Banks

Kano, Nov.2, 2023: The Nigerian Deposit Insurance Corporation (NDIC) said it  has paid off N 16 billion  depositors and shareholders liquidation dividend for all banks that failed about 20 years ago.

Hajara Sule Imam, a Principal Manager with the NDIC Zonal office in Kano disclosed this  at this year’s World Savings Day.

Imam  that the NDIC had earmarked over N16 billion for the exercise and most of the depositors and shareholders are finally paid.

She explained further that some of the microfinance banks with insured deposits that were closed down recently have been paid and the process is still on.

“Recently, NDIC has earmarked about N16 billion to pay most of the depositors and even shareholders liquidation dividend for all the banks that failed about 20 years back.  We are finally paying most of them now.

“The microfinance banks that were close recently some of them that are insured have been paid. You know is a process and is ongoing” she explained.

Speaking on the issue of unclaimed deposits, she explained that dealing with the banks that were closed down 20 years ago is a difficult task due to lack of proper information.

Sha said it is unlike the current system where all information about depositors could be reached through the Bank Verification Numbers (BVN).

However, the basic information is used and advertised to the public to come up and claim their payments adding that they have achieved 90 percent success so far.

This year’s event with the theme “Conquer the World Through Savings” was hosted at Government Girls College Dala, Kano with the intention of inducing financial discipline and planning in the younger generation.

Lagos, Oct. 13, 2023: Experts have expressed optimism that the banking industry would soon embark on new recapitalisation drive owing to the current economic realities in the country.

They said this at the official launch of Proshare Impact Report on Nigeria’s banking sector titled: ‘Reassessing Tier 1 Banks – The Class of 2023,’ on Friday in Lagos.

The experts spoke on the topic: “Banks are Dead, Banking is Reborn: Bridging Regulatory Compliance, Changing  Business Models and Rising Expectations.”

Speaking at the panel session, Mr Johnson Chukwu, the Group Chief Executive Officer, Cowry Asset Management Ltd., said banks would likely embark on a new recapitalisation drive due to regulatory capital pressure and increase in transaction cost.

“The banks have a complying need beyond increasing their liabilities and to also increase their operating capital because of the shift in exchange rate,” Chukwu said.

He said banks need to shore up their operating capital to fund big businesses.

Chukwu said the return investors make from investing in banks was another factor that would comply banks to embark on new recapitalisation drive to retain investors and make more money.

He said that banks generate higher return even in a difficult environment when compared with other investment class.

“If you look at the Nigerian capital market performance as of Oct. 12, the All-Share Index had gained 30.93 per cent, the banking sub-sector had gained 60.43 per cent, that’s far higher than the All-Share Index.

“There’s no other investment class that will give more than 60 per cent return like the banks.

So, in the interest of investors, it makes more sense for them to give their money to the banks because they have the capacity to read the market, trade and generate better returns even in a difficult environment,” he said.

Also speaking, the Chief Financial Officer, EcoBank Nigeria Ltd., Mrs Ibukun Oyedeji, stressed the need for capital and liquidity for banks to remain in business.

Oyedeji said banks must reduce cost through investment in technology to remain in business.

She also said that banks must learn how to replicate the Fintech model in order to play actively in that space.

Dr Biodun Adedipe, Founder and Chief Consultant at B.Adedipe Associates (BAA Consult), observed that the major problem of Nigeria was the devaluation of the naira.

“Everything changes in the country whenever there’s change in the exchange value of the naira,” Adedipe said.

He, however, called on the Central Bank of Nigeria to pay more attention to the exchange rate.

Mr Ayodeji Ebo, the Managing Director, Chief Buisness Officer, Optimus by Afrinvest, said that banks must ensure enhanced  risk management to survive the current economic challenges.

Ebo also stressed the need for commercial banks to strengthen their models to boost financial inclusion through technology.

Meanwhile, the 2023 edition of the Proshare Bank Strength Index (PBSI) revealed that Access Bank, Guaranty Trust Company, United Bank for Africa and Zenith Bank retained their ranking as Tier 1 banks.

The report said that Stanbic IBTC and Fidelity Bank dropped from the Tier 1 ranking to Tier 11.

“This is according to the methodology deployed by the PBSI, which requires that banks/financial Holdcos over the 50th percentile are ranked as Tier 1, while those below the mark are categorised as Tier II and III, respectively.

“Ecobank Transnational Incorporated joined the Tier 1 ranking for the 2023 PBSI from the Tier II ranking in 2021/2022.

