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Expert Warns Against The Dangers Of CBN’s Policies

Godwin-Emefiele

The Chief Economist, Standard Chartered Bank, Africa, Razia Khan, has cautioned that the recent foreign exchange policies introduced by the Central Bank of Nigeria (CBN) – the imposition of forex restrictions on imports and the requirement that clients’ demand for forex be pre-funded 48 hours ahead – were already fueling inflation, thereby making it difficult for the Federal Government to implement key reforms such as the removal of the subsidy on petroleum products and increasing the Value Added Tax (VAT).

In a statement made available, she said: “The authorities’ policy options are likely to be constrained unless there is a change in Nigeria’s FX regime, which would likely relieve pressure on the FX reserves and attract new inflows, while reducing – over time – the need for very tight monetary conditions. To date, FX reserves and the real economy, rather than the currency, have borne much of the adjustment to lower oil prices. This has been costly.

“In the absence of policy change, little can be done to boost banking- system liquidity. Fiscal policy has little scope to boost growth amid reports of substantial government arrears. Monetary policy cannot do much either. The worry is that recent FX restrictions, which appear to have exacerbated existing price pressures, further restrict the policy choices available.”

Also speaking on the backdrop of rising inflation, she said it will be difficult to proceed with important reforms such as longterm revisions to costly fuel subsidies and a VAT increase to sustainably boost non-oil revenue.

“In theory, lower oil prices and the goodwill generated by a successful election should be creating opportunities for reform in Nigeria. But the policies enacted to date, including a frozen interbank FX market and the controversial imposition of FX restrictions on imports, have significantly restricted the choices available. Inflation is arguably higher than it needs to be. A poorly functioning FX market discourages new FX inflows – both direct investment in the real economy and portfolio flows that might help to finance a larger fiscal deficit.”

Diamond Bank In Fraud Allegation, Dragged To Court

UZOMA-DOZIE
Diamond Bank Plc has been dragged to court on account of breach of agreement which detrimentally affected the business and income of one of its customers -Charismond Nigeria Limited (Importer of chemical products)and its Managing Director, Mr. Aliandu Monday.
This was revealed in a statement of claim filed before the Federal High Court of Nigeria, Lagos under Suit No: FHC/L/CS/1148/2013.
The whole saga started in June 2012 when a staff of Diamond Bank Plc, Chinonso Chijioke who happened to be the account officer of Charismond Nigeria Limited advised the company’s Managing Director to commence processing its import papers from the bank’s branch at Agidingbi to prevent stress of shuttling between Mainland and Island for its bank transactions going by the proximity of the company’s location with Diamond Bank’s Agidingbi Branch.
It was learnt that the MD accepted the advice after being assured by his account officer that he would get the same quality of professional banking service equal to the one he gets at the bank’s head office.
Pursuant to the advice, the MD visited Diamond Bank Plc Agidingbi branch where he collected three different sets of Form ‘M’(MF1 valued at $42, 752, MF2 valued at $44, 352, and MF3 valued at $37, 376) for the importation of chemical products – Normal Butanol, Ethyl Acetate and Iso-Propylol respectively.
It was claimed that after proper filling of the import papers, he returned them to Agidingbi Branch of the Diamond Bank Plc on the 28th June, 2012 for processing.
Eventually, he forwarded the endorsed copies of the import papers to the company’s chemical products suppliers – GAPUMA (UK) Limited for onward transmission of the Bill of Lading as well as other shipping documents for shipment of the goods into Nigeria from United Kingdom.
Moreover, two months after the aforementioned events, the MD claimed he called the attention of the bank to the fact that first batch of the goods had been ferried to Nigeria and that it had forwarded the shipping documents to the bank.
Consequently, while preparing for clearing of the goods, he visited the Agindigbi branch of the Bank to inquire about the shipping documents which was forwarded and received by the bank via DHL Courier service. But to his dismay, he was directed to the International and Operations department of Diamond Bank’s Head Office to pick the documents – a development which negated the promise and confidence he received on the Agidingbi branch of Diamond Bank Plc initially.
Thereafter, it was all drama filled with twists and turns. The MD requested for the debit note for payment of his import duties to the government but he was informed at the bank’s head office that he cannot make the payment because the bank’s computer system cannot trace the import papers (Form Ms) registered on the bank’s database. The officer who attended to MD, one Mrs. Ifeoma Iwunna further stated that hard copies of the import papers which were earlier submitted to the bank could not be found.
He was redirected to Diamond Bank Plc branch at Agidingbi and fortunately, the import papers were presented to him. But to his chagrin, the important papers were unprocessed and or treated whatsoever.
According to the bank’s officer, he said the development ensued due to the fact that the import papers were not forwarded to the Scanning and Risk service provider (COTECNA) registration after six weeks which the import papers were submitted to the bank for processing. The forms were meant to be submitted to COTECNA within 5 working days.
The unfolding issue persisted and the imported goods remained unclear, hence accumulating huge demurrage, yet the bank couldn’t provide the import papers for the company to clear goods over two months after.
It was further claimed that the import papers were finally processed and released to the company’s clearing agent from Diamond Bank’s Ajao Estate Branch on the 5th October, 2012.
On getting to Apapa sea port, the company was compelled to pay a whopping sum of N6, 294, 279.5 (Six Million, Two Hundred And Ninety Four Thousand, Two Hundred And Seventy Nine Naira) as demurrage and other shipping charges due to the delay in the clearing of the goods caused by the negligence of the Diamond Bank Plc in processing the import papers (Form Ms).
However, to prevent further compilation of the charges, the company sought for loan from Diamond Bank Plc which was declined. It therefore, resulted into paying huge interest on the money borrowed from KECO Nigeria Limited to fund the belated clearing of the imports.
Consequently, the plaintiff (Charismond Nigeria Limited) through its Managing Director, Mr. Aliandu Monday demanded the payment of the sum of N50, 000, 000 (Fifty Million Naira)as general and special damages of severe economic and financial loss it incurred as a result of the bank’s breach of contractual and legal duty.

