The Nation Newspaper

Tag: Naira

  • Petrodollars from IOCs strengthen naira

    Petrodollars from IOCs strengthen naira

    Rising dollar inflows from international oil companies (IOCs) last week boosted the naira. It appreciated as the IOCs pumped petrodollars into the local market, pushing the currency to 0.2 per cent rise to N157.25 to a dollar on Friday, data from the Central Bank of Nigeria (CBN) website showed. The naira gained for a second week by less than 0.1 per cent.

    However, the naira is expected to come under pressure next year, a year before the 2015 general election, Director, Africa Economist, Citi, David Cowan, has warned.

    Speaking at the EuroFinance conference in Lagos, Cowan, who spoke on the theme: Global economic update: Europe casts a long shadow, added that oil price will also weaken in 2014, a development which will put pressure on the naira.

    He said increased fiscal spending pressure will grow in 2014, adding that there is need to strike a balance between the urban inflation rate and the rural inflation rate in the country.

    A Fixed Income & Currencies analyst at Ecobank Nigeria, Olakunle Ezun, said on the short run, the naira will likely continue to trade on the interbank market within the CBN’s three per cent band either side of N155 to a dollar.

    He said the steady rise in reserves to $46.9 billion, which is around 10 months equivalent of imports, provides a large cushion to support the naira in the months ahead. The foreign reserves rose $46.9 billion on February 20, and might be stable in the near term.

    The government’s borrowing costs fell for a fourth monthly bond auction last week after the CBN forecast that inflation slowed in January. The Debt Management Office (DMO) sold N105 billion ($667 million) in securities, it said in a statement on its website.

     

    Inter-bank rate

     

    The inter-bank rate rose 90 basis point to 14 per cent on, reflecting CBN’s effective liquidity management efforts. The CBN’s aggressive liquidity mop-up re-emphasised its monetary policy stance and it is supported by the circular issued last August reviewing its guidelines for how banks access its Standing Lending Facility window.

    Call and overnight and seven-day money market rates rose 14 per cent and 14.4 per cent. The three-month Nigeria Interbank Offered Rate (NIBOR) also rose 15.4 per cent though less activity is done on the tenor. The secured lending (Open Buy Back) rose 13.7 per cent for deposit money banks and 14 per cent for discount houses.

     

    Sustainable banking

     

    The CBN has called on banks to pursue and implement issues itemized in the Nigerian Sustainable Banking Practice (NSBP).

    In a circular to banks, Special Adviser to the CBN Governor on Sustainable Banking, A’sha Mahmood explained in a statement to banks that the policy involves integration of social and environmental considerations into banks’ operations, services, procedures and strategies.

    According to the CBN guidelines on the policy, the environmental and social policies as well as decision-making processes will also be integrated into the operations of discount houses and development finance institutions.

    The sustainable banking practice, it said aims at minimising or mitigating the negative impacts of financial institutions’ operations on the environment and local communities in which they operate.

    It captures the Nigerian sustainable banking principle on agric sector, power sector and the oil and gas sector.

    According to the regulator, for the successful implementation of the principles the institutions would be required to develop a management approach that balances the environments and social (E&S) risks identified with the opportunities to be exploited through their business activities.

     

    e-Clearing

     

    Electronic clearing (e-clearing), which is currently implemented only at banks’ headquarters will be extended to all banks’ branches across the country once the Central Bank of Nigeria (CBN) gives its approval.

    The policy, which became effective last August, could not be fully decentralised to all the banks’ networks because of poor technical know-how and infrastructure needed for seamless take-off in those units.

    An executive of Sybrin Systems Limited, Daniel Parreira, who confirmed this development in an interview, said provision of sophisticated payment solutions, adoption of fully integrated management systems and anti-fraud mechanisms by banks will enable them achieve the feat. Decentralisation to branches, he added would further reduce the pressure on the clearing centres.

    Sybrin Limited, a software technology firm based in South Africa, provides e-clearing services and other payment solutions to Africa’s leading banks, clearing houses and corporations. The firm is in Lagos to seek partnership with banks and regulators of the financial system on effective implementation of e-payment solutions.

     

    Cashless

     

    Transactions recorded by the Nigerian Inter Bank Settlement System (NIBSS) under its NIBSS Instant Payment (NIP) and Nigerian Electronic Fund Transfer (NEFT) have increased significantly to about N40 billion daily.

    NIP and NEFT are products used by corporate organisations to make payment for huge transactions electronically, in line with the cash-less policy. Data gathered from NIBSS also shows that as a result of the cashless policy, cheques, Point of Sale (PoS) and Automated Teller Machines (ATMs) use have continued to rise in volume and value.

