All Posts in "Banking & Finance"

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The Securities and Exchange Commission, Nigeria (SEC Nigeria) and Financial Sector Deepening (FSD) Africa have  announced the start of a joint review of Nigeria’s 10-year Capital Markets Master Plan (CMMP) to support the country’s economic resilience amid new economic challenges including lower oil prices and the COVID-19 pandemic.

The review of the CMMP will see SEC Nigeria work with FSD Africa’s Regulator Support Programme to develop a revised 10-year CMMP that will strengthen Nigeria’s capital markets’ and their capacity for capital mobilization. The CMMP provides a vision for Nigeria’s capital market, as well as a roadmap with objectives to meet it.

The process will involve an assessment of progress made since the plan’s implementation to date and engaging with stakeholders for input. This will result in the introduction of more stringent tools to measure the plans progress against objectives, and the inclusion of new challenges, opportunities and risks related to the current environment into the plan.

The review of the CMMP comes in response to changes in the economic and market circumstances upon which the plan was originally based on when launched in 2015, that needed updating to match the current environment. These include the effects of lower oil prices on Nigeria’s economy as well as a slowdown in economic activity due to the COVID-19 pandemic. The introduction of new initiatives and products will help to improve the liquidity and depth of Nigeria’s capital markets.

FSD Africa’s support comes as part of its ongoing multi-country programme to strengthen Africa’s capital markets. The programme is centred on the development of capital markets master plans, conducting institutional capacity assessments, and creating capacity for sustainable finance such as green bonds, helping markets to adapt to their operating climate.

The Director Capital Markets at FSD Africa,Mr Evans Osano said, “This review will give market stakeholders in Nigeria a unique opportunity to not only take stock of the plan’s results so far, but also to grow and respond to previously unforeseen economic developments. As FSD Africa works to support and regulate financial markets in Sub-Saharan Africa, we are excited to be partnering with SEC Nigeria to enable them to strengthen the country’s capital markets during a time of immense upheaval.”

The Director General of the Securities and Exchange Commission Nigeria, Lamido Yuguda stated, “The implementation of the Capital Market Master Plan will deepen our market and improve the capital market’s contribution to our economic growth and national development. To this end, the review of the Capital Market Master Plan better positions the SEC to deliver on these objectives in these very challenging times. The FSD Africa and SEC Nigeria’s laudable partnership underscores our mutual goals to build financial markets that are robust, efficient and above all inclusive”

Patoma Admin by — December 19, 2020 in Banking & Finance 0

By admin

The Securities and Exchange Commission, SEC has stated that the Federal and State Governments have the capabilities to unlock enormous potentials through privatisation.

Director General of the SEC, Mr. Lamido Yuguda stated this on Tuesday at a Webinar organised by the Nigerian Stock Exchange (NSE), in collaboration with the Nigeria Governors’ Forum (NGF) and the Nigerian Investment Promotion Council (NIPC) with the theme: Privatisation in Nigeria and the Outlook for Subnational Economic Development.

Represented by Mr. Reginald Karawusa Executive Commissioner Legal and Enforcement, Yuguda said the theme speaks to one of the issues that is germane to financing for state governments.

He said there is indeed no better time to discuss alternative funding sources at the sub national level given adverse impacts brought about by the COVID-19 pandemic.

According to him, the capital market’s primary role in any economy is to facilitate capital formation. By creating a system for allocation of capital, investors are able to price risk efficiently while issuers have the opportunity to raise funds to finance projects. In doing so, issuers may choose to raise equities or debts.

“Sub national issuers in Nigeria have been able to access the debt capital market over the years since 1978, state governments in Nigeria have raised close to N900bn through debt issuances. A significant part of these funds were deployed to finance capital projects across the country. However, the ability of states to continue to borrow in a sustainable manner has been severely impacted in recent times. With the huge infrastructure gap, decreased allocation from the federal purse owing to relatively low oil revenue and the depressed level of internally generated revenues, states are barely able to pay salaries after servicing their outstanding loan obligations.