Apparently, the Diamond Bank Plc disinclined with the demand of the company, hence sought redress in the court of law with a counter affidavit deposed to by its solicitors-Philip Ndubuisi Umeh & Co. The bank averred that the facts and documents attached to the plaintiff’s statement of claim are of no value and irrelevant to any of the parties.

Access Bank Announces New Director, As Gbenga Oyebode Resigns

Mosun-Belo-Olusoga, access bank,chairman

According to a statement from the bank, the retirement of Oyebode follows his successful completion of the maximum term limit as prescribed by the Central Bank of Nigeria’s Code of Corporate Governance for Banks and Discount Houses in Nigeria.

The appointment of Belo- Olusoga also follows a thorough selection process by the Governance and Nomination Committee of the Board led by Mr. Emmanuel Chiejina, a non-Executive Director. Belo-Olusoga joined the Board of the Bank in November 2007 as a non-Executive Director. Until her recent appointment, she was the Chairperson of the Credit and Finance Committee and member of the Board Committees on Audit, Governance and Nomination, Risk Management and Remuneration.

She was formerly an Executive Director of Guaranty Trust Bank Plc and was at various times responsible for Risk Management, Corporate and Commercial Banking and Transaction Services and Settlements. She is a graduate of Economics from University of Ibadan and a Fellow of the Institute of Chartered Accountants of Nigerian and Chartered Institute of Bankers of Nigeria.

Speaking on her appointment, Belo-Olusoga said; ‘‘I consider it a great privilege to chair Access Bank, an outstanding financial institution at a time like this. I look forward to working with its great team in transforming it into the world’s most respected African bank.’’

NAME & SHAME: Fidelity, Union, Other Banks List Debtors

Godwin-Emefiele

Banks are exposing the businesses and people behind the mountain of debts threatening to kill the sector  – courtesy of a Central Bank of Nigeria (CBN) directive that expired at the weekend.

Barring unforeseen developments, some of the banks will begin the publication of their debtors’ list today.