    Head, Shared Services at the CBN, Mr Chidi Umeano, said the cash-less project has continued to record huge success, adding that the initial challenges associated with the alternative channels are being tackled.

    “Banks have continued to roll out more innovative electronic payment platforms to meet customers’ expectations. The cash-less policy has been very successful in Lagos considering when we started and how far we have gone in terms of PoS deployment. When we started the cashless Lagos, we had less than 10,000 PoS in Lagos, but currently we have over 150,000 PoS machines in the state alone,” he said.

     

    Revenue

     

    The Federal Government earned N2.4 trillion in the fourth quarter of last year, according to the Central Bank of Nigeria (CBN) Economic Report released last week.

    The report, published on the CBN website said the revenue, represents a decline of 0.4 when compared with earnings in the preceding quarter. However, the figure shows an increase of 101.1 per cent above the receipts in the corresponding period of 2011.

    At N1.82 trillion, oil receipts, which constituted 75.6 per cent of the total revenue, exceeded the budget estimate and receipts in the corresponding period of 2011 by 9.91 and 151.2 per cent. But the oil earnings declined by 5.8 per cent below the receipts in the preceding quarter.

    “The increase in oil receipts relative to the budget estimate was attributed largely to the rise in the receipts from petroleum profit tax, royalties and domestic crude oil and gas sales during the period,” it said. The report said that the Federal Government retained revenue for the fourth quarter was N821.24 billion, while total expenditure was N1.2 trillion, leading to a N420.81 billion deficit in fiscal operations of the Federal Government.

     

    Visa

     

    Visa, a global electronic payments company, has reiterated its commitment to unlocking trade and tourism potential within sub-Saharan Africa. In a statement, Ade Ashaye, Country Manager for Visa in West Africa, said: “Visa plays an active role in travel and tourism and its research in the tourism industry provides key insights into the trends. We believe that continued engagement in the industry is important.”

    He also announced the firm’s partnership with Future Group and its Nigeria-based partners, Tradeblazers Limited, to sponsor the BT Africa, conference holding in Lagos in March. Ashaye said Visa is committed to consolidating its position in the travel industry throughout sub-Saharan Africa. He said the company has been instrumental in reshaping the payment landscape in West Africa with the introduction of several products, including the Visa Corporate card, for enabling secure and convenient cashless transactions within the region.

     

    Debt

     

    Banks’ top 50 customers’ total obligations amounted to N2.39 trillion, representing 30 per cent of the total N7.87 trillion owed the banking sector, the CBN Financial Stability report for June 2012 had shown.

    The report, endorsed by both the CBN Governor, Sanusi Lamido and Deputy Governor, Financial System Stability, Kingsley Moghalu, said the banking sectors’ total credit was N7.2 trillion at the end of December 2011.

    It noted that the top 100 obligors accounted for 39.1 per cent of the gross credit, indicating a high level of loan concentration within the banking sector. The ratio of non-performing loans (NPLs) to gross loans declined by 0.6 per cent from 4.9 per cent, but fell within the regulatory threshold of five per cent.

     

    Finance Houses

     

    The implementation of reforms in the finance houses sub-sector of the economy is being hindered by bureaucracy, among which is the pending Central Bank of Nigeria (CBN) governor’s assent, The Nation learnt.

    An insider at the Finance Houses Association of Nigeria (FHAN) explained in confidence that stakeholders approvals have been secured in critical areas, especially in the drive to raise the sectors’ capital base from the N20 million to about N100 million.

    This, he said, will ensure that only seriously minded operators are allowed to carry on the businesses of finance houses in the country. The source said that stakeholders are expectant of the new reform, which is expected to be unfolded by the CBN before the end of this quarter. It is also expected that the reforms will expand the funding structure of the subsector to allow new investors into it.

     

    Banks’ credit

     

    Credit by banks is expected to rise by 20 per cent within the year, Renaissance Capital (RenCap), an investment and research firm, has said. In an emailed report obtained by The Nation, RenCap said banks excite it most within the Europe, Middle East and Africa (EMEA) banks context this year. According to the firm, with the country’s growth expectations for Gross Domestic Product (GDP) of 6.7 per cent, the Nigeria market should benefit from accelerating top-down trends.

    It also said West to East African banks are also viable performers within the year, with the Kenyan elections a potential headwind. RenCap said Equity Bank remains its pick of the bunch on a relative basis.

     

    Bank to bank report

     

    First Bank of Nigeria last week toured the University of Lagos (UNILAG) campus in a new campaign that promotes its FirstNaira MasterCard termed ‘expressions on card’. The product gives existing customers the opportunity to upload personal pictures of choice depicting memories, smiles and any others experiences on it.

