The Nation Newspaper

Tag: loans

  • ‘Bad management responsible for toxic loans’

    ‘Bad management responsible for toxic loans’

    The rising incidence of bad loans in the banking sub-sector is due to poor management of loan portfolios on the part of the commercial lenders, Prof. Chris Onalo has said.

    Onalo, who is Chief Executive/Registrar, Institute of Credit Administration (ICA) made this revelation during an interview with The Nation.

    According to him, while it is the responsibility of the Central Bank of Nigeria (CBN) to ensure that there are no toxic loans in the system, the deposit money banks are expected to management their loan portfolios in such a way that the incidence of bad loans are curtailed.

    “The primary objective of CBN’s directive is to tell debtors to pay up on whatever they are owing but this does not portray Nigeria as an enlightened economy,” he said.

    While noting that borrowing will remain a continuous exercise in commercial banks, he emphasised that the banks should be able to manage the loan portfolio as well as device effective resolution mechanisms including legal actions should the need arise.

    “Though borrowing from banks will never stop but if you borrow and the portfolio is not well managed, you could crash land but then, there are effective mechanisms needed to be exploited including legal actions.”

    “While I’m not making a case for any particular individual, I think this whole idea of publishing names of debtors as have been done in the past has not yielded the necessary results. So, I think it has to be stopped, banks are publishing because CBN has not retracted the initial directive given to them and I don’t think they are getting the best result out of this exercise so it is not worthwhile.”

    In case of credit default, he suggested that debtors should be adequately penalised through the instrument of law so as to serve as a deterrent.

    Pressed further, he said: “What has happened so far is not good. We don’t do such thing in an economy that is looking to attract investors that could manage the sector.

  • Stanbic IBTC Bank secures term loans

    Stanbic IBTC Bank secures term loans

    Stanbic IBTC Bank has secured its maiden syndicated term loan facility. The one-year transaction, led by MashreqBank  as co-ordinating bank and sole Bookrunner, was oversubscribed.

    Stanbic IBTC closed the syndication within six weeks of launch at a competitive pricing threshold, given the prevailing market conditions.

    The eight-bank syndicate comprised long-standing relationship banks of Standard Bank Group, Stanbic IBTC Holdings’ parent company, that included MashreqBank psc, The Commercial Bank (Q.S.C.) and ING Bank N.V. as Mandated Lead Arrangers and Bookrunners, while Al Ahli Bank of Kuwait K.S.C.P., Al Khaliji France S.A., Commerzbank Aktiengesellschaft, Filiale Luxemburg, Doha Bank Q.S.C. and SBM Bank (Mauritius) Limited participated in the facility as mandated lead arrangers. MashreqBank psc is also acting as the facility agent for the transaction.

    Chief Executive, Stanbic IBTC Bank, Yinka Sanni said the bank was delighted with the reception of the syndicate banks to its debut deal. “We appreciate the confidence that the syndicate has in Stanbic IBTC, as it reinforces our market leadership position in corporate and transactional banking and our commitment to supporting Nigeria’s economic growth.

    “It will also help to boost our operations in Nigeria in line with our business objective of organically growing our footprint in the retail banking space,” he said.

  • Dickson woos Christian community with N100m loans

    Dickson woos Christian community with N100m loans

    Ahead of the December 5 governorship election in Bayelsa State, Governor Seriake Dickson has doled out N100 million soft loans to Christian cooperative societies.

    He reassured workers of his commitment to pay their salaries despite receiving only N4 billion as revenue accruing to the state from the Federation Accounts Allocation Committee (FAAC) last month.

    A statement at the weekend by Dickson’s Chief Press Secretary, Mr. Daniel Iworiso-Markson, said the governor lamented the harsh economic realities facing the state and the country.

    Dickson, however, assured the people that government would begin payment of salaries this week.

    The governor was said to have presented the cheques to the cooperatives at an interactive meeting with Christian leaders in Yenagoa.

    He said the gesture was in fulfilment of an earlier promise to extend his administration’s poverty alleviation and economic empowerment programme to churches.

    Dickson urged beneficiaries of the scheme to make judicious use of the revolving funds for the benefit of Bayelsans.

    Some of the benefiting cooperatives are Bayelsa Indigenous Ministers Fellowship Micro Project Cooperative Society (MPCS), N3 million; Gold Chain MPCS, N3.5million; Salvation Elders Farmers Cooperative Society Limited, N3 million; ECWA Family MPCS, N3.5 million and Women Wing of the Christian Association of Nigeria (WOWICAN), Agricultural Cooperation Society, N3.5 million.

  • PDP, APC trade words over bailout loans

    Kogi State Governor Idris Wada has said he will not compromise the right and interest of the state.

    Wada, in a statement in Lokoja at the weekend, said the bailout loan given to states by the Federal Government to pay backlog of salaries was an issue his administration would pursue to a logical conclusion.