“In the maiden edition of the “Tier 1 Banking Report” titled The Case for Redefining Tier 1 Banks, the PBSI focused on measures of asset quality, profitability, and liquidity.

“This has been broadened to cover efficiency ratios, risk management, and digital income to incorporate assets, gross earnings (in absolute terms and on logarithmic scales).

“Capital Adequacy Ratio, Loans Feposit Ratio, Cost to Income-Ratio, Cost of Risk, Net Interest Margin, Non-Performing Loans Ratio, Digital Income to Gross Earnings Ratio, and Independent Non-Executive Directors to Board Ratio.

“Dynamism would be a key feature for surviving business disruptions beyond 2023 Revised,” said the report.

The report stated that Nigerian banks must find new ways of holding on to their customers and ensure the creation of uncontested markets, as seen in the rise of banking’s AI-supported fintech services.

“A few banks may encounter difficulties, but many, especially Tier 1 banks, will continue to thrive,” said the report.

The report assessed the full-year 2022 performance of the banks/financial Holdcos and incorporated the half-year 2023 results, considering the timing of the Tier 1 banking report release.

It features six sections and highlights the following key areas: H1, 2023 Silicon Valley Bank crisis and impact on global banking, operations of Nigerian banks, revised 2021 PBSI and bank classifications.

Also, the financial risk profile of Tier 1 and Tier 2 banks, the rise of tech foundries and digital income in the Nigerian banking industry and the recommendations for regulators.

Lagos, Oct. 8, 2023: The Fiscal Responsibility Commission (FRC) on Saturday highlighted the risks associated with banks’ lending in a manner that contravenes the Section 45 of its Fiscal Responsibility Act.

Its Executive Chairman, Mr Victor Muruako, who spoke at a one-day stakeholders dialogue in Lagos, said such manner could also have severe consequences for banks and the Nigerian economy as a whole.

The dialogue was on implementing Section 45 of the Fiscal Responsibility Act.

The commission began discussions with banks and financial institutions in the country to ensure that their lending practices consistently comply with provisions of the Fiscal Responsibility Act(FRA).

Muruako emphasised that although borrowing by the government and public institutions is a tool for development, lending by banks and financial institutions in violation of the provision is unlawful.

Despite the simplicity and clarity of the Act’s language, he pointed out that banks often approve and disburse loans to subnational governments without fully adhering to the provisions of the FRA.

Muruako said: “Not once in the commission’s verification exercises, has it confirmed that a Proof of Compliance With Provision of the FRA was specifically requested for and obtained by a bank or financial institution before lending to any government.

“Also, only one, out of a recent sample of 13 loans to governments across the country, had an associated ‘Cost-Benefit Analysis’, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied.

The FRA chairman said there lawsuits in courts across the country, challenging the propriety of some bank loans to governments and public institutions, based on provisions of the FRA 2007.

Muruako said: “The unsavory effect of this non-compliance, may spread well beyond the individual banks to the inside macroeconomic space.

“Since the commission has responsibility toward macroeconomic stability, we thought it necessary to hold this stakeholders dialogue to get the perspectives of banks and also stem the tide before it’s too late.

“I urge the banks and other financial institutions to support the bold macroeconomic reform initiative of President Bola Tinubu’s administration.

 “By being intentional in helping to reduce the risk of macroeconomic instability through ensuring that their lending practice consistently comply with provisions of the FRA.”

Muruako appreciated the leadership of Access bank for their support in organising the event and stakeholders in the financial industry for their cooperation with FRA.

In his remark, Mr Felix Obiamalu, a lawyer, advised the FRC to work toward engaging the Nigeria Governors’ Forum (NGF) and carry them along to ease the implementation of the provision.

Obiamalu, also Associate Director, Legal and Sanctions, Nigeria Financial Intelligence Unit,

stated that the FRA should also be empowered to enforce compliance to the FRA.

This, he noted, could be done by enabling laws to sanction and penalise defaulters of the Act.

In his presentation, Prof. Uche Uwaleke of the Nasarawa State University, Keffi, also harped on the need to curb borrowings from government at all levels.

He said this had become more for consumption, rather than for capital projects.

Uwaleke noted that government borrowings over the years had been on the rise, as the country currently has over N87 trillion public debt.

According to him, this is causing strain on government balance sheet and stifling the nation’s development.

The state holders at the dialogue included: representatives of NGF, Nigeria Deposit Insurance Corporation (NDIC), Chief Compliance Officers, Chief Risk Officers, Chief Legal Officers and Chief Executive Officers of banks, among others. 