    The bank’s Head, e-Business, Mr Chuma Ezirim, explained that the bank is giving customers, especially the youth and youth at heart, the flexibility to express themselves through images captured on the card. “We want people to carry along memories, smiles and any other thing that is personal to them on their FirstNaira MasterCard. It gives customers the opportunity to upload a picture of their choice on the bank’s existing naira MasterCard,” he said.

    Union Bank of Nigeria Plc said it had to continue the transfer of legacy pension for post 2005 pensioners to their Pension Fund Administrators (PFA) in line with the Pension Reform Act (PRA) 2004.

    In a statement, the bank said the PFAs will consequently take over full responsibility for pension payments for affected pensioners, excluding pre-2006 pensioners, with effect from February 2013. The affected pensioners have been informed through letters and test messages. The bank also said it has set up a contact centre on the fourth floor in the Head office (Stallion Plaza), which can be reached by concerned pensioners.

    Ecobank Foundation has donated cash to the Kanu Heart and Lumina foundations as part of the bank’s corporate social responsibilities reaching out to communities where Ecobank does business in Africa.

     

  • Naira weakens as CBN cuts dollars sale

    Naira weakens as CBN cuts dollars sale

    The naira depreciated for a fourth day on higher demand for the US currency after the Central Bank of Nigeria (CBN) cut the size of its dollar sales this week, reducing supply.

    The naira weakened by 0.1 per cent to N157.09 per dollar. It gained 3.9 per cent last year, the strongest performance among African currencies tracked by Bloomberg.

    The CBN sold $108.48 million at an auction yesterday, bringing sales this week to $120.30 million, representing a 38 per cent decline, compared with $193.20 million sold last week, according to data on its website.

    The apex bank sells foreign exchange at auctions on Mondays and Wednesdays to stabilise the naira. Fuel imports have been a source of pressure on the naira, the CBN said.

    “Dollar demand exceeded the supply this week as businesses resumed for the year,” Tunde Ladipo, Chief Executive Officer of Lagos-based Valuechain Investment Limited, said by phone yesterday.

    Yields on 10-year naira debt rose 13 basis points to 11.44 per cent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website.

    Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 declined two basis points to 3.736 per cent.

     

  • Naira weakens on corporate demand

    The naira depreciated for a second day as demand for dollars increased after the end of Christmas and New Year festivities.

    According to Bloomberg report, the currency weakened 0.2 per cent to 157.0375 a dollar and had lost 0.4 per cent last week. “We expect to see a build-up in demand for foreign exchange as businesses resume” operations, analysts at Lagos- based Cowry Asset Management Ltd., led by Edgar Ebinum, said. “We expect to see pressure on the naira.”

    The Central Bank of Nigeria, which sells dollars to lenders to stabilise the naira, resumed twice-weekly foreign-currency auctions yesterday after a break since December 19. It sold $150 million, compared with $300 million disbursed at the previous sale, it said in an e-mailed statement.

    Yields on the nation’s $500 million of Eurobonds due January 2021 slid two basis points, or 0.02 percentage point, to 3.906 per cent. The rate on 10-year naira debt fell 15 basis points to 11.52 per cent, according to January 4 prices compiled on the Financial Markets Dealers Association website.

    Central bank policy makers left the benchmark interest rate unchanged at 12 percent last year. Nigeria’s inflation rate rose for a second month in November to 12.3 per cent from 11.7 percent, the National Bureau of Statistics said Dec. 17. Ghana’s cedi weakened 0.1 per cent to 1.8975 per dollar in Accra, the capital. It depreciated 16 per cent last year, the most since 2008.

  • Naira weakens despite Diaspora dollar inflow

    The naira on Friday, slipped 0.3 per cent to N156.7 per dollar on the interbank market, and for the week, depreciated 0.4 per cent despite. This ensued despite dollar inflows from the Diaspora.

    The currency’s position was also aggravated by the Central Bank of Nigeria’s (CBN’s) suspension of foreign-exchange auctions, which curbed demand for the dollar.

    The apex bank, which sells dollars to keep the naira within a three per cent band around N155 per dollar, ended twice- weekly auctions on December 19 and resumes today. “The closure of foreign-currency auctions for the second week has reduced dollar supply, relative to demand from companies reopening for business,” Sewa Wusu, currency analyst at Lagos-based Sterling Capital Ltd., said told Bloomberg.

    The previous week, the naira had strengthened, reaching the highest in more than two months, as citizens living abroad returned for the holiday period, increasing the supply of dollars.

