its website, rating firm said the evaluation comes less than a year after the Fund was launched. It said the Fund is deemed to have “minimal to low risk of investment loss due to net asset value volatility”. According to the report, the rating is supported by good credit quality of underlying assets. All investments must have a minimum ‘A’ rating and at least 25 per cent of net assets are invested in short term Federal Government Securities.

    “The Fund has conservative investment guidelines with respect to interest rate risk. All investments mature within 365 days, with a maximum weighted average maturity of 90 days. The portfolio manager is well qualified, with over 13 years of liquidity and investment management experience,” it said.

    The Managing Director of FBN Capital Asset Management, Michael Oyebola expressed satisfaction with the rating saying his firm has created a balanced suite of mutual fund products which are accessible to varying levels of investors.

     

    ICAN

     

    The Institute of Chartered Accountants of Nigeria (ICAN) has given 795 members its Fellowship award. Speaking at the weekend after the conferment of the award on the recipients, ICAN President, Adedoyin Owolabi, said the accountants attained the status between January 1, 2003 and March 31, 2013.

    “As a professional Institute, we have every reason today to celebrate the attainment of this special status by these award recipients. This conferment is the highest professional status that can be attained by any member of the prestigious accountancy profession worldwide,” he said.

    He said the conferment is in line with global practice and means that recipient has demonstrated professional knowledge, skills and excellence in the discharge of their duties.

    He added that the recipients were expected to continue to exhibit an unwavering commitment to ethical values of accountability, transparency, honesty and integrity as espoused by the profession and the institute.

     

    Forex demand

     

    Foreign Exchange (Forex) demand by authorised dealers consisting of the Wholesale Dutch Auction System (WDAS) and Bureau De Change (BDC) operators dropped to $4.29 billion in the fourth quarter of last year, CBN External Sector Development Report, has said.

    The report said the 34.2 per cent decline, when compared with third quarter performance and 59.4 per cent when compared with the levels recorded in the corresponding quarter of 2011.

    The report also showed that dollar has continued to dominate external reserves as the currency constituted 84.3 per cent of the $43.83 billion reserves as at December 31, 2012. The figure represents an increase of $3.15 billion compared with its level of $33.81 billion in third quarter.

    Other currencies in the basket included; Euro (5.9 per cent), Chinese Yuan (1.9 per cent), GB Pounds (1.9 per cent) and SDR (5.9 per cent). A review of the management of external reserves revealed that the portfolio was composed of fixed deposits (48.6 per cent), funds under Asset Management (20.1 per cent), Joint Venture Company cash call (0.1 per cent) and current account (6.3 per cent) as well as Sovereign Wealth Fund (SWF) (2.3 per cent).

     

    Taxation

     

    The stability and growth of world economies will depend on their adaptation of efficient and effective tax policies, President Chartered Institute of Taxation of Nigeria (CITN) Sunday Femi Jegede has said.

    Speaking ahead of the 15th Annual Tax conference holding from May 7 to 11 at the Tinapa Lakeside Hotel, Calabar, Cross River State, the CITN boss explained that how tax revenues are generated and spent by different levels of government should be of utmost concern to civil society groups, local communities and entire population. He said such awareness would help put the needed checks that will bring lasting development to the people.

    He explained that the conference with theme: Global stability, revenue generation and economic growth, will serve as unique opportunity for participants to interact with tax administrators and policy makers that will be attending from different parts of the continent and globally.

    He said the conference is being organised by CITN. The lead paper will be presented by Niger State Governor, Dr Muazu Babangida Aliyu while Acting Chairman, Federal Inland Revenue Service (FIRS), Alhaji Kabir Mohammed Mashi will be Chairman of one of the sessions.

    Also expected at the event is Akwa Ibom State Governor, Godswill Akpabio as Special guest at the Gala Nite and his Cross River State counterpart, Liyel Imoke, as Special guest at the opening ceremony.