The publications are coming on the heels of the July 31, 2015 deadline set by the apex bank for the debtors to pay up.

The lists, an official of one of the banks said, is just a part of the whole.  “Some debtors have entered into various payment schemes  to avoid being shamed by this exercise,” the bank official, who pleaded not to be identified because of “the sensitivity of the action”, said.

The debtors are to be blacklisted and banned from participating in the foreign exchange market as well as trading in the Nigerian Government Securities market. The publication of the debtors’ lists is to be a continuous exercise.

Union Bank is owed  huge sums by 176 debtors. Six customers collectively owe the bank N27.91 billion. They are Dec Oil & Gas, owing N15.7 billion following a 1999 contract finance loan that expired in 2000. The directors of the company are Patrick Ugboma and Pius U. Malaka.

Other debtors include Alliance Energy, which is owing the bank N4.92 billion. The term loan approved in 2004 expired 2006. The directors are Akinwale Omoboriowo, Kojo Anan and Timi Austen-Peters.

Hajaig Construction is owing the bank N2.99 billion on a loan approved in 2012 and which expired in 2014. The directors are Abdul Nasser Hajaig, Rud Wan Hajaig and Mohammed Hajaig.

Sapta International Industries Limited is owing the bank  N1.87 billion over a 1987 term loan that expired in 1988. The directors are Alex Aloy Nwokodikwa and Clement Nwokodikwa.

Petroleum Project International has a debt of N1.25 billion over a term loan obtained in 2004 that expired in 2007. The directors are Akinwale Omoboriowo, Kojo Anan and Timi Austen-Peters.

Best Aluminum owes N1.11 billion for import and lease facilities obtained between 2010 and 2012. The directors are Chief Godwin Nweke and Chief Pius Nweke.

Fidelity Bank’s debtors include the telephone firm Starcomms Limited, which owes N3.08 billion cumulatively in the three accounts it runs with the lender under the same name and directors. The first account, which got in 2009 an overdraft which expired in 2014, is owing the bank N1.68 billion; the second account, a term loan approved in 2011 and which expired in 2014, is indebted to the tune of N1.16 billion. The third account, also an overdraft approved in 2007 and expired 2014, is indebted up to N239.65 million. The directors are Chief Maan Lababidi, Paul Edwards, Tajudeen Dantata, Omar Lababidi, Dr. Chris Ogbechie and Olusola Oladokun.

Fidelity released a list of 28 customers with “delinquent” loans. Other customers include Kesio Associates, which is owing the bank N328.1 million and Diesel Solutions (N324.28 million). Patemglobal Limited is owing the bank N268.5 million.

Kasolute Nigeria Limited owes Sterling Bank Plc N475.3 million over an overdraft loan approved in 1999, which expired in 2000. Just Jays Limited owes the bank N254.7 million; Alcun Industries Limited owes N192.1 million. G.Cyrus Global Resources  is owing the bank N187 million.

One bank executive  said  that  many of the banks offered some debtors who made moves to settle  “their  long-outstanding  loans the option of rescheduling, or  making part-payment of the loans.

“Those that have reached this understanding with their banks have their names removed from the published debtors list, “ he said, adding that the other category whose names are missing from the list, are those that are contesting their indebtedness in the courts.

“The CBN has directed that all cases that are in the purview of the courts should be reserved for judicial determination and resolution,” the official said.

He said the Loan Recovery unit of the banks were still working hard,  compiling the list of other debtors. “This publish and shame strategy would continue,  as the next category of NPLs falls due, except otherwise directed by the regulator, he stressed,” the source said.

A CBN official, who spoke in confidence, said the resolve of the apex bank to adopt “the publish and shame” strategy was as a result of the failure of persuasion which many of the banks  have adopted over the years. He warned that this would be the beginning of a long-battle  aimed at recovering all outstanding loans due the lenders.

Some of the facilities in the bank books are classified as overdrafts, project  financing, term loans and others which are said to be unauthorised credit advances. The NPLs range from one to over five years in many instances.