    The statement signed by the Chief Communication Manager to the Governor, Mr. Phrank Shaibu, said it would be uncharitable for any well-meaning individual or group to politicise the loan.

    Wada, who was reacting to a comment allegedly made by the governorship candidate of the All Progressive Congress (APC), Prince Abubakar Audu, that the bailout fund should be stopped, urged President Muhammadu Buhari not to be swayed by “this negative stance.”

    His words: “What kind of desperation will make a man to callously and viciously wage a war against the release of resources meant for the people of his state?

    “The Kogi State government is of the view that the bailout fund is only a loan and not a presidential benevolence.”

    Responding, Head of Media, Abubakar Audu Campaign Organisation Dr. Tom Ohikere said there was never a time the APC governorship candidate canvassed the stoppage of the bailout fund.

    He advised the state government not to lose focus on its quest to secure the fund, saying the issue of the bailout was about Nigeria and not Kogi State alone.

    Wada, however, reiterated his resolve not to compromise on the rights of the indigenes, especially when “it is being spearheaded by some desperate politicians from Kogi State for selfish reasons.”

  • ‘Easy access to loans ‘ll curb unemployment’

    The Association of Promotional Products Specialists of Nigeria (APPSON) has said access to soft loans by the government and financial institutions in the country will go a long way in curbing the rising unemployment index.

    Speaking during a briefing in Lagos earlier in the week, President of APPSON, Mrs. Ngozi Ezeonu, stated that they were committed to adding value to the economy and provide employment opportunities for many Nigerians, especially youths given the right kind of support from government and relevant organisations in the country.

    According to Ezeonu, the association was created to promote the best practices in the industry and also align with global standards of business by weeding out quacks that operate without recourse to safety and health considerations.

    She said: “Our industry is a big one and we decided to form an association to further protect practitioners and weed out quacks from the industry. We are already partnering with relevant government agencies like customs because most of the items we deal in come through imports even though a sizeable number are sourced locally.

    “At the formal launch of the association next week we are going to have the chance to interface with a lot of clients and major stakeholders in the industry. As part of efforts to sanitise the industry, every APPSON member has a special number assigned to them to show their authenticity.

    “But then there are key issues that affect our operations and these include multi-taxation, ban on the importation of certain items. We want government to initiate policies that will encourage entrepreneurs like us so that we can in turn provide more employment opportunities for people.’’

     

     

    That is why we believe that easy access to soft loans will help the industry a lot and make business better.”

  • UBA trims loans as African units turn profit

    UBA trims loans as African units turn profit

    United Bank for Africa (UBA) lowered its forecast for 2015 loan growth to five to eight percent from 15 to 20 per cent as rising regulatory and economic uncertainty increase risks to lending, the bank said yesterday.

    UBA CEO Phillips Oduoza told Reuters in an investor call that the lender would maintain a conservative approach to lending for the second half of the year with a view to balancing risk with returns.

    Loans grew 8.5 percent in the first half with foreign currency loans accounting for 30 per cent of total N1.16 trillion ($5.8 billion) loan book. That compares with 14 per cent growth in loans last year.

    Oduoza said the bank would maintain its other forecasts. He forecast 2015 return on equity (ROE) would be above 20 percent, up from 19.2 per cent last year. ROE hit 22.3 percent in the first six months of the year.

    “We have revised downwards our loan growth target … given renewed uncertainty in the global and domestic market we would maintain a conservative approach,” HE said.

    Nigeria’s economy slowed sharply to 2.35 percent in the second quarter from 6.54 percent a year ago as lower crude prices took its toll on Africa’s biggest economy and top oil producer.

    The drop in crude prices also hit the currency market, prompting the central bank to tighten access to dollars in a bid to curb speculation on the naira, in turn hurting bank revenues from foreign exchange activities.

    Oduoza noted that regulatory risk was also rising with the government withdrawing public funds from the banking sector.

    Last week, UBA posted a pretax profit rise of 35 per cent in the first half to N39.04 billion ($196 million) and declared a dividend of 0.20 naira, thanks to increased income from business customers.

  • AfDB’s loans, grants hit $7.8b

    Although African Development Bank’s (AfDB’s) financing in Africa is overshadowed by lenders, such as the World Bank and China, its loans and grants totalled $7.8 billion in 2014, 22 percent more than the previous year’s.

    The World Bank committed a record $15.3 billion to sub-Saharan Africa projects in the fiscal year which ended June, last year.

    The new President of the AfDB, Akinwumi Adesina, who took charge on Monday, is taking over an institution entering a much tougher economic environment than the one his predecessor, Donald Kaberuka, inherited when he won the job a decade ago.

