Intervention of the Central Bank of Nigeria (CBN) and foreign exchange upswing in the last one week forced the naira to halt a five-day decline. The local currency rose 0.9 per cent and traded 0.6 per cent stronger at N158.65 per dollar last Friday after the banking watchdog intervened with about $50 million dollars.
Also, the reserve, which rose to $48.2 billion on March 14, strengthened the naira, which has dropped to 1.5 per cent this year, according to data obtained from the CBN website.
“There was intervention from the central bank. There was a lot of corporate demand” and the regulator is trying to stabilise the market, he said,” Tega Adeda, a foreign exchange trader at Stanbic IBTC Holding Co, told Bloomberg.
The bank reduced dollar sales to lenders by six per cent last week to $360 million. The regulator uses the twice-a-week auctions to stabilise the naira as costs of importing refined fuel, which accounts for 70 per cent of the local gasoline market, boosts dollar demand and puts pressure on the currency, according to the central bank.
The CBN held the rate at the record level on January 21 to control consumer prices and maintain the naira’s level. Inflation eased to nine per cent in January from 12 per cent in December, the statistics bureau said last month.
Borrowing costs on the country’s 16.39 per cent domestic bonds due January 2022 rose nine basis points to 11.27 per cent, according to Thursday’s data compiled on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due January 2021 fell two basis points to 4.204 per cent.
Cashless
The Central Bank of Nigeria (CBN) will from June 1, 2013 implement a policy that places N150,000 limit on all over the counter cheque withdrawals in commercial banks, microfinance banks and primary mortgage institutions (PMIs) nationwide.
In a circular to all stakeholders, CBN Director, Banking and Payment System, Dipo Fatokun said the policy is in recognition of the success recorded in Lagos and the need to extend such success to other states within the federation. He said the Lagos success story has also contributed to the reduction of fraud on cheques and aided the National Financial Inclusion (NFI) Strategy.
“All banks are therefore directed to ensure that implementation of N150,000 limit on third party cheques that could be cashed over the counter nationwide, with effect from June 1, 2013,” he said.
Also, the CBN chief stopped banks from charging their customers payments for third party cheques below N150,000 cashed over the counter. “All banks are hereby directed to stop charging their customers for third party cheques of up to N150,000 cashed over the counter,” he said. He explained that the policy is in recognition of the CBN’s role in the development of an efficient payment and settlement system that is well modernised.
GDR
The admission of Zenith Bank’s Global Depositary Receipts (GDR) to the official list of the London Stock Exchange (LSE) and trading same on the LSE is expected to take place within the month, Renaissance Capital (RenCap), an investment and research firm had said.
“Our understanding from management is that the listing of the instruments should happen in March 2013,” it said in an emailed report obtained by The Nation.
It said the objectives of the GDR issuance are to increase the bank’s visibility and trading in its securities, as well as to expand and diversify its investor base. “Given that Zenith Bank is the most highly capitalised Nigerian bank with a capital-adequacy ratio of 29 per cent as at last September, and does not require any capital injection, it makes sense to us that the GDRs are non-capital-raising,” RenCap said.
The GDR issuance, it added, simply gives existing shareholders the option to convert to an LSE-traded instrument. The conversion ratio is 50 common shares to one GDR.
MfBs
The National Microfinance Development Strategy will soon be released by the CBN. The document is expected to outline modalities for developing the subsector and rules that operators will follow to achieve improved performance s well s sector’s stability.
The CBN is also working on consolidating on the achievements recorded so far by the country in the development of MfBs by strengthening the regulatory frameworks and other guidelines. This also includes formation of National Microfinance development Strategy with the United Nations Development Programme (UNDP) and the recent signing of a major agreement with the Alliance for a Green Revolution in Africa (AGRA).
Besides, the CBN is considering the establishment of a Microfinance Development Fund (MDF) as a further step to deepen the financial market. The MDF when established, would assist in addressing teething challenges of underfunding for microfinance institutions in the country.
Mortgage banking
The CBN also last week approved the Regulatory and Supervisory Framework for the Operations of a Mortgage Re-finance Company (MRC) as an exposure draft. Its Director, Other Financial Institutions Supervision Department, Olufemi Fabamwo, said the framework is drawn based on provisions of the CBN Act 2007, Banks and Other Financial Institutions Act (BOFIA) CAP B3, Laws of the Federation of Nigeria (LFN) 2004, other relevant Laws.
The CBN also set a minimum capital base for the subsector at N5 billion, but intending operators will have to pay non-refundable application fee of N100,000 and non-refundable licencing fee of N200,000.
He said the framework provides for the licensing and establishment of a MRCs as specialised second-tier institution which would provide short-term liquidity, long-term funding and/or guarantees to mortgage originators and housing finance lenders.