However, there are strong indications that much pressure is being mounted by some prominent debtors against the publication of the debtors’ list. We learnt that about two to three banks have withdrawn the list they sent to some media houses for publication, saying they required more time to clean them up.

A banker, who craved anonymity, said he was concerned that the strategy that these debtors applied in the past to evade settlement of their debts might come to play again. He said many of the debtors were strong enough to offset their indebtedness, but regretted that lack of determination to apply the rules always favoured them.

Access Bank’s Customers’ Trust Boosted With Moody’s First-Time Rating

herbert wigwe

Access Bank Plc, (Bloomberg: ACCESS NL; Thomson Reuters: ACCESS.LG) (“Access Bank” or the “Bank”), a leading full service commercial bank with headquarters in Nigeria, and operations across major cities and commercial centres in Sub-Saharan Africa, the UK and China, today announces its first-time credit rating by Moody’s Investors Service.

Moody’s, a top three global leading rating agency, has assigned first-time foreign currency issuer and local currency deposit ratings of Ba3 with stable outlooks to Access Bank Plc. It also assigned Access Bank a Counterparty Risk Assessment (CRA) of Ba3 (cr)/Not Prime(cr).

The ratings are underpinned by a b2 Baseline Credit Assessment (BCA) which measure an issuer’s standalone financial strength.According to the agency, “Access Bank’s b2 standalone profile reflects (1) solid asset quality metrics, underpinned by tangible improvements in loan underwriting standards and risk management in recent years; (2) robust capital and liquidity buffers, supported by sustainable internal capital generation; and (3) a stable liability structure predominantlyfunded with deposits.”

The agency further stated that these strengths are balanced against Nigeria’s challenging operating environment, which takes into account the strong growth potential of the system and institutional and structural weaknesses,as well as the concentration risks on the Bank’s books, including to the oil and gas industry. However, the agency noted that Access Bank is very well positioned to weather the macroeconomic challenges and they expect its standalone credit profile to remain resilient.

According to Moody’s, the long-term deposit and issuer ratings of Ba3reflects the Bank’s Systematically Important Bank (SIB) status in Nigeria as the 5th largest bank in the industry. The Ba3 rating assigned to Access Bank is at the same level as the country’s sovereign rating, which is the highest any local bank in Nigeria can attain.

Access Bank MD Excited Over Euromomey Awards As Best Flow House In Africa

herbert wigwe

Access Bank Plc has emerged winner of the Best Flow House in Africa accolade in the Euromoney Awards for Excellence 2015, which held at the Natural History Museum in London on Thursday.

It is the first time an African Bank will be recognised as winner of this highly sought award.  Access Bank’s win comes in recognition of the Bank’s increasing transaction flows across Africa, particularly its dominancein the Nigerian financial markets

According to Euromoney,the Best Flow House award is given to honour firms that have demonstrated an ability to excel across the region in the key areas of foreign exchange, equities, rates and credit. The winning firm must also have shown commitment to providing liquidity and pricing in all market conditions.  Also, such firm will have shown leadership in developing and integrating technology into its sales and trading businesses, as well as the importance of research.

Speaking at the presentation ceremony, the Group Managing Director of Access Bank Plc, Mr Herbert Wigwe said, “We are delighted to be presented with this highly coveted award. This is recognition of our regional expertise; and our continuing ability to provide customized currency and fixed income solutions to our customers across Africa. This award is an attestation of the Bank’s determination to be the world’s most respected African bank by 2018”

Wigwe assured that the Bank will sustain this growth momentum while noting that the award is an honour not only for Access Bank, but for Nigeria. “This is just the beginning of more things to come for our bank,” he concluded.

The Euromoney Awards for Excellence, now in their 25th consecutive year, continue to be the most respected awards in the financial services industry. The awards, which are based on independently verifiable date, recognize those institutions that have brought the highest levels of service, innovation and expertise to their customers.

Access Bank Plc is rated B by Fitch, BB- by Standard &Poors and A+ by Agusto & Co.