    The former Minister of Agriculture and Rural Development was elected on May 28, this year during the AfDB’s yearly meeting in Abidjan, Ivory Coast. He will face a slowdown in some of Africa’s biggest economies after a plunge in oil prices and rising political risk. He said the AfDB needs to focus on promoting investment by businesses.

    Kaberuka, who visited Nigeria prior to end of his tenure, expressed his assurance that the AfDB will continue to support economic projects in Nigeria.

    The Federal Government had earlier remarked that with the shock of falling oil prices, lack of revenue and insecurity, the elites must provide guidance in their communities, and also lead the economy on the right path.

    President Muhammadu Buhari, who received him, at the State House also said his administration would welcome more support from the AfDB for projects in versatile sectors, such as agriculture, that can easily be explored to create more jobs for unemployed Nigerians.

    Speaking to the AfDB staff before his exit, Kaberuka said: “I was optimistic then, and I’m optimistic now. I leave the bank as confident as ever about where Africa is heading. Presidents come and go, but the bank stays. Africa needs a strong AfDB – and we have an AfDB that gets stronger by the day.

    “In all of our challenges, we have always been sure of the cause we were fighting for – the economic transformation of this continent. I’ve fought the fight, finished the race, and kept the faith. Whatever I do now, I know that it will be about Africa, for Africa, and most likely in Africa.”

    The Chairperson, African Union Commission, Nkosazana Dlamini-Zuma, said: “We bid our brother Donald farewell from the bank, but not from the continent. I thank him for his wisdom, support, encouragement. I thank him for being who he is – in loving and respecting himself first, so he could love and respect his colleagues and the people of this continent.”

    While sub-Saharan Africa has grown faster than any region in the world except developing Asia in the past 10 years, an almost 40 per cent slump in the price of oil in the second half of last year and declining metal prices are clouding the outlook for economies such as Nigeria,Angola and Zambia.

    The International Monetary Fund (IMF) last two month lowered its economic growth forecast for sub-Saharan Africa by 1.25 percentage points to 4.5 per cent.

    In West Africa, where the worst outbreak of Ebola has crippled Sierra Leone, Guinea and Liberia, a 53 percent plunge in iron ore prices since the beginning of last year has hampered growth.

    Economic growth on the continent can return to levels recorded before the global financial crisis in 2008-2009 if commodity prices stabilise, the AfDB said in its African Economic Outlook report. The bank is estimating 4.5 percent expansion in Africa this year and five percent in 2016.

    Analysts said the bank must increase efforts to keep wealth on the continent and share it more equally among citizens if it wants to stay relevant and meet its aim of reducing poverty.

     

     

    “The biggest challenge facing Africa today is to transform the tremendous wealth of Africa for the benefit of Africans,” Jaloul Ayed, one of the eight contenders for the position and a former finance minister in Tunisia, who lost the position to Adesina said.

     

  • N338b loans for Ekiti, Oyo, Kwara, Ondo, Osun, others

    N338b loans for Ekiti, Oyo, Kwara, Ondo, Osun, others

    CBN-backed cash ready for 27 states to pay workers

    Cash-strapped workers who are being owed salaries are set to smile again, with the disbursement of the Central Bank of Nigeria (CBN) – backed bailout loans for states.

    Fourteen banks are disbursing N338 billion “to stimulate the economy”.

    Kwara and Zamfara have received their loans and have begun the payment of salary arrears to workers.

    A CBN source confirmed that the other states will get the cash this week.

    A breakdown of the loans repayable at an interest rate of nine per cent over 20 years is as follows:

    Abia- N14.152b; Adamawa- N2.378b; Bauchi- N8.60b; Bayelsa – N1.285b; Benue – N28.013b;

    Borno – N7.680b; Cross River – N7.856b; Delta – N10.036b; Ebonyi – N4.063b; Edo – N3.167b; Ekiti – N9.604b; Enugu – 4.207b; Gombe – N16.459b; Imo – N26.806b; Katsina – N3.304b; Kebbi – N0.690b; Kogi – N50.842b; Kwara – N4.320b; Nasarawa – N8.317b; Niger – N4.306b; Ogun – N20.00b; Ondo – N14.686b; Osun – N34.988b; Oyo – N26.606b; Plateau – N5.357b; Sokoto – N10.093b and Zamfara – N10.020b.

    The CBN last week announced that it had approved that Deposit Money Banks (DMBs) lend money to requesting states to pay salary arrears owed their workers.

    Some of the conditions for accessing the loan include:

    • resolutions of the State Executive Council authorising the borrowing;
    • State House of Assembly consenting to the loan package; and
    • issuance of Irrevocable Standing Payment Order (ISPO) to ensure timely repayment.

    With the signing of the  ISPO, “it is clear that the facility is not free as the states’ financial exposure to the banks becomes first line charges deducted from their monthly allocation”.