He said the establishment of MRC is primarily aimed at increasing the liquidity within the mortgage sub-sector and availability of mortgage credit in the country. It will also reduce mortgage and related costs, and make residential housing more affordable. It specified the standards and criteria for, and timing of, periodic assessments of the creditworthiness of borrowers, obligors, or other counterparties, and for the establishment of credit limits.
IFRS
The CBN has set up a roadmap on International Financial Reporting Standard (IFRS) stipulating compliance by all Small and Medium Scale Enterprises (SMEs) by January 31, 2014.
The roadmap requires that the business community in the country would implement and converge in phases while the phases are submerged within a general implementation framework. The general plan would therefore ensure that appropriate changes and restructuring are made to processes, systems and the personel in terms of training and capacity building.
The IFRS is a globally-accepted set of accounting standards, framework and interpretations, adopted by the International Accounting Standard Board (IASB and its interpretative body, the International Financial Reporting Interpretations Committee (IFRIC).
The IFRS was issued by the IASB. It was issued to serve as the global accounting language for the purpose of meeting the information needs of global business investors, shareholders and financial services providers.
The Financial Reporting Council (FRC) had earlier announced its decision to converge to IFRS in the last quarter of 2010, but the commencement date was later shifted to January 1, last year to ensure legal and capacity building in the project.
Economy
There is need to carry out radical reforms in the financial system of the country to achieve stability in the economy, CBN’s Deputy Governor, Corporate Services, Suleiman Barau, has said.
Speaking at this year’s EuroFinance Conference in Lagos at the weekend, Barau, who was represented by the Deputy Director of Banking Supervision, Steve Nwadiuko, said such the restructuring was the only way to avoid massive corporate failure witnessed during the financial crisis of 2007 to 2009, which exposed the weaknesses in many banks.
He said reforms were needed to strengthen the stability and resilience of the global financial system and prevent the reoccurrence of systematic crisis.
He said chief finance officers of banks across the globe need to design strategies that would adequately address possible hitches in the financial system.
Bank to bank report
Sterling Bank is set to organise a fashion competition for undergraduates of tertiary institutions in Lagos State. In a statement, the bank said the exercise was meant to discover and celebrate the creativity of the youth.
The competition, which is part of the bank’s Corporate Social Responsibility (CSR) efforts in the education sector, seeks to transform the perception artistically inclined undergraduates have of themselves in relation to corporate organisations, their acceptability and the difference they can make given the opportunity and a suitable platform.
The competition tagged “Sketchamania,” is a break from the norm and an unequivocal statement by Sterling bank that it seeks to identify new opportunities to make a difference in a distinct manner by impacting society through deliberate interventions aimed at encouraging and celebrating unique talents, which abound in Nigeria.
The Managing Director, Bank of Agriculture (BoA), Mr Muhammadu Satunraki, has said the institution would promote agricultural biotechnology.
He said the development would help in increasing food production. The bank, in a statement, quoted Satunraki as saying that biotechnology is a new field that must be supported to foster growth of the country.
Fidelity Bank Plc has given out five Hyundai Accent cars to five winners in its ongoing Cars and Cash Savings Splash held in Lagos. Twenty-one other winners also went home with cash prizes ranging from N100, 000, N500, 000 and N1 million.
Some of the customers, who won cars are Arinzechi Victus, Nwambu Chinwetara, Tansi Grace & Josephine, Umorem Etido Akpan and Maduka Stepenie. Also, Ozoeze Ndidi Amaka won N1 million while Oku Felix and Samuel Emua won N500,000 each. Those who won N250,000 are Paul Abraham, Elizabeth Korgba Nkwa Eze while Nnachi Franklin, among others won N100,000.
Enterprise Bank customers will henceforth, enjoy additional convenience with the introduction of the lender’s dual purpose prepaid MasterCard used locally and internationally.
In a statement, the bank said the new addition is a multi-purpose chip and pin debit card that can be pre-funded with cash. The card can then be used to effect cashless payments (like a bank debit card) on the internet, Point of Sale (PoS) terminals and cash from Automated Teller Machines (ATMs).
It said that the unique benefits of the card, which is open to both customers and non-customers of the bank alike is that the individual would have no need to open or have a bank account in order to have the prepaid card. The card, which can be pre-funded in naira or dollar denominations, is ideal for students, corporate accounts expense cards, estacode, and corporate travel and travel cards among others.
The card, the bank added, also eliminates the burden of carrying cash around just as it allows its holders to spend more than their approved daily spend limits since both the Personal Travel Allowance (PTA) and Basic Travel Allowance (BTA) are loadable on it.