UBA Gladdens Shareholders Hearts With 23% From 3.3Billion Right Issue

Phillips Oduoza, UBA - MD

Shareholders of United Bank for Africa, UBA Plc, who subscribed for the bank’s rights issue in February, have earned more than 23 per cent capital gain.

UBA had between December 2014 and February 2015 sought to raise N11.5 billion new equity funds from existing shareholders through a rights issue of one ordinary share for every 10 ordinary shares at a price of N3.50 per share. The rights issue was fully subscribed.

The bank, last weekend listed about 3.3 billion ordinary shares of 50 Kobo each that arose from the rights issue.

While the supplementary shares were listed at the offer price of N3.50 per share, UBA opened on Tuesday, July 28, at N4.31 per share, providing immediate return of 23.1 per cent or about N2.67 billion capital gains to the rights’ holders.

The listing was closing step in the final phase of the issuance process, which included dispatch of share certificates and electronic transfer of shares to shareholders’ shareholding account at the Central Securities Clearing System (CSCS). With the shares in the CSCS, the rights’ holders can trade on their shares.

Zenith Bank Clear Leadership Reinforced By 3 Certifications At A Go!

New-Zenith-Boss, Peter Olisamedua Amangbo

For the first time in the history of the country, Zenith Bank plc has further solidified its leadership as it last week achieved three certifications from the British Standards Institution (BSI).

The certifications are the Information Security Management System ISO/IEC 27001:20013; IT Service Management System ISO/IEC 20000-1:2011 and Business Continuity Management System, ISO 22301:2012.

The milestone demonstrates Zenith Banks continual commitment to offer their customer and stakeholders enhanced satisfaction in a more stable and secure environment. Further more this highlights their determination to provide innovative and relevant solutions to maintain the security and integrity of its customers’ data.

“Our commitment to these internationally accepted standards stems from a resolve to deepen customer experience through greater information security, an efficient IT management system and a robust business continuity plan that emphasizes the protection of the customers and their investments in an increasingly unpredictable business environment. Certification to these three standards is strong proof of the bank’s commitment to implement policies and practices that meet globally recognized standards”, Jim Ovia, Chairman of the banks said at the night award.

Speaking at the event, .Peter Amangbo, managing director/CEO, said, “Today, is a landmark occasion. Landmark, not just because Zenith Bank is being awarded, but today is actually a special journey for me. We are talking of a three in one award and this is the first time in the history of this country that any institution at all, whether financial institution, manufacturing or service industry would be having these three certifications at the same time.

He noted that the award comes with a lot of responsibilities, challenging the bank to further ensure that it keeps to the tenets of the awards. “I want to assure the BSI and all those present here today that the management and board of Zenith Bank is absolutely committed to continue to support this initiative and we would continue to give our support to ensure that this bank gains other certifications. We should not rest on our oars. We would also ensure that the award and all what it stands for is engraved in our DNA”

“Becoming certified to these three standards provides evidence in our efforts to comply with local and international regulations relating to data protection, privacy and IT governance. We hope through implementing ISO/IEC 27001, it will give greater confidence to our customers and various stakeholders that the security of assets such as financial information , intellectual property, employee details and information entrusted to us is protected securely. ISO/IEC 20000-1 acknowledges our high level of efficiency in IT service provision and our ability to continuously improve the delivery of IT services.

“ISO 22301 will help us identify potential threats and unexpected disruptions to our organization and make sure we have a robots plan and solution in place. Therefore if incidents happen, the bank will be prepared and in a position to respond effectively”, Amamgbo said.

The certificates were awarded to Ovia  and Amamgbo from the Deputy British High Commissioner, Mike Purves. The ceremony featured a number of high ranking executives, officials and bank employees also attended the ceremony from Zenith Bank and Global Info Swift.

UBA GMD, Phillip Oduoza Excited Over Right Issues, Praises Shareholders.

Phillips Oduoza, UBA - MD

United Bank for Africa (UBA) Plc has raised N11.5 billion in a recent rights issue to shareholders.

The bank made the announcement following the approval of the Central Bank of Nigeria and the Securities and Exchange Commission on its equity offering of one ordinary share for every existing 10 units at a price of N3.50 each. The offer was fully subscribed by its shareholders.