    “Many Nigerians in the Diaspora have come home with dollars, which has increased the supply,” Pabina Yinkere, head of research at Vetiva Capital Management told Bloomberg. Remittances to sub-Saharan African countries from citizens abroad are forecast to increase 6.3 per cent to $24 billion, the World Bank said in June. Nigeria, Kenya, Sudan, Senegal and South Africa are the largest recipients of remittances in sub- Saharan Africa, with about 69 per cent of the funds in 2010 from migrants in the United States and Western Europe, according to the bank.

    Central Bank policy makers left their benchmark interest rate unchanged at 12 per cent last year to control inflation and stabilise the naira. The inflation rate rose for the second consecutive month in November to 12.3 per cent from 11.7 per cent, the National Bureau of Statistics (NBS) said.

     

    T-Bills

    Yields are rising on Tanzania’s and Nigeria’s Treasury bills, although demand continues strong, according data posted on the website of the Central Bank of Tanzania and CBN. The average yield-to-maturity for Tanzania was 13.43 per cent on the 364-days bills, 12.86 per cent on the 182-days paper, 11.76 per cent on 91-days and 7.25 per cent on 35 days.

    For Nigeria, it is 12.5 per cent on the 364-days bills, 11.75 per cent on the 182-days paper, 11.6 per cent on 91-days. The main investors in government securities in both markets are Pension Funds and commercial banks who took more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions. Treasury bills are issued regularly as part of monetary control measures to help lenders manage their liquidity.

     

    Reserves target

    The Federal Government has missed the $50 billion target it set for the foreign reserves by December 31. The reserves closed the year at $44.2 billion based on figure obtained from the CBN website on December 24, $5.8 billion below the estimate.

    However, analysts have predicted that the Nigeria foreign reserve is expected to hit $47 billion by March next year. Managing Director, Financial Derivatives Company Limited, Bismark Rewane, said such accretion would strengthen naira’s stability.

    The reserves were $44.3 billion as at December 20, from a low of $33.09 billion January 4, this year. The global oil prices continue to fluctuate as risks of supply disruptions in the Middle East increase and global economic outlook weakens further. Bonny Light declined to as low as $111.4 per barrel in October and as at December 19 traded at $112.6 per barrel.

     

    Currency unification

    The central banks of West and Central Africa are considering merging their currencies to boost trade within the region, Lucas Abaga Nchama, governor of the Bank of Central African States, has said.

    According to Bloomberg reports, the West African and Central African CFA francs are separate currencies that are both pegged to the euro. Merging them would boost trade and help fight money laundering, Nchama said.

    The franc zone covers 14 African countries, Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo Republic, Equatorial Guinea, Gabon, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo.

    Six other West African nations, namely Nigeria, Ghana, Sierra Leone, Gambia, Guinea and Liberia — plan to enact a common currency, known as the Eco, by January 2015, 12 years behind an initial target, Temitope Oshikoya, chief executive officer, West African Monetary Institute, said.

     

    Finance Houses

    Reform package that would drive the finance houses sub-sector of the economy will be unfolded this month by the CBN. An insider at the Finance Houses Association of Nigeria (FHAN) who spoke in confidence, said the apex bank would also be releasing timeline for compliance to regulatory issues raised in the guideline.

    The source also hinted that the Board of Directors of the CBN is also expected to approve an enhanced capital base for the subsector to strengthen its operational capabilities.

    The Nation findings showed that the apex bank’s board would release a new prudential guidelines for the subsector that also includes raising the capital base from the current N20 million to about N1 billion. This, he said, would bring stability to the troubled sector. The source said other policy issues such as the appointment of Managing Directors form part of the ongoing reforms in the subsector.

     

    SWF

    Governors’ opposition against the Sovereign Wealth Fund (SWF) will affect the amount of money needed for investment but there is high chances of reaching a compromise, FBN Capital, a research firm has said.

    The Nigerian Sovereign Investment Authority is due to start its investment programme in March, but the agency will not have sizeable funds to invest until the state governors drop their opposition to the scheme. The legality of the SWF is still being challenged by different state governments across the country.

    It said higher budget threshold would reduce the transfers to the SWF, adding that given the porous nature of the account and the many obstacles to its expansion, there are legitimate concerns about the defences against an external shock and therefore called for sufficient buffers to be built.

    The $1 billion SWF was set up in May last year to invest savings made from the difference between budgeted oil prices and actual market prices. Nigeria on crude exports account for more than 90 per cent of foreign income and about 80 per cent of government revenue, making it vulnerable to swings in prices.