“Privatisation is an avenue for governments to unlock economic potentials inherent in government owned enterprises. The focus on Nigeria’s journey on privatisation has largely been on the Federal Government. There have been several phases of privatisation exercises in the past with emphasis on enterprises operating in different sectors of the economy including oil and gas, hospitality, mining etc.” Yuguda stated.

The DG said the discourse is crucial in the light of current economic realities as a number of these deals were consummated through the listing of these entities on the Nigerian Stock Exchange, some of these companies have been positively transformed and have returned value to shareholders.

“Several enterprises are still owned and controlled by the government, both at the state and federal levels. A number of these entities have the capacities to generate cash flows and corporate profitability. However, owing to certain inefficiencies, these entities are under performing and in some cases subtracting from value. Perhaps this is the time for state governments to revisit the privatisation value proposition. There are several benefits to privatisation” he stated.

He said privatisation has numerous benefits as the proceeds from the sale of government interest in these enterprises would help augment budget shortfalls and can be applied towards funding critical infrastructure.

“Beyond the funds to be generated, governments will enjoy cost of savings as there would be no further requirements to fund these entities post-privatisation.

“There are further benefits to be enjoyed through the taxes that would be paid in the future by those entities. As they undergo strategic transformation and become positioned for profitability, these entities are able to create jobs and employ residents of their host states, facilitate infrastructure development and further positively impact the economy in other areas” he added.

In his remarks, CEO of the Nigerian Stock Exchange, Mr. Oscar Onyema said the NSE is pleased to hold the webinar as part of its strategic strive in assisting the states towards economic sustenance.

Onyema said privatisation occupies a critical position in economic globalisation and provides an avenue for raising the bar towards economic development.

“Given COVID-19, there is no better time to re-visit privatisation and cascade this to the subnational levels” he said.

Also speaking, the Chairman of Nigerian Governors Forum, Dr. Kayode Fayemi said the state governments have been constrained to increase spending in a bid to mitigate the effects of the pandemic.

According to him, “containment is fairly in place but more needs to be done to ensure progress is not lost and that is where privatisation comes in. If the private sector takes over in critical sectors, state governments can focus on education and health among others”.

Fayemi assured that the forum will continue to partner with the NSE to bring in long term financing for infrastructure development.

 

Patoma Admin by — November 17, 2020 in Banking & Finance 0
Fidelity Bank posts N20.41 billion profit in nine months

Desite harsh consequences of the coronavirus pandemic on businesses, Fidelity bank, one of Nigeria’s second tier banks, has posted a Profit After Tax worth N20.41 billion for the period ended September 2020.

This is according to the recently released unaudited financial result sent to the Nigerian Stock Exchange today.

Profit After Tax (PAT) grew by 7.1%, from N19.05 billion as at September 2019 to N20.41 billion in the corresponding period this year, as the bank also recorded a gross revenue of N155.03billion in 9 months.

On liquidity related issues, deposits from customers increased from N1.12 trillion as at September 2019 to N1.498 trillion in the corresponding period this year, indicating an increase of 34.21%.

Loans and advances to customers also increased by 18.5% from N1.07 trillion to N1.27 trillion within the period under review.

The following are other key financial metrics posted by the bank in its latest financials

Gross earnings for the nine-month period ended September 2020 declined by 14.2% Year-on-Year.

Net interest income appreciated from N58.2 billion to N75 billion within the period under view indicating a gain of 28.8%.

Profit Before Tax increased by 3.6% within the period under view.

Profitb After Tax increased by 7.1%.E

EarningsPer Share increased from N66 to N70 within the period under review, indicating a gain of about 6.1%.C

Cash and balances with the Central Bank also increased from N4.18 billion to N6.34 billion, indicating an increase of 51.8%

Patoma Admin by — November 3, 2020 in Banking & Finance 0
Nigeria generates N424.71 billion VAT in Q3 2020

Nigeria’s value-added tax (VAT) collection increased from N327.2 billion recorded in Q2 2020 to N424.71 billion in Q3 2020, as other manufacturing sector led the pack with N47.07 billion remittance.

This was disclosed by the National Bureau of  Statistics (NBS) in its sectoral distribution of value added tax Sectoral Q3 2020 report released on Monday.