    Also to attend is the immediate past President of West African Union of Tax Institutes (WAUTI), Prince Kunle ‘Quadri and other stakeholders in Nigeria’s tax administration as well as representatives from the academic community. Professor Akin Oyebode of the University of Lagos will be one of the discussants.

     

    Corruption

     

    Forensic expert, Mr Steven Powell, has urged accountants to work toward getting Nigeria out of the list of corrupt nations. Powell, who is the Managing Director of ENS Forensics Limited, South Africa, spoke at the Fifth Convocation Lecture of the Nigerian College of Accountancy (NCA), Jos, a Postgraduate Accountancy College owned by the Association of National Accountants of Nigeria (ANAN). “My challenge to you is to get Nigeria away from the list adding that accountants have practical roles to play in the future of the country as Nigeria being perceived as a highly-corrupt nation,” he said.

    Powell said the association is happy about the upcoming whistle blowing legislation in Nigeria. “In Nigeria, people are so scared to come forward and blow the whistle. Staff should be courageous to come forward with information without fear. When dealing with organised crime syndicates, if the whistle blower’s identity is disclosed, his life is in danger. But if the identity is not disclosed, is hard to get the whistle blower and his life is safer,” the forensic expert said.

    He urged accountants to report fraudulent practices to the law enforcement agencies, adding that accountants should also be vigilant. “Make sure your organisation adopts the necessary control measures as an auditor. Do not look the other way, act with honesty and integrity. Powell suggested that there was need to change people’s lifestyles. He urged the post-graduate students to pursue careers in Forensics which he described as rewarding,” he advised.

     

    DMO

     

    The Debt Management Office (DMO) last week at its monthly auction of bonds raised N104.8 billion ($670 million).

    Based on FBN Capital report, the DMO tentatively offered Nigeria’s long bond in February to raise just N15 billion and may have been surprised by the bid of N79 billion for the paper.

    It said the total sales target is higher than its projection given that the agency had raised N285 billion (gross) in just three months and that the approved 2013 budget sets domestic borrowing (net) at N577 billion.

    “The auctions in the past year have generated demand comfortably above projected sales, a rare exception being September. Many offshore investors may favour the longer dated treasury bills but few, if any liquid government bond markets match the yields available in Nigeria. Also, the shift by domestic institutional investors from bonds to equities has not been dramatic,” it said.

    It said the market rally since last August is driven by tight monetary policy is not exhausted, and that yields on the more liquid bonds may narrow by 100 basis points in the first half of the year.

     

    MasterCard

     

    MasterCard Inc., which is under pressure from France to cut card payment fees, said European consumers are increasingly using credit and debit cards for purchases, dismissing the region’s sovereign debt crisis, Bloomberg report has said.

    “Our business in Europe has been growing really well. The sovereign debt issue isn’t affecting consumer confidence in the way that it might,” Ann Cairns, president of international markets at the company, said in an interview in Dubai.

    MasterCard Inc said it is expanding even as Europe’s financial crisis enters unprecedented territory after Euro-area finance ministers agreed to a tax on Cypriot bank deposits at the weekend.

     

    IFC

     

    The International Finance Corporation (IFC) has said it is working with Corporate Affairs Commission (CAC) to build a collateral registry system that will make it easier for banks to lend to Small and Medium Scale Enterprises (SMEs).

    Speaking at the SME Toolkit Global Partner conference held in Lagos, IFC, Nigeria Country Manager, Solomon Quaynor, said the corporation has realised that banks do not want high risk transactions, synonymous with lending to SMEs.

    He said the corporation is also partnering with 10 local banks to de-risk lending to the subsector. He said the SME Toolkit launched in the country by IFC, IBM and EDC Pan African University, will enable the entrepreneurs to effectively manage their businesses. He, therefore, said the IFC has stepped in to de-risk such loans by providing financial infrastructure and developing collateral registry that will assist banks in lending to the subsector.

    Quaynor said since a lot of the SMEs do not have landed assets, except receivables, IFC is working with Corporate Affairs Commission (CAC), Ministry of Trade and Investment to build a registry system that should include the ability of SMEs to borrow from banks.