Finance

Banks Advance N21.3tn Loans in 10 Months

Published

8 years ago

January 31, 2016

The total domestic credit from the banking sector to the economy dropped by 0.8 per cent to N21.3tn as of the end of October 2015, statistics obtained from the Central Bank of Nigeria have revealed.

The CBN in its economic report for October stated that the drop in credit to the economy was a reflection of the 18.9 per cent decline in net claims on the Federal Government.

The report, a copy of which was obtained by our correspondent in Abuja on Friday, said while the total credit to the private sector experienced an increase of 1.9 per cent to N19.07tn, the credit to the Federal Government dropped by 18.9 per cent to N2.26tn.

It attributed the decline in credit to the government to a drop in bank’s holding of the government securities particularly the Nigerian Treasury Bills which fell by 10.3 per cent during the period.

It said, “At N21.34tn, aggregate credit to the domestic economy, on month-on-month basis, fell by 0.8 per cent at the end of October 2015 in contrast to the 0.6 and four per cent growth at the end of the preceding month and the corresponding period of 2014, respectively.

“The development reflected the 18.9 per cent decline in net claims on the Federal Government, which more than offset 1.9 per cent growth in claims on the private sector.

“Over the level at end of December 2014, net domestic credit, however, grew by 10.8 per cent at the end of the review period, compared with the growth of 11.7 per cent at the end of the preceding month.

“The development reflected the increase in net claims on both the Federal Government and private sector.”

The report did not provide details of where lending was channelled in the private sector but noted that growth in the key monetary aggregate decelerated during the period.

The CBN Governor, Mr. Godwin Emefiele, had while speaking after the recent Monetary Policy Committee meeting said the apex bank in November reduced the lending rate from 13 per cent to 11 per cent but stressed its objective of easing lending to the real sector of the economy had not been achieved.

He said the CBN would continue to adopt moral suasion to encourage the Deposit Money Banks to support financing for targeted lending to the real sector as well as agriculture, solid minerals and the Small and Medium Enterprises sectors of the economy.

He said, “The committee acknowledged the continuous liquidity surfeit in the system stemming partly from the recent growth-stimulating monetary policy measures, as well as the tendency of the banks to invest excess reserves in government securities, rather than extend credit to the needed sectors of the economy.

“To this end, the committee once again urged the deposit money banks to improve lending to the real sector, as part of their patriotic obligations to the country and enjoined the management of the bank to continue to explore ways of incentivising lending to employment and growth-generating sectors, particularly the SMEs.”

When asked if the CBN would consider forcing banks to lend to the real sector, the governor said inasmuch as the CBN would prefer that the DMBs increased their lending to the real sector, it would be practically impossible to force them to do so owing to the fact that banks were established to make profit.

He said, “Unfortunately, the DMBs are in business to make money and we cannot regulate their interest rate. And so it can be difficult to really force them to lend to a particular set of people.

“But what we can continue to do is to put in place policies that will encourage them to do so or we can continue to incentivise them by putting in place policies that will encourage them to do so.

“So it is a free market and we cannot really compel them as it is expected. We will continue to try.

“This is why at the last meeting, we reduced the Cash Reserve Requirement from 25 per cent to 20 per cent. And we then insisted that that liquidity that will be made available or that those banks can only enjoy the reduction if they introduce to the CBN projects that are targeted at the real sector such as manufacturing, agriculture and the SMEs.”

He said the apex bank remained optimistic that the banks would heed the advice and lend to the real sector.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Adesola Adeduntan’s Early Departure Prompts First Bank Holdings to Scrap Capital Raise Plans

Published

7 hours ago

April 20, 2024

Samed Olukoya

First Bank Holdings Plc has decided to scrap its plans for capital raise following the early departure of its Managing Director, Adesola Adeduntan.

The decision to cancel the extraordinary general meeting (EGM), which was planned to discuss the proposed N300 billion capital raise, comes amidst Adeduntan’s resignation from his role, eight months before the scheduled expiration of his tenure.

The bank formally announced the cancellation of the EGM in a filing seen by Investors King on Friday.

The meeting, which was initially scheduled to be held virtually on April 30, 2024, aimed to seek authorization from the company’s members for the capital raise and address other related matters.

Adeduntan’s resignation, announced on the same day as the cancellation of the EGM, comes as a result of the Central Bank of Nigeria’s tenure requirements affecting bank executives.

In his retirement letter addressed to the Chairman of First Bank, Adeduntan expressed gratitude for the support received during his stewardship and highlighted the strides made by the bank during his tenure.

He stated, “During this period, the bank and its subsidiaries have undergone significant changes and broken new grounds. We have repositioned the institution as an enviable financial giant in Africa.”

Adeduntan further mentioned his decision to pursue other interests, prompting his early retirement effective April 20, 2024.