VAT Collections in the quarter  indicates a 29.8% increase as against N327.2 billion recorded in the previous quarter and 54.37% increase compared to N275.12 billion generated in the corresponding quarter of 2019.

Key highlights

Other manufacturing, generated the highest amount of VAT with N47.07 billion and closely followed by Professional Services, which generated a sum of N44.01 billion.

Commercial and Trading generated N21.18 billion while Mining, Textile and Garment industry generated the least with N63.5 million and N346.27 million respectively.

Out of the total amount generated in Q3 2020, N214.66 billion was collected locally as Non-Import VAT while N115.34 billion was collected as Non-Import VAT for foreign.

The balance of N94.70billion was generated as NCS-Import VAT.O

Out of the 28 sectors, 24 of them recorded improved VAT remittances during the period, compared to Q2 2020 while 4 of them recorded decline

The N424.7 billion generated in Q3 2020, brings the total VAT collections year-to-date to N1.08 trillion, which is 22.87% higher than N876.1 billion generated as at the same period in 2019.

Reasons for Increment
Since manufacturing sector is the biggest contributor to VAT during the quarter, the increase can mainly be attributed to the increase in manufacturing activities.

However, it is worth noting that offshore operations recorded the highest growth of 193% in VAT remittances during the period.

Who benefits?
The increase in VAT will grow government revenue base especially in a time when oil revenue is dwindling, this could in turn be invested in infrastructure, other developmental projects, etc.; thereby, stimulating the nation’s economic growth.

Patoma Admin by — November 3, 2020 in Banking & Finance 0
Swiss Re loses $691n in nine months of 2020

The Swiss reinsurer has sustained a net loss of $691 million in the first nine months of 2020 compared to a profit of 1.34 billion USD in the same period of 2019.

However, if we were to exclude the Covid-19-related debts and the claim reserves of $3 billion (before tax), the net result would be set at $1.6 billion.

As of 30 September 2020, the Property & Casualty (P&C) activity showed a net deficit of $201 million. The direct insurance entity, Corporate Solutions, also recorded a deficit of $323 million.

The Life Capital entity made no exception as it ended the three quarters with a net deficit of $136 million.

However, the first nine months of 2020 do not show negative figures only. Swiss Re indeed posted a 6.1 percent turnover increase with $30.16 billion of premiums by late September 2020.

Patoma Admin by — November 2, 2020 in Banking & Finance 0
Ganduje presents N148b budget before Kano Assembly

By Favour Nnabugwu

The Kano State Governor, Mallam Abdullahi Ganduje has presented N147,933,302,948 as the 2021 budget termed “Budget for economic recovery and sustainable development” before the Kano state Assembly.

Ganduje while making the presentation on  declared that a total of N74.661b was declared for Capital expenditure which is N14.9b lower than the capital expenditure in of the 2020 budget in Kano today.

He also announced N73.273 billion as the recurrent expenditure for the 2021 fiscal year.

The budget is lower than the 2020 budget by N68,372,456,709 which was N206,207,759,657.

25 percent of the total budget, equivalent to N37.8 billion was declared to the educational sector while in 2020, the sector got 30 percent with N41.8 billion.

The health sector was allocated 17 percent of the budget in 2021 with N25.5 billion which is an increase from what was allocated in 2020 where N9.8 billion was allocated.

Other sectors that include Agriculture N5.7 billion, Water Resources N9 billion and Religious Affairs N555.7 million were announced by the Governor.

Others include Judiciary N5.1 billion Information N2.5 billion and Commerce and Industry 108.2 million were declared for the 2021 fiscal year.

Governor Ganduje thanked the people of the state for eschewing engaging in the current crises across the country while he assured of transparency in the implementation of governance in the state.

“I call on the people of the state to remain law abiding and shun negative activities. I also assure you of total transparency in the implementation of government programs in the state.”

Receiving the Budget, the Speaker of the Assembly, Abdulaziz Gafasa promised to continue to support the state government in its strive for the development of the state.

Patoma Admin by — October 27, 2020 in Banking & Finance 0

By Favour Nnabugwu

Access Bank Nigeria Plc has announced plans to offer N50 billion interest-free credit facility to individuals and businesses, following the losses people and corporate organisations suffered during the #ENDSARS# period.