Abuja, Oct. 6, 2023: Vice President Kashim Shettima has urged banks to key into Nigeria’s digital programme targeted at creating one million jobs in the technology space.

Shettima made the demand when he received a delegation from the Chartered Institute of Bankers of Nigeria (CIBN) on a courtesy visit to the Presidential Villa, on Thursday in Abuja.

The delegation was led by its President and Chairman of Council, Dr Ken Opara.

The vice president spoke passionately about the intentions of President Bola Tinubu’s administration to initiate policies and programmes to transform all sectors of the nation’s economy.

“Support us in our digital jobs initiative, support us to save this nation. I have confidence and hope in this nation and together we can make this nation work again.

“Beyond the fuel subsidy removal, the harmonisation of foreign exchange and beyond the tax and fiscal reforms,  President Tinubu is the most business-friendly President in the contemporary history of Nigeria.

“He understands the business world; he has been part of the business world. He is determined and committed to reposition this nation.”

Shettima who spoke glowingly about the commitment of the banking sector to the development of the Nigerian economy, called on the community to “bequeath to the future generation, the Nigeria of our dream.”

Earlier, president of CIBN, Dr Opara, explained that the leadership of the banking community in Nigeria was at the Presidential Villa to pay homage to the vice-president.

He commended the Tinubu administration for its recent economic policies, especially the removal of fuel subsidy and the exchange rate harmonisation, among others.

Opara assured the vice-president of CIBN’s cooperation in all the administration’s programmes and policies.

“The banking community will be very supportive in ensuring that the laudable policies of this administration are actualised in the interest of the people of this country.

“The banking industry will continue to play pivotal roles in supporting inclusive economic growth. We will continue to deepen financial inclusion by expanding access to banking services across the country.”

He also briefed Shettima on key engagements of the Institute, including those targeted at addressing emerging challenges in the polity, especially the brain drain syndrome.

He said the slowdown in economic activities was responsible for the depletion in the banking sector’s contribution to the nation’s GDP but that tide is already changing.

“Essentially, the banking sector represents the engine of growth and that is very important. They serve as catalysts for economic growth.

“What you saw with the growth in terms of our GDP contribution is what happened during the period of the last quarter where there was a slowdown in economic activities.

“But what we are seeing now is that banks are also deepening access to financial support, especially to the key sectors like agriculture, manufacturing, small businesses and infrastructure.

“So, we are going to see growth in the financial system as we move on, especially before the end of this financial year.”

Opara also highlighted other areas of collaboration between the Nigerian government and the Chartered Institute of Bankers.

Abuja, Oct.4, 2023: The Fiscal Responsibility Commission (FRC) is to hold a stakeholders dialogue with bank operators, key stakeholders in the financial sector on how to improve the nation’s debt management practices.

This is contained in a statement by the Commission’s Head of Strategic Communications, Mr Bede Anyanwu on Thursday in Abuja.

The statement revealed that the dialogue which is to take place on Saturday in Lagos, will involve government representatives, economists, academics and experts in fiscal governance.

According to the statement, the engagement was also aimed at implementing sections of the Fiscal Responsibility Act that relates to lending of money from banks to government and public institutions of the Federation.

Anyanwu said that according to the Fiscal Responsibility Act 2007 (FRA), lending by banks to Ministries, Departments and Agencies (MDAs) in contravention of certain provisions of the Act shall was considered unlawful.

He said that the Commission aims at using the meeting to refresh the attention of stakeholders to the provision of the Act and to foster stakeholders agreement on ways to enhance compliance.

Lagos, Sept. 5, 2023: Some commercial banks in Lagos, on Tuesday, defied the call for withdrawal of service by the Nigeria Labour Congress.

Access Bank, First Bank, Guaranty Trust Bank (GTB), Zenith Bank, Sterling Bank were among those that opened while customers were also seen at the various banks.

Some of the areas included Ikorodu, Anthony, Maryland, Ojuelegba and Iponri.

In spite of the downpour,  there were beehives of activities at Mile 12 Market, Ketu Market and Oyingbo Market.

Traders and buyers were seen transacting at the various markets while commercial transport operators were seen picking passengers at various bus stops and motor parks.

NLC had declared a two-day nationwide strike on Sept. 5 and Sept. 6, over increasing hardship and suffering caused by the removal of fuel subsidy.

The National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), in a circular dated Sept. 2, directed all organs of the union to comply with the NLC strike.

The union said the directive was imperative to get the needed attention of the government.