    The CBN official explained that specific figures were attached to the facilities to be disbursed to the states is because “every state is to come up with its specific needs in order to access the facility from the commercial banks. They’re (states) working out what they need from the banks according to the conditions they reached with the banks”.

    The decision to borrow money from commercial banks is sequel to the decision by the National Executive Council (NEC) at its June 29 meeting, requesting the CBN “in collaboration with other stakeholders to appraise and consider ways of liquidating the outstanding staff salaries owed by state and local governments.”

    The Buhari administration announced a bailout package for states to take care of the backlog of workers’ salaries and access funds for development through the rescheduling of their debts by banks with the CBN’s guarantee.

    Eleven states have had their commercial debts to DMBs restructured with a proviso to pay 14.83 per cent of the value of their bonds which their commercial debts were converted to. Eleven others are also to have theirs restructured.

    Debt Management Office (DMO) Director-General Abraham Nwankwo said “the restructuring was effected using a re-opening of the FGN-Bond issued on July 18, 2015 and maturing on July 18, 2034. The pricing was based on the yield to date of the bond at a 30-day average, resulting in a transaction yield of 14.83 per cent.”The impact of the restructured states’ commercial debts to domestic bonds, he said, is that “management operations will include: monthly debt service burden will drop by a minimum of 55 per cent and a maximum of 97 per cent, among the 11; and interest rate savings for the 11 states ranging from 3 per cent to 9 per cent per annum.”

  • Ekiti disburses N144m vehicle/housing loans to teachers

    •Govt vows to demolish illegal structures

    Ekiti State Government has disbursed N144 million as vehicle and housing loans to 712 teaching and non-teaching workers in public schools.

    Commissioner for Finance and Economic Development Toyin Ojo, who said this in Ado Ekiti at the weekend, added that N63 million of the amount was disbursed as car loans to 257 teaching and non-teaching personnel according to their grade levels.

    He explained that the vehicle loans range from N250, 000 to N1million for benefitting teachers on grade Level 7 to 16. Junior non-teaching staff from Grade Level 1 to 6  received  N70, 000.

    Ojo said the balance of N81million was disbursed as first and second tranche of housing loans to 455 teaching and non-teaching workers.

    He noted that Governor Ayo Fayose had last month approved the disbursement of N119 million as car loans to 623 workers in the state public service in spite of the prevailing paucity of funds.

    The commissioner explained that the gesture would reduce the burden of obtaining bank loans with its attendant high interest rate among the beneficiaries.

    He assured that the exercise would be continuous, saying that all interested teachers would benefit from the schemes.

    The state government has served a notice to demolish all ‘illegal attachments’ to shops in all markets in Ado-Ekiti, the state capital.

    Commissioner for Lands, Housing and Urban Development, Taelolu Otitoju, gave the warning in Ado-Ekiti during the official opening of five blocks of four lock-up shops at the Oja Bisi market in Ado-Ekiti.

    He said the illegal extensions to the shops without approval and erection of kiosks under power lines were unwholesome and constitute grave danger to the people.

    Princess Adebisi Aderonke pledged on behalf of the other market women to comply with the rules and regulations in the agreement signed with the state government.

  • NYSC secures N200m bank facility for disbursement to corps members as loans —DG

    NYSC secures N200m bank facility for disbursement to corps members as loans —DG

    The National Youth Service Corps (NYSC) said yesterday that it has secured an over N200 million bank facility for disbursement to corps members as loans to assist them in starting their businesses.

    The NYSC Director General, Brig.-Gen. Johnson Olawumi, told the Commander, Guards Brigade, Nigerian Army, Brig.-Gen. Musa Yusuf, who visited the NYSC Headquarters in Abuja that corps members could obtain as much as N400,000 each on the submission of a good business plan.

    “Corps members based on the business plan they submit could get as much as N250, 000 and N400, 000. We have also signed an MoU with the Bank of Industry, though it is yet to take off, but we are working on it.

    “A couple of months ago, I also approached Heritage Bank and it is setting aside the sum of N200 million under a package where corps members will get a soft loan and the only collateral they will have to drop will be their discharge certificate.

    “We are also talking with the Central Bank governor to see that a micro credit loan could be arranged specially to address corps members in this category.’’

    He said the NYSC has so far trained over 400,000 corps members since the commencement of its skills acquisition programme in over 12 different skills.

    He added that the NYSC, under the sponsorship of the World Bank, is currently partnering with an international organisation to train corps members interested in going into the building and property development sector.

    Earlier, Brig.-Gen. Yusuf assured the NYSC that the brigade had made adequate security arrangements to ensure the safety of corps members serving in the FCT.

    Yusuf said that part of the security arrangements put in place include regular patrolling of the FCT, adding the safety of corps members was one of the priorities of the Guards Brigade.