     

    Bank subsidiaries

    Nigerian banks with subsidiaries may rethink their continued operation in Ghana and Zambia as deadline for their recapitalisation in the counties ended last year. The Nation’s findings showed that not much has been achieved in terms of complying with the recapitalisation order by local banks in these countries.

    Specifically, Ghana and Zambia central banks had raised their minimum capital requirement for banks, saying that the measure would help mobilise additional resources for their economies and enable banks participate effectively in their national economic growth as well as provide more funds for flow of credit.

    In the case of Ghana, whose financial market had been undergoing some restructuring since the discovery of oil in the country, the Bank of Ghana has directed all banks to recapitalise to the tune of GH¢60 million ($31.7 million) by the end of 2012, from the $5.28 million it used to be.

     

    Exchange rate

    The exchange rate was relatively stable in the past one year, with the naira maintaining moderate appreciation and depreciation at intervals.

    The naira-dollar rates stability was largely as a result of increased supply of foreign exchange through autonomous sources to the interbank segment. Also, the CBN intervened in the market to dampen demand pressure and increased the net open position of commercial banks in part to curtail speculative foreign exchange demand. To achieve this, the regulator adjusted the mid-point exchange rate band from N150 plus or minus three per cent to N155 plus or minus three per cent within the year.

    Managing Director, Blue Wall Bureau De Change (BDC) said that despite occasional upsurges in foreign exchange demand due to interventions by the CBN and the increased supplies from autonomous sources, the exchange rate never exceeded a two per cent appreciation or depreciation margin. He said the year has seen some of the CBN policies on forex reflect on the dollar-naira parity at both the local and international market.

     

    CIBN

    The Chartered Institute of Bankers of Nigeria (CIBN) has reiterated the need for certified bankers in the country to work in other African countries. In a statement, the institute said a communique at the end of its Annual General Meeting (AGM) called for an inter-country recognition and acceptance of qualifications and certificates of member countries. This, it said, will encourage and promote mobility of labour as well as skills among banks in the continent.

    It stressed the need for the Alliance of African Institute of Bankers (AAIOB) member institutions to participate actively in the establishment, programmes and activities of the Global Banking Education Standards Board (GBESB), which is expected to be launched at the World Conference of Banking Institutes (WCBI) scheduled to hold in Nairobi, Kenya in June, this year.

     

    Bank to bank report

    Guaranty Trust Bank Plc has re-affirmed its commitment to the safety of stakeholder funds as it prepares for the financial year. In a statement, the bank said it has installed several new technologies and introduced a number of internal procedures that enable it check frauds on customers’ accounts.

    The bank’s Managing Director Segun Agbaje said the lender is committed to ensuring that its customers are protected from the rising incidence of online and other forms of electronic fraud being experienced within the industry.

    Ghana’s economic growth is set to beat the African average for a sixth year in 2013, risks boosting imports and fuelling further weakness in the region’s third-worst performing currency, Standard Bank Group Limited and Ecobank Transnational Incorporated (ETI) have said.

    The cedi, which has declined 14 per cent against the United States currency last year, may slump to 2.15 a dollar over the next 12 months, according to Ecobank’s head of economic research, Angus Downie. Samir Gadio, emerging-markets strategist at Standard Bank, sees the Ghanaian unit at 1.95 a dollar by the end of 2013. It weakened 0.3 per cent to 1.9065 a dollar according to data compiled by Bloomberg.

     

  • Naira set for best week

    Naira set for best week

    The naira is set for its best week in three weeks after the last Nigerian bond and Central Bank foreign- exchange auctions for the year held tlast week.

    The currency of Africa’s biggest oil producer was unchanged at N157.2 a dollar. The naira has risen by 0.3 per cent, according to data compiled by Bloomberg.

    Nigeria’s 10-year borrowing costs declined to the lowest ever at the last auction four days ago. The N30 billion ($190 million) of bonds due January 2022 were sold at a marginal yield of 11.9001 per cent, a record low.

    The Central Bank of Nigeria (CBN) sold $300 million the same day at its last foreign- currency auction of the year, the most at a single sale since August 8, according to data compiled by Bloomberg.

    Yields on 10-year naira debt were unchanged at 11.89 per cent in the secondary market, according to prices compiled on the Financial Markets Dealers Association website.

    Borrowing costs on the nation’s $500 million of Eurobonds due January 2021 declined one basis point to 4.09 per cent at the close of business last week., retreating four basis points this week.

     

  • Tight monetary stance, rising reserves strengthen naira

    Tight monetary stance, rising reserves strengthen naira

    The naira has appreciated 2.8 per cent this year over Central Bank of Nigeria (CBN’s) tight monetary stance and rising foreign reserves. The CBN aims to keep the naira at a rate of about three per cent above or below N155 a dollar.