The bank stated that it intends to strengthen its operations and improve its capital base ahead of the full implementation of Basel 2, which requires higher capital buffer for banks to accommodate credit as well as operational and market risks in the business of financial intermediation.

Group Managing Director, UBA, Phillip Oduoza, said at the announcement, “I am pleased with the successful completion of this rights issue, as it provides further leverage to exploit our growth potential.

“On behalf of the management of UBA, I appreciate the shareholders for their strong commitment towards the growth of our dear bank and for the unwavering confidence reposed in us in building a great pan-African institution.

“We will remain true to our promise of delivering superior and sustainable returns to all stakeholders over the near to long term, just as we are committed to the development of the African economies where we operate.”

The rights issue is coming on the heels of an earlier offer in December 2014, in which UBA raised N30.5 billion in tier-2 capital through fixed rate unsecured notes, maturing in 2021.

The bank has also completed the dual listing of its corporate bond on the Financial Market Dealers Quotation Over-the-Counter market and the Nigerian Stock Exchange.

Group Chief Financial Officer, Ugo Nwaghodoh, explained that, “This additional equity provides further capital buffer for us to grow our business over the medium term, with a strong positive outlook on delivering our performance guidance for the year.”

Results for the bank’s first quarter, which ended in March 2015, showed that its earnings rose by 22 per cent to N83 billion from N68 billion in the comparative period of 2014.

Zenith In Fantastic Lead As Most Actively Traded Stocks, Emerges NSE Most Capitalised

New-Zenith-Boss, Peter Olisamedua Amangbo

Based on its positive performance for a period of 15 months, Zenith Bank Nigeria Plc has emerged the most active and capitalised stock of the Nigerian Stock Exchange (NSE).Zenith Bank had in February, occupied the third position as the most capitalised stock, trailing behind Nigerian Breweries Plc and First Bank Nigeria Plc.

To achieve the new position, Zenith Bank Plc recorded 20.8 per cent increase in market capitalisation from N394.6 billion in February, to N476.5 billion in the month of March.Also, according to information obtained from the NSE, First Bank of Nigeria Plc occupied the second position with 12.7 per cent increase in market capitalisation from N422.04 billion to N475.41 billion.

Nigerian Breweries Plc occupied the third position with an eight per cent rise in market capitalisation from N431.1 billion to N465.1 billion, while Guaranty Trust Bank Plc and United Bank for Africa Plc (UBA), retained the fourth and fifth positions. They both recorded increased market capitalisation of 15.7 per cent and 16.8 per cent, respectively. According to NSE, Zenith Bank Plc emerged the most active stock with transactions volume of 763.7 million shares, followed by Access Bank Plc with 559.1 million shares, while First Bank of Nigeria Plc placed third with 542.3 million shares.

BA placed fourth with 538.2 million shares. Guaranty Trust Bank Plc occupied the fifth position with 524.9 million shares, while Diamond Bank Plc occupied the sixth slot with 452.9 million.The top three most active stocks accounted for 1.9 billion shares or 17.4 per cent of total traded stocks, while the top five most active stocks accounted for 2.93 billion or 27.3 per cent of total transactions during the month.

Zenith Bank plc recently, proposed a total dividend payout of N11.3 billion and a bonus of one-for-four for the reporting period ended December 31, 2009.The bank’s result indicates a pre-tax profit of N35 billion and a profit after tax of N20.6 billion out of which over N11 billion has been set aside for dividend pay-out. During the period, Zenith recorded gross revenue of N277 billion, up from N211 billion in 2008, representing a 31 per cent revenue growth and increasing dominance in its market share.

Equally impressive is the Capital Adequacy Ratio of the bank, which stands at about 30 per cent, three times the 10 per cent regulatory minimum requirement under the Basel II framework and also above the industry average. The bank’s liquidity ratio stood at 60 per cent and is more than double the 25 per cent minimum regulatory requirement. This very strong liquidity position is the product of well-articulated risk management policies and practices.

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