The cancellation of the capital raise plans shows the impact of Adeduntan’s departure on the bank’s strategic initiatives.

It reflects a shift in priorities for First Bank Holdings as it navigates leadership changes and seeks to chart a new course for its future direction.

Banking Sector

First Bank MD, Dr. Adesola Adeduntan, Resigns to Pursue New Opportunities

Published

8 hours ago

April 20, 2024

Samed Olukoya

Dr. Adesola Adeduntan - FirstBank CEO - Investors King

Dr. Adesola Adeduntan, the Managing Director of First Bank Nigeria Limited, has announced his resignation from the bank after nine years of leadership.

In a letter addressed to the Chairman of First Bank, Mr. Tunde Hassan-Odukale, Dr. Adeduntan expressed his decision to step down voluntarily, effective April 20, 2024, to pursue new opportunities.

Having served as the CEO since January 1, 2016, Dr. Adeduntan’s tenure has been marked by significant transformations within the institution. Under his leadership, First Bank and its subsidiaries have undergone substantial changes, positioning the bank as a formidable financial powerhouse in Africa.

In his resignation letter, Dr. Adeduntan highlighted the achievements made during his tenure, stating, “We have repositioned the institution as an enviable financial giant in Africa.”

He expressed gratitude to the board of directors of First Bank and FBN Holdings Plc for their support throughout his stewardship.

Dr. Adeduntan’s decision to resign comes as he approaches the end of his contract, which was set to expire on December 31, 2024.

He stated, “After which I would no longer be eligible for employment within the bank.” Despite his departure, he wished the institution continued success and progress in its evolution.

Throughout his career in banking and finance spanning over three decades, Dr. Adeduntan has been recognized for his contributions and received numerous awards.

He holds a Doctor of Science, Honoris Causa, and an MBA from Cranfield University, United Kingdom, and is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and the Chartered Institute of Bankers of Nigeria (CIBN).

Dr. Adeduntan’s departure marks the end of an era for First Bank, as the institution prepares to transition into a new phase of its evolution.

His leadership has left a lasting legacy of transformation and growth, and his contributions will be remembered in the annals of the bank’s history.

Banking Sector

UBA America Strengthens Commercial Diplomacy, Hosts Diplomats, Others at World Bank Summit

Published

1 day ago

April 19, 2024

Samed Olukoya

UBA America, the United States subsidiary of United Bank for Africa (UBA) Plc hosted diplomats, government officials and business leaders to a networking reception in partnership with the esteemed Business Council for International Understanding (BCIU) and the U.S. Department of States in Washington DC on Monday .

The event which was held on the sidelines of the ongoing IMF World Bank Spring Meetings was organised by the BCIU and US Department of State to enhance collaboration and fortify commercial diplomacy among nations, institutions and individuals.

Speaking during the event, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, noted that the bank’s co-hosting of the event via its American subsidiary, underscores its commitment towards cultivating robust relationships within the development communities in the United States.

He said, “As a distinguished member of BCIU, a non-profit organisation providing customised commercial diplomacy services, UBA Group and UBA America share BCIU’s vision of actively pursuing strategic opportunities, contributing to global economic cooperation, deepening of economic diplomacy, facilitating ideas, forging partnerships, and adding value for all stakeholders.”.

“Our resolve to co-host this Networking Reception symbolises our dedication to fostering inclusive economic growth and partnership across borders. By leveraging platforms like this, we can collectively address shared challenges and seize opportunities for sustainable development,” he stated further.

BCIU is a non-profit Association comprising of policy experts, strategic advisors, and trade educators, and offers bespoke commercial diplomacy services to the world’s governments and leading organisations, from Fortune 100 companies to global investors and multilateral institutions.

Only last year, the CEO UBA America, Sola Yomi-Ajayi, was appointed to the Board of BCIU, where she collaborates with fellow board members to ensure the organisation operates in alignment with its by-laws and New York 501(c)3 non-profit legislation.

Yomi-Ajayi has been committed to nurturing long-term organisational growth and sustainability, thereby reinforcing the bond between UBA America, BCIU, and the broader international community.

UBA America is the United States subsidiary of United Bank for Africa (UBA) Plc, one of Africa’s leading financial institutions with presence in 20 African countries, as well as in the United Kingdom, France, and the United Arab Emirates. UBA America serves as a vital link between Africa and the global financial markets, offering a range of banking services tailored to meet the needs of individuals, businesses, and institutions.

As the only sub-Saharan African bank with an operational banking license in the U.S., UBA America is uniquely positioned to provide corporate banking services to North American institutions doing business with or in Africa.

UBA America delivers treasury, trade finance, and correspondent banking solutions to sovereign and central banks, financial institutions, SMEs, foundations, and multilateral and development organizations. Leveraging its knowledge, capacity, and unique position as part of an international banking group, the Bank seeks to provide exceptional value to our customers around the world.