    The local currency firmed on inflows for purchases of fixed-income securities after the CBN held its benchmark interest rate at a record high last Tuesday to check inflation and stabilize the local currency. The naira gained 0.1 per cent to N157.9 a dollar after weakening 0.1 per cent the last week.

    The naira’s appreciation could be traced to tight monetary conditions, improved supply of foreign exchange to the market by oil companies and increased inflows from portfolio investors, CBN Governor Sanusi Lamido Sanusi said.

    The nation’s foreign-currency reserves have risen 32 per cent this year to $43.45 billion as of November 16, according to data on the CBN’s website, an exercise that has further strengthened the naira.

    Inflation, which accelerated for the first time in four months to 11.7 per cent in October on widespread flooding of farms, is still above the bank’s target of less than 10 per cent. Also, Nigerian bond yields remain attractive to offshore investors, with the inflows boosting dollar supply.

    “An interest rate of 12 per cent will check excess money supply and demand for dollars,’’ Wale Abe, chief executive officer of the Financial Market Dealers Association, which groups lenders trading in the money market, said.

     

    Agency Banking

     

    Framework that would define the mode of operation for Agency Banking will be out by the middle of December this year, the Governor, Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi has said.

    Speaking at the Enhancing Financial Innovation and Access (EFInA) forum held in Lagos, he said that the CBN Committee of Governors is already fine-tuning the draft exposure the agency banking, which will be issued soon.

    He said issues relating to number of agents, type and nature of agents including considerations for super agents are critical areas being considered in the draft exposure. He said all the processes for this line of banking to become functional in the country will be finalised by this year-end.

    He said there have been a lot of improvements in the Nigerian payment system, including the drive for financial inclusion. The apex bank boss said lenders have to address the need for special products that consider women and the handicapped to ensure that everyone is carried along.

    He said that the agency banking provides financial services to the widely dispersed population at affordable price and has assisted some countries in decongesting existing customers from crowded branches, and will equally serve same purpose in Nigeria.

     

    Third quarter earnings

     

    The five biggest banks in the country earned $1.6 billion as at September 2012, four times the $400 million they achieved in 2005, the Managing Director, Access Bank Plc, Aigboje Aig-Imoukhuede, has said. This was contained in a report by the Oxford Business Group Update released at the weekend. “The Nigerian banking system is poised for a new era of competition,” he said.

    In a September report on the sector, Lagos-based Cordros Capital noted that the 12 banks it surveyed – including the top five – all posted revenue growth of more than 20 per cent in the first half of 2012.

    The United Bank for Africa (UBA), announced in unaudited results that its gross earnings grew to N168.2 billion, up 21.4 per cent on N138.5 billion in the same quarter of 2011. Total assets rose 11.1 per cent year-on-year to N1.95 trillion and profit before tax surged 376.25 per cent to N44.86 billion.

    The figures represent a turnaround after the prolonged effects of the 2008/09 crisis, when 10 banks accounting for 40 per cent of the system were signalled out by the CBN for auditing and were subsequently sold off, nationalised or recapitalised.

     

    LCCI

    The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern over the implications of Monetary Policy Committee (MPC) retention of a tight monetary policy stance.

    LCCI Director-General, Muda Yusuf said the current economic and business conditions will escalate unemployment crisis, decline profit margins, weaken consumer demand and lead to prohibitive interest rates.

    He also said the MPC decision to retain Monetary Policy Rate at 12 per cent will decelerate economic growth and lead to high mortality rate of small businesses. “These conditions call for policy choices that would stimulate the economy, even at the risk of inflation. Boosting economic activities would increase output and invariably moderate inflation. The MPC decision to retain a regime of tightening is ill advised and insensitive,” he said.

    According to Yusuf, the apex bank’s concern about inflation, exchange rate stability and the preservation of foreign reserves are noted but given the present socio-economic conditions, stimulating the economy should be paramount at this time.

     

    Contracts

     

    The Federal Government must respect and fulfill terms and conditions it signed with both local and foreign investors that won power sector bids, Governor, Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi has said.

    Sanusi who spoke at the weekend during the 46th Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, said investors will not take government seriously if by any reason, it reneges on keeping its own side of the contracts.

    “Government must respect contracts signed on power. Under no circumstance should these contracts be revoked and I am happy that the power reforms contracts have not been revoked,” he said.

    Data provided by the Bureau of Public Enterprises (BPE) showed the assets for privatisation include 11 distribution companies (Discos) and six generation companies (Gencos) from the unbundled Power Holding Company of Nigeria (PHCN).