This is in support of Nigerians through interest-free loans and grants to support communities, the youths, and micro, small and medium-sized businesses.

This information was disclosed by the bank through its official LinkedIn page.

The bank’s official statement read thus,

“Now more than ever, we remain committed to our purpose of impacting lives positively. In light of the recent occurrences, we will be supporting Nigerian businesses with 50 Billion Naira interest-free loans and grants. Watch this space for more information.”

The impact of the pandemic, coupled with the hijacked #EndSARS protests that led to the looting of businesses and destruction of properties has thrown so many Nigerians into debts.

This show of support from Access Bank will help alleviate and stimulate economic activities, as well as produce many positive multiplier effects on the economy.

Additionally, it is worthy of note that Access Bank dedicates a minimum of one percent of its Profit-Before-Tax to Sustainability. The Bank also co-created the first disability inclusion hub in Nigeria, initiated and led the development of the Nigerian Sustainable Banking Principles and has brought about social and economic benefits to host communities across Nigeria through its employee volunteering scheme.

Patoma Admin by — October 24, 2020 in Banking & Finance 0

By Favour Nnabugwu

The Central Bank of Nigeria (CBN) has reviewed the appointment criteria for Chief Compliance Officers in Merchant Banks and Regional Banks (Commercial and specialized).

This is according to a circular issued by the apex bank dated October 9, 2020, and signed by its Director of Financial Policy and Regulation Department, Kevin Amugo.

According to the latest notice, Merchant banks and Regional banks are hereby granted dispensation to appoint CCOs on a grade not below an Assistant General Managers.

However, the CCOs will report directly to the ECO of the financial institutions who have sole responsibility for compliance matters in the bank.

This latest action by the CBN is the sequel to consultations and engagement with stakeholders emanating from its earlier circular referenced FPR/DIR/GEN/CIR/06/004 of September 28, 2016, in which the tentative requirements for Executive Compliance Officers and Chief Compliance Officers of deposit money banks were mooted

Patoma Admin by — October 23, 2020 in Banking & Finance 0
London insurance market loses £4.5bn premium to Brexit

London insurers lost a whopping £4.5 billion premium last year as companies restructure for Brexit  says the International Underwriting Association (IUA).

This ‘controlled’ premium was previously written in European offices but managed by London market companies. The London market still wrote some £6.2bn in controlled premiums, which are written outside the UK’s capital but managed within, last year. But this is down from £8.8bn in 2018.

The IUA said planning for Brexit had cost London market companies.

“Reorganisation and the impending loss of financial services passporting rules has meant that a large amount of business written in Europe is no longer overseen and managed in the same way by London, but reported directly to operations located within the EU,” said Dave Matcham, its chief executive.

“Such restructuring has increased costs for IUA members, making them globally more inefficient and, ultimately, less able to offer a better deal for clients,” he added.

Overall, London market companies increased premium income from commercial and wholesale risks by 10% last year to £21.4bn, the IUA says in a new report. The figure rises to £27.6bn when combined with £6.2bn in controlled premiums, but excluding those now recorded by European entities.

The IUA said London market companies had seen strong premium rate increases across almost all business lines in 2019. “The hardening market conditions are supplemented by firms developing growth areas such as cyber and transfers of business from Lloyd’s of London into the company market,” it said.

The IUA’s annual statistics report recorded three new lines of business. These were: political risk, which recorded premiums of £261m; trade credit, where premiums totalled £243m; and standalone cyber with premiums of £253m.

Mr Matcham said the London company market had returned “a remarkable performance” in 2019, with growth in energy, aviation, property and professional lines. He added that business written through managing agents with delegated authority increased by 28%.

In its tenth year, the IUA’s statistics report has tracked growth in the London company market from premiums of £19.6bn in 2010.

“The make-up of market participants has also altered with an increase in overseas capital, consolidation among the largest players and firms increasingly operating in both the Lloyd’s and company markets,” Mr Matcham said.

Patoma Admin by — October 13, 2020 in Banking & Finance 0