     

    ATM Charges

     

    The Nigeria Deposit Insurance Corporation (NDIC) and CBN will be sending examiners to banks to see if the lenders are complying with N100 waiver on other banks’ Automated Teller Machines (ATMs).

    Managing Director, NDIC, Umaru Ibrahim, disclosed this during a media workshop held in Jigawa. He said the regulators are committed to ensuring that all banks comply with the directive to ensure that CBN’s policy on financial inclusion is achieved.

    The apex bank had early last week, finally agreed to put a stop to all charges associated with the use of ATMs. The agreement was the highpoint of a meeting between the Bankers Committee made up of chief executive officers of Deposit Money Banks, directors and top officials of the CBN and NDIC. Before now, account holders had been made to pay a flat rate of N100 per withdrawal any time they used other banks’ ATMs.

    He said the decision to stop the charge would help to increase the patronage of ATMs, thus deepening the financial inclusion strategy.

     

    Asset seizure

     

    The managing director, DataPro, Abimbola Adeseyoju, has called for the implementation of the asset seizure, confiscation and forfeiture policy of Economic and Financial Crimes Commission (EFCC) to check money laundering in the country.

    Speaking at the DataPro inaugural lecture series held in Lagos, he said that the anti-money laundering /combating the financial terrorism (AML/CFT) initiative was instituted by the Central Bank of Nigeria (CBN) to ensure that financial crime perpetrators were punished to ensure they do not benefit from their crimes.

    He advised that an acceptable framework that tallies with ‘Recommendations Four of the Financial Action Task Force 2012 Principles’ which is on asset seizure, confiscation and forfeiture as one of the deterrents to money laundering and terrorists financing.

    He said that government should ensure that competent authorities have powers to freeze or seize and laundered property or proceeds including instrumentalities used or intended to be used for money laundering or terrorism financing.

     

    World Bank

     

    World Bank report says the African continent would also generate an extra $20 billion in yearly earnings if its leaders can agree to dismantle trade barriers that blunt more regional dynamism. The report was released on the eve of an African Union (AU) ministerial summit in Addis Ababa on agriculture and trade.

    In a statement, the bank says that Africa’s farmers can potentially grow enough food to feed the continent and avert future food crises if countries remove cross-border restrictions on the food trade within the region.

    The report urges African leaders to improve trade so that food can move more freely between countries and from fertile areas to those where communities are suffering food shortages. “The World Bank expects demand for food in Africa to double by the year 2020 as people increasingly leave the countryside and move to the continent’s cities,” it said.

    According to the new report, Africa Can Help Feed Africa: Removing barriers to regional trade in food staples, rapid urbanization will challenge the ability of farmers to ship their cereals and other foods to consumers when the nearest trade market is just across a national border.

     

    Taxation

     

    The President of the Chartered Institute of Taxation of Nigeria (CITN), John Sunday Jegede, has said that taxation, and not oil, remains the engine-room for sustainable economic development in the country. He said oil and gas will in the very near future dry up but taxation will always remain a source of revenue for countries.

    Jegede disclosed this during CITN’s 27th induction ceremony in which 546 new members were inducted. According to him: “It is no longer news that what is needed to drive our economy and assist in the realisation of vision 20-2020 and the transformation agenda of the Federal Government is the diversification of the economy with emphasis on taxation”.

     

    Bank to bank report

     

    The Fidelity Helping Hands Programme (FHHP), a staff funded volunteer initiative, has renovated and handed over Sought After Foundation Orphanage Home in Lekki, Ajah to its management.

    The bank’s Executive Director, Shared Services, Mrs Ugochukwu Chijioke, who was represented by the General Manager of Operations, Mr Sam Obijiaku, said the renovation was done in the spirit of giving back to the society where it operates.

    As part of activities planned to mark 15 years of a rewarding partnership, UBA in conjunction with MoneyGram, has donated a fully branded crèche for the Oncology Pediatric ward of the Lagos University Teaching Hospital (LUTH) in Nigeria.

    The ward branch was handed over to senior management of LUTH at a colorful ceremony within the hospital premises.

    The Product Manager, Stella Okojie, said that as part of bank’s incentive to reward customers during the UBA/MoneyGram 15th Year Anniversary, the Bank plans to execute hospital-based corporate social responsibility (CSR) projects.

    Standard Chartered Bank Nigeria has officially opened its new branch located in Apapa, Lagos. In a statement, the lender said the opening of the branch is in line with its strong business growth and strategic expansion drive in the country.

    It said Lagos presents it with tremendous opportunities in a country which is central to its business footprint in Africa. “The strength of the Nigerian market has been reflected in our business growth which has been exponential,” it said.

    Regional Head for Consumer Banking in the Middle East, Pakistan and Africa, Raheel Ahmed said: “Lagos is an extremely important state in Nigeria. It has always played a pivotal role in the development of the country and whatever happens in Lagos usually gets replicated positively in other parts of the nation,” he said.

     

  • Naira hits three-week high

    Naira hits three-week high

    Nigeria’s naira currency hit a three week high against the United States dollar on the interbank market yesterday, supported by low demand for hard currency and dollar inflows from foreign banks.

    The naira closed at N157.05 to the dollar on the interbank, firmer than the N157.30, it closed at on the last trading day on Wednesday. The last time it was higher than Monday’s level, it closed at N156.45 to the dollar on October 4.

    “The market was very liquid from dollar sales by some foreign banks and offshore investors buying local debt and this boosted support for the naira,” one dealer said.

    Traders according to Bloomberg, said weak demand for dollars at the official window also helped to strengthen the naira, as most banks were selling down their positions.

    The Central Bank had initially offered to sell $100 million at the bi-weekly auction, but ended up selling $43.5 million at N155.76 to the dollar, compared with $142.96 million sold at N155.76 to the dollar at the last auction on Wednesday.

    Traders said the naira could strengthen further in the near term if the Nigerian National Petroleum Corporation (NNPC) and other oil multinational companies sell dollars this week, as expected.

    NNPC supplies the bulk of foreign exchange sold on the interbank market.

  • Naira firms on Shell, NLNG dollar sales

    Naira firms on Shell, NLNG dollar sales

    The naira firmed against the U.S dollar on the interbank market yesterday, supported by dollar sales by two energy companies, which boosted greenback supplies.

    The local currency strengthened to N157.30 to the dollar on the interbank market, firmer than the N157.40 it closed on Friday.

    “The market liquidity was boosted through dollar sales by Shell and Nigerian Liquefied Natural Gas (NLNG) company, which provided support for the naira,” one dealer said.

    Traders said the naira should remain stable around the present level as dollar inflows from month-end sales by energy companies and offshore investors buying treasury bills at an auction this week could balance out demand in the market.

    On the bi-weekly auction, the Central Bank of Nigeria sold $150 million at N155.76, same amount and rate at the last auction.

    The naira had weakened to around a three week low last week, pressured by demand for dollars from gasoline importers, but the local currency rallied on dollar inflows from oil companies and from offshore investors buying bonds.

  • Naira falls to three-week low

    The naira fell to its weakest in three weeks on the interbank market yesterday, as dollar demand by foreign exchange bureau and importers outpaced supply of hard currency, traders said.

    The naira closed at N157.55 to the dollar on the interbank market, weaker than the N157.40 to the dollar it closed on Friday and the level last seen on September 25 when it closed at N157.65 to the dollar.

    The currency however remained unchanged at the bi-weekly auction, as the Central Bank of Nigeria (CBN) sold $162.2 million at N155.75 to the dollar, compared with $120 million sold at the same rate at the last auction on Wednesday.

    Dealers said demand for the dollar from importers pushed down the local currency.

    “We see the naira strengthening a little in the coming days as dollar sales by one of the oil companies and expected inflow from offshore investors buying local debt boosts supplies and helps calm the market,” one dealer said.

    Traders said a unit of Shell sold some dollars toward the end of trading yesterday, adding that its effect would be felt in the market later in the week.

  • Naira rises on foreign demand for bonds

    Naira rises on foreign demand for bonds

    The naira firmed against the U.S. dollar on the inter bank yesterday, supported by inflows from foreign investors ahead of a bond auction this week and a $57.5 million sale by ExxonMobil to some lenders, dealers said.

    The naira closed at N157.65 to the greenback, firmer than Monday’s close of N157.75.

    The naira has gained 1.62 per cent so far this year on the back of rising oil prices and foreign reserves in Africa’s second biggest economy. It has traded within a range of N157-N158 over the past month on high dollar liquidity, dealers said.

    “Sentiment is high and we see the naira gaining further this week or at least remaining stable,” said a dealer at Standard Chartered Bank, adding that dollar inflows have risen in recent months to help sustain demand.

    Dealers said the inclusion of Nigeria’s debt into the JP Morgan emerging market government bond index from October saw foreign investors pump in dollars to buy treasury bills.

    Nigeria will sell N104.70 billion ($663.50 m) worth of treasury bills with maturities ranging from three-months to one-year this week, with foreign investors already buying naira to participate in the auction, dealers say.

    Foreign reserves rose to $40.28 billion in September, up 10.3 per cent on